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Big profits at 17 insurance companies... Or is there?

135

Comments

  • #62
    Yurt2
    Registered Users Posts: 9,381 ✭✭✭Yurt2


    enricoh wrote: »
    Heard some insurance industry rep saying that 80c in every euro they take in in motor premiums goes out on whiplash payments.
    Whiplash payouts are 4.5 times the uk payout.
    Cut whiplash payouts n premiums drop - simple.

    My home insurance is reasonable imo, why? - No whiplash.


    I call BS on that figure (not that he said it, on the actual substance of the claim).


    I guarantee there's some serious f*ckery going on with their figures.


  • #63
    Wanderer78
    Registered Users Posts: 28,797 ✭✭✭✭Wanderer78


    c.p.w.g.w wrote:
    I got quoted 5 grand to get insured on my own car 12 months ago. Provisional License and in 30's. Was told my premium was so high as to cover the possibility of me crashing into petrol pumps and causing a massive fire...deadly serious he was too...


    Forecourts are lethal places, being insured under someone else significantly reduces those risks, makes perfect sense really


  • #64
    c.p.w.g.w
    Registered Users Posts: 4,994 ✭✭✭c.p.w.g.w


    Wanderer78 wrote: »
    Forecourts are lethal places, being insured under someone else significantly reduces those risks, makes perfect sense really

    Really, those pumps are designed to take a hit and their are numerous safety features to prevent a catastrophic accident.


  • #65
    Wanderer78
    Registered Users Posts: 28,797 ✭✭✭✭Wanderer78


    c.p.w.g.w wrote:
    Really, those pumps are designed to take a hit and their are numerous safety features to prevent a catastrophic accident.


    I can see the insurer's point, I'd imagine you change your driving style in someone else's car, oh wait, maybe all this is pure nonsense, I think someone may have been telling you porkies, Jesus they talk some nonsense


  • #66
    Jurgen The German
    Closed Accounts Posts: 1,220 ✭✭✭Jurgen The German


    Yurt! wrote: »
    I call BS on that figure (not that he said it, on the actual substance of the claim).


    I guarantee there's some serious f*ckery going on with their figures.

    I doubt its 80c on every euro for whiplash claims alone more likely all claims. It's called the loss ratio. Loss ratio is basically the cost of writing policies. A 100% loss ratio is the break even point. A 110% loss ratio means for every €1 taken in, €1.10 is being paid out in claims. An 80% loss ratio means that for every €1 taken in €0.80 is being paid out so a gross profit of €0.20 on every €1 remains. A prudently run insurer should expect to have a loss ratio of around 80 - 90%.

    Insurers are in the business of risk, they know claims will happen as its the nature of the business and they accept that risk. It's when they either under price the policies they sell or there is an increase in the level of awards/claims made that problems arise.


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  • #67
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    Jurgen The German wrote: »
    They are starting to return to profit because the rates increased ergo the rates had to increase.

    Are the figures quoted net or gross profits?

    What level profit would you be happy to see insurers make?

    None?

    Break even?

    A million?

    You are missing the point, I don't really care if they make profits or not. They are a private company they have no God given right to make healthy profits or any profits in fact, no more than your local butcher has.

    They are obliged to run their business prudently, something they didn't do for a number years, this was their own fault, not yours and not mine.

    That said people looking at just annual figures no not see the full picture, over the past 15-20 million years collectively they have made billions in profit form the Irish insurance market.

    Jurgen The German wrote: »
    You accused me of getting personal in one of your previous posts.

    It's not personal to point out what is clear ie you do not have a clue about the insurance market, underwriting profit and the industry as a whole.

    Because I don't swallow the absolute BS the Insurance Industry peddle?. Something clearly you have lapped up, maybe debate the points instead of getting personal. You haven't refuted anything I have said.
    Jurgen The German wrote: »
    Insurers figures are available for all to see on the central banks website. It goes into in depth detail about gross written premium and about what has been paid out on claims.

    Link?
    Jurgen The German wrote: »
    There were a number of years where huge losses were incurred and its only recently that a return to modest profit has arisen.

    Again their own doing.
    Jurgen The German wrote: »
    You mention the legal obligation for people to have motor insurance. With all banks there are conditions that a house be insured as part of the terms of the mortgage so there is a captive audience for home insurance too. With that been the case, why aren't insurers jacking up the rates of their house policies? People have to buy it so it's easy money, right?

    You are getting confused between a legal obligation and a T&C.

    I am under no obligation legal or otherwise to have house insurance for my mortgage.

    Poor example.
    Jurgen The German wrote: »
    Lower claims payments = lower premiums for all.

    Higher claims payments = higher premiums for all.

    It's really quite simple if you take more than a cursory glance at things.

    Yeah, no one is refuting that, you are just stating the obvious.

    I'll add one more though.

    Insurance Industry acting with wreckless impunity = Higher Premiums for All.


  • #68
    suicide_circus
    Registered Users Posts: 19,802 ✭✭✭✭suicide_circus


    c.p.w.g.w wrote: »
    I got quoted 5 grand to get insured on my own car 12 months ago. Provisional License and in 30's. Was told my premium was so high as to cover the possibility of me crashing into petrol pumps and causing a massive fire...deadly serious he was too...

    Became a named driver on the misses car for 89€... how is it 700 times more risky for me to be insured on my own car...

    The car I was looking for a quote was a 1 litre **** box with just third party
    how are you still on a provisional licence? thought they were gone years


  • #69
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    enricoh wrote: »
    Heard some insurance industry rep saying that 80c in every euro they take in in motor premiums goes out on whiplash payments.
    Whiplash payouts are 4.5 times the uk payout.
    Cut whiplash payouts n premiums drop - simple.

    He was telling lies, hardly a surprise.

    Motor insurance in Ireland is slightly cheaper than the UK.

    Had he an explanation for this?

    You would expect it to be much lower in the UK given those figures, not 4.5 times lower, but pretty significantly lower if the main driver for premiums is whiplash as we are being told constantly, no?


  • #70
    GreeBo
    Registered Users Posts: 27,027 ✭✭✭✭GreeBo


    Boggles wrote: »
    You are missing the point, I don't really care if they make profits or not. They are a private company they have no God given right to make healthy profits or any profits in fact, no more than your local butcher has.

    And what impact do you think insurance companies exiting the Irish market will have on your premium?

    Because thats what happens when a company can't or doesn't make a profit, they leave or cease to exist.

    BTW they also have no God given obligation to offer you cheap insurance.


  • #71
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    GreeBo wrote: »
    And what impact do you think insurance companies exiting the Irish market will have on your premium?

    I have no idea and I don't think anyone can absolutely state what would happen.

    We opened up the market and motor premiums for a finish shot up 70%.

    What we have learned with spectacular clarity is they can't self regulate, so that has to be taken out of their hands.
    GreeBo wrote: »
    Because thats what happens when a company can't or doesn't make a profit, they leave or cease to exist.

    Yeah, company doesn't run itself properly it goes bust, not exclusive to any one private firm. What's your point? :confused:
    GreeBo wrote: »
    BTW they also have no God given obligation to offer you cheap insurance.

    I never said they did, you must be confusing me with someone else.

    What they should be obliged to do when offering a product that is a legal requirement, is have 100% clarity on how they came to the price of that product.


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  • #72
    GreeBo
    Registered Users Posts: 27,027 ✭✭✭✭GreeBo


    Boggles wrote: »
    I have no idea and I don't think anyone can absolutely state what would happen.
    You were obviously a Scrabble person growing up, check out Monopoly for a idea of what would happen.
    Boggles wrote: »

    We opened up the market and motor premiums for a finish shot up 70%.
    Causation or correlation?
    Boggles wrote: »

    What we have learned with spectacular clarity is they can't self regulate, so that has to be taken out of their hands.
    Did we?
    Based on what?
    Boggles wrote: »

    Yeah, company doesn't run itself properly it goes bust, not exclusive to any one private firm. What's your point? :confused:
    So your premise is that they lost money on their code business over the last 5 years because they were improperly run? And not because claims were multiples of premia?
    Boggles wrote: »

    I never said they did, you must be confusing me with someone else.
    You certainly implied it.
    Boggles wrote: »

    What they should be obliged to do when offering a product that is a legal requirement, is have 100% clarity on how they came to the price of that product.
    Why is that exactly?


  • #73
    actuar90
    Registered Users Posts: 242 ✭✭actuar90


    Boggles wrote: »
    I have no idea and I don't think anyone can absolutely state what would happen.

    Insurance premiums would increase both due to supply and demand and what we've seen every time a player has dropped out of the market - their unpaid claims need to be paid by the rest of the market which will always result in increased premiums for us.
    Boggles wrote: »
    What we have learned with spectacular clarity is they can't self regulate, so that has to be taken out of their hands.

    What makes you think they are self regulated? They are regulated by the Central Bank and by EIOPA. The Irish regulator is tougher on insurance companies than in many other countries.
    Boggles wrote: »
    Yeah, company doesn't run itself properly it goes bust, not exclusive to any one private firm. What's your point?

    When insurers do "run themselves properly" and charge appropriate levels of premiums that allow them to cover the crazy court awards in our country, allow for the increasing claim for everything culture we have, cover their expenses and (heaven forbid!) allow themselves to build in some margin in the hopes of making a profit then everyone starts to clamour that they are price gouging/colluding.

    What insurers do is price the premiums based on what they think the claims will be for those policies they haven't written yet, essentially trying to predict the future - which can't be done. It can then take a couple years for all the court cases to close the full extent of the medical expenses to known.

    So it can be easily 3 years later when the insurers realise the true cost of the policies they've written and do what any sensible business would do, reflect the actual cost of claims for those policies written 3 years ago in their new prices - which could make premiums go up or down, just depends on how many people claimed and how big those claims were.
    Boggles wrote: »
    What they should be obliged to do when offering a product that is a legal requirement, is have 100% clarity on how they came to the price of that product.

    I agree that they could share a little bit more info publicly on this but a lot of the price they charge is down to their strategy and which segments of the market they are trying to sell to (because they believe they will claims less or they can charge them a higher premium) and which segments they are trying to avoid. This kind of info is obviously commercially sensitive so can't be shared and anything else they did share wouldn't be the full picture so maybe it is better to share nothing, who knows.


  • #74
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    GreeBo wrote: »
    So your premise is that they lost money on their code business over the last 5 years because they were improperly run? And not because claims were multiples of premia?

    This isn't very hard.

    Every business has costs, these cost can fluctuate, you charge accordingly to cover your costs.

    If you don't, Whose fault is that?


  • #75
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    actuar90 wrote: »
    Insurance premiums would increase both due to supply and demand and what we've seen every time a player has dropped out of the market - their unpaid claims need to be paid by the rest of the market which will always result in increased premiums for policyholders.
    actuar90 wrote: »
    What makes you think they are self regulated?

    You just answered your own question above.
    actuar90 wrote: »
    When insurers do "run themselves properly" and charge appropriate levels of premiums that allow them to cover the crazy court awards in our country, allow for the increasing claim for everything culture we have, cover their expenses and (heaven forbid!) allow themselves to build in some margin in the hopes of making a profit then everyone starts to clamour that they are price gouging/colluding.

    This is just more Insurance Industry BS.

    5% of claims go to court. The vast majority of all claims are settled privately by the insurance company.

    actuar90 wrote: »
    What insurers do is price the premiums based on what they think the claims will be for those policies they haven't written yet, essentially trying to predict the future - which can't be done.

    Of course in can be done, with startling results, they have pulled billions in profit out of the Irish market, focusing on a short period where they fooked the market themselves is both equally naive and myopic.

    These companies would not be here if there wasn't money to be made.

    I honestly can't believe any right thinking individual would be gullible enough to contentiously swallow their hyper waffle.


  • #76
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    actuar90 wrote: »
    I
    I agree that they could share a little bit more info publicly on this but a lot of the price they charge is down to their strategy and which segments of the market they are trying to sell to (because they believe they will claims less or they can charge them a higher premium) and which segments they are trying to avoid. This kind of info is obviously commercially sensitive so can't be shared and anything else they did share wouldn't be the full picture so maybe it is better to share nothing, who knows.

    They tried that spiel all ready didn't they? They got raided at dawn.

    If something is a legal requirement their should be full transparency, it's a no brainer.


  • #77
    Cryptopagan
    Closed Accounts Posts: 419 ✭✭Cryptopagan


    Jurgen The German wrote: »
    I never said the industry was blameless. Massive missteps were made and there was a race to the bottom in terms of pricing but like I said, people benefitted from the rock bottom prices for a number of years, people didn't stick with their existing insurer, they went with the cheapest price.

    Do you remember insurance pricing in the 90s and early 00s? People were paying substantially more for their insurance then than they are paying now. The rock bottom prices of 123 or Setanta were the exception rather than the rule for the last 30 years however people are unable to understand that or simply choose to ignore it.

    Like I said, insurers are not blameless but to expect businesses not to want to make profits is as stupid as anything I've ever read.

    You should explain all this to the EU, who are investigating if the Irish insurance industry are running a cartel.


  • #78
    actuar90
    Registered Users Posts: 242 ✭✭actuar90


    One of the reasons I don't post on Boards too often, especially about finance is the incredibly strong opinions and beliefs some people have about the banks/insurance/etc even though they have almost no knowledge how the industry really works. And even when a logical, truthful argument is put before them they are blind to it because of their utter (incorrect) certainty that they are correct, but anyway...
    Boggles wrote: »
    This isn't very hard.

    Every business has costs, these cost can fluctuate, you charge accordingly to cover your costs.

    If you don't, Whose fault is that?

    Like I said in my last post, nobody can predict the future, not even Insurance companies, so sometimes they get it right and sometimes they get it wrong - thats just the nature of being in an uncertain business. But because it is a business and not a charity they can't afford to get it wrong every year so need to change the premiums to reflect the latest claims information.
    Boggles wrote: »
    You just answered your own question above.
    Just in case you misunderstood, what I said is that they are heavily regulated by both the Irish Central Bank and European entities. One of the main reasons that more Insurers didn't move here because of Brexit was due to strict regulation of the insurance industry here.
    Boggles wrote: »
    This is just more Insurance Industry BS.

    5% of claims go to court. The vast majority of all claims are settled privately by the insurance company.

    I don't know if % you quoted above is correct or not but its irrelevant as the ones that do end up in court are the claims worth millions of euros and even a little change in the way the courts treat these can have millions of euros of impact on an insurance company
    Boggles wrote: »
    Of course in can be done, with startling results, they have pulled billions in profit out of the Irish market, focusing on a short period where they fooked the market themselves is both equally naive and myopic.

    These companies would not be here if there wasn't money to be made.

    I honestly can't believe any right thinking individual would be gullible enough to contentiously swallow their hyper waffle.

    If you can predict the future I strongly encourage you to play euromillions tonight.

    Nobody could have predicted the extent to which the country went from only claiming for genuine injuries to every single slip, trip and tiny bump over a short period of time or how much the payouts for these small claims have increased in the same period.

    If you think it can be done, then why do investors/traders ever invest in a stock that will lose value? Why would a bank give a mortgage to someone that will default on the loan in 20 years time? Surely they could just predict the future in the same way that you expect the insurers can?

    Nobody can know these things, they can take a best guess but that guess will always be either too high or too low


  • #79
    Eggs For Dinner
    Registered Users Posts: 2,935 ✭✭✭Eggs For Dinner


    Deadlift kid wrote: »
    Just took out a new policy a week ago with 123 and was informed all new policies will not be covering whiplash claims was the cheapest quote I could get @ €611 tpft with full ncd driving since 21 so 18yrs clean driving never a tip never a penalty point full licence 15yrs I think 611 is too high imho

    That's nonsense. No insurer can put terms and conditions into it's policy which affects the legal rights of a 3rd party


  • #80
    Eggs For Dinner
    Registered Users Posts: 2,935 ✭✭✭Eggs For Dinner


    Boggles wrote: »
    You are missing the point, I don't really care if they make profits or not.

    You should care that they are profitable because it is in everyone's interest that they are. If you don't understand that you don't understand the system


  • #81
    Jurgen The German
    Closed Accounts Posts: 1,220 ✭✭✭Jurgen The German


    Boggles wrote: »
    This isn't very hard.

    Every business has costs, these cost can fluctuate, you charge accordingly to cover your costs.

    If you don't, Whose fault is that?

    How many businesses in the world can selling something for €500 end up costing the company literally millions of euro?

    Absolutely none, other than insurers.

    How long would a business last that continuously operates at a loss?

    Answer is that it wouldn't last long term.

    The fault is with insurers for under charging for a number of years. They redressed that balance and have moved back into sustainable territory.

    You are calling for transparency of how premiums are calculated. Many people seemingly cannot understand the basics of how the industry works so how could they assimilate and understand complex actuarial data?


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  • #82
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    actuar90 wrote: »
    One of the reasons I don't post on Boards too often, especially about finance is the incredibly strong opinions and beliefs some people have about the banks/insurance/etc even though they have almost no knowledge how the industry really works. And even when a logical, truthful argument is put before them they are blind to it because of their utter (incorrect) certainty that they are correct, but anyway...

    WTF? Boards have 100s of forums covering 100s of topics. :confused:

    But if you go to them with a whiff of non evident superiority off you maybe they won't respond.

    actuar90 wrote: »
    Like I said in my last post, nobody can predict the future, not even Insurance companies, so sometimes they get it right and sometimes they get it wrong - thats just the nature of being in an uncertain business. But because it is a business and not a charity they can't afford to get it wrong every year so need to change the premiums to reflect the latest claims information.

    Insurance companies by and large get it right, the profits they have made in this country would be evidence of that.

    The reason they didn't profit over a short period of time is because they didn't run their business accordingly.

    It's the same for every other business.
    actuar90 wrote: »
    Just in case you misunderstood, what I said is that they are heavily regulated by both the Irish Central Bank and European entities.

    A relative small market that allows companies to go operate, bust spectacular and wreck the entire market are not regulated properly.

    actuar90 wrote: »
    I don't know if % you quoted above is correct or not but its irrelevant as the ones that do end up in court are the claims worth millions of euros and even a little change in the way the courts treat these can have millions of euros of impact on an insurance company

    Any claimant that gets millions of euros in court more often than out deserves it, these high settlement are usually reserved for medical malpractice, etc.

    But again you miss the point, the vast majority of claims are dealt with privately by the insurance companies, this is a guarded secret. Why are these not open to scrutiny?

    actuar90 wrote: »
    Nobody could have predicted the extent to which the country went from only claiming for genuine injuries to every single slip, trip and tiny bump over a short period of time or how much the payouts for these small claims have increased in the same period.

    Have you figures to back this up?


  • #83
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    Jurgen The German wrote: »
    How many businesses in the world can selling something for €500 end up costing the company literally millions of euro?

    How many businesses can sell something for €500 and not have to provide a tangible product or service?


  • #84
    Jurgen The German
    Closed Accounts Posts: 1,220 ✭✭✭Jurgen The German


    Boggles wrote: »
    How many businesses can sell something for €500 and not have to provide a tangible product or service?

    They are providing a service, they are protecting you, me and everyone else from being at a financial loss either through our own actions or because of the actions of others.

    Its not tangible, fair enough, but do you expect a handjob with your renewal notice or something?


  • #85
    GreeBo
    Registered Users Posts: 27,027 ✭✭✭✭GreeBo


    Boggles wrote: »
    5% of claims go to court. The vast majority of all claims are settled privately by the insurance company.

    Why does it matter if the claim is settled in or out of court?
    Money going out is money going out.

    Also, do you think they settle them out of court because its cheaper or more expensive than going to court?


  • #86
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    Jurgen The German wrote: »
    They are providing a service, they are protecting you, me and everyone else from being at a financial loss either through our own actions or because of the actions of others. Its not tangible, fair enough,

    Sorry forgot to add it's also a legal requirement. i.e a crime not to have.

    You brought other companies into it and what factors they operate under.

    What was your point exactly?

    Let's be honest if a company or companies fook a market where they operate a cartel selling a product that will land you in court or maybe prison for not having then that is entirely on them.

    I have zero sympathy for them or there bullshít rhetoric.
    Jurgen The German wrote: »
    but do you expect a handjob with your renewal notice or something?

    Now your onto something.


  • #87
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    GreeBo wrote: »
    Why does it matter if the claim is settled in or out of court?
    Money going out is money going out.

    It was in response to the narrative been pushed that all claimants are scumbag on the take that drag it through the courts to get the highest return.

    GreeBo wrote: »
    Also, do you think they settle them out of court because its cheaper or more expensive than going to court?

    I have no idea, like I said it is a guarded secret.

    If they were a little bit more transparent we would all know.

    They have been asked several times to be, but they won't do it.

    Why do you think that is?


  • #88
    GreeBo
    Registered Users Posts: 27,027 ✭✭✭✭GreeBo


    Boggles wrote: »
    How many businesses can sell something for €500 and not have to provide a tangible product or service?

    Betting shops?


  • #89
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    GreeBo wrote: »
    Betting shops?

    Betting on a horse is not a legal requirement.

    Also you get free tea and coffee in a bookies.

    :)


  • #90
    GreeBo
    Registered Users Posts: 27,027 ✭✭✭✭GreeBo


    Boggles wrote: »
    It was in response to the narrative been pushed that all claimants are scumbag on the take that drag it through the courts to get the highest return.
    That might be your narrative but I think, on this thread, the point is that they have massive outgoings. They settle privately to avoid going to court and potentially paying out twice as much.

    I have no idea, like I said it is a guarded secret.

    If they were a little bit more transparent we would all know.

    They have been asked several times to be, but they won't do it.

    Why do you think that is?

    Perhaps because its the crux of their business model?:rolleyes:
    What would be the point in having multiple insurance providers if they are all offering the same thing at the same price?


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  • #91
    Boggles
    Registered Users Posts: 39,502 ✭✭✭✭Boggles


    GreeBo wrote: »
    That might be your narrative but I think, on this thread, the point is that they have massive outgoings.

    And massive profits.
    GreeBo wrote: »
    They settle privately to avoid going to court and potentially paying out twice as much.

    Well then, publish the details, if they want reforms it has to be based on complete data, 75% of that data is a guarded secret.
    GreeBo wrote: »
    Perhaps because its the crux of their business model?:rolleyes:
    What would be the point in having multiple insurance providers if they are all offering the same thing at the same price?

    That wouldn't happen, how would it? Also I don't see the major problem

    Lot's of business offer the same product at comparible prices and they co exist.


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