Originally Posted by coylemj
Doesn't each pillar of the insurance business have to stand on it's own merits?
With all the controversy about motorists getting screwed by insurance, I've heard the blame laid at the doors of generous judges, exhorbitant legal fees, staged accidents etc. This is the first time I've heard that bad weather in the previous year can be a factor!
Each portfolio is underwritten to stand on it's own merits, but it doesn't have to. If an insurer incurs significant claims in one sector, it will look to make up the shortfall on other business. It has always been so
Even big events in other countries or continents affect your premium. All insurers lay off part of their exposure to the global insurance market for a share of the premium. It's called Reinsurance. Irish based insurers often accept, for example, a share of flood cover from an insurer in France. If things go well, it adds to the bottom line. If it goes bad, profits are reduced. Both outcomes influence what the insurer is able to quote you for your car