Yeah, it's really the claims causing insurance spikes...

13-06-2019 8:47am #1

https://www.independent.ie/business/personal-finance/the-great-motor-insurance-ripoff-profits-jump-1300pc-for-insurance-firms-38215319.html

Charlie Weston wrote:

Insurance companies have enjoyed a profits surge from covering homes, drivers and businesses.

Profits have jumped by a staggering 1,300pc, despite the country being gripped by an insurance crisis.

New figures from the industry show 17 general insurers in this market made combined operating profits of €227m in 2017, the latest date for overall data on the sector.

These profits were up from €16m in 2016, according to Insurance Ireland - equal to a rise of 1,318pc.

Motor cover proved hugely profitable in 2017.

The 17 domestic non-life insurers made combined profits of €125m from private and commercial motorists.

So for years we have been hearing that the massive increase in costs is ALL down to the cost of claims.

And a very strong point made here, not followed through on other than a soundbite from the Insurance sector

Pressure group Alliance Ireland questioned how much money insurers are repatriating to their parent companies.

Peter Boland of the Alliance said: "This figure has distorted performance in the past."

He said the Central Bank forced insurers to bump up their reserves in 2015. Insurers will now find they have over-reserved and will be able to boost their profits by writing these back.

13-06-2019 9:13am

The insurance sector is essentially a cartel driving up prices in unison. Claims are a convenient smokescreen.

Hedgelayer · 13-06-2019 9:20am

[Deleted User] wrote: »

The insurance sector is essentally a cartel driving up prices in unison. Claims are a convenient smokescreen.

That's for sure, there's no balance of morals in the insurance industry.

There was a time when you took out insurance and the onus was on the insurance company to look after their customers....

Now the insurance companies needs the customers to look after the insurance company.

Masterfully they turned their responsibilities the full circle and made the customers pay for their selfish agendas.

Almost like a mass hypnosis...

V8 Interceptor · 13-06-2019 10:15am

I remember a few people on here defending insurance companies as if their lives depended on it. They could do no wrong.

Hedgelayer · 13-06-2019 10:27am

V8 Interceptor wrote: »

I remember a few people on here defending insurance companies as if their lives depended on it. They could do no wrong.

That's because More than likely they work in the industry and their livelihood depends on it.
They're probably going to staff meetings patting each other on the back, knowing full well they're fleecing us all, building up their wages and having more benefits.

And dare anyone suggest in the meetings that this is wrong and they'll be public enemy in office and with the management.

I worked in the corporate world in the early 00's they were absolutely ruthless back then.
It takes a certain mindset to be an absolute vvanker.

I sometimes watch Jordan Peterson and others lecturing about narcissism and borderline personality disorder.
And you'll witness that in big cooperation and boardroom meetings.

If you told people of that ilk they've narcissistic undertones, they'll Google narcissism and actually wear it like a badge of honour.

These people are not like normal people, they're wired totally different.

It goes very deep

steamsey · 13-06-2019 10:48am

A lot of the key players in the insurance industry in this country are essentially in a boys' club. They all know each other - brothers, cousins, uncles - it's massively incestuous.

They watch the market to see what it can bear. When they feel the market can take it, they start rolling out their claims stories and jack up their premiums. There is no direct link between higher premiums and higher claims - the link actually is between higher premiums and the market's ability to pay same.

We desperately need competition independent of the current boys' club.

They are fleecing us - there is no doubt about it. It's a rotten, rotten industry.

What really irks me is that we are required by law to have motor insurance but are then thrown to the wolves to get a policy. I'd much prefer government based not for profit insurance for mandatory insurance types.

Del2005 · 13-06-2019 10:54am

[Deleted User] wrote: »

The insurance sector is essentially a cartel driving up prices in unison. Claims are a convenient smokescreen.

You think that they would do all this for €13m each? It also does not mention if its before or after tax. That's tiny profits for such large companies.

Where is the article on the profits our legal system is making from the claims culture? Don't forget where the judges who make the awards are selected from.

Hobosan · 13-06-2019 11:00am

steamsey wrote: »

A lot of the key players in the insurance industry in this country are essentially in a boys' club. They all know each other - brothers, cousins, uncles - it's massively incestuous.

They watch the market to see what it can bear. When they feel the market can take it, they start rolling out their claims stories and jack up their premiums. There is no direct link between higher premiums and higher claims - the link actually is between higher premiums and the market's ability to pay same.

We desperately need competition independent of the current boys' club.

They are fleecing us - there is no doubt about it. It's a rotten, rotten industry.

What really irks me is that we are required by law to have motor insurance but are then thrown to the wolves to get a policy. I'd much prefer government based not for profit insurance for mandatory insurance types.

People could try pooling their money together and form their own insurance group, without paying any premium. Unfortunately, the public are in such dire straits, that they'll sooner trust fleecers like this with their money than their own neighbours.

A fairly sad indictment of the state of the country that such a simple and massively cost effective solution like that is beyond us.

Henry Ford III · 13-06-2019 11:46am

V8 Interceptor wrote: »

I remember a few people on here defending insurance companies as if their lives depended on it. They could do no wrong.

Insurance co's aren't saints. They can and do make mistakes. They are there however to provide a product/service and with a view to making profits by doing so.

There's then the usual semi informed hysterical reaction to such an announcement.

Here's the thing though - if such bumper profits were sustainable we'd be awash with new profit hungry ventures looking for a slice of this hugely attractive market.

We're not though - so the entire argument falls over.

p.s. I paid considerably less for motor at the last renewal.

cruizer101 · 13-06-2019 11:49am

This might be of interest here

Thoie · 13-06-2019 11:55am

A year or so ago the Insurance Federation had an ad out saying something along the lines of "false claims add €50 to your policy - they're taking the money out of your pocket". That didn't explain why my motor policy renewal had gone up over €300 that year with no claims, no incidents, no change in circumstances.

I shopped around and got a far more reasonable price, but I still can't see any justification for such a large jump other than "chancing their arm".

Eggs For Dinner · 13-06-2019 1:39pm

Analyse the figures. 17 insurers made 16m profit in 2016, that's 941k each. Do you know how precarious that is, given the amount of gross premiums generated? Obviously, some made more than others but that means some lost money. Losing money means players leave the market and prices rise

Forget sensationist headlines about % increases, profit was only an average of 13m each in 2017 with 84m of the total coming from property insurance, not the problem areas of liability and motor injuries. The article also states that a big chunk of profit came from investment, which is fine, but you can't base your business on investment covering losses made in claims.

Insurance is too damned high in Ireland, but thinking that Insurers have targeted Ireland to ride it's customers for excessive profit is ignoring the facts. Clams and the cost of claims are unsustainable

13-06-2019 1:42pm

Eggs For Dinner wrote: »

Analyse the figures. 17 insurers made 16m profit in 2016, that's 941k each. Do you know how precarious that is, given the amount of gross premiums generated? Obviously, some made more than others but that means some lost money. Losing money means players leave the market and prices rise

Forget sensationist headlines about % increases, profit was only an average of 13m each in 2017 with 84m of the total coming from property insurance, not the problem areas of liability and motor injuries. The article also states that a big chunk of profit came from investment, which is fine, but you can't base your business on investment covering losses made in claims.

Insurance is too damned high in Ireland, but thinking that Insurers have targeted Ireland to ride it's customers for excessive profit is ignoring the facts. Clams and the cost of claims are unsustainable

That was after the regulator instructed them to increase their claims reserve.
So they were able to drastically increase their reserve and STILL post a profit. Do you see how little the claims hurt them, if they were able to do that?

The reason that their reserves were so low, in the first place, is that they could send all their money back to the parent companies.

Fanny Wank · 13-06-2019 3:02pm

Eggs For Dinner - your attempts to bring rational conversation to a "debate" fuelled by sensationalism is admirable. However you are wasting your time

People who don't know how an insurance company is run want to spout nonsense & claim "my car insurance would be 100 quid a year if it wasn't for those nasty companies ripping me off". You're wasting your time - people don't want sensible, rational debate based on facts

One last comment (despite promising I'd never get sucked into this again) - I keep hearing profits are "excessive". Define excessive? Most insurers probably target 5-6% margin on premiums. Profits/losses are very volatile and cyclical. They won't make 5-6% every year. Hundreds of millions of losses were racked up in the years pre 2016.

Eggs For Dinner · 13-06-2019 3:29pm

I fully understand everyone's frustration with insurance. Premiums are TOO DAMNED HIGH. I just believe the reason behind it is not excessive profit

mgbgt1978 · 13-06-2019 8:39pm

The Directors/Board Members don't mind paying themselves six-figure sums either (even in the lean years

)......all before the Net Profits are announced.

NIMAN · 13-06-2019 8:56pm

The insurance companies were telling us only s few years ago that there was very little profit in their business.

Henry Ford III · 14-06-2019 9:50am

Take average profits over any 5 year period and they are right.

V8 Interceptor · 14-06-2019 7:43pm

Hedgelayer wrote: »

That's because More than likely they work in the industry.

By rights they should come back on now and apologise for their lies and deceit.

V8 Interceptor · 14-06-2019 7:45pm

Henry Ford III wrote: »

Insurance co's aren't saints. They can and do make mistakes.

Mistakes???

CiniO · 19-06-2019 1:05am

Every obligatory insurance should be operated by state-owned non-profit insurer.
So all car third party insurance should be covered by that.

Then commercial insurers should compete for customers in other fields. And competition would make prices competitive.

On the other hand, it's sad to admit, that even though not required by law, many types of insurance policies are pretty much a must - like most policies covering businesses.
Would anyone be brave enough in Ireland to open even a tiny icecream shop and not buy public liability insurance, knowing that any idiot can come into their premises, slip on a floor, break a leg, and demand millions ?

There's so much wrong with the whole insurance industry in Ireland, that's it's hard to even think about it.

Eggs For Dinner · 19-06-2019 7:32am

CiniO wrote: »

Every obligatory insurance should be operated by state-owned non-profit insurer.
So all car third party insurance should be covered by that.
.

I would, in principle, agree with state run motor liability insurance. However, unless you tackle the money leaving the system in claims (genuine and fraudulent) and legal costs, it isn't going to be any cheaper

Does anyone real!y think that a non-profit government department, administered by civil servants would be cheaper?

dr.fuzzenstein · 25-06-2019 7:18pm

Meanwhile in Germany insurance for my 15 year old, 2 liter diesel, 136 hp Cmax has dropped to just below €500.
I am still building up no claims bonus*, so this will drop further.
I'm sure this has absolutely nothing to do whatsoever with the fact that light whiplash with no lasting damage is rewarded with €600 to €3000 here and an absolute minimum of €12500 in Ireland, with a far higher instance of whiplash at any speed the Irish mysteriously seem to suffer from.
Must be a genetic weakness of the neck, cause, as people keep pointing out, absolutely no one in Ireland would ever dream of pocketing an easy few grand for "ow, my neck hurts a bit..."

*no claims in Ireland is a maximum of 5 years, while in Germany it is far more than that, up to and even more than 25 years. I had far more in Ireland, but no insurance company would certify that.
My insurance was nearly €700 in the first year. The insurance rep even apologised that it was so outrageously high.
Had i made the move the other way round, I'm sure I would have paid north of €2k.
And we have some of the same insurance companies in Germany, for some reason they don't charge an arm and a leg for car insurance.

25-06-2019 7:36pm

Just as an aside.
Without a claim, I have had whiplash. Didn't realise it at the time and now, 15 years later, I am in pain quite regularly given my desk based role and decreased sport fitness.

Painful enough that I can feel nauseous, if I am seated too long (say a flight). Had I known then just how long I would have symptoms and just how frustrating it would be I damn well would claim.
Problem with it though? Impossible to diagnose, so massive fraud, and often takes years for the full effect to be felt.

V8 Interceptor · 09-07-2019 11:56pm

Insurance industry head honchos were doing some squirming at the Dail Committee today.

Yeah, it's really the claims causing insurance spikes...

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