I always use an excellent insurance broker for all my insurance business and it helps that the senior partner (a friend) lives in the same area as me and drives decent cars, so I know that he will get the best rates for large houses and good cars for our postcode.
The renewal notice came round yesterday with a renewal premium from NU of £1,520 - an increase of about 40%. Fortunately, the broker had found Zurich who would bring it back to something more sensible - still just over £1,000 - but what I expect and am used to.
We have had no claims for over three years and no change to circumstances in the same period, so why increase the premium so much? They were asking me to take my business away. Why?
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Espada III - well if you have a family and need a Lamborghini, what else do you drive?
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Most of this year NU have been offering lowest quote price promises and losing money on policies to increase their market share (my sister works for them) - your increase is a way of them recouping some of the money - you are wise and are changing, they are banking on plenty of others not doing so.
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Yep NU have been quite aggressive for new business they took 30% off my renewal from another co so I went with them as a new customer.
A few weeks after getting their policy I rang them posing as a new customer and in that time they had trimmed another £60 off the figure they gave me in the first instance so it seems they are very keen to get new customers.
As always
Mark
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They don't care.
Cheap quote to start off with gets your business. One year down the line, the renewal notice arrives, which is an increase on what you used to pay.
You, me, and probably most other people here then shop around for a better deal. For every one of us, however, there are at least two people who just accept the renewal quote. Not necessarily daft people either, just people who either are unaware or unable to shop around. No idea why.
I have phoned existing insurers and sked them your question. They had no real answer, but weren't prepared to lower their quote to keep my business. I can only assume they have worked out that this is the most lucrative business model.
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I have just renewed my car insurance with Frizzel/Liverpool Victoria. I went to the confused.com site and found 7 quotes cheaper than my quoted renewal but some didn't include legal cover and some had high XS and I hadn't heard of most of them either. The only one that exactly matched the requirements I had put in my data was £10 cheaper, on a premium of £215, and was from a firm called Masterquote. For £10 I couldn't be bothered to change. NU quoted £261 for the same risk and didn't even include a courtesy car!
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Part of the reason might be that NU are trying to recoup the £28 million which they lent to Ipswich town football club when they were briefly in the premiership and have been told not to expect it ever to be repaid.
Now isn't that good business knowing how finacially stable and solvent most football clubs are especially those who are relegation candidates.
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It has been my view for some years that the financial services industry puts little effort in to customer retention, until very recently their marketing activity has been exclusively directed towards customer aquisition. This perhaps make sense in the mortgage market where each time a customer moves from lender there is an opportunity to charge survey fees, set up charges etc, all of which additionally generally get added to the loan and increase the lender's revenue ongoing.
However when it comes to car insurance I would guess that the reverse would be that case, i.e. it is in the insurance industry's interest for individual company to retain customers by offering competitive renewal quotations. For instance if my insurance costs me £400 and the renewal is £450, I might shop around and get a deal for perhaps £380/£400 from another company where as if I had been quoted £420 upon renewal I probably would stick with it due to the hassle in changing and thus the value of my business to the insurance industry in general would be optimised.
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True cheddar - but the real cost of your £400 policy may be nearer £600, so in year two they want £800. As all insurers are fighting for customers you will never get a true cost policy as there will always be one selling below actual cost. You call one and they say £600, but you have a quote for £400 from another - would you pay £600 now on a vague promise that it would only go up to say £650 the year after, or would you pay £400 now and change after one year?
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On the other hand how lucky have i been.
24Th Oct changed from "Churchill" with whom i have been insured for the last 6 years TPFTto the AA fully comp protected.Cost to change £80 extra cost for the year £240.Car 97 TD Mondeo Estatewityh 10K on the clock.
Monday AM accident with Mr Myopic leaves the car dented to the tune of £1000- £1200.Car is being repaired ( surprisingly) and goes in tomorrow, bodyshop cannot start it untill the 16Nov, coutesy car F.O.C it's included in the policy along with legal cover.How glad am i that i am insured FC?
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Correction
103K on the clock.
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I got a shock this year when I received my 2nd year renewal quote from Privelledge insurance, the renewal quote was nearly £20 less than the first year. I still rang/surfed around though and only found one company, More Than, that gave a £12 lower quote, which did not include a courtesy car, whereas Privelledge did, so I renewed with Privelledge. Most of the other quotes were quite a bit higher too.
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I seem to recall reading somewhere that the insurance industry makes a loss on car insurance, and that it is subsidised by other forms of insurance. In my case, a total loss accident would wipe out 27 years worth of premiums. And that would only cover replacing the car. A total loss accident could well entail all manner of other costs such as compensation claims, damage to property other than the vehicle(s), hospitalisation costs, removal and storage of damaged vehicles etc etc. Even a minor accident these days can wipe out several years worth of premiums. I sometimes think that my insurer is doing me a favour by insuring my car.
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L\'escargot.
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More realistic to say a total-loss accident would wipe out the premiums of 27 people for a year. Same sum, but presented differently. Put in that context, with the relative scarcity of total-loss accidents per insured car, and I can assure you that motor insurance is still profitable in the UK, provided you are prepared to sacrifice major market share to concentrate on your known, quality business.
$$
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