Car Insurance: Still losing money
The article in Broking shows that car insurance is still losing money - the best view is that for every £100.00 received by the insurers, they pay out £116.00 - and it could be a lot higher.
So why all the adverts?
You can see hundreds of adverts online for car insurance sold by aggregator websites. Why is this the case when the insurance companies are losing billions selling car insurance?
The first point is that most companies advertising on aggregator websites are not in fact insurance companies - they are insurance intermediaries and to them the fact that the companies that actually insure the car are losing money is neither here nor there - as long as they get their commission. The same is true of the aggregator itself. They get their money when a policy is sold through their website, irrespective of whether it has been sold correctly, the cover provided, the claims service of the insurer/ intermediary or whatever.
There are only a few insurance companies that do not sell through aggregator websites e.g. Aviva, Direct Line and they have to advertise constantly to persuade people to visit their websites as well as the aggregators (to preserve market share - although why an insurer would want a large slice of a loss-making product I do not know)
In fact one remedy for insurers would be to pull the plug on intermediaries who sell through aggregators - statistics show that policies sold face to face through insurance brokers have much better loss ratios.
Currently we are carrying a 15% increase of rates through our main insurer year on year - this compares to the market increase of 40% - and our insurer is happy with the loss ratio of policies sold through brokers.
In fact in a few months it is likely that the best deals in terms of cover, service AND price will be found in the local insurance broker market. Why not call us for a free quotation and get some proper car insurance?
For more information contact JB Portwood john.portwood#portwood.co.uk