Brexit and its effect on our insurance

Mrs. Crotta Cliach

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Behind a Sunday Times paywall, seems 16 (so far) out of 84 British insurance companies have decided to take a Brexit leave from Ireland. The blurb I got said 66 out of 84 companies.
Anyone know any more. and what do you think this will do for Irish insurance rates that are already far, far too high to afford?
 


Mrs. Crotta Cliach

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"Brexit will lead to the departure of 16 insurance companies operating from Britain and Gibraltar that write almost €1bn of premiums a year in the Irish market, according to the Central Bank of Ireland.

Its figures are the first official confirmation of how Britain’s decision to leave the EU is affecting the industry."

 

Lumpy Talbot

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No
Gibraltar. How curious. I'm assuming this will be some tax avoidance scheme ... either that or the Gibraltaroonian people are an unusually courageous bunch.
 

Mrs. Crotta Cliach

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Gibraltar. How curious. I'm assuming this will be some tax avoidance scheme ... either that or the Gibraltaroonian people are an unusually courageous bunch.
Why Courageous? I have a feeling Ireland will have no auto insurance available next year. Won't bother me.
 

cunnyfunt

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Behind a Sunday Times paywall, seems 16 (so far) out of 84 British insurance companies have decided to take a Brexit leave from Ireland. The blurb I got said 66 out of 84 companies.
Anyone know any more. and what do you think this will do for Irish insurance rates that are already far, far too high to afford?

What I know, is insurance companies are despots! If Brexit happens they'll spin it that prices will rise, deal or no deal. If Brexit doesnt happen, they'll spin it that prices will rise, deal or no deal. They're a bunch of kn.ackers, and our government will let them charge what they like, as they have skin in the game!
 

Watcher2

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Gibraltar. How curious. I'm assuming this will be some tax avoidance scheme ... either that or the Gibraltaroonian people are an unusually courageous bunch.
Insurance companies are worse than the tech companies for locating in offshore tax havens. Bermuda is riddled with the insurers.
 

Hillmanhunter1

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This thread is a classic example of how a lot of people have difficulty in dealing with large numbers, small numbers are so much easier to understand. That is why we are outraged when TDs get an extra grand, but are largely indifferent to the cost of servicing the public debt.

The British insurance companies referred to write 1bn a year in premiums. That sounds like an enormous sum, until you understand that the total Irish market in 2016 (most recent year I could find) was more than 114bn.

In other words these insurance companies account for less than 1% of the market.

Insurance.JPG
 

Mrs. Crotta Cliach

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This thread is a classic example of how a lot of people have difficulty in dealing with large numbers, small numbers are so much easier to understand. That is why we are outraged when TDs get an extra grand, but are largely indifferent to the cost of servicing the public debt.

The British insurance companies referred to write 1bn a year in premiums. That sounds like an enormous sum, until you understand that the total Irish market in 2016 (most recent year I could find) was more than 114bn.

In other words these insurance companies account for less than 1% of the market.

Insurance.JPG
Actually what I am more concerned about is what type of insurance is leaving: Auto, Home, Event. etc. At the moment it sounds like event insurance, but I doubt that will be all. I'd like to know what % of the auto insurance is leaving and what will that do to rates? Ditto home insurance.
 

raetsel

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What I know, is insurance companies are despots! If Brexit happens they'll spin it that prices will rise, deal or no deal. If Brexit doesnt happen, they'll spin it that prices will rise, deal or no deal. They're a bunch of kn.ackers, and our government will let them charge what they like, as they have skin in the game!
It's called market economics.
If 16 companies are writing less than 1% of insurance business in Ireland then it suggests there is quite a bit of competition in the market. It's not the government's job to intervene in the insurance market, unless there is evidence of cartels operating or other types of suppression of competition.
Is there any actual evidence of that?
 

cunnyfunt

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It's called market economics.
If 16 companies are writing less than 1% of insurance business in Ireland then it suggests there is quite a bit of competition in the market. It's not the government's job to intervene in the insurance market, unless there is evidence of cartels operating or other types of suppression of competition.
Is there any actual evidence of that?

There was a review of the industry think it was by Harney approx 15 yrs ago?? Irish firms back then were making approx 11 times the profits of their UK counterparts!

They're scum. Car 10 yrs old?........dont want to insure you or charge you more! Car a coupe?..........charge more. Engine 1.6 or bigger?..............bend over! Car fairly new?......bend over. They want to know your occupation................to see if there's an angle there to screw you. Want to know what milage you do.........again for more money. The penalty points system is another way they screw people. Have an endorsement on your license?......bend over big time!
Its simply heads they win, tails you lose. Scum.
 

Lumpy Talbot

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No
I'll never forget owning my first car and paying something like 500 punts for insurance when I was 17, which cleaned out my bank account and probably cost 50% of the price of the car.

One year later reasonably expecting that as I had gone through my first year of driving with no accidents or claims I got a quote for renewal for my second year, which turned out to be 100% of the price of the car at about a thousand punts which I just could not afford so had to sell the car.

I did ask about a no-claims bonus and for the mathematics involved in the quote, and of course got no answer except a line saying 'an appropriate no-claims discount has been taken into account' which was absolute balls, and clearly indicated to me that the mathematics were 'whatever the customer will swallow'.

It was one of the main impulses behind my decision to go and work abroad. I always had a sense with certain Irish services that (a) there was a cartel involved charging whatever it liked without being able to justify its numbers and (b) that there was almost certainly a kind of extraction involved not based on any risk metrics around insurance.

It was stick a finger in the air stuff. Strange how certain benefits of a wider market in goods and services never seem to make it to the Irish market. Then again I'm equally aware that the IMF and Troika are well aware of the operation of these awarded cartels in Ireland.
 

raetsel

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There was a review of the industry think it was by Harney approx 15 yrs ago?? Irish firms back then were making approx 11 times the profits of their UK counterparts!

They're scum. Car 10 yrs old?........dont want to insure you or charge you more! Car a coupe?..........charge more. Engine 1.6 or bigger?..............bend over! Car fairly new?......bend over. They want to know your occupation................to see if there's an angle there to screw you. Want to know what milage you do.........again for more money. The penalty points system is another way they screw people. Have an endorsement on your license?......bend over big time!
Its simply heads they win, tails you lose. Scum.
I live in the UK. Those questions are standard on a UK insurance application and they base their loadings on the answers there as well. If you have penalty points, do a high annual mileage or own a more powerful car, it is obvious that you will be loaded. Also, statistically, for whatever reason, people working in certain occupations make more claims ad therefore present more risk also.
Older cars also present greater risks as well.
Part of the problem is the level of payouts in Ireland.
payouts for soft tissue injuries here are more than three times that seen in Britain, and account for about 80% of all payouts – again, way ahead of the international norm.
I live in the north, and am aware of another obvious problem: the standard of southern drivers is a problem - seriously, at least partly because of the way "L" drivers have been allowed for years to drive unsupervised. That's no way to learn. As a consequence, when you see a driver blatantly doing stupid things on the road up here, e.g. an illegal manoeuvre like a U turn on a busy thoroughfare, chances here is that it is a southern registered car.
I can't find anything on profit levels though, but it is clear that government legislation on claim awards and bogus soft tissue injury claims particularly, would bring down costs, as would an effort to improve driving standards.
 

Hillmanhunter1

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A couple of comments about understanding the insurance industry:

Firstly, commentators need to understand the "insurance cycle". It is fairly immutable and goes a long way towards explaining why premium levels and profitability vary from year to year.
What Is an Underwriting Cycle?

Secondly, simply looking at the profit numbers tells us nothing about the profitability of any business, including insurance. To calculate profitability you have to look also at the quantum of capital that was allocated to generating that profit.

Moving on from these, there are clearly several problems in Ireland on the claims side of the business:
- "manufacturing claims" appears to have developed into a cottage industry;
- it seems to be suspiciously easy to obtain a sympathetic but vague medical report;
- no-foal no-fee lawyers reduce the downside risk of an unsuccessful "speculative" claims; and
- insurance companies are not robustly challenging claims that they suspect are fraud (and are not reporting them to the police.

Leaving aside the last one for a moment, all of the other factors are outside the control of the insurance companies, and are not their responsibility to fix. They just price these costs into their model and the punter pays.

Regarding paying on suspicious claims I suggest there is a need for the Central Bank (as a regulator with an explicit mandate to protect consumers) to step in here and introduce a rule that prohibits insurance companies from paying on a claim where they have reasonable grounds to suspect fraud, and requiring them to report these suspicious claims to the Gardaí for investigation.
 

Lumpy Talbot

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No
Insurance companies will always pad their invoices. It is a no-brainer. They will also allocate any negative costs across their entire base of customers, so it doesn't pay them to investigate claims very far if they are under a certain level. It can just be allocated to next year's premiums.

It is part of their business model. If car drivers were actually paying on the basis of their personalised risk profile then premiums would be much lower.

Best solution? Almost impossible for any family with two or three kids living in the sticks but I got rid of my last car twenty years or so ago and haven't owned one since.

I may have to scoot around the UK next year a bit but I'm thinking motorbike, as I don't want to be bothered with the nuisance of having to catch a train to London to get a train back out somewhere else in the south or midlands.

Had to hire a van for removals purposes occasionally, but the last move I hired a lad to do the box carrying and driving.
 

cunnyfunt

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I live in the UK. Those questions are standard on a UK insurance application and they base their loadings on the answers there as well. If you have penalty points, do a high annual mileage or own a more powerful car, it is obvious that you will be loaded. Also, statistically, for whatever reason, people working in certain occupations make more claims ad therefore present more risk also.
Older cars also present greater risks as well.
Part of the problem is the level of payouts in Ireland.

I live in the north, and am aware of another obvious problem: the standard of southern drivers is a problem - seriously, at least partly because of the way "L" drivers have been allowed for years to drive unsupervised. That's no way to learn. As a consequence, when you see a driver blatantly doing stupid things on the road up here, e.g. an illegal manoeuvre like a U turn on a busy thoroughfare, chances here is that it is a southern registered car.
I can't find anything on profit levels though, but it is clear that government legislation on claim awards and bogus soft tissue injury claims particularly, would bring down costs, as would an effort to improve driving standards.

In relation to the point about higher risk categories, you could be driving claim free here for 20+ yrs............ and still see your policy rise. #joke
 

raetsel

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In relation to the point about higher risk categories, you could be driving claim free here for 20+ yrs............ and still see your policy rise. #joke
That's the same in the UK. I'd guess its the same anywhere. I haven't had a claim in over 30 years and yet faced a considerable premium hike last year, but that was a result of market conditions generally. It happens. Costs rise, inflation plays a part.
From what I know of the stock market, I don't believe that the insurance sector or the financial sector generally is any more profitable than any other industrial or commercial category over time, so it is impossible to claim that you are being overcharged for insurance any more than for a pint of beer, unless you have concrete evidence to support it.
That link that you provided claiming that there was a rip off due to a 1300% profit growth actually proves nothing because there was no context. 17 companies making profits of €16m one year, rising to €227m the next, doesn't explain very much without knowing what the return on investment figure is compared to other companies. For the paper to claim that it is a rip-off without context is idiotic.
 


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