Competition watchdog the Office of Fair Trading (OFT) has reached agreement for limiting the use of a tool produced by credit reference company Experian over fears that it could lead to illegal price co-ordination. Seven insurers and two IT companies have agreed to limit the information they share and the OFT has warned that the …
WhatIf? Private Motor
So do questions still remain about the motorbike and home insurance versions.. or is what If gone for good? Having used whatif all I can say is is the biggest steaming pile of poo I have ever seen! but being made by experian I'm not surprised. I doubt this will really make much difference as a lot of insurer systems rely on the common EDI structure to provide best rate matching for customers so, this kind of rate extraction is too easy to do anyway, experian just did it, and sold it. and using the comon structure allows for aggregator websites to find the best prices too.
Aggregator sites have allowed millions of quotes to be generated effectivly acting as a massive stress test on everybodies rating engines, of couse they only sold the cheapest policies and hundreds of pounds could be saved, this seriously hurt the insurance market which has resulted in massive price hikes across the board with poliices this year looking to be at least 30% higher than last years cheapest...
As everybody knows, the big insurance companies operate as a cartel, raising premiums almost identically to boost profits, rather than for any proper reason, like a rise in claims.
Everybody presumably knows that operating a cartel is one of the few things that you can be sent to jail for, under the Companies' Act.
Seeing as how motor insurance is a legal requirement here in the UK, I neer understood why it couldn't be provided, at least in a very basic form, by the state, at cost. Surely if whole "private industry can do it cheaper and better" mantra has any truth behind it then private insurers could still compete on price, and if they are unwilling or unable too then they could provide a much greater level of service, much like BUPA does for healthcare.
More money in everyone's back pocket and a significant downsizing of an industry generally considered to be parasitic, I don't see that this idea has a downside (well a few call centre workers and insurance adjusters will lose their respective "jobs")
No Claims Incentive..
Providing Third Party Only cover with Road tax is a neat solution however is far to open to abuse, At present some people are inclined to settle small claims personally so as not to prejudice a large no claims discount, without this incenticve all of the small claim would hit the system too only leading to increasd costs for all.
The reson claims have gone up so drastically is because the market is correcting itself after the website aggregators pointed everyone to a whole in someone elses rating structure 'saving' them hundreds of pounds.. now they have to pay it back..
not forgetting that we have also had a lot of snow claims here in the UK. and also for some reason claim profiles are changing, there are no longer just two cars to fix, the councils claim and now every passanger claims too.. what used to be two payouts per claim is now on average five payouts per claim.
they and their ilk behind the Credit Score here in the US are a law unto themselves... opaque measurements based on often inaccurate data with no real recourse for the person being scored or a sensible way to provide input to the system.
recently the providers have, um, colluded to come up with an "insurance score" which uses a subset of your credit history to decide if you're a good/bad insurance risk ... not your driving record, your age, where you live ... but the balance on your credit card.
Because I have the nasty habit of using the credit card companies money - I keep a high revolving balance so for 30 days money is earning me interest (and my credit card even gives me an extra 1% cashback!) but I always ensure I have cash on hand to cover the amount owed - I am deemed to be a credit risk ... as a result my insurance quote just more than doubled with an insurer who I've been with - accident free - as long as we've lived in the US. Luckily in this case a phone call sorted the problem out, but as automated schemes like this gain more credibility people will be forced to change their common sense behaviour to follow some hidden rules designed to make life more rewarding for those offering credit and insurance.
I agree with Pypes ... a basic "at cost" scheme provided by the state with optional private "top up" options would be the way to go and force a fairer playing field
Additional Assessment factors?
Do you collect Nectar points, Clubcard, or any other loyalty points for your shopping?
Does your Supermarket now offer Insurance?
Do you think that bottle of sherry you buy every week for Aunt Jenny might boost your car insurance quote?