Post new topic Reply to topic  [ 129 posts ]  Go to page 1, 2, 3, 4, 5 ... 9  Next
Author Message
 Post subject: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 11:07 am 
Offline
Nationalised
User avatar

Joined: Jan 1, 1970
Posts: 22165
I got an insurance renewal advisory last week. Words fail me... but I'll try.

Clearly I'm a bit late to this part of the story. However, it struck me that the rapid inflation in the motor insurance market make serve as a final canary in the coal mine of run away costs of living. A topic that has been discussed on the pin for some time but may now be ripping through vital day to day economy.

Marking a destructive phase while the usual powers that be are fairly asleep at the wheel. Including taxes, there seems to be an insidious pattern of broad-spectrum rising costs that may have passed a viable threshold, the effects of which are yet to be fully realised, but have they begun in earnest?

Does the recent undershoot in VAT returns possibly mark beginning of another serious contraction in the economic double-miracle-whip Irish economy?

Quote:
Tax revenues came in below target in July due to a shortfall in VAT receipts, while corporation taxes and excise duties also came in lower than expected. The figures indicate that consumer spending growth may have slowed in the run-up to the Brexit vote...

...“Slightly worryingly, the figures show VAT receipts continuing to lag behind target. If this trend accelerates post Brexit, we could see the VAT figures falling further behind at the end of September. A resultant drop in VAT receipts could impact on the scope for tax cuts or spending increases in the Budget,” said Mr Vale.

“On the positive side, income tax figures remain on track, reflecting the strong labour market. Again, it will likely be some time before we see the impact of Brexit flowing through to the tax numbers, he added.

http://www.irishtimes.com/business/econ ... -1.2743899


No idea why they punch in the Brexit segway... people still know the names of the twelve months of the year. Perhaps they are trying to offload the cause by conflating the issue in the readers mind with Brexit.

Meanwhile over at finfacts

Quote:
Dublin 14th most expensive of 20 global cities to live/ work

Savills says that the European cities have shown mostly modest rental growth in local currencies but the strengthening of the euro since December has made them slightly more expensive in dollar terms.

The exception is Dublin which has seen an overall live-work increase of 6% in euro terms, fuelled primarily by a big bounce in office rents from low post-financial crisis levels, and especially in the creative/tech sector. This compares to a 3% rent rise in Berlin and 1% in Paris.

Despite their small size, both Berlin and Dublin look very good value to businesses looking to locate within a large and prosperous economic region. Annual accommodation costs in these cities are among the lowest in the Savills live-work index and comparable to Mumbai and Lagos.

Big foreign-owned companies can be sanguine about rising rents in Dublin but it's not good news for local startup firms. Dublin also lacks quality budget hotels and overnight rates now exceed the peaks of the bubble years of 2006 and 2007.

http://www.finfacts.ie/Irish_finance_ne ... e-work-673

_________________
Follow The Pin - https://twitter.com/dailypinster

"Politicians are always realistically maneuvering for the next election. They are obsolete as fundamental problem-solvers." - Buckminster Fuller

"I was comfortable with a couple of banks being married today, instead i wake up and find I'm married to the banks." - Catbear

Image


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 1:34 pm 
Offline
Holiday Home Owner

Joined: Nov 11, 2012
Posts: 302
My car insurance came up for renewal last week. I paid 340 last year. This year, the lowest quote I could get (I phoned 7 insurers) was 541 - that's almost a 60% increase. That 541 quote was received from my current broker and they reduced their admin fee for me by 30 euro.

I'm gobsmacked at the extent of the increase. Is it a Canary? Possibly.

_________________
"All that is necessary for the triumph of evil is that good men do nothing. " - Edmund Burke


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 2:03 pm 
Offline
Real Estate Developer

Joined: Jun 14, 2012
Posts: 757
I've decided to learn to drive and get a car because the service provided by Dublin Bus is just so dire (previously I lived in countries with excellent public transport and fantastic cycle lanes). Anyway, the *only* quote I got was for €3500, most insurers wouldn't even quote me.


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 2:31 pm 
Online
Nationalised
User avatar

Joined: Jan 4, 2013
Posts: 16417
Location: To the right of the decimal place
I can't figure out why it's gone up though. Of course legal fees are obscenely high, and some awards are also (even MSM is now writing stories about how PIAB should be obligatory for non-contested cases, to remove legal fees and award variation). However it's not clear what's changed since a year ago. A representative of the insurance insurance industry was on Pat Kenny yesterday and was asked a pointed question -- are there more claims, or have the amounts gone up? He obfuscated and avoided answering.

Surely there are only a small number of variables:

- The number of claims
- The size of awards
- The amount of legal fees
- The return on invested premiums
- Misc overheads of the insurance company
- The profits of the insurance company

Which one has changed by 30% in the last 12 months? No-one's saying, and no-one's even forcing an answer from the industry. Just loads of hand-wringing media about how prices are rising.

_________________
Success is like being pregnant. People will congratulate you, but no one knows how many times you were fucked before you got there.

"You see a mousetrap, I see free cheese and a fucking challenge." --Scroobius Pip


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 3:37 pm 
Offline
Property Magnate

Joined: Oct 10, 2010
Posts: 659
Location: the airport
Mantissa wrote:
Surely there are only a small number of variables:

- The number of claims
- The size of awards
- The amount of legal fees
- The return on invested premiums
- Misc overheads of the insurance company
- The profits of the insurance company


or regulations setting aside how much capital they should hold maybe?

Interest rates at zero will certainly be having an affect on these guys


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 4:47 pm 
Offline
Old Time Landlord

Joined: Mar 2, 2010
Posts: 380
Try kennco. I had similar problems. It won't be cheap but you should get something in the 1100 range. Also, BOI are surprisingly cheap for some people. Good luck.

croquette wrote:
I've decided to learn to drive and get a car because the service provided by Dublin Bus is just so dire (previously I lived in countries with excellent public transport and fantastic cycle lanes). Anyway, the *only* quote I got was for €3500, most insurers wouldn't even quote me.


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 5:21 pm 
Offline
Planning Tribunal Attendee

Joined: Jul 31, 2011
Posts: 1298
Was there another bankrupt company last march?

Quote:
In his written response, Noonan said the figures relating to 2015 are still being compiled.

However, the available figures showed insurance companies paid out €1.01 billion in 2014. This is less than the €1.5 billion paid out in 2011 and €1.06 billion paid in 2012. Just over €987 million was paid out in 2013.

McGrath said the figures show the amount paid out in claims in 2014 was 36% less than the amount paid out in 2011.

http://www.thejournal.ie/insurance-prem ... 9-Jul2016/
claims are falling down.


I came across 2014 numbers for Europe (Section C, p 31):
http://www.insuranceeurope.eu/european- ... ce-markets

_________________
Why is it so windy here?

This is my best finding this year:
06/2007: Central Bank predicts soft landing for housing
http://www.independent.ie/business/iris ... 96858.html
It's all grand


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 5:33 pm 
Online
Nationalised

Joined: Sep 29, 2010
Posts: 7821
Location: London, innit
Image


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 5:57 pm 
Offline
Too Big to Fail
User avatar

Joined: Mar 7, 2012
Posts: 3113
Location: Lovely Leitrim
I think ZIRP has a large part to play in this as the firms can no longer nake gains on their investments so are squeezing consumers. Another example of confiscation following the bailout of financial institutions.

_________________
If Monday was a browser it'd be IE.
Snapchat has replaced facebook as the imbeciles tool of choice.


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 6:01 pm 
Offline
IMF'd

Joined: Sep 13, 2007
Posts: 30950
Location: Tullamore
macannrb wrote:
Mantissa wrote:
Surely there are only a small number of variables:

- The number of claims
- The size of awards
- The amount of legal fees
- The return on invested premiums
- Misc overheads of the insurance company
- The profits of the insurance company


or regulations setting aside how much capital they should hold maybe?

Interest rates at zero will certainly be having an affect on these guys

Yep. And QE driving bond rates down. Insurers will hold a good proportion of their capital in AAA sovs. It now costs them money to buy there... well done ZIRPers, you've generated inflation... there still won't be wage rises as a result...

_________________
"It is impossible to design a system so perfect that no one needs to be good."

So long and thanks for all the fish.


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 7:06 pm 
Offline
Under CAB Investigation

Joined: Apr 9, 2014
Posts: 1633
Mantissa wrote:
I can't figure out why it's gone up though. Of course legal fees are obscenely high, and some awards are also (even MSM is now writing stories about how PIAB should be obligatory for non-contested cases, to remove legal fees and award variation). However it's not clear what's changed since a year ago. A representative of the insurance insurance industry was on Pat Kenny yesterday and was asked a pointed question -- are there more claims, or have the amounts gone up? He obfuscated and avoided answering.

Surely there are only a small number of variables:

- The number of claims
- The size of awards
- The amount of legal fees
- The return on invested premiums
- Misc overheads of the insurance company
- The profits of the insurance company

Which one has changed by 30% in the last 12 months? No-one's saying, and no-one's even forcing an answer from the industry. Just loads of hand-wringing media about how prices are rising.


To the best of my knowledge all Irish insurers lost money in 2015. For example FBD lost the guts of €100m and they have less than 20% market share.

What is often overlooked is that insurance costs fell substantially in the last couple of years and even after current rises remain below their 2009 levels. But than again nobody ever complains when prices are falling :)


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 7:14 pm 
Online
Nationalised
User avatar

Joined: Jan 4, 2013
Posts: 16417
Location: To the right of the decimal place
Luan wrote:
Mantissa wrote:
I can't figure out why it's gone up though. Of course legal fees are obscenely high, and some awards are also (even MSM is now writing stories about how PIAB should be obligatory for non-contested cases, to remove legal fees and award variation). However it's not clear what's changed since a year ago. A representative of the insurance insurance industry was on Pat Kenny yesterday and was asked a pointed question -- are there more claims, or have the amounts gone up? He obfuscated and avoided answering.

Surely there are only a small number of variables:

- The number of claims
- The size of awards
- The amount of legal fees
- The return on invested premiums
- Misc overheads of the insurance company
- The profits of the insurance company

Which one has changed by 30% in the last 12 months? No-one's saying, and no-one's even forcing an answer from the industry. Just loads of hand-wringing media about how prices are rising.


To the best of my knowledge all Irish insurers lost money in 2015. For example FBD lost the guts of €100m and they have less than 20% market share.

What is often overlooked is that insurance costs fell substantially in the last couple of years and even after current rises remain below their 2009 levels. But than again nobody ever complains when prices are falling :)


But that still doesn't answer the question. What changed? Is it just insurers increasing profits/decreasing losses?

_________________
Success is like being pregnant. People will congratulate you, but no one knows how many times you were fucked before you got there.

"You see a mousetrap, I see free cheese and a fucking challenge." --Scroobius Pip


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 7:41 pm 
Offline
Nationalised
User avatar

Joined: Apr 1, 2010
Posts: 8957
Mantissa wrote:
But that still doesn't answer the question. What changed? Is it just insurers increasing profits/decreasing losses?

It doesn't have to be anything that happened specifically last year. The industry is alleging higher claims payouts, a poorer investment environment and, crucially using up reserves. Those reserves have to be replaced (and have to match new reserve requirements a.f.a.i.k.). Insurance tends to be pretty competitive, with little brand loyalty etc. The race for market share has eroded premiums and profits. Now
the insurers have decide they can't hack it any more in the face of economic headwinds. (Or at least that's my potted summary of a two minute Google. You might fare better.)

_________________
"Prediction is very difficult, especially about the future" – Niels Bohr


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 7:44 pm 
Online
Nationalised
User avatar

Joined: Jan 4, 2013
Posts: 16417
Location: To the right of the decimal place
But then something did happen: claims increased (in number, value or both).

Again there are 7 places the extra money could be going. Which is it?

_________________
Success is like being pregnant. People will congratulate you, but no one knows how many times you were fucked before you got there.

"You see a mousetrap, I see free cheese and a fucking challenge." --Scroobius Pip


Top
 Profile  
 
 Post subject: Re: Motor Insurance - A Canary?
PostPosted: Sat Aug 13, 2016 7:45 pm 
Offline
Of Systemic Importance

Joined: Jun 9, 2008
Posts: 6968
Low interest rates are affecting the model.

It's not hard to understand.

_________________
“Don't ask the barber if you need a haircut—and don’t ask an academic if what he does is relevant.” Nassim Nicholas Taleb


Top
 Profile  
 
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 129 posts ]  Go to page 1, 2, 3, 4, 5 ... 9  Next


Who is online

Users browsing this forum: Bing [Bot], Mantissa, Poacher turned gamekeeper, slasher, superman, The Naked Chef and 12 guests


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum

Jump to: