Marks and spencer insurance ripoof

monstadog

I know many cyclists use M+S home insurance cover as they offer good cover on cycles, both at and away from home.

I just had my renewal premium. Up by over 40% !!!! >:( >:( :hand:

I havent had any claims, I havent changed circumstances, so why the hike?

The reason given by their customer services? I'm paying for everyone elses claims!!! :-?

I've just emailed them and told them to stick it where the sun doesnt shine. :-D

I would suggest that if you use M+S for insurance you look at your renewal premium carefully.

You have been warned

rdaviesb

Remember the floods? Got to be paid for. That's the point of a social fund, otherwise known as insurance. *

There's been a number of 1 in 200 years insurance events recently. Current pricing doesn't support the cost of them, so prices have got to go up.

cakewalk

try ETA (www.eta.co.uk.)

Free breakdown cover! On Bikes!

Brains

Remember insurance works exactly the same way as any other betting system.

The Insurer (or Bookie) has to spread the load of the past and predicted losses over future takings.

As M&S lost last year in the floods, they will be increasing premiums this year to cover their losses

Exactly the same way as the bookies if they loose out on the Grand National won't give such good odds on the Darby

This is also why Insurance is not permitted under Sharia law as it's seen as a form of gambling, which in truth it is.

ricadus

Long term, for a bike you are better off putting a bit of money every month into a savings account, though interest rates aren't as good as they once were. If you don't "claim" you still have the £££ at the end of the day.

TomF

Go to the M&S website and get a quote as if you were a new customer. I did that last time when the renewal increased the price by about 40%.

Mind you, this was prior to the floods etc. of last year....

PhilofCas

rdaviesb wrote:

Remember the floods? Got to be paid for. That's the point of a social fund, otherwise known as insurance. *

There's been a number of 1 in 200 years insurance events recently. Current pricing doesn't support the cost of them, so prices have got to go up.

remember all the millions of people who pay insurance but don't claim year in year out ?

rdaviesb

Yes I do. That's why this is called INSURANCE, not an INVESTMENT POLICY. Your premiums are calculated with an amount of guess work included; the 1 in 200 year exceptional events. As I said earlier we've had a number of 1 in 200 year events in the last 5 years, and this is why premiums have got to go up.

PhilofCas

rdaviesb wrote:

Yes I do. That's why this is called INSURANCE, not an INVESTMENT POLICY. Your premiums are calculated with an amount of guess work included; the 1 in 200 year exceptional events. As I said earlier we've had a number of 1 in 200 year events in the last 5 years, and this is why premiums have got to go up.

funny INVESTMENT POLICY ?

text from a quick Google
"This item's from the South Florida Sun-Sentinel. Something to think about when you get your homeowners insurance bill or when you read about insurance companies crying the blues about the need for higher rates. Even in 2005, they made a ton of money:

Insurers enjoy record 2006 with $63.7 billion in profits
The nation’s property/casualty insurers collected record profits in 2006, a year after suffering record hurricane losses, industry groups reported Wednesday.
The industry’s net income rose to $63.7 billion in 2006 from $44.2 billion in 2005, according to the ISO, a risk information service, headquartered in Jersey City, N.J., and the Property Casualty Insurers Association of America, an industry trade group. based in Des Plaines, Ill."

also, in the Guardian 4th April 2008

"Lloyd's of London warned yesterday that an absence last year of natural disasters or man-made accidents was putting pressure on firms to reduce premiums in 2008.

The world's oldest and biggest insurance market said that though the lack of major disasters had allowed firms to push up profits 5% in 2007, underwriting margins were being squeezed.

Almost half of the 320-year-old market's business was conducted in the US last year. It is a major insurer of the Florida seaboard and oil rigs in the gulf of Mexico. In 2005, a series of natural disasters culminated in Hurricane Katrina clattering into New Orleans. The clean-up bill pushed Lloyd's into a £103m loss.

However, two years of relatively few claims for environmental damage have increased competition in the sector. "On the back of a good performance in 2007 we need to sound a note of caution for 2008 because of softening market conditions and because of the financial turmoil we have seen," said Richard Ward, chief executive of Lloyd's.

"The indications are that people are being prudent in what they are doing by cutting back on writing business," he added.

Though the financial credit squeeze was unlikely to affect the market and the amount of business it was able to write, he said investment income, which makes up a large proportion of profits, could be hit. "Given that insurers derive much of their income from investments, it is a potential problem," Ward said.

The market, where 75 syndicates underwrite cover, reported a 2007 pre-tax profit of £3.85bn, up from £3.66bn in 2006."

£3.85bn in't too bad is it ?

I apologise if i've got it wrong.

rdaviesb

Unfortunately you have (no offence intended) - you are quoting figures out of context, and you cannot compare the UK and US markets.

First the point of principle. Just because you don't claim this year, doesn't mean that you are any more or less entitled to claim next year. What I meant by insurance not being an investment policy is that you are not building up you own personal fund against which you can claim. The fund is managed for the benefit of all, a service for which insurers get paid (through re-imbursement of their expenses, which includes dividends to shareholders).

Now for the figures. The Lloyds profit you quote is quite different, and pre-tax. It represents amounts accrued to those who have an unlimited personal liablity (which they were bleating about ten years ago, when times were bad - tough as far as I am concerned), as opposed to most shareholders, who have a limited liabilty. To give a bit of context, Tesco profit in 2007 was £2.8bn, whereas the Lloyds syndicates profit relate to an entire market.

The figure that are most useful in this discussion are loss ratio (the difference between premiums in and claim paid out), and combined ratio (premiums in less claims out less insurer expenses). If you take a look at these, you'll find that most market level loss ratios approach 100% (i.e. insurers pay out as much as they take in) and that in some lines of business, most notably motor, insurers consistently pay out more in claims than they take in premiums.

So, what you are seeing, with an M&S premium hike, is most likely a change in their marketing strategy. It's not unknown for insurers to allow a book to run at a short term loss, clawing back that loss over an extended period. Perhaps M&S have misjudged the game a little to require such a premium hike. However, in the short term, their customers have paid less in premiums than they should have, so all in all, it's a bit of swings and roundabouts.

Apologies for the length of this post. I have been repairing a leaking washing machine, an insurable event (and indeed an insured event) for which I will not be making a claim.

rdaviesb

Unfortunately you have (no offence intended) - you are quoting figures out of context, and you cannot compare the UK and US markets.

First the point of principle. Just because you don't claim this year, doesn't mean that you are any more or less entitled to claim next year. What I meant by insurance not being an investment policy is that you are not building up you own personal fund against which you can claim. The fund is managed for the benefit of all, a service for which insurers get paid (through re-imbursement of their expenses, which includes dividends to shareholders).

Now for the figures. The Lloyds profit you quote is quite different, and pre-tax. It represents amounts accrued to those who have an unlimited personal liablity (which they were bleating about ten years ago, when times were bad - tough as far as I am concerned), as opposed to most shareholders, who have a limited liabilty. To give a bit of context, Tesco profit in 2007 was £2.8bn, whereas the Lloyds syndicates profit relate to an entire market.

The figure that are most useful in this discussion are loss ratio (the difference between premiums in and claim paid out), and combined ratio (premiums in less claims out less insurer expenses). If you take a look at these, you'll find that most market level loss ratios approach 100% (i.e. insurers pay out as much as they take in) and that in some lines of business, most notably motor, insurers consistently pay out more in claims than they take in premiums.

So, what you are seeing, with an M&S premium hike, is most likely a change in their marketing strategy. It's not unknown for insurers to allow a book to run at a short term loss, clawing back that loss over an extended period. Perhaps M&S have misjudged the game a little to require such a premium hike. However, in the short term, their customers have paid less in premiums than they should have, so all in all, it's a bit of swings and roundabouts.

Apologies for the length of this post. I have been repairing a leaking washing machine, an insurable event (and indeed an insured event) for which I will not be making a claim.

Gavin Gilbert

Nicely put Mr Davies I assume you work in the industry?

It is also worth stating that the £3.85bn profit at Lloyds is due to 2007 being an exceptionally quiet year for US Windstorm losses, and the significant strengthing of the £;$ exchange rate. London set the 2007 premiums at an ROE of 1.85ish whereas the balance sheets stated it at nearer 2 Dollars to the Pound.

rdaviesb

Yes. Let's just say I work in "loss prevention", which is also why I find TOMF's admission quote revealing. :roll: