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Updated: 01/07/2012 07:50 | By motoringresearch.com
20-year losing streak for car insurers
According to UK investment consultants Ernst & Young, the British car industry is on a 20-year losing streak, and not set for a return to profit until 2014.
This means the UK car insurance industry has paid out more in claims than it’s taken in premiums since 1994 – which may come as a surprise to many motorists, stung by the rising cost of their annual renewal.
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Young drivers in particular have found it increasingly difficult in recent years to get affordable cover, with some reports suggesting it now accounts for at least a fifth of their wages.
However, Ernst & Young say that even with a two-year rise in prices, which has just (apparently) ended, there has been no return to profitability for insurers. A situation that’s now unlikely to change until new legislation aimed at curbing ‘no win, no fee’ lawyers comes into effect.
This isn’t set to happen until April 2013, which means its impact – intended to reduce expensive personal injury claims – won’t be felt until 2014 at the earliest.
While some insurance firms have shown overall profits, Ernst & Young says this is due to good investment returns, rather than the business itself.
Data on the loses comes directly from the Association of British Insurers.
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51Comments
27/06/2012 10:28
Aren't they kind to us. They're losing money on our behalf and still they advertise in every commercial break.
I have to go now - my eyes are welling up with tears, and I can't see to type anymore.
27/06/2012 11:39
Perhaps the government should make it illegal for insurance companys to sell the details of motorists who are involved in car accidents to these Ambulance chasing Legal firms who promise customers the world to get them to sue for damages.
27/06/2012 10:37
Rather strange.
To make good investment returns they must have made the money in the first place to be able to invest.
No profit = no investment.
Puzzled.
To make good investment returns they must have made the money in the first place to be able to invest.
No profit = no investment.
Puzzled.
27/06/2012 13:23
look at any major city in the world, and you will see the tallest, most luxurious and expensive buildings all belong to companies that produce nothing, ie, Banks and Insurance companies.
if i was skint and losing money year after year, i wouldnt have the biggest house in my town.
27/06/2012 12:00
Well somebody has been making a profit and its not us drivers thats for sure! insurance companies have ripped us off for years now they know how it feels, my heart bleeds for them!!!
27/06/2012 13:21
You have to be kidding me. With the cost of car insurance premiums going through the roof day after day and they dont make a profit!
That has to be one heck of an accident to account for all that revenue.
27/06/2012 12:40
All insurance companies use RE INSURANCE companies usually Swiss or offshore based, just like they do for life insurance. Dont for one minute imagine the company you pay premiums to take on the risk.
This article is utter rubbish and should be given the contempt it deserves.
This article is utter rubbish and should be given the contempt it deserves.
27/06/2012 10:54
What tommy rot! No company can survive 20 years losing money all the time. Ah but wait. Silly me I was forgetting about Rangers F.C.. O.K. so, if these insurance companies have been losing money with car insurance, ergo it must be the case that they are making up these losses with other insurance. No wonder my house and contents insurance is so high then!
They keep going on about having to pay out for uninsured drivers which explains why insurance premiums are going up. Oh yes? And what about all the ANPR cameras which the police use to capture these uninsured vehicles/drivers? That technology was not available a few years ago and must be having an impact now, but this does not seem to be being reflected in the prices of our policies.
27/06/2012 12:02
You would think that insurance companies would be leaving the car insurance business in droves if things were as bad as the consultants say. However if you sit down to watch sky television at any time of the day or night you are bombarded by ads for car insurance so I take all this with a pinch of salt. .
27/06/2012 11:03
What a load of ****
27/06/2012 11:39
Perhaps the government should make it illegal for insurance companys to sell the details of motorists who are involved in car accidents to these Ambulance chasing Legal firms who promise customers the world to get them to sue for damages.
27/06/2012 11:26
20 YEARS YEH RIGHT,
JUST SHOWS YOU HOW TV AND NEWS PEOPLE, THINK THEY CAN DO ANYTHING AND SAY ANYTHING WHAT EVER THEY LIKE AND REALLY BELIEVE THAT IS HOW LIFE REALLY IS.
GREED AND ARRONGANCE AND BLINDNESS TO REAL LIFE HAS LOST IT,S WAY IN ENGLAND.
NEVER SEEN SO MUCH WRONG DOING AND NO BODY WANT TO STAND UP AND FIGHT.
WHAT DOES THAT TELL YOU ?????????? ALL THEY DO IS WALK ON BUY AND LAUGH, MADNESS.
JUST SHOWS YOU HOW TV AND NEWS PEOPLE, THINK THEY CAN DO ANYTHING AND SAY ANYTHING WHAT EVER THEY LIKE AND REALLY BELIEVE THAT IS HOW LIFE REALLY IS.
GREED AND ARRONGANCE AND BLINDNESS TO REAL LIFE HAS LOST IT,S WAY IN ENGLAND.
NEVER SEEN SO MUCH WRONG DOING AND NO BODY WANT TO STAND UP AND FIGHT.
WHAT DOES THAT TELL YOU ?????????? ALL THEY DO IS WALK ON BUY AND LAUGH, MADNESS.
27/06/2012 11:12
And yet they are still in business, go figure.
Car insurance are fiddling left right and centre, don,t belive it for half a scond not 1 that they have made no money bull****.
England a country who,s business folk are twisting and bending and turning policy written words used by humans to trick you into a shambles of a deal, no i don,t trust anyone who puts a contract in front of me any more, full of lies and deceat, this is madness and wrong doing, but i know there is no will left in the people to even bat a eye lid about it, ONLY ARROGANCE AND A TOFFY NOSED FALSE ACTIONS AND TALK ARE WELCOMED NOW WITH A SLICE OF CORRUPT THINKING PEOPLE AT THE TOP, YOU HAVE SHOWN ME AFTER ALL I HAVE SEEN WITH CELEBS / WAR / GOVERMENTS / BUSINESS / LEADERS YOU ARE ALL IN BED TOGETHER, MY UNCLE SAID IT THE BEST AND PROIUD.
" TREAT THEM ALL THE SAME AND YOU CAN,T GO WRONG KID "
" THOSE AT THE TOP ARE THE WORST OUT FOR WRONG DOING "
GUESS WHAT IS ACTUALLY 100% TRUE "
SOME THING THE RICH CANNOT DO, WHICH IS TELL THE TRUTH .
Car insurance are fiddling left right and centre, don,t belive it for half a scond not 1 that they have made no money bull****.
England a country who,s business folk are twisting and bending and turning policy written words used by humans to trick you into a shambles of a deal, no i don,t trust anyone who puts a contract in front of me any more, full of lies and deceat, this is madness and wrong doing, but i know there is no will left in the people to even bat a eye lid about it, ONLY ARROGANCE AND A TOFFY NOSED FALSE ACTIONS AND TALK ARE WELCOMED NOW WITH A SLICE OF CORRUPT THINKING PEOPLE AT THE TOP, YOU HAVE SHOWN ME AFTER ALL I HAVE SEEN WITH CELEBS / WAR / GOVERMENTS / BUSINESS / LEADERS YOU ARE ALL IN BED TOGETHER, MY UNCLE SAID IT THE BEST AND PROIUD.
" TREAT THEM ALL THE SAME AND YOU CAN,T GO WRONG KID "
" THOSE AT THE TOP ARE THE WORST OUT FOR WRONG DOING "
GUESS WHAT IS ACTUALLY 100% TRUE "
SOME THING THE RICH CANNOT DO, WHICH IS TELL THE TRUTH .
27/06/2012 13:10
What a joke and no doubt the gullible british public will fall for this sad excuse.
This is a setup by the government and insurers to steal peoples right to claim for genuine injury and out of pocket expenses, aswell as to give the insurance companies an excuse for the disgusting and unacceptable rise in insurance costs over the last couple of years.
With the amount of money insurance companies steal from us they have plenty of money for genuine compensation claims and still make a huge profit, after all insurance companies are getting our money for free ?
Some of you maybe thinking, free money how ?
Well most people don`t stop to consider , what do we get from buying insurance ? NOTHING !
When you buy car insurance, you are taking out cover in case something happens and you blindly do this without question year after year for most of your life.
But what have you got to show for all these years of paying your hard earned money ? NOTHING
Usually when buy something, you hand over your money and get something to show for it, you hand over money and get a new tv, or a new laptop etc.
Even with other kinds of insurance like life insurance, sooner or later it pays out and either you or your family get a cash lump sum payout.
But with car insurance, your money gets taken form you every year for how ever long you drive, for most of us that could be 40-50 years maybe more.
But if you never claim you don`t get anything back in return.
I would say i am an example of most ordinary people in britain, i have never claimed against my insurance, i am only 30 and have a full 10 years no claims.
So for 10 years, i have paid for nothing, so my insurance companies have made total 100% profit from me and many of you.
We hand over hundreds of pounds every year, but if we do not need to claim, what outlay or cost has you insurance company had, they don`t have factory`s or production costs or layout for materials to make products.
So surely, if you are forced by law to take out insurance just in case something happens, should that not mean at the end of the years policy, if nothing has happened and no claim has been needed, should we not get our money back ?
Sorry to have went on a bit folks but this really annoys me, it is one of the biggest scams in life and no one seems to see it, you go along and don`t question it because you are brought up to just accept it as the norm.
But there are very few things in life where you hand over your money and get absolutely nothing to show for it, no material item, and no return like you get with life insurance.
27/06/2012 14:15
Well no wonder with everyone who is involved in a minor crash claiming for whiplash even though theres nothing wrong with them.
But at the same time ive absolutely no sympathy for insurance companies, they want an extra £50 from me because ive got a non driving related conviction, which is just an excuse to get more money out of me.
Im sure there are plenty of people out there who would agree that insurance companies are thiefs, they will take your money in an instant but will try their upmost to avoid ever paying out.
27/06/2012 13:00
Yes right, and I am the Queen of England.......
27/06/2012 14:38
sorry don't believe it!!! they are a set of lying /robbing bastards
27/06/2012 12:38
if you believe this you must be mad, no business will ever reveal true profits, did the company directors get a newer bigger car or mortgage payment, did the board get holidays, did the top boys and girls get significant pay increases and bonuses, did these extras figure in the totals before they calculated profits and losses. ?
27/06/2012 14:23
Funny, I've not had a claim in 20 odd years so my premiums have been pure profit! All I've noticed is the premiums being hiked up every year!
27/06/2012 11:20
I feel very,very sorry for them, maybe they should be given Charity status like so many others and get Taxpayer Funding as well as the policy payments.
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