Why do insurance companies/ intermediaries ask so many questions?
The prices produced by insurance companies are entirely driven by statistics. The people that set the rates, the underwriters, ‘live and breath’ by them.
These statistics are produced over many years giving the different accident potential of various types of motorists, driving different types of cars, in all UK postcodes.
The statistics will show you that younger drivers have more frequent and expensive accidents than mature drivers. People in rural areas, with less traffic, have significantly less accidents than city dwellers.
Professional sportsmen and musicians have far more accidents than Bank clerks and so on.
All of this type of information goes into the melting pot (computer), which then works out the ‘odds’ of you having an accident, and what stake (premium) they would like to cover their risk for you.
If they win (you have no claims) they keep the premium. If you win (you need to make a claim) it can cost them thousands of pounds.
To try and produce an edge on their competitors, insurers have resorted to asking if you have young children, are a homeowner, do you smoke etc. as they are desperate to find a relevant statistic that the opposition does not use.
The main criteria is:
• Age
• Previous convictions
• Car
• Previous accidents
• Postcode
• Annual mileage
• Use of the car i.e. business use etc.
• What no claims discount you have earned
Intermediaries tend to deal with 15 or more different companies and have to satisfy all the various questions they ask. Answering these can be very time consuming.
It is also fair to say that the most valuable commodity to an Insurer/Intermediary is their data base.
They sell database to each other and various other industries. Many insurance companies are owned by banks and it is a natural progression to try to get you ‘on board’ with your banking requirements. Effectively, the more information they have about you, the more valuable their database.
Comments:
Tell your insurer that you do not want your details passing on to other companies and do not wish to be contacted about ‘various products that may be of interest to you’. |
