What do you consider to be the best "con" of recent years?

[Rich]

I don't know about Mother England or the US of A but in Australia (and I think the others would be much the same) most general insurers do well to break even on underwriting, that is, premiums coming in equal premiums going out. The profit comes from investment of the premium.

Rubbish, most insurance is a con

 

[Fifty2One]

I do not do credit cards, I have discovered that if you need to pay money then cash is convenient - pay it once to who you owe and not other people. Why would you want to make a credit company rich just for the convenience of not carrying cash

Anyhow I prefer to barter and trade but a lot of places will not take a chicken or some eggs in trade... believe me you do not want to try to pay the electricity bill with a goat

I find my credit cards useful to avoid carrying large amounts of cash. However I make a point of paying the full amount every month so it doesn't run up debts.

 

[Mike375]

Rubbish, most insurance is a con

Not so. With general insurance the premium is cut to the bone. Life insurance companies, that is, disability or Income Replacement, trauma life etc are different and one reason being that regulations require much higher reserves and the produducts in general are not as price sensitive.

Now if you mean by "con" that the product does not match what people are told or led to believe then that is a different situation.

 

[Atomic Shrimp]

It seems to me there are two parts to global warming:

1) Is it happening

2) If it is happening is due to man's activities

The group that answers 'yes' seems to be mostly scientists

The group that answers 'no' (often strenuously) seems to contain a few more politicians and businessfolk.

Hmmm...

 

[Atomic Shrimp]

Wind farms are not a solution. Currently -4 C and not a breath of wind. How is your heating system to run.

Wind Farms require standby generation. However they allow the Government to say "We are doing this...." and gives the energy companies some return on least expenditure.

The money should be going towards cold fusion or similar technology development,

Yeah, but the wind does blow sometimes in the UK, doesn't it?

Wind farms are not the whole solution. Nobody ever said they were, but they can be part of the solution, can't they?

Cold (or even hot)fusion power generation may quite possibly never leave the category of science fiction. I'm all for interesting research, but I think we'd be better off throwing some big money at things we already know can work.

 

[ASherbuck]

George W Bush "We're Going to Mars."

 

[MSAccessRookie]

George W Bush "We're Going to Mars."

I thought a "CON" implied that fact that people ACTUALLY BELIEVED it?

 

[Rich]

Not so. With general insurance the premium is cut to the bone.

Define general insurance, my public liability went through the roof because of the "terrorist threat" what's a terrorist going to do with my blow torch, threaten punters?

 

[Mike375]

Define general insurance, my public liability went through the roof because of the "terrorist threat" what's a terrorist going to do with my blow torch, threaten punters?

Public liability is general insurance.

Public liability and professional indemnity are two areas that have increased a lot and in some cases to the extreme.

But the money has to go into statutory reserves because of the actuarial calculations and ultimately the premium is determined by re insurers.

So you will find the premium for the liability insurance, while it might have greatly increased for you, it still be close to the bone as far as the insurers are concerned . Of course it could be a case that too much caution is being used by actuaries and as such the amount of premium having to go to statutory reserves is too high.

 

[GaryPanic]

Mike375-

Spot on -

PL insurance and the exposure to Terrorism is quite remote - however most insurers are recouping up to 6 years of bad losses (not down to just terrorsim) - Katrina cause some serious losses (still on going)
then you have the loss of investment income (insurance companies use the time the premium is paid in and the time the claim is paid out and invest the monies as best they can (but they are restricted in what they are allowed to investin - bonds etc...unless they are running at a decent profit margin (very few currently are).

they have to have reserves of 22% of the gross written premium of the previous year or the average of 3 years claims 28% reserve this they invest in "safe" funds such as banks investment houes- in the current market - this is causing some real concern a some insureres would of invested in Icelandic banks - irish bank (these are a bit wobbley)

PL premiums have not kept up with inflation a flat premium 5 years ago at say £100.00 and the person still expects the price to be at £100 now (I have had this discussion today)

the person doesn't realsie that claim payments which might of been £10k five years ago are now running at close to £15K for the same claim loss (Claim payout are incresing higher than inflation rate - but you get the gist

the higher the average payout is the higher the premium has to be

"the premiums of the many to cover the losses of the few"

i rant -

 

[Mike375]

The biggest problem with insurance, in terms of peoples perception, is they don't want to listen or have slective memory.

For example, a house and contents policy might put some limit on things such as paintings or whatever and additional premium/policy would be required to full cover something that is more expensive than the normal.

The insurance bloke asks the prospect about the painting on the wall...the prosect says, Yes, it is a very expensive piece but we alway take to my mothers when we go on holidays etc. and etc. and so I don't need the extra cover policy.

A few years down the track there is a fire in the house and the insurance company pays the standarr policy amount for the painting. The policy holder now says the insurance company is a rip off etc. and etc. and just about everyone regards the financial institution as fair game.

If you want to really see rip offs and con jobs you should see what some plicy holders are like ar claim time and also the deliberate lies on applications for insurance.

 

[Rich]

My liability is limited to £2,000,000 and has been for many years, the claim that inflation is a justifiable reason to jack the premiums up is nonsense

 

[GaryPanic]

My liability is limited to £2,000,000 and has been for many years, the claim that inflation is a justifiable reason to jack the premiums up is nonsense

No you mis understand what i was try to say (my fault)

the claims payout has risen higher than inflation rate so what would of been a £10k payout 5 years ago - courts are now paying £15K

yet you expect the premium not to change

that would be the same as the cost of food going up but you are still only giving your wife the same housekeeping and expecting the same dinner -lifestyle

if x rises then y must rise as there is a link between the two

also PL claims are long tailed - a policy written in 2006 has a three year period in which to notify a potential claim so claims are coming on a policy that was written 3 years back - ok now they now 3 years in which to submit a "legal claim" so claims can be paid on a policy going back to 2003 or in my example the claim may be finalised in 2012


what are you paying now for your PL exposure - i might be able to suggest alternatives for you

so taking my 10k and 5 years lapse to increase the claim to 15k

it is in the claimants interest to drag the claim out for as long as possible (this only relates to person injury claims on PL/EL policies )
Property claims are usuaslly settle in weeks - easy to quantify ...

 

[Mike375]

My liability is limited to £2,000,000 and has been for many years, the claim that inflation is a justifiable reason to jack the premiums up is nonsense

The insured amount can remain the same but the base premium rate can go up, right up.

The rates are underlined by the appointed actuary and there is no way around it.

 

[Rich]

The insured amount can remain the same but the base premium rate can go up, right up.

The rates are underlined by the appointed actuary and there is no way around it.

Since the max payout is and has been limited for a long time what's the justification for a huge increase in premiums on a policy that I've held for over twenty years other than a get rich quick con, especially when the increase far exceeds the rate of inflation and the co. will look to every opt out clause it can find

 

[GaryPanic]

The insured amount can remain the same but the base premium rate can go up, right up.

The rates are underlined by the appointed actuary and there is no way around it.

thats me - i set the premium according to the risk /exposure
and the claims ratio for that particular class of risk (I am in to the entertainment element more than general insurance) concerts /festivals discos - etc

 

[Mike375]

Since the max payout is and has been limited for a long time what's the justification for a huge increase in premiums on a policy that I've held for over twenty years other than a get rich quick con, especially when the increase far exceeds the rate of inflation and the co. will look to every opt out clause it can find

Because the risk perceived by the actuaries has changed.

and the co. will look to every opt out clause it can find

That is a fallacy. Insurance companies pay when they don't have to pay.

I saw a case last year where someone died and on the application for insurance they had all the Nos and Yes's where they should be. However, upon death it became the knowledge that the insured had been on regular blood pressure treatment starting a couple of months before the application. Big time non disclosure.

I will tell you what happened. The insurance company paid an amount that the insured's premium would have purchased given the likely premium loading that would have applied if he had told the truth on the application.

In actual fact, they should have paid nothing because the reality is that recently diagnosed blood pressure usually results in the application being declined or deferred until such times as blood pressure treatment is seen to be satisfactory for the person.

There is another reason they don't need to look for every opt out clause. They already know that people want to pick up some extra goodies so they build it into the premium. In other words the premium already covers someone picking up some freebies due to the claim but they won't tolerate a false claim that is about turning their policy document into a winning ticket for Lotto as much as many people try.

You really need to spend some time in a claims office, especially for disability or income relacement insurance. You would not believe what you see.

 

[Rich]

A few exceptions doesn't hide the fact that in the majority of cases insurance companies like banks will hide behind the illegible small print whenever they can

 

[Mike375]

A few exceptions doesn't hide the fact that in the majority of cases insurance companies like banks will hide behind the illegible small print whenever they can

To you use one of your favourite words, rubbish.

 

[Rich]

Because the risk perceived by the actuaries has changed.

The risk today is no greater than when the IRA was in full fling here, it's just an excuse to jack up premiums and profits