Reply With QuoteWow.. some of those figures are ridiculous.. and that picture made me LOL
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Wow.. some of those figures are ridiculous.. and that picture made me LOL
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AM #483 - 2010 ZX-10R.
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Haha! Yeah, I thought to myself, I betcha that happens every day somewhere in Toronto!Originally Posted by caboose483
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Last edited by lucky2; 02-24-2012 at 12:29 PM.
Which is irrelevant to the cost of providing auto insurance.
Maybe so, but not irrelevant to the way they treat us. They lose money, that justifies an increase. Using the same approach record profit heard should translate to a decrease in those premiums, but they never have. It's the same problem with gas prices.
Funny. I got a rebate on my home insurance with Halwell Mutual last year because the company had a good year with minimal losses due to claims or other causes. It worked out to about a 10% refund on my already-paid premium for the year before.
In any case, home insurance rates are not regulated, so any reductions would come through ordinary market forces as insurance companies adjust rates downwards to either lure customers away from other companies that do not lower rates, or to stay competitive with other insurance providers that do lower their rates.
As far as auto insurance goes, selling a product at a loss is not sustainable in the long run. While you might be able to sustain an operating loss over the short term (say, a couple of years or so), in the longer term rates must go up to cover losses or the company will go down. The only other possible alternative is to use the auto insurance line as a loss leader product deliberately sold at a loss in order to attract more business to other less-regulated insurance lines that carry more profit potential, like home and life insurance.
Last edited by turbodish; 08-17-2011 at 09:14 PM. Reason: Halwell, not Halliwell!
Decreases do happen, just not much recently due to rapidly increasing claims cost.
FYI, the rate changes approved by FSCO are all available online:
http://www.fsco.gov.on.ca/en/auto/ra...s/default.aspx
I'm an Actuarial Analyst for a Major Canadian Insurance Company. I analyse claims patterns to determine overall rate changes, as well as relative premium differences by various risk characteristics (eg. age, experience, claims, convictions, usage, etc.)
Unless it's private, please post insurance-related questions in the forum rather than sending me a PM.
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I would think this was more or less expected, and a huge factor in getting the caps lowered or instated on liability claims. Hope they can figure out a way to crack down on the fraud.
1996 Kawasaki ZX11D - "When I'm on the road, I'm indestructible. No one can stop me ... but they try."
Congrats a couple people here have actually hit the nail on the head.
Usually people take threads like this as a way of slamming the insurance companies and the thread just disintegrates into a hundred different reasons for people to hate insurance companies.
I'm confused. I'm with Statefarm. I don't see them listed. My rate on my car increased by 28% but bike stayed the same. Just trying to understand the increase.
There's not much to understand. There's nothing logical in how they apply an increase (except for "Hey FSCO we lost money, here's the accounting proof, we need 25% hike across the board ...No problem SF, here we go, enjoy."). Meaning, if you have a spot clean record, your rate would have most likely gone up with SF, at least twice in the last year or so. For SF it's all about where you live (so they can paint us all with the same brush in the the same area), not so much about your personal record. This alone to me should be illegal ... LOL
Anyways your only choice is to leave SF for something less expensive. There usually are choices, at least there was one for me ... we will see for how long and then it will be a time to switch again. Screw the loyalty they were trying to sell me before I left ... until they are willing to revert a loyalty and clean record!
To Viffer. I have seen you claim that rate decreases do happen and I understand that there's always someone somewhere who gets one (without much of sensible logic applied). Well as you might guess, in the last 10 years, I've had none. So therefore I'd believe that rates only can go up ... LOL (would you blame me?)
Just to play Devils advocate, my rates have gone down or stayed the same every year since I started (Started at age 30, and I'm now 36). This is not to say that they didnt try, I just shopped around each time I received an increase notice and found a better rate. Might be worth the efforts. I am now paying less than I ever have.
I started with Riders Plus Primmum, left and went to J.Duffy (Jevco), and am now with TD Meloche Monnex.
According to their financial report, they look like they are in good shape. Up almost $400 million over 2009
http://www.statefarm.com/aboutus/_pd...ual_report.pdf
Yeah, I'm sure they do alright. They're just pointing to auto insurance and the losses they absorb there. I'm sure they make money on their other products and investments. Just trying to point out that on auto insurance, they've lost money, contrary to what many people believe.
And according to their financial report they paid out more in claims and operating expenses than they earned in insurance premium income.
The only thing putting them into the black was investment income. Coincidentally, their increase in net income from 2009 to 2010 was due almost entirely due to an increase in investment income.
State Farm is 34th on the Fortune 500...don't worry, they're doing fine. What they lose on cars, they make up for (++) in other insurance and investment products they sell.
I've been insured with State Farm since I started driving. My rates have gone up over time but it hasn't ever been a drastic increase. I'd say about on par with inflation, maybe a bit more.
I absolutely agree. Nice recovery from 2009 nonetheless http://www.statefarm.com/aboutus/_pd...nualreport.pdf
Seems like losses from claims is a trend that began in 2008. 06 and 07 were crazy solid years http://www.slideshare.net/finance4/s...-annual-report. Claims and the costs associated with delivering on the claims are up about 10% each. I am sure they have been there before.
Still very hard to butch about being in the black by nearly a billion dollars regardless of how you get there. I offer no sympathy for their losses.
The raw number ($951 million in the black) doesn't mean all that much.
They sold $32.4 billion in insurance policy premiums. That 951 million profit represents less than 3% in profit margin on the policies sold, which is minimally sustainable for a commercial business venture. That less than 3% profit on sales is also well below the 15% to 20% or so that the other pillar of the financial industry (banks) typically enjoy in a given year.
You or I could have done just as well simply putting our money in a high interest ING savings account.
If you owned a company..ANY company..and you lost a billion on a business unit..would you keep it?
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