13 Aug 2018

Car insurance fiasco - NOT amateur radio

Well, I  have been with my current car insurer for ages. Most years I have to ring up to tell them it is too much and get a better quote. This morning I did this again and they dropped a very little. So I told them to let their policy lapse and I'd look around. I have got the same cover for very much less, even allowing for introductory offers.

Now, wouldn't you think they would want to keep a loyal customer who has never made a claim? No, they have lost me now, probably for ever. Crass stupidity!! Their loss - not being able to see this.

In my view, the insurance industry is mad. Surely, they should give loyal, good customers a good deal to prevent them going elsewhere. Instead I get an idiot in a call-centre who couldn't care a jot. As I said, their loss, not mine. They deserve to lose all my business in future years, and they probably will now.


Anonymous said...

Same goes for house insurance. Mine is up again this year but a meerkat search gives better cover for last year's cost with the same provider. Just goes to show loyalty isn't a currency that is recognised these days.

Kelly said...

It makes sense for the company to charge more for returning customers than to new customers.

Suppose the cost for the insurance company is going up 5%. For new customers, they'll likely quote about something close to the actual cost plus the bare minimum profit margin they need. That's how the insurance company stays competitive.

But for existing customers, they might as well charge them 10% or 15% more. Most of the existing customer will grumble and pay it; only a few will leave (likely less than 10%). So for 90% of the existing pay, the insurance company has doubled their profits.

Customer loyalty is why these companies pay so much money in advertising - so that when they jack up their profit margin, customers won't leave right away.