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3/16/2010

Issues that are not forgotten

There were many issues raised before, and nothing happens. I have to renew my motor insurance and to my horror, I have to pay even more after another 10% of NCB. The premium is now nearly $1,300 despite the NCB. Three years ago I paid less than $800. And the reason, more accident claims so premium must go up. What has that got to do with my premium when I have not made a single claim? Where is the statistics to show that there are more accidents and claims? I thought someone is looking into this fleecing of the motorists by a cartel of crooks. After one whole year, nothing heard. Like loan sharks, very difficult to catch. So the innocent public has to pay for it. Maybe no one is complaining so they think everyone has resigned to the fate that they have to pay more insurance premiums. Legitimate daylight robbery! See, if the people don't kpkb, don't raise problems, then it is taken as no problem.

10 comments:

Wally Buffet said...

These motor insurance underwriters are more like undertakers. They undertake that is,to fleece your pockets but no one will come to your aid even if you bang your head against the wall and cry out in despair.

Think you can claim against your own comprehensive insurance and not loose the NCB because you also bought a scam of an NCB protector? Think again. When the next insurance renewal comes, you will have to pay your debt because they are going to increase the gross premium specially for you! Nett result? You are actually paying for your own claim but in arrears.

Where are the LTA, the AA, Case and our 13K a month representatives?

This dirty business should be nationalized. We, the motorists should petition the government for a motor insurance co-operative to be set up by motorists, for motorists and make all insurance companies give up this segment of their general insurance business. There is a big scam going on involving motor surveyors, motor workshops and abetted by some unscrupulous insurance companies. These undertakers, oops sorry, underwriters will give you the impression that motor insurance is a losing business. Don't be fooled. It ain't. If it is really loss making, they colluded to make it so.

It's time we really put a stop to it. The issue is raised off and on and then nothing is ever heard about it again.

WTF!

Chua Chin Leng aka redbean said...

The last parliament sitting no one raise this issue. Would any MP take up this cause?

I didn't hear anyone say aye. Maybe got to shout louder and more frequently.

Where is undertaker? Want to change profession to be underwriter? They claim to be losing money then don't cling to it lah, let other people do it. Yes Wally, the motorist should do a buy out from all these robbers.

Maybe Tan Kin Lian can take up this cause and start a new insurance company, of the motorist, by the motorist and for the motorist.

Robert Tan said...

It's probably true that the insurers are not making much profits or a small loss from selling motor insurance. Usually, when profit arises, they will lower the premium the following year and vice versa.

I think the only way to lower the premiums more meaningfully and in the longer term is to consider implementing one or a few of the following possible suggestions:

(1) introduce direct selling as opposed to selling via agents/brokers or car dealers. This will cut out about 15% of premiums as commission costs.

(2) clamp down hard on inflated insurance accident claims by:

a) increase the excess/deductibles

b) introduce co-payment for amounts exceeding the deductibles

c) introduce a cap to the maximum claim on the police for property damage arising from an accident claim regardless of which party is at fault. If one wants coverage over this amount, he or she must buy additional insurance for his own vehicle.

d) introduce policies covering purely only third party and injury claims, excluding property damage

For items 2a, 2b and 2c, 2d offer a significant discount to the policyholder who is willing to purchase such a policy.

Those are just thoughts off the top of my head, so, I admit that there could be some flaws and or considerations which I may not have thought about. The suggestions can serve as food for thought by the relevant parties.

Robert Tan said...

Should be policy instead of police in para 2c.

Wally Buffet said...

Hehe,

The relevant parties have already ate up all the food for thought aeons ago. They just wished the complaints would go away and things will simmer down into nothingness and motorists will just pay up and shut the fuck up.

I often wonder why a lst world country like this cannot tackle a mundane problem and make motorists a happier lot. Is it a lack of will power? Are we short of talented brains? What?

I absolutely do not agree that motor insurance is a losing business at the premiums that they are charging. The money has dripped off their fat fingers into the cesspit.

Chua Chin Leng aka redbean said...

I don't know who is making all the money in motor insurance. They just demand and the motorists pay. What choice is there? Shopping for insurance when A and B may differ by $100?

Anonymous said...

When people talk to walls do they get a reply? No. Only echoes. That's what we get nowadays.

Singaporeans deserve the Government that they voted for.

End of story.

Robert Tan said...

Historically (and probably now as well), motor insurance is a commodity product with little perceptible product differentiation.

It is therefore, a high volume/low margin product which consumers will tend to purchase from the most price competitive seller.

This results in stiff price competition between insurers, where insurers try very hard to gain/maintain market share through price competition.

The small differential in pricing is therefore due more to competition rather than price controlled large margin cartels.

I think the problem with high premium rates in Singapore is because of:

(1) commissions payable to intermediaries;

(2) disproportionately high cost of claims; (repairs costs in Singapore are just too high - especially if one chooses the authorised dealers for repairs)

(3) disproportionately high overhead costs (perhaps due to relatively smaller absolute number of motor vehicles in Singapore); and

(4) the tendency to choose comprehensive cover(as opposed to third party cover) with low deductibles and no co-insurance or upper limit of claims built-in.

Maybe I shouldn't write too much....must keep some "trade-secret" in case decide to "start-up" an insurance company, as suggested by Redbean.... Tsk! Tsk!

Chua Chin Leng aka redbean said...

It is the right move to acquire Prudential and AIA. A lot of money to be made. Oh no, there are losing money, like motor insurance.

All insurance companies are losing money and need to raise premiums higher to cover cost.

Robert Tan said...

1. Prudential and AIA are Life Insurers. Their business is a bit different from general insurers. (NTUC is a composite insurer-i.e., it does both life and general business)Life insurers in Singapore historically have made huge profits selling whole-life, endowment and certain types of investment-linked policies. So have the agents - they make huge commissions selling these policies. These policies are not a good idea to buy.

2. Better to buy term life polices and invest the rest directly so that the agents/brokers and insurers don't take a big cut away from your investment returns.

3. Maybe, with people being more knowledgeable, life insurers won't be able to sell as many as before the type of policies in para 1.

4. This information is probably not so useful to us anymore at this stage but if you have friends and family members who are thinking of buying life insurance, you may want to share this information with them.