Why your insurance is getting more expensive
When insurers can't make a profit, putting up prices is always the first tactic they use.
Insurance giant QBE released its annual results last year. It made an interim profit of $265 million, which is hardly chicken feed. However, it had a combined operating ratio of 99.0%, which isn't such good news. If the ratio goes above 100%, the business isn't breaking even. So what is QBE going to do? Put its prices up.
That's not just guesswork on my part. QBE says so quite explicitly in its results announcement:
We are responding decisively with price increases, revised terms and conditions and other portfolio adjustments.
So you can look forward to higher prices, more nit-picking over claims and more exclusions in any insurance policy you take out. While QBE has been unusually up-front about its plans, the pressures it faces impact the entire industry. That means that more than ever, if you want to get the best deal for your insurance, you need to shop around and compare brands and deals carefully.
This isn't a new development. For insurance, the devil is always in the details. If you're looking at health insurance, you need to pay careful attention to where the gaps are going to be. If you're after travel insurance, you need to make sure that you include all the activities you might take part in, but don't pay for options that you aren't going to use. If you're examining car insurance, you need to consider who will regularly drive your vehicle.
QBE's key responsibility is to its shareholders, which is why it makes its plans so clear. Your key responsibility is to yourself. Don't just settle for the first insurance deal you find, or mindlessly renew your existing deal. Even in a tough market, you can still save by shopping around.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.
- Money Hacks: Racking up frequent flyer points when buying health insurance
- finder.com.au Money Podcast #14 – Divorce and finances, difficult apartment dwellers and denim indecision
- NSW property developments will soon be approved quicker
- Contiki offering exclusive VIP Splendour packages for 2017
- View Finder: Offline with Stan and the joy of Dolby Vision