backfoot:And here endeth the 'latest' sermon........lol. Praise be to the almighty Viscous one.

LOL! I hope you had the palms of your hands together! (That was in jest, don't you know!)

- I also like the 'Viscous' part. Very apt! ;o)

And here endeth the 'latest' sermon........lol. Praise be to the almighty Viscous one.

Hi backfoot,

I didn't 'shut up shop' when MS came back with a counter argument. They aided my point! The allegations made were based on facts, not opinions. Leadbetter has a vested interest in Swift, by insuring his vehicle(s) with them and as an employee of MoneySupermarket (Swift's No.1 fan). Swift's cover is not comparable with the mainstream because they offer a different, much less cover! Simple as! They have very basic cover unless you pay extra for it, poor customer service because it prefers to deal by e-mail and a poor claims handling process due to their ridiculous premiums! Fact not opinion!

I'm not bothered if somebody differs with an opinion, but when it is factually based to do with insurance, there seems to be very few people who actually know what they are talking about. You are one of them, proving so in your illogical posts! Those that differ offer their opinion not fact. I have no idea what you do for a living, but I wouldn't dare question it (unless it was do with Insurance, of course, then I would suggest you find an alternative method of income!). eg. I don't have a clue about mortgages and for me to question a certain aspect of mortgage with an advisor would be absolutely ridiculous! He/she knows what he/she is talking about!

My approach to posts are to either enter a discussion and give a view/opinion, or when something is factually incorrect or somebody looking at a topic at face value, to correct them to see the full picture.

If anyone were to approach my 'expert status' in the same field, then they would be agreeing with me; although I would insist on seeing credentials for an equal set of equivalent qualifications to myself lol!

Whilst I would love to entertain you further, you're clearly a wasted effort. There's a cake in your oven, quick... before it burns! Did you set it to the right temperature? Not that I'm questioning you.... (!)

Vicissitude:

But we're talking insurance?? The business model would be a hell of a lot different for gas, credit card companies etc.

LOL - round and round in circles with you. Another one that doesn't listen. Tittish.

hmmm.I actually said thanks for the insight.Not sure why you have gone off the deep end.I do listen( well read in this case).

Just because someone else develops a discussion and may dare to differ with at least some of your 'all knowing comments' doesn't make them tittish.It's an interesting style you adopt,all sort of superior and arrogant when you don't get a consensus to your view.I thought it was the same when you were challenged by MS about the Swift issue and your categorical allegations.You quickly shut up shop when they came back with a counter argument......lol.You got your assumptions totally wrong then and when you accused me of being an MS employee .

Heaven forbid that there is anyone approaching your expert status.

But we're talking insurance?? The business model would be a hell of a lot different for gas, credit card companies etc.

LOL - round and round in circles with you. Another one that doesn't listen. Tittish.

Thanks for your insight into the market. Makes interesting reading. I think my point remains that in the long run,this will all be counterproductive but then again there are still so many people who have not switched energy provider,so it may be longer than i think. In the meantime,I will have to get on and make savings where I can utilising search engines/best buys etc.

Flipping it to the credit card market, things have caught up there do some extent.Introductory offers,free balance transfers,high credit limits are coming home to roost with a vengeance for the customers and the providers.So again a business model which may work for a while but can be totally flawed if economic conditions alter.

Of course it works! It's worked very well, especially in the past 10 years! You will be very suprised at the number of people that do not look around each year and where tacit renewals are enforced. There are a high number of people that do search around for quotes but where the price increases (either due to their own error in not understanding, or the aggregator's poor questioning and mapping) they stick with the same company due to the hassle.

As stated, insurers have a higher rate of retention from new customers after the first year which steadily declines thereafter; but creating a cycle by new offers being sold and bought.

A lot of direct insurers have fewer aquisition costs due to the lack of commissions paid to 3rd parties for a 'finders fee', thus creating higher frequency of lower premiums; which then creates more customers than they can handle and puts a strain on their claims ratio and targets. Swift are a prime example of the opposite. They advertise for themselves, and are on the panel of aggregators, and offer this £30 cash back nonsense (although there is a deal between MS and Swift on this). They do, however, have very few staff. Due to the low premium they provide, and after the aquisition costs, they have a very poor claims reputation and clauses within the contract to create a 'clawback' effect; to which will also give a negative persona (at claim stage).

I see your point RE: going elsewhere, but it's simply not enough to affect companies (yet!)

Thanks for explaining their business model.

The trouble with it is that ,certainly for me,it doesn't work.I may take advantage of it for the introductory offer,ignore any crossselling attempts (costing them more) ,then switch to the next offerring from somebody desperate for volume business.I suspect like CK ,most people who switch using comparison sites,shop around for crossold products as well and instead of developing their brand,they actually join the pit of all those doing the same,so there is no differentiation.

What's hard to follow is the discount is huge. It just goes to illustrate how little actually depends on your insurance risk profile but more on marketing to different segments.

I agree its business,but its not to my taste. NR were in business as well and look where its got them.....lol

I was going to leave this thread alone because I thought it would be over by now but here we go...

With insurance, there are things like gross written profits, less claims, less expenditure etc etc. to account for.

If the Post Office offered this rate to everyone, including previous customers, it would actually cost them money to write the business as opposed to making the profit required. Insurance companies make very little money per capita whilst writing the business, especially when going through comparison sites like MS, Confused, GoCo etc. due to the commission to be paid to the agent, the staff member, and advertising. Depending on the deal with the aggregator, an intermediary/direct insurer can pay an average of £49-£53 per policy sold through their site! These are acquisition deductions and profit is made by renewals and cross-sold products.

The Post Office are trying to obtain a significant (and probably a calculated-specific) number of new business customers before the promotion ends, which gives a very accurate projected profit figure for the next year. Whilst you are a returning customer (in view of the promotion) you may have left them originally for some other motive. Insurers have an increased chance of customer retention from 'brand new customers only' rather than returning customers.

It's not discrimination... it's business!

There's your answer.

Your reasoning is perfectly sensible, I see a point coming when most of these companies that have picked and chosen their customers in the past will run out of options because disgruntled ex-customers will not return as a matter of principle anyway.

You will really see them then start to panic and change their attitude when they are struggling to attract the amount of business they require in order to be profitable.{Look what happened when British Gas slowly realised).

It's all roundabouts and swings at the moment.

Ck,

Loose phrasing mate.I didn't mean you. Sorry. I fully know your track record as well as the quality.

Turning back to the issue though. Yes we can choose our supplier but what i was genuinely curious about and I think at the heart of the original poster's question was the rationale behind their approach.

The underwriting risk,is exactly the same,the original quote proved it. Yet ,on the basis of picking up a brand new customer they offer a huge discount.The type of customer they will pick up is exactly the market savvy person who shops around and will probably leave them next year as did this one.They could recapture him/her but presumably they don't feel that their loss leader quote (?) will be worthwile a second time around.

It's just a bit naff really and makes a mockery of so called loyalty to a company .They obviously don't care.It's particularly poor when they are using their 'safe and reliable' brand to atract you in the first place.Probably just a front for another big insurer.

Have I got it right or am I still missing the point?

Hi backfoot ......My comments don't appear to be harsh at all.... just realistic.

I didn't want the OP to be under the mistaken illusion that they could class theirself as a new customer, when clearly in the true sense... they are not.

I agree that insurance companies and other institutions, eg banks and lenders seem to be a law unto themselves and are prone to, "cherry pick" their customers, but until other outside regulations are in place it would seem that they are free to continue this practice whether we like or agree with it or not. All we can do in the meantime is vote with our feet and take the business to another company that welcomes it with open arms, or until they too decide that we no longer fit their criteria which meams shopping around for a new quote and moving on again.

Reality my old friend, not harshness, you know me... if anything I am on the side of the consumer.

Gosh you guys are harsh when someone asks a pretty sensible question.Clearly Ely is a past customer of the post office by any definition. It also looks like the postoffice or any insurer can do whatever they want.

If I could take the liberty of rephrasing the question.Why wouldn't the post office want to attract Ely back to them with a competitive quote ? He/she had a good claims record,no payment problems and presents a good risk. What is the difference to a similar but brand new customer where some of this data may be incomplete but the overall risk profile will be the same?

I don't follow the logic either Ely.

I agree there is no grey area. A returning customer is not a new customer. You are a previous customer who is returning.

If it is unfair to treat returning customers differently from new customers why is it not unfair to treat renewing customers differently? The idea that you should be able to alternate between companies and repeatedly receive a 'new customer' discount is ludicrous.

Hi --- It makes you a returning previous ex-customer, not a new customer.

In the same respect if you were to return to any of the 20 companies that have covered you in the past.