CityPress - - Business -

When I moved house, I con­tacted my in­surer, MiWay, to in­form them that my ad­dress had changed and that my car would no longer be in a locked garage. They in­formed me that my monthly pre­mium would be in­creased by nearly R200. Af­ter pick­ing my­self up from the floor, I told the con­sul­tant that I would have to shop around for other quotes. He asked me to hold. A few sec­onds later, he came back on the line and said he had looked at my cus­tomer pro­file. As some­one who was such a valu­able cus­tomer, they had re­assessed the sit­u­a­tion and would only in­crease my pre­mium by R20.

I was ec­static and thought my in­surer was just fab­u­lous. But then I started speak­ing to other peo­ple about their in­sur­ance ex­pe­ri­ences and a pat­tern started to emerge.

When Ros was no­ti­fied by her in­surer, Auto & Gen­eral, that her pre­mium on her house­hold in­sur­ance would in­crease by a mas­sive 21.7%, she sent them an email to ques­tion the fig­ure. “They replied quickly, of­fer­ing me a re­duced quote that was an in­crease of just 4.2%, which ob­vi­ously I ac­cepted,” says Ros.

Gil­lian, a savvy con­sumer, has learnt to ques­tion her OUT­surance in­sur­ance premi­ums each year.

“Last year, they dropped the pro­posed pre­mium by R11 000 for the year when I showed them com­peti­tor quotes. This year, all I had to do was say that I was query­ing the pre­mium in­crease and they in­stantly kept it the same as last year in­stead of hik­ing it by 17% – a sav­ing of R4 000 over the year.”

It is un­der­stand­able that cus­tomers are won­der­ing why they have to ques­tion es­ca­la­tions – surely these should al­ready be priced ac­cord­ing to your be­hav­iour and you should al­ready be get­ting the best deal pos­si­ble.

The re­al­ity is that in­sur­ers are will­ing to make less money from good clients rather than lose them al­to­gether.

As Dawie Buys, man­ager of in­sur­ance risks at the SA In­sur­ance As­so­ci­a­tion, ex­plains, the short-term in­sur­ance in­dus­try is a hugely com­pet­i­tive busi­ness and in­sur­ers will do ev­ery­thing in their power to re­tain clients with good risk pro­files be­cause it is far more ex­pen­sive to put new busi­ness on the books.

Buys says the dif­fi­cult eco­nomic sit­u­a­tion means con­sumers find them­selves with less distributable in­come and the first thing they look at is where they can save on in­sur­ance premi­ums.

“It is there­fore not ab­nor­mal for them to ap­proach their in­surer with the re­quest to have the level of their premi­ums re­viewed. In­sur­ers then take a look at their cir­cum­stances and risk pro­file, and if it is a risk that they would like to re­tain, they will com­pro­mise by of­fer­ing a lower pre­mium at re­newal, where it may be jus­ti­fied,” Buys ex­plains.

Chris­telle Fourie, CEO of in­surer MUA, says the re­newal of the pol­icy is a time when con­sumers typ­i­cally shop around, so for the in­surer it is a very fine bal­anc­ing act to try to in­crease premi­ums to keep up with in­fla­tion, but at the same time re­tain prof­itable clients.

“Ul­ti­mately, we have to work hard to re­tain our good clients. You will find most in­sur­ers will be pre­pared to rene­go­ti­ate re­newal in­creases if a good client is not happy with the in­crease pro­posed.”

In re­sponse to a City Press query around the han­dling of es­ca­la­tions, An­toinette O’Cal­laghan of Auto & Gen­eral In­sur­ance says that fac­tors such as gen­eral global fi­nan­cial dy­nam­ics, ris­ing in­fla­tion, un­pre­dictable weather con­di­tions and the cus­tomer’s in­di­vid­ual risk cal­cu­la­tions are used to cal­cu­late pre­mium in­creases.

In the case of Ros, who had house­hold con­tents in­sured with Auto & Gen­eral, O’Cal­laghan says the gen­eral in­crease for house­hold items is 10% to mit­i­gate the risk of the

how your pre­mium will be af­fected at re­newal be­fore sub­mit­ting smaller claims be­cause, of­ten, it is not worth claim­ing when con­sid­er­ing the an­nual in­crease in premi­ums.

Not all in­sur­ance poli­cies are cre­ated equal. Typ­i­cally, if you pay less, you have less cover and it is there­fore vi­tal to do a proper com­par­i­son of cover. Check ex­cesses, driver re­stric­tions, pol­icy cover and lim­its of ex­ten­sions. If you get stuck, ask a bro­ker for help.

Use your bonus or 13th cheque to pay your premi­ums an­nu­ally rather than monthly. This could save you up to 15% of your pre­mium.

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