James Benskin - BSure FSP Number 8761

James Benskin - BSure FSP Number 8761 James Benskin - Bsure Short Term Insurance Broker - Commercial & Domestic Short Term Insurance Specialists.

Domestic, Commercial, Community Living - Body Corporates, Engineering Risks, Buildings, Motor including fleets and all short term related risks.

06/04/2020

Post 3:
Why do premiums differ so much between insurers? (part one)

In my previous post I touched briefly on the concept of a risk pool. (the pool of funds you contribute to monthly) Insurers and Underwriting managers that have refined their capability of managing a healthy risk pool by attracting the ideal client, eliminating claims abuse, maximising infrastructural and staff capabilities will no doubt have the upper hand.

In this post I will start to list factors and circumstances that directly influence the premium you are paying. Motor vehicle risk exposure is probably the most popular place to start.

Underwriting managers specialise in specific risk segments by focusing their resources and skills to that market. Their expertise empowers them to offer better cover limits and benefits at exceptional rates. These options are only available through the broker market and not direct channels due to the underwriting and selection process. Examples of specialised policies include Classic Cars, Executive cars, Executive Clients and 4X4 cover (to name a few).

Risk factors and considerations:
Insurance companies need to be profitable business concerns otherwise the cover we need would simply not exist. The premium an insurer charges is directly linked to their risk exposure. Premiums are determined by actuarial analysis of the risk which includes the following risk factors:
a. The insurers actual data on losses they have incurred for theft and accidents specific to that risk. In a broad context this looks at the premiums received compared to the claims paid. (*will expand below)
b. Cost of Parts
c. Availability of Parts (impact of rand value)
d. Cost of Repairs (panel beating)
e. Use of vehicle (Business or Private)
f. Risk Profile of regular driver: Age, Gender, marital status, occupation, location of vehicle during the day and night, risk measures taken to prevent or reduce a risk, ITC profile, claims history, Insurance history.

*With the aid of technology, insurers can measure the income they generate compared to the losses experienced on a daily bases for specific risks. This enables insurers to make immediate premium adjustments to new business for those risks. Certain motor vehicle models are known to be high risk for theft and Hijacking. When the insurer’s data indicates that they are making loses (paying out more claims than the premium they receive) for insuring that particular vehicle, they will increase the premium. Similarly, where the data indicates a low risk experience, the insurer can reduce the premium. It is important to remember that competing insurers may have a completely different risk experience for the same vehicle hence the significant premium difference between insurers for exact same risk.

To keep these posts short, I will continue with this topic in mu following post.

Keep safe and be positive.

31/03/2020

Post 2: Understanding short term insurance.
What happens to your short term insurance premium every month? Is it invested into a “fire pool”?

The basic idea behind short term insurance is premium pooling. An easy way to think of it is like a swimming pool filled with money, and no, not the fire pool. The concept is simple, the pool of funds is filled by the premiums received by many people. When life happens and we face a loss that we cannot afford to remedy or it impacts our standard of living, we rely on the money in this shared pool of funds to save us from this loss. This is commonly referred to as a risk pool.

The funds required to maintain a healthy level of reserves in the pool is significantly impacted by the funds drained from the pool to pay claims. Here’s where it gets tricky. The concept of a swimming pool is not far off. A swimming pool must always have a minimum level of water and must be constantly managed. The infrastructure must be able to retain the water and the water must be kept clean. Other factors that impact the cost to keep the swimming pool in operation includes the cost of water, electricity, labour, chemicals, safety and so much more.

Now let’s consider factors that influence the costs of a risk pool from which your claims are paid. The most common drain on a risk pool is motor vehicle claims. (Did you know that only 25 to 30% of motor claims are as a result of theft / hijacking and total loss accidents? The remaining 70 – 75 per cent comes from repairs relating to accidents, hail, third-party costs and windscreens.) The cost of motor repairs includes the cost of parts, salaries, labour, towing, premises rentals, rates, electricity and so much more. Panel beaters’ rentals increase every year, salaries need to be adjusted to combat inflation, utility costs increase, the list continues. Besides the annual increase in the cost of car parts, the value of our rand has drastically impacted the price of imported parts.

Controlling the cost of repairs has become essential to managing the funds drained from the risk pool you contribute to. Insurers have had to initiate sound strategies of controlling these costs by careful, deliberate selection of repairers (panel beaters) that charge fair prices. (Repairers that do not inflate the cost of parts unnecessarily)

People that abuse risk pool funds make it costly to retain legislated reserves for honest clients. Simply stated, the higher the abuse of funds in your risk pool, the higher your premium. Having like minded people of integrity contributing to any risk pool and claiming only when there is a valid claim, is essential.

To sum it up in the simplest possible way, the premium you pay is determined by the behaviour of the of the contributors to the pool of funds your claims are paid from and how this risk pool is managed. This is particularly true for broker group schemes. The cheapest and best cover available to you is determined by correctly underwriting your risk and matching your profile to the insurer that has the most favourable outlook and experience to your profile and risk exposure. This is why we as brokers, partner with a wide variety of choice insurers and specialist underwriting managers, to find the best fit for you.

31/03/2020

Helping you understand your insurance cover and cost.
Post 1: Introduction (to series of posts)
Our reality changes with new facts, new knowledge and new understandings. This series of posts aims to highlight realities that will equip you with a better understanding of the cover you purchase. I invite you to engage with me through this process as we expand our understanding on how your assets and lifestyle translates into significant financial risk, how varying insurers interpret this risk and determine the premium you buy your cover for.

I will cover topics such as risk pools (the pool of funds you contribute to and claim against); why insurers will differ in premium for the exact same risk / asset; broker group schemes in relation to modern risks, legislation and cost of cover; Eskom the threat to your electronic devices (actual claims examples); broker vs direct; why does the Average clause in all policy wordings even exist; Underwriting Managers and Insurance companies; common errors that jeopardise your cover such as vehicle use and nondisclosure's; Cyber Risks; commercial risks, why the best cover is not available through direct marketing channels and actual claims examples to highlight real risks we face daily.

If there are insurance related topics you would like me to cover, please mention in the comments tab.

I look forward to engaging with you.

21/11/2019

The use of new technologies now enables much more effective protection of thatch structures that is also much more aesthetically pleasing.

Motor Bike Owners take Note. Taken from a newsletter from Beame.Motorcycle syndicates on the rise – make sure you’re cov...
03/10/2016

Motor Bike Owners take Note. Taken from a newsletter from Beame.

Motorcycle syndicates on the rise – make sure you’re covered!
It’s hard to believe that carjacking’s in South Africa increased by 14.3% over the past year – Gauteng reported the highest number of cases, with 7 367 incidents. However, it’s not just light motor vehicles that are at risk of theft. Motorcycle theft is also a serious concern in South Africa and while the stats here are grouped into the stolen vehicle category, there is no doubt that we are beginning to hear more and more stories of motorcycle syndicates around the country.
With the South African summer in full swing, many of you will start taking part in outdoor activities such as picnicking or even venturing out on your usual Sunday breakfast run, if you’re a biker. But despite the excitement of trekking across town to a new destination on your motorcycle, now is as good a time as ever to consider the possibility of your motorcycle being stolen – given the increasing theft - and whether you have something in place to recover it, should the worst happen.
So while your car is comfortable at home in its garage – fitted with its Beame device – have you considered whether such a device can work for your other assets too, such as your motorcycle?
Well, it certainly can and so, before you venture out on your motorcycle this weekend, you will have to go beyond just packing your helmet, leather jacket and boots. . Considering the fact that motorcycle syndicates are on the rise in certain communities, as thieves work around the clock to try and outsmart motorcycle owners, there is no doubt that protecting more than your car these days is critical.
Did you know that Beame is a solution that you can trust to not only protect your passenger vehicle, but all your other movable assets too - giving you the freedom to do the things you love with the added confidence of knowing that in the unfortunate event your vehicle or assets are stolen – you have one of the country’s leading recovery devices securing your prized possessions – not to mention a device with one of the highest recovery rates in the market.

I have had personal experience of a Beame Recovery. It is excellent. If you would like to know more. contact me.

Bsure strikes Gold at Santam awards. Always doing our best for our clients.
30/06/2016

Bsure strikes Gold at Santam awards. Always doing our best for our clients.

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