I've compalined about them before, but here's some proof - not selecting insurance and meals on cheap flights prooved rather difficult! The legistaltion changes, but they always find a way to shuffle the fees and squeeze more out of consumers.
Friday 27 April 2012
Sunday 22 April 2012
TV licencing in the UK
TV licencing is a scheme in the UK that has had me half scratching my head, and half in stitches on the floor in laughter ever since I've lived in the UK. Essentially the whole scheme relies on individuals who posses a TV subscribing the 150 pounds per year in order to legally view broadcasts. As a student (clearly not possessing a TV), I came into this fantastic body by means of severally increasingly urgent letters. From what I could deduct their reasoning went something like this:
Clearly no one had sat down and looked at the reasoning - doing nothing vs declaring no TV has essentially the same consequences, aside from calling an expensive 0845 number. I clearly didn't bother calling them. Until the 5th or so letter.
This really does beg the question though - why persist with such an archaic system? Sure you can no subscribe by Internet, but surely financing the many letters, UK call centre, and home visit inspectors takes up a massive wallop of the 150 pound fee?
Surely the most efficient way to deal with this fee - which essentially goes to the BBC - would be to take it out of the income tax purse. No one would notice it, and for the amount that gets spent on administration, I'm sure it would be much less than the 150 pounds or so that they currently charge. So why isn't hits being done? I personally think it's down to a cultural phenomenon that I like to call the 'small change economy' of Britain - where people like to pay for EXACTLY what they use - right down to the small change lent to a colleague for a snack, or the 20 mins parking at 40p per hour.
The irony of the whole system is that TV licencing are currently trying to advertise (in a TV campaign) just how easy it is to maintain a 'mum and 3 kids lifestlye' and still pay the licencing fee.
The further Irony is that in order for an inspector to determine whether a property needs a TV licence, they have to inspect it - something the lawful occupier can remove from them - yes, as I'm learning nearly everything in the UK is up for negotiation if you push hard enough!
But what use is this system anyway, when I can watch whatever I want whenever I want on unlimited Internet.....
- Subscribe - no more letters, and no inspection
- Declare that you have no TV - no more letters for a while, and the threat of an inspection just in case
- Do nothing- the threat of more letters and potentially an inspection
Clearly no one had sat down and looked at the reasoning - doing nothing vs declaring no TV has essentially the same consequences, aside from calling an expensive 0845 number. I clearly didn't bother calling them. Until the 5th or so letter.
This really does beg the question though - why persist with such an archaic system? Sure you can no subscribe by Internet, but surely financing the many letters, UK call centre, and home visit inspectors takes up a massive wallop of the 150 pound fee?
Surely the most efficient way to deal with this fee - which essentially goes to the BBC - would be to take it out of the income tax purse. No one would notice it, and for the amount that gets spent on administration, I'm sure it would be much less than the 150 pounds or so that they currently charge. So why isn't hits being done? I personally think it's down to a cultural phenomenon that I like to call the 'small change economy' of Britain - where people like to pay for EXACTLY what they use - right down to the small change lent to a colleague for a snack, or the 20 mins parking at 40p per hour.
The irony of the whole system is that TV licencing are currently trying to advertise (in a TV campaign) just how easy it is to maintain a 'mum and 3 kids lifestlye' and still pay the licencing fee.
The further Irony is that in order for an inspector to determine whether a property needs a TV licence, they have to inspect it - something the lawful occupier can remove from them - yes, as I'm learning nearly everything in the UK is up for negotiation if you push hard enough!
But what use is this system anyway, when I can watch whatever I want whenever I want on unlimited Internet.....
Friday 9 March 2012
Application specific marketing in retail
An interesting observation I've made recently is that of application specific branding and marketing in the sale of consumer products. Once upon a time it was possible to simply buy products for what they were, and use them for any number of non-specific purposes. Now it seems with the advent of a 'time poor' society, and lifestyle TV shows, we the consumer need to be sold helpful 'kits' in order to get the job done. The kind of store that exemplifies my point best is hardware super-stores such as B&Q in the UK, and Bunnings in Australia.
The last few times I've visited these places (a necessary evil), I've been searching for relatively simple products such as black plastic sheet, tie-wire, and a standard size bolt - on all occasions I've encountered ridiculous trouble trying to find them. In a traditional hardware store this was easy, 2-3 aisles of hardware, a tools section, garden section, and a timber yard. All the above items naturally fall into the hardware section, so would take all of 2 mins to find, even with help from a store employee. In B&Q black plastic, going by the 'applications' system, could have been bagged as a drop-sheet for painting, or as a garden bed weed-proof matt. No suitable versions were found in the entire warehouse. Similarly, tie-wire could have been in the gardening section, in the fasteners and chain section,or in the car section, or equally in one of those silly randomly distributed end-of-aisle discount bins. It was found in the garden section described as being "useful for tying up plants in the garden or greenhouse" - clearly not applicable to the odd jobs I wanted it for then…. Don't even get me started on trying to find an M8 x 60mm bolt in these places - it would no doubt come in a pack of 3-15 and be hidden at the back of set screws - 20 minutes of searching revealed nothing last time I attempted that one.
So while it's a hassle to find what you are looking for in these stores, If you actually have an idea of the product (not application) what you want, another problem altogether is product proliferation. Proliferation seems to be abundant, not just with similar products, but with the same product marketed ever so slightly differently for different applications. WD40 made a notable appearance in the tool, automotive, and paint sections, not to mention the checkout 'opportunity' stands at B&Q last time I visited. And I wonder why I feel like banging my head against the wall when I leave…..
Ironically, for a style of marketing that is supposed to save the consumer time, it always seems to take 10x longer to find what you are after in these places, as not even the staff have any idea where a specific product lives. Really at the end of the day, these places are setup to extract maximum consumer (read bogan) cash by sending customers on the longest possible journey (read walk past as many 'bargains' as possible).
Naturally these principles apply to supermarkets and the like, but my personal frustration never quite reaches the same level, even when I walk past 3 different branded and sourced versions of the same 1.5 g pack of oranges for 1.99.
The last few times I've visited these places (a necessary evil), I've been searching for relatively simple products such as black plastic sheet, tie-wire, and a standard size bolt - on all occasions I've encountered ridiculous trouble trying to find them. In a traditional hardware store this was easy, 2-3 aisles of hardware, a tools section, garden section, and a timber yard. All the above items naturally fall into the hardware section, so would take all of 2 mins to find, even with help from a store employee. In B&Q black plastic, going by the 'applications' system, could have been bagged as a drop-sheet for painting, or as a garden bed weed-proof matt. No suitable versions were found in the entire warehouse. Similarly, tie-wire could have been in the gardening section, in the fasteners and chain section,or in the car section, or equally in one of those silly randomly distributed end-of-aisle discount bins. It was found in the garden section described as being "useful for tying up plants in the garden or greenhouse" - clearly not applicable to the odd jobs I wanted it for then…. Don't even get me started on trying to find an M8 x 60mm bolt in these places - it would no doubt come in a pack of 3-15 and be hidden at the back of set screws - 20 minutes of searching revealed nothing last time I attempted that one.
So while it's a hassle to find what you are looking for in these stores, If you actually have an idea of the product (not application) what you want, another problem altogether is product proliferation. Proliferation seems to be abundant, not just with similar products, but with the same product marketed ever so slightly differently for different applications. WD40 made a notable appearance in the tool, automotive, and paint sections, not to mention the checkout 'opportunity' stands at B&Q last time I visited. And I wonder why I feel like banging my head against the wall when I leave…..
Ironically, for a style of marketing that is supposed to save the consumer time, it always seems to take 10x longer to find what you are after in these places, as not even the staff have any idea where a specific product lives. Really at the end of the day, these places are setup to extract maximum consumer (read bogan) cash by sending customers on the longest possible journey (read walk past as many 'bargains' as possible).
Naturally these principles apply to supermarkets and the like, but my personal frustration never quite reaches the same level, even when I walk past 3 different branded and sourced versions of the same 1.5 g pack of oranges for 1.99.
Are automotive diesel and gasoline engines converging in design?
A look at what engines are currently being offered by auto manufactures would seem to reveal that the once completely segregated designs of diesel and petrol engines are now headed towards pretty similar territory.
Starting with diesel engines, in the not too distant past – compression ratios were high (22+:1) in order to attain sufficient temperatures for compression ignition, this, along with the fact that low pressure injectors didn't do the best job of charge mixing consequently meant they were quite harsh, noisy, and overbuilt. With injector material advances, electronic control, and improved fuel qualities, common rail injection systems have improved in-cylinder charge mixing, resulting in lower compression (16-18:1), lower peak pressures, and structuraly lighter engines. Now, as it stands with 4th generation common rail, combustion is that smooth that engine blocks can even be made from cast aluminium, as more commonly done on gasoline blocks.
Diesel combustion and technology has progressed light years in the last decade with the introduction and advancement of common rail injection systems, and it would appear that this route of increasing injection pressures and adding further events per cycle is approaching the point of diminishing returns. What is interesting however, is that engine designs are heading further and further into gasoline territory with 2-stage turbocharger systems – mostly in the name of extending the engine torque curve, and improving bottom-end response. BMW has to be a field leader with this, first with their 2.0 twin turbo with a modulated 2-stage steup, and now the tri-turbo diesel.
Conversely, looking at emerging trends in gasoline engines, there seems to be a shift to downsized turbocharged direct injection engines, namely the fiat group twin-air, and the ford focus 1.0. From an efficiency and emissions standpoint, this idea makes sense - reduce and engines size to reduce friction, inertia and pumping losses, whilst also running the smaller engine at a more efficient running point more of the time. Once again it is a game chaining technology that has been the key enabler - gasoline direct injection seems to be on par with common rail developments in the diesel engine. Direct injection improves in-cyclinder charge mixing, enabling higher compression ratios and higher boost pressures. In it's second generation, GDI is even headed towards centralised injectors - similar to that in a diesel engine.
While downsized engines represent a practical concept in both engine and overall vehicle efficiency improvements, it is ironic to see that the torque curves from these engines is somewhat narrower (just like a diesel engine) when compared with a non-boosted variant. Looking at several 1.6L current production European engines from for and the PSA group, the trend is pretty clear. Unfortunatley for clarity, I'm not too bothered to go and graph them separately on the same scale, so the manufactures graphics will have to do.
Since downsizing essentially demands more load from a smaller engine, and a steeper torque curve, this necessitates higher mean pressures in cylinders, and hence higher bearing, piston, con-rod, etc mechanical loads. Interestingly lessons are being borrowed from diesel engines here in rod design for stiffness and block construction (the new 1.0 Ford ecoboost uses a cast iron block). Components also experience higher thermal loadings owing to these higher combustion pressures, meaning other diesel technologies such as piston ring oil cooling are coming into vogue.
While looking at other measures pursued by manufactures in looking for efficiency in newer gasoline engines, it is interesting to note the trend in shifting to longer bore/stroke ratios, and longer l/r ratio’s for con-rods – trends that are heading towards conventional engine design for diesel engines - essentially these parameters mean a longer stroke, and slower piston speeds. For comparisons sake, we can use the same engines (and the 1.0 ecoboost) as used for the torque curves to look at the bore / stroke ratio:
PSA DV6 1.6 diesel = 0.85
PSA TU5 1.6 gasoline = 0.95
Ford ecoboost 1.6 gasoline = 0.97
Ford ecoboost 1.0 gasoline = 0.88
From these figures, we can see that the latest 1.0 engine is heading pretty close to diesel territory.
In terms of compression ratio, It would appear that in general engines are able to utilise 10% more compression than in port injected engines. Interestingly, it appears that Mazda may be pushing this a notch further at 14:1 for their SKYDRIVE-G engine series. Interestingly, their diesel (SKYACTIVE-D) drops compression to 14:1 - in a strategy similar to the Toyota Prius's 1.8, with valve timing matched to give a higher expansion ration than compression ratio - thus giving a longer duration combustion.
An overall architecture similarity comparison gives the following now common features in engine architecture shared between gasoline and diesel engines:
· 4 valvers per cylinder
· Central direct injectors
· Turbocharged
· b/s l/r ratios approaching
· throttle-less
· compression ratio’s approaching
· piston ring cooling
· torque curve shape
· engine block construction
Interestingly, while we are seeing a convergence in design of both major IC engine architectures, it seems the perfect mix of the two, HCCI (homogeneous charge compression inanition), is some while away from being realised. In theory, HCCI engines make the best of both worlds, homogeneous in-cylinder charge, coupled with compression ignition ensures the smoothest combustion process possible, however in practice this would require a variable compression ratio to cover the speed and load range encountered in automotive powertrains. HCCI has been the subject of much research, and I'm yet to see anything convincing, so it's a small irony that gasoline and diesel engines are converging towards it in production variants.
Starting with diesel engines, in the not too distant past – compression ratios were high (22+:1) in order to attain sufficient temperatures for compression ignition, this, along with the fact that low pressure injectors didn't do the best job of charge mixing consequently meant they were quite harsh, noisy, and overbuilt. With injector material advances, electronic control, and improved fuel qualities, common rail injection systems have improved in-cylinder charge mixing, resulting in lower compression (16-18:1), lower peak pressures, and structuraly lighter engines. Now, as it stands with 4th generation common rail, combustion is that smooth that engine blocks can even be made from cast aluminium, as more commonly done on gasoline blocks.
Diesel combustion and technology has progressed light years in the last decade with the introduction and advancement of common rail injection systems, and it would appear that this route of increasing injection pressures and adding further events per cycle is approaching the point of diminishing returns. What is interesting however, is that engine designs are heading further and further into gasoline territory with 2-stage turbocharger systems – mostly in the name of extending the engine torque curve, and improving bottom-end response. BMW has to be a field leader with this, first with their 2.0 twin turbo with a modulated 2-stage steup, and now the tri-turbo diesel.
Conversely, looking at emerging trends in gasoline engines, there seems to be a shift to downsized turbocharged direct injection engines, namely the fiat group twin-air, and the ford focus 1.0. From an efficiency and emissions standpoint, this idea makes sense - reduce and engines size to reduce friction, inertia and pumping losses, whilst also running the smaller engine at a more efficient running point more of the time. Once again it is a game chaining technology that has been the key enabler - gasoline direct injection seems to be on par with common rail developments in the diesel engine. Direct injection improves in-cyclinder charge mixing, enabling higher compression ratios and higher boost pressures. In it's second generation, GDI is even headed towards centralised injectors - similar to that in a diesel engine.
While downsized engines represent a practical concept in both engine and overall vehicle efficiency improvements, it is ironic to see that the torque curves from these engines is somewhat narrower (just like a diesel engine) when compared with a non-boosted variant. Looking at several 1.6L current production European engines from for and the PSA group, the trend is pretty clear. Unfortunatley for clarity, I'm not too bothered to go and graph them separately on the same scale, so the manufactures graphics will have to do.
 |
| 1.6 Ford / PSA 110BHP turbo diesel (3rd generation common rail, aluminum block) |
 |
| 1.6 PSA 110BHP N/A gasoline |
 |
| 1.6 Ford 150 PS turbo down-sized turbo gasoline |
While looking at other measures pursued by manufactures in looking for efficiency in newer gasoline engines, it is interesting to note the trend in shifting to longer bore/stroke ratios, and longer l/r ratio’s for con-rods – trends that are heading towards conventional engine design for diesel engines - essentially these parameters mean a longer stroke, and slower piston speeds. For comparisons sake, we can use the same engines (and the 1.0 ecoboost) as used for the torque curves to look at the bore / stroke ratio:
PSA DV6 1.6 diesel = 0.85
PSA TU5 1.6 gasoline = 0.95
Ford ecoboost 1.6 gasoline = 0.97
Ford ecoboost 1.0 gasoline = 0.88
From these figures, we can see that the latest 1.0 engine is heading pretty close to diesel territory.
In terms of compression ratio, It would appear that in general engines are able to utilise 10% more compression than in port injected engines. Interestingly, it appears that Mazda may be pushing this a notch further at 14:1 for their SKYDRIVE-G engine series. Interestingly, their diesel (SKYACTIVE-D) drops compression to 14:1 - in a strategy similar to the Toyota Prius's 1.8, with valve timing matched to give a higher expansion ration than compression ratio - thus giving a longer duration combustion.
An overall architecture similarity comparison gives the following now common features in engine architecture shared between gasoline and diesel engines:
· 4 valvers per cylinder
· Central direct injectors
· Turbocharged
· b/s l/r ratios approaching
· throttle-less
· compression ratio’s approaching
· piston ring cooling
· torque curve shape
· engine block construction
Interestingly, while we are seeing a convergence in design of both major IC engine architectures, it seems the perfect mix of the two, HCCI (homogeneous charge compression inanition), is some while away from being realised. In theory, HCCI engines make the best of both worlds, homogeneous in-cylinder charge, coupled with compression ignition ensures the smoothest combustion process possible, however in practice this would require a variable compression ratio to cover the speed and load range encountered in automotive powertrains. HCCI has been the subject of much research, and I'm yet to see anything convincing, so it's a small irony that gasoline and diesel engines are converging towards it in production variants.
Tuesday 21 February 2012
Airline debit card fees
If you booked a low cost flight in Europe, I'm sure you are familiar with the low cost airlines 'optional extras' that tend to include things like buying a seat, and paying by a credit / debit card other than that operated by the airline. Well seems just as legislation is due in the UK to crack down on these things, with particulare reference to Ryan Air - at the bottom of the pile, I was a little suprised to see the following piece of marketing shite from slightly better Easy Jet
So while I might not be paying any more - there is a massive 9 quid in admin fees, and further 4.95 if I we were to pay by credit card. So while Ryan Air is in the shit for charging 6 a head, it looks as though companies are going to be getting away with admin fees like this for some time to come.
So while I might not be paying any more - there is a massive 9 quid in admin fees, and further 4.95 if I we were to pay by credit card. So while Ryan Air is in the shit for charging 6 a head, it looks as though companies are going to be getting away with admin fees like this for some time to come.
Wednesday 25 January 2012
Speeding - a multi faceted gold mine for revenue
Having been through the process of losing my licence before, I'm thoroughly convinced that not too many places milk the motorist for petty speeding offences as badly as the Australian traffic police. Compared with the majority of Europe (excluding those that scale fines according to income), Australia must be 3-4 times more expensive. Clearly the approach being played by the police is cracking down on speeding as a means of accident reduction, while I dispute that as a direct cause (not a contributing factor) of the majority of accidents, it is indeed cheap and easy to police, and it's easy to make money out of. In actual fact I have a strong suspicion that poor driver training, poor spatial awareness, road rage, drink driving, and poor roads are bigger contributors, but all of these are pretty hard to tackle in the short term.
By contrast in the UK, I've done 20,000 - 30,000 miles and not been booked, breath tested, or even pulled over, Nothing! The country has gone that far up the path of pursing speeding as the course of accidents (or revenue raising, you decide), that now, as with the high density of CCTV cameras, this is mathced on the roads by a ridiculous density of speeding cameras, sometimes up to 1 per 100 metres! Incidently though driver education lags behind that of mainland Europe, and now Australia. So after 18 months incident free, my other half scored a low level speeding ticket from a fixed camera. No big deal, however the irony lies in how the fine was dealt - 3 points and 60 pounds - fair for the offence, but all this was served up from the "West Yorkshire Casualty Reduction Partnership". Yep thats what i'd call the West Yorkshire Police trying on a bit of marketing lingo to disguise revenue raising if ever I saw it.
Names aside, what was more Ironic was that for a further 15 pounds, she was able to attend a road safety awareness course, and have the points waived. This was pushed particularly hard, given that it was printed on a cardboard flyer next to the crummy government recycled paper fine notice, and mentioned in no less than all 3 pieces of correspondence to date. Further, one would think that this type of offer would be offered to repeat of high-level offenders - the ones who are just about to lose their licence. Here is what I suspect - knowing what I know about insurance premiums in the UK, and the fact that all demerit points have to be declared, I suspect that the cost of the course and the time to attend it must be worth it compared to what the average premium increase would be. This then is very clever marketing
By contrast in the UK, I've done 20,000 - 30,000 miles and not been booked, breath tested, or even pulled over, Nothing! The country has gone that far up the path of pursing speeding as the course of accidents (or revenue raising, you decide), that now, as with the high density of CCTV cameras, this is mathced on the roads by a ridiculous density of speeding cameras, sometimes up to 1 per 100 metres! Incidently though driver education lags behind that of mainland Europe, and now Australia. So after 18 months incident free, my other half scored a low level speeding ticket from a fixed camera. No big deal, however the irony lies in how the fine was dealt - 3 points and 60 pounds - fair for the offence, but all this was served up from the "West Yorkshire Casualty Reduction Partnership". Yep thats what i'd call the West Yorkshire Police trying on a bit of marketing lingo to disguise revenue raising if ever I saw it.
Names aside, what was more Ironic was that for a further 15 pounds, she was able to attend a road safety awareness course, and have the points waived. This was pushed particularly hard, given that it was printed on a cardboard flyer next to the crummy government recycled paper fine notice, and mentioned in no less than all 3 pieces of correspondence to date. Further, one would think that this type of offer would be offered to repeat of high-level offenders - the ones who are just about to lose their licence. Here is what I suspect - knowing what I know about insurance premiums in the UK, and the fact that all demerit points have to be declared, I suspect that the cost of the course and the time to attend it must be worth it compared to what the average premium increase would be. This then is very clever marketing
The national car insurance scam
When I first moved to the UK, I was under the impression that securing auto insurance (of all things!) would be a relatively straight forward endeavour - I mean there are that many similarities between how things are administered in Australia and the UK, that auto insurance would likely be one of them.
My first quote for a car similar to what I was already driving back home came in at a whopping 3k online. Thinking I was missing out on something big style, I visited a broker, where the best I was offered was £1900 - more than twice the value of the car receiving the cover in the first place! Perhaps more surprisingly was being told that this was infact a good deal! Further digging online halved this price again, but the amount of input variables required by these companies when quoting I found to be simply astounding - the occupation list alone was about as extensive as that of the tax office. After handing over a substantial wad of cash, I was under the impression that this was the end of the hassle, and next years bill would be loads cheaper in any case, as I'd be accruing 'valuable' UK driving history.
Moving house 2 months later, well you could hardly call it moving when it was 5 doors down on what was once the same street, the insurance company decided that they were accepting additional risk and charged an additional £50 for the move. While I can appreciate that it may have been closer to a more dangerous area, I would hardly call 5 doors statistically significant - and herein lies the problem - If insurance companies sense any kind of additional risk that can be quantified on any scale they will charge for it! Clearly uncontrollable factors such as manner of parking, gang activity, and other incompetent drivers activity, and an individuals pre-disposition to making a claim (to name a few) would be more significant contributing factors to an insurers risk, but since auto insurance is administered via a call centre, the odds of actually having an intelligent conversation are out the window.
To Illustrate just how out of touch call centre operators selling insurance are, I'll give an example of how I tried to negotiate my premium increase down from the £50 increase. The only factors left to change were where I could leave my vehicle overnight (street, driveway, or garaged). I had them all quoted, and was surprised that the most expensive was indeed having it garaged! The explanation: "People who have expensive cars garage them". Once again a demonstration of lack of critical thinking - In reality it's likely that these expensive cars are actually targeted by organised thieves, and are not simply kids out stealing whatever they can break into. Putting things into context - I was driving a family car in South Yorkshire at the time - clearly not a target for organised crime, and much more likely to be stolen by joy riders. Clearly if they are going to use such a high-level model on quoting insurance premiums, they should occasionally apply the odd reality check! Incidentally I didn't have any of these options available to me living in a flat - hence also demonstrating the lack of operator engagement or any kind of thought, when you can check all this on google street view!
Further to this, I've been charged indiscriminately for minor policy upgrades. Firstly I wanted to add another driver for a week - fair play, I get charged. To add 1 more day of coverage to this, I'm charged for a whole extra week - cover I don't need, but I'm still paying for. I've also borrowed a car from the dealer while mine has been getting serviced - only to be told that I'd need to get it added to my policy for £20 per day! And that no, I couldn't remove my car from the policy, as it would need to be insured too. Clearly this would have incurred a lot of administration costs to do so, but the stupidity remains - my car getting serviced would have been covered by the dealers property / professional insurance, and it would hardly have been possible for me to be driving both at once in any case. Further the car I did end up borrowing had the power of a lawnmower - reduced risk if anything! And for all this they wanted £25! for 1 Day. Just to go the full trifecta, I'll add one more example. Recently I had to add business cover for my partner on the policy (the fact that they can charge for usage type on it's own is a crime), and as I'm the policy holder, I had to upgrade too - yes thats right, more fees for additional features that i'm never going to use!
These 3 examples illustrate the rigid nature to which insurance companies enforce and monitor usage - any changes, you bet they will charge you for them! Sure they also demonstrate a clear lack of analytical thought on the operators behalf too, but what is slightly worrying for me is that for an industry such as this which is essentially a service sector, the customer is treated like crap. I mean if you walked into a car dealership and spent the same order of money as we are talking about here on accessories, then had the hide to ask for a discount or say take 2 car matts instead of 4, I'm sure they'd come to the party to please you owing to the amount of money spent.
So we have seen by the previous price hike that insurance companies blindly apply statistics to any kind of circumstances change, all without the slightest reality check, so long as it adds up in there favour - so what happens when it doesn't? Recently I changed from an Australian to UK licence, and was told before doing so that my premium would be discounted. Clearly this makes sense, as a UK licence means that points from traffic offences actually count, rather than being lost in international waters. Funnily enough though this made no difference to my premium, despite a pretty significant incentive to slow my driving down, had I been inclined to fully exploit the benefits of possessing a foreign licence.
Being fed up of paying for minor changes - which incidentally are a legal requirement of being insured driving in the UK - I decided to look into the regulations on the industry. I'd heard many times on the phone to my insurer about who they are regulated by in the legal blurb, and for all the legal crap that they sugar coat it with, essentially my insurer (and all others i presume) are regulated by the FSA, while the industry is self regulated by an industry association. A small but significant point- this only regulates them in terms of selling financial products, not in terms of how they can charge for policy differences. Sure they do provide a high level of financial cover - if you ever actually need it - and this is what is required by the government, but for the vast majority of people this remains a facility seldom used. I believe that the way this industry conducts itself is a shining example of self regulation, and a strong case for government to step in, and ensure these companies limit their profits and cut down on scamming the public. The irony here is that this is perhaps one of the better microcosms for the current attitude of UK society - that self regulation promotes competition and is good for business. That it may be, but at what price to the consumer? Sure it can be a hefty financial price, but few Brits ever consider what I like to call the administration cost - the lost time spent checking for discounts, updating the companies on minute circumstance details, and wondering which car they should buy based on how much the insurance is going to be. I'm honestly surprised that few seem to want to do anything about the state of affairs given the supreme waste of time it generates, not to mention the family feuds it must cause for all those but the super wealthy who are not bothered by a few thousand pounds expenditure on the rolls.
Whilst on the cost of insurance to the average Joe - it must be significant, given the fact that there are of order 500K drivers on this small island presently driving without cover - this must be of order 2-3 % of cars on the road if we estimate that there is roughly half the population owning and driving cars. I'm sure this number is liable to grow, as we are presently watching unemployment climb, and auto insurance has gone up 40% or so in the past year. Hold up 40%! Thats ridiculous. So while there is currently a government inquiry into the price of auto insurance, the public is repeatedly fed the message by insurers that the price of insurance is driven up by un-insured drivers. Interestingly the fine for being uninsured is £500 max ,and the cheapest car you can get is only a few hundred, so when you compare this to nearly £1k for an insurance policy for someone living a less than desirable area, you can see if you are barely scraping by financially, its a risk thats going to look more and more attractive as the economic situation worsens, and insurance premiums rise. Incidently, it is often that in impoverished areas where people struggle to pay the bills that auto insurance is also at its highest.
So Insurance was something I'd never be making use of - that was until someone decided to key my car in a supermarket carpark under full view of CCTV. While it would be any sane person's view that catching the petty theif who did this (along with several other cars at the same time) would be the primary concern of the insurance company, supermarket, and police - sadly it was not. My partner was shown CCTV footage of the car parked in the car park at the supermarket, so she made a police report in the hope that they would have access to the footage and get on the case. Several days later the police notified us that the the supermarket had no sign of our vehicle on CCTV footage. For me that just didn't add up, so a trip to the supermarket revealed that their corporate policy was to only release footage to insurance companies - not even the Police! From this series of events, I'm left to conclude that the supermarket probably did have the footage, and that it's highly likely they are in bed with the insurance companies - financially it adds up. If the perp was to be prosecuted without me making a claim, there is no upside for the supermarket - perhaps apart from having retained a customer, however knowing the state of affairs with the accident and injury claims side of auto insurance that was revealed some months ago, it would not be too much of a stretch to assume a similar state of affairs here.
One more nail in the coffin of poor customer service was when it came to renewal time. One would think that for a business that customer retention would be a high priority, given the administration time and costs involved in transferring customer information between companies, so you can imagine my surprise when discovering my renewal price was £250-300 more than a 'new customer' price from the same insurer with identical policy conditions! This does nothing to retain a customer, and it clearly is poor business when the onus is on the customer to check the pricing, and even poorer when the discrepancy is so great. Alas though, as with the case with the supermarket, it would appear that customer retention is a long lost concept in the UK.
Fundamentaly it's a pretty poor state of affairs in the UK when there is little to no transparency in policy pricing, or even any common sense behind it. The industry is one of the few of its kind left that is not administered online, rather it relies on call centres - I suspect in part this is so the consumer is unable to spend too much time comparing the relative costs of policy options in order to get a discount. In essence it is the complexity and lack of clarity in the system that allows them to charge to the hilt, legaly and without a so much as a reality check. To further Illustrate the state of affairs one can purchase "No claims bonus protection" along with a policy - i.e. paying an extra premium to retain ones no claim history in the event of a claim - Hold up thats effectively taking out insurance on your insurance!
To avoid this pile of nonsense, it would be my suggestion to charge based on 4 simple factors: accidents, claims, driving history, and vehicle class only. Other factors that are charged for at present - which indeed may or may not be actual significant factors - are likely discrimination under European Law. Earlier last year, a case was heard in Luxembourg as to why there was discrepancy between men and womens insurance premiums - this was ruled illegal under EU law, so naturally premiums will rise to parity! Furthermore 3rd party cover should be assumed on any vehicle if the driver has permission - the amount of drivers who are restricted to a single car, and for example could not driver their drunk friends car home from the pub, is simply ridiculous owing to current legislation. Government regulation would also likely make insurance affordable for those who presently do not see the financial benefit (i.e. those who choose to drive uninsured), meaning fairer cover for all in the long run.
My first quote for a car similar to what I was already driving back home came in at a whopping 3k online. Thinking I was missing out on something big style, I visited a broker, where the best I was offered was £1900 - more than twice the value of the car receiving the cover in the first place! Perhaps more surprisingly was being told that this was infact a good deal! Further digging online halved this price again, but the amount of input variables required by these companies when quoting I found to be simply astounding - the occupation list alone was about as extensive as that of the tax office. After handing over a substantial wad of cash, I was under the impression that this was the end of the hassle, and next years bill would be loads cheaper in any case, as I'd be accruing 'valuable' UK driving history.
Moving house 2 months later, well you could hardly call it moving when it was 5 doors down on what was once the same street, the insurance company decided that they were accepting additional risk and charged an additional £50 for the move. While I can appreciate that it may have been closer to a more dangerous area, I would hardly call 5 doors statistically significant - and herein lies the problem - If insurance companies sense any kind of additional risk that can be quantified on any scale they will charge for it! Clearly uncontrollable factors such as manner of parking, gang activity, and other incompetent drivers activity, and an individuals pre-disposition to making a claim (to name a few) would be more significant contributing factors to an insurers risk, but since auto insurance is administered via a call centre, the odds of actually having an intelligent conversation are out the window.
To Illustrate just how out of touch call centre operators selling insurance are, I'll give an example of how I tried to negotiate my premium increase down from the £50 increase. The only factors left to change were where I could leave my vehicle overnight (street, driveway, or garaged). I had them all quoted, and was surprised that the most expensive was indeed having it garaged! The explanation: "People who have expensive cars garage them". Once again a demonstration of lack of critical thinking - In reality it's likely that these expensive cars are actually targeted by organised thieves, and are not simply kids out stealing whatever they can break into. Putting things into context - I was driving a family car in South Yorkshire at the time - clearly not a target for organised crime, and much more likely to be stolen by joy riders. Clearly if they are going to use such a high-level model on quoting insurance premiums, they should occasionally apply the odd reality check! Incidentally I didn't have any of these options available to me living in a flat - hence also demonstrating the lack of operator engagement or any kind of thought, when you can check all this on google street view!
Further to this, I've been charged indiscriminately for minor policy upgrades. Firstly I wanted to add another driver for a week - fair play, I get charged. To add 1 more day of coverage to this, I'm charged for a whole extra week - cover I don't need, but I'm still paying for. I've also borrowed a car from the dealer while mine has been getting serviced - only to be told that I'd need to get it added to my policy for £20 per day! And that no, I couldn't remove my car from the policy, as it would need to be insured too. Clearly this would have incurred a lot of administration costs to do so, but the stupidity remains - my car getting serviced would have been covered by the dealers property / professional insurance, and it would hardly have been possible for me to be driving both at once in any case. Further the car I did end up borrowing had the power of a lawnmower - reduced risk if anything! And for all this they wanted £25! for 1 Day. Just to go the full trifecta, I'll add one more example. Recently I had to add business cover for my partner on the policy (the fact that they can charge for usage type on it's own is a crime), and as I'm the policy holder, I had to upgrade too - yes thats right, more fees for additional features that i'm never going to use!
These 3 examples illustrate the rigid nature to which insurance companies enforce and monitor usage - any changes, you bet they will charge you for them! Sure they also demonstrate a clear lack of analytical thought on the operators behalf too, but what is slightly worrying for me is that for an industry such as this which is essentially a service sector, the customer is treated like crap. I mean if you walked into a car dealership and spent the same order of money as we are talking about here on accessories, then had the hide to ask for a discount or say take 2 car matts instead of 4, I'm sure they'd come to the party to please you owing to the amount of money spent.
So we have seen by the previous price hike that insurance companies blindly apply statistics to any kind of circumstances change, all without the slightest reality check, so long as it adds up in there favour - so what happens when it doesn't? Recently I changed from an Australian to UK licence, and was told before doing so that my premium would be discounted. Clearly this makes sense, as a UK licence means that points from traffic offences actually count, rather than being lost in international waters. Funnily enough though this made no difference to my premium, despite a pretty significant incentive to slow my driving down, had I been inclined to fully exploit the benefits of possessing a foreign licence.
Being fed up of paying for minor changes - which incidentally are a legal requirement of being insured driving in the UK - I decided to look into the regulations on the industry. I'd heard many times on the phone to my insurer about who they are regulated by in the legal blurb, and for all the legal crap that they sugar coat it with, essentially my insurer (and all others i presume) are regulated by the FSA, while the industry is self regulated by an industry association. A small but significant point- this only regulates them in terms of selling financial products, not in terms of how they can charge for policy differences. Sure they do provide a high level of financial cover - if you ever actually need it - and this is what is required by the government, but for the vast majority of people this remains a facility seldom used. I believe that the way this industry conducts itself is a shining example of self regulation, and a strong case for government to step in, and ensure these companies limit their profits and cut down on scamming the public. The irony here is that this is perhaps one of the better microcosms for the current attitude of UK society - that self regulation promotes competition and is good for business. That it may be, but at what price to the consumer? Sure it can be a hefty financial price, but few Brits ever consider what I like to call the administration cost - the lost time spent checking for discounts, updating the companies on minute circumstance details, and wondering which car they should buy based on how much the insurance is going to be. I'm honestly surprised that few seem to want to do anything about the state of affairs given the supreme waste of time it generates, not to mention the family feuds it must cause for all those but the super wealthy who are not bothered by a few thousand pounds expenditure on the rolls.
Whilst on the cost of insurance to the average Joe - it must be significant, given the fact that there are of order 500K drivers on this small island presently driving without cover - this must be of order 2-3 % of cars on the road if we estimate that there is roughly half the population owning and driving cars. I'm sure this number is liable to grow, as we are presently watching unemployment climb, and auto insurance has gone up 40% or so in the past year. Hold up 40%! Thats ridiculous. So while there is currently a government inquiry into the price of auto insurance, the public is repeatedly fed the message by insurers that the price of insurance is driven up by un-insured drivers. Interestingly the fine for being uninsured is £500 max ,and the cheapest car you can get is only a few hundred, so when you compare this to nearly £1k for an insurance policy for someone living a less than desirable area, you can see if you are barely scraping by financially, its a risk thats going to look more and more attractive as the economic situation worsens, and insurance premiums rise. Incidently, it is often that in impoverished areas where people struggle to pay the bills that auto insurance is also at its highest.
So Insurance was something I'd never be making use of - that was until someone decided to key my car in a supermarket carpark under full view of CCTV. While it would be any sane person's view that catching the petty theif who did this (along with several other cars at the same time) would be the primary concern of the insurance company, supermarket, and police - sadly it was not. My partner was shown CCTV footage of the car parked in the car park at the supermarket, so she made a police report in the hope that they would have access to the footage and get on the case. Several days later the police notified us that the the supermarket had no sign of our vehicle on CCTV footage. For me that just didn't add up, so a trip to the supermarket revealed that their corporate policy was to only release footage to insurance companies - not even the Police! From this series of events, I'm left to conclude that the supermarket probably did have the footage, and that it's highly likely they are in bed with the insurance companies - financially it adds up. If the perp was to be prosecuted without me making a claim, there is no upside for the supermarket - perhaps apart from having retained a customer, however knowing the state of affairs with the accident and injury claims side of auto insurance that was revealed some months ago, it would not be too much of a stretch to assume a similar state of affairs here.
One more nail in the coffin of poor customer service was when it came to renewal time. One would think that for a business that customer retention would be a high priority, given the administration time and costs involved in transferring customer information between companies, so you can imagine my surprise when discovering my renewal price was £250-300 more than a 'new customer' price from the same insurer with identical policy conditions! This does nothing to retain a customer, and it clearly is poor business when the onus is on the customer to check the pricing, and even poorer when the discrepancy is so great. Alas though, as with the case with the supermarket, it would appear that customer retention is a long lost concept in the UK.
Fundamentaly it's a pretty poor state of affairs in the UK when there is little to no transparency in policy pricing, or even any common sense behind it. The industry is one of the few of its kind left that is not administered online, rather it relies on call centres - I suspect in part this is so the consumer is unable to spend too much time comparing the relative costs of policy options in order to get a discount. In essence it is the complexity and lack of clarity in the system that allows them to charge to the hilt, legaly and without a so much as a reality check. To further Illustrate the state of affairs one can purchase "No claims bonus protection" along with a policy - i.e. paying an extra premium to retain ones no claim history in the event of a claim - Hold up thats effectively taking out insurance on your insurance!
To avoid this pile of nonsense, it would be my suggestion to charge based on 4 simple factors: accidents, claims, driving history, and vehicle class only. Other factors that are charged for at present - which indeed may or may not be actual significant factors - are likely discrimination under European Law. Earlier last year, a case was heard in Luxembourg as to why there was discrepancy between men and womens insurance premiums - this was ruled illegal under EU law, so naturally premiums will rise to parity! Furthermore 3rd party cover should be assumed on any vehicle if the driver has permission - the amount of drivers who are restricted to a single car, and for example could not driver their drunk friends car home from the pub, is simply ridiculous owing to current legislation. Government regulation would also likely make insurance affordable for those who presently do not see the financial benefit (i.e. those who choose to drive uninsured), meaning fairer cover for all in the long run.
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