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In the competitive car insurance market, how can you optimize for profit without incorporating the risk of payout?
by dogruck 9y ago
In the competitive car insurance market, how can you optimize for profit without incorporating the risk of payout?
- microcolonel 9y agoMaybe there's something preventing the car insurance market from being competitive, who knows.
- dogruck 9y agoAre you implying collusion? Have you noticed the massive amount of money the competing car companies spend on advertising? Have you ever suspected collusion when you shopped for your own car insurance?
- wtallis 9y ago> Have you noticed the massive amount of money the competing car companies spend on advertising? Have you ever suspected that maybe they put so much effort into advertising because it takes a lot to get someone to bother to switch insurers?
- dogruck 9y agoWhy do you think people are reluctant to switch? Perhaps because the market is so competitive that there really isn't much difference between the offerings?
- pwinnski 9y agoAll these hypotheticals! I don't switch because it's a pain to even try. I've had experiences in which a price I was quoted turned out to be lower than I was actual billed, so I don't have a lot of confidence that I'll get a straight answer if I do ask for quotes for new companies. I'm not sure I have accurate answers for questions they might ask. So I keep paying whatever, even though it's more than I like. For all I know, I could be paying half as much elsewhere. This is just the company I've been with for many, many years.
- dogruck 9y agoYes, it is a multidimensional competition. Price is not the only variable. So is service when you make a claim (I've been "screwed over" twice when making car insurance claims). And so is obfuscation of services provided. So is money spent on advertising. And lobbying. All insurance companies compete with a unique strategy on the mix of variables.
- icantdrive55 9y ago'So competitative' Wow--I just don't have the energy. The reason why I don't switch is for many reasons. 1. They make it difficult. 2. My car doesn't have a computer. 3. They make it difficult. It comes down to the Insurance industry owns us. They pay our politicians, and we pay. https://www.opensecrets.org/lobby/top.php?indexType=i https://www.opensecrets.org/lobby/top.php?indexType=i
- afarrell 9y agoThats not what the parent is saying. The parent is saying that, in the same way that retailers might act on the knowledge that OSX users are willing to pay higher prices for goods, insurers act on the knowledge that Tesla drivers are more risk-averse.
- deleted 9y ago[deleted]
- Spooky23 9y agoIts a pretty bold accusation. Car insurance is probably the most competitive market out there. Why would dozens of car insurers in multiple states collude to hurt poor Tesla and put themselves at risk of Federal and State sanction? If they were doing that for a tiny niche automaker like Tesla, why wouldn’t they screw over BMW or Lexus? This whole controversy is just a distraction to draw attention from Tesla’s service practices and support for a integrated “car as a service” model where Tesla owns financing, sales and insurance.
- afarrell 9y ago> why wouldn't they screw over BMW and Lexus? Because Tesla markets itself as "the safest car on the road". > collude Who is saying anything about collusion?
- Spooky23 9y agoSo did Volvo for decades. You didn’t need magic Volvo insurance. When you have a highly competitive market, and most participants decide to make an identical business decision that isn’t in their competitive interest (ie charge a high margin for a commodity), that’s generally accepted as evidence of collusion.