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http://news.independent.co.uk/business/ ... ory=502280

Speed cameras drive Cox to record year
By Rachel Stevenson

18 March 2004

Cox Insurance, which this week revealed it was in talks to take over its rival Highway, yesterday said it had enjoyed the best year in its history as the proliferation of speed cameras had helped to make motorists become safer drivers.

The motor insurer, which pulled out of its commercial business after heavy losses from the 11 September attacks, said profits before tax were up 22 per cent to a record £52m, under-writing profits were up 33 per cent to £52.7m, and dividend payments have been resumed.

Motor insurance is now the group's core focus, and Cox yesterday said its combined operating ratio - a measure of claims as a proportion of premiums - was 86 per cent.

"We had 15 per cent fewer claims this year. Motorists are becoming much safer drivers - their behaviour is changing as all these speed cameras and penalty notices take effect. They make people drive slower and have fewer accidents," Neil Utley, the chief executive of Cox, said, adding that this was a long-term trend in motoring.

Mr Utley, who led an abortive attempt to buy out the company last year, said the premium levels in motor insurance were holding up well. Many analysts had expected rates to fall, but Mr Utley said consolidation in the motor insurance market had propped up rates, and it has already taken market share to become the number seven motor insurer in the UK.

The company declined to comment further on the possible takeover of Highway. It, too, has undergone restructuring, abandoning the Lloyd's market entirely to cut down on expenses. An all-share takeover is at present being discussed, and the deal could be worth more than £75m.

Cox's broking arm took a hit from the liquidation of Tribune Risk and Insurance Services, an insurance agent that collapsed in December last year. It was supposed to place cover with authorised insurers, but had not, leaving thousands of customers without insurance. Cox has suffered losses of some £6.5m from exposure to the company, but yesterday said this would be the full extent of the damage.

It also began a three-year cost reduction programme to take £15m out of the business, which it said yesterday was on track.

Cox shares yesterday closed up 2p at 88.5p
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We're very confident indeed that 2003 fatality figures are well up on 2002. So how is it that this company thinks accidents are down?

Are we making small accidents less likely and big accidents more likely?

Or is there something funny about the Cox claims? Like their pricing policy is more effective at attracting good drivers?

A real drop of 15% (accidents, casualties, injuries, deaths) in a population wide accident class in 12 months is unheard of. The national deaths figures have stayed within about 0.5% for the last 5 years for example (2003 excluded).

_________________
Paul Smith
Our scrap speed cameras petition got over 28,000 sigs
The Safe Speed campaign demands a return to intelligent road safety

I'm not suprised insurance companies are keen to support cameras. After all what mechanism allows them to increase the premium around 10% when the actual risk of claim is unchanged?

3M poeple now pay more insurance, per year as a result of scameras. I suspect Cox's is using this line to defend increasing profits.

It's not clear if he is saying accidents are down or claims are down? I can understand why claims might be down.

Of course those customers who don't support this view may well take their business elsewhere.

What a great demonstration of just how cynical the insurance market is. If they really have managed to reduce claims by 15% yet keep premiums "Holding up well", then you'd think they'd be keeping very quiet about it, instead of loudly proclaiming to their customer base that they are in effect ripping them off by blatant profiteering.

I suppose an increase in fatals might be good news for an insurance company, as they don't then have to pay out massive personal compensation sums. It's just difficult to imagine how you would become so dehumanised as to consider that to be a reasonable way of doing business.

Here's an interesting idea a friend of mine postulated, which I'm beginning to agree with:

His idea was that we should lobby Government to make all Insurance Companies register as charities, as Insuring people is in essence charity work. And when you think about it, it's true. They go and collect up a fund of money from people in general, then use it to assist anyone who suffers an unfortunate accident, which is just like (say) the RNLI.

If the RNLI made a fat profit for its shareholders, and charged a spiralling amount for its services against a falling demand there would be uproar, and rightly so!

So why does Government give carte blanche to insurers to profiteer out of the misfortunes of the public? Indeed, as the Road Traffic Act makes insurance compulsory, it positively encourages this. At the very least, the Government ought to run a non-profit making motor insurance service, seeing how they insist upon you having to have it. That way, at least the only opening for commercial insurance to make a profit would be by being more efficient than the state scheme.