So I've just moved out of my marina and back onto a swing mooring out in the bay at Kettering. Club Marine charged me an additional $176 for this. I asked the rep. why and got the standard "more risk' line for swing moorings.
Are swing moorings in Tasmania really more risky than marina pens? We have a pretty good system here for moorings, by law one is required to have them serviced at regular intervals. I'm wondering:
1. Do insurance companies actually pay out more for swing mooring related claims compared to marina pens?
2. Is there any way to access the actual stats for comparison?
While in the marina (for less than a year), I saw a few accidents, heard of more and had one myself when I got blown into my neighbors boat by a side gust (I hooked their dinghy that was hanging on davits and smashed it). Marina pens with their tight access, limited maneuvering room and risks from side winds, seem far more likely to generate more claims than swing moorings. Perhaps it's just that the swing mooring related claims, when they happen, are more disastrous and therefore more expensive. Interesting to hear what you all think about this?
I worked in the business for 25 years. Insurers do have some pretty good and long tetm stats. Via the reinsurers they can access some global stats. They don't tend to make stuff up.
As for getting access to stats, these would be confidential commercial data sets. I don't think that they would be released.
We do tend to act and think on personal experience and bias. Men remember being cut up by a woman driver (but not all the men) and then can't believe that women are better drivers. How many "young gun" male drivers would accept that the slow old guy in front of them is a way better insurance risk?
On the same vein, I suggest that we notice more incidents or near misses in marinas partly because we can easily observe 100 boats - or get the gossip from our neighbours.
You are also right that it is possible that swing mooring claims tend to be more costly. Possibly there is less chance of recovery from the guilty party on a swing mooring.
Cheers
Bristol
Only $176 are you kidding.
Move on.
On one boat, I only have cover if the boat is on the mooring and I am house overlooking the mooring.
Go back to work, the boat goes back to marina.
Select to expand quoteBristolfashion said..
I worked in the business for 25 years. Insurers do have some pretty good and long tetm stats. Via the reinsurers they can access some global stats. They don't tend to make stuff up.
As for getting access to stats, these would be confidential commercial data sets. I don't think that they would be released.
We do tend to act and think on personal experience and bias. Men remember being cut up by a woman driver (but not all the men) and then can't believe that women are better drivers. How many "young gun" male drivers would accept that the slow old guy in front of them is a way better insurance risk?
On the same vein, I suggest that we notice more incidents or near misses in marinas partly because we can easily observe 100 boats - or get the gossip from our neighbours.
You are also right that it is possible that swing mooring claims tend to be more costly. Possibly there is less chance of recovery from the guilty party on a swing mooring.
Cheers
Bristol
So would they calculate the premium based on the risk in each anchorage, each state- Tasmania in my case, or Australia overall, or worldwide overall?
You're probably right regarding what we notice in our respective locations and our bias. Not being able to see the data means it's just guesswork and faith from a consumers point of view though.
Select to expand quotelydia said..
Only $176 are you kidding.
Move on.
On one boat, I only have cover if the boat is on the mooring and I am house overlooking the mooring.
Go back to work, the boat goes back to marina.
Glad to hear $176 is insignificant to you Lydia 
But my point is that we take it on good faith that there are greater risks/costs to insurers from swing mooring claims compared to marina pen claims and therefore the cost should be greater for our policies. I'd like to see the stats. to back that up.
And then there's the issue of whether the claims are clustered in specific anchorages, states, countries or whatever and how the insurers calculate risk and apply premiums. Do they just average the risk across each state for example, with no regard to specific anchorages being either less or more risk than others? What if my anchorage has had a lot less claims historically compared to another anchorage in the state? For example, there was a major flood event a little while ago in the north of Tas on the Mersey River in Devonport. It caused a lot of damage to boats on swing moorings and on the marina. And a section of the floating marina with boats was swept away. I think there was a boat or two lost altogether, they disappeared in Bass Straight. When I asked the operator what my additional premium would be to put my boat on a swing mooring in the Mersey River, it was the same as Kettering.
B.t.w. Where are your boats located? Are there lots of swing mooring accidents there? What are the local legal requirements for mooring service there?
Ah, the art and science of insurance rating.
You need a certain minimum claims experience for reasonably accurate statistical rating. In most individual locations you'd have nowhere near that level. On the other hand, if you use national stats, you miss the fine detail and any significant differences. Rating is often a combination of underlying statistical rates and additions and subtractions for known positive or negative features.
If you think of the theory of insurance, we all put into the pool according to our risk and receive according to need.
It's interesting that we get so obsessed with the underlying pricing of insurance - over the long term insurers make no more than an acceptable rate of return. On the other hand, do we know the underlying pricing details of cars, egg, solicitors, real estate agents etc etc.
Just a final nod to the law of diminishing returns. An insurer could spend, say, 2days evaluating your new mooring where they only insure your boat - they'd then have to charge you a couple of grand for the evaluation AND might decide that your premium needs to go up. Somewhat averaged premiums help avoid massive jumps in price up and down.
Cheers
Bristol
I worked in insurance for a year or so on a management consultancy. In my view the whole thing is a scam. About 20% of the premium goes into underwriting the risk, the rest goes into peoples pockets.
Normal commissions paid to the insurance seller/broker is between 40-60%. If you buy $1,000 of insurance $200 underwrites the risk, about $450 is paid to the seller/broker and the rest pays the people involved and shareholders.
It is a necessary evil where the loss could ruin or seriously upset your life. But if you can afford it it is best to self insure.
I should add I have shares in AMP and QBE so I can get some return out of the industry.
A scam! Them is fightin' words.
Firstly, a good definition of a management consultant is "someone who borrows your watch and then charges to tell you the time". Now that IS a scam. By the way, this is meant to be light-hearted - you did call my whole career "a scam".
Secondly, all industries have a range of costs. It's like saying that coffee shops are a scam 'cos only 20c goes on the coffee - the rest is wasted on cups, coffee machines, staff, tax, advertising etc. In the same way, you've gotta have underwriters to take on the risk, claims staff etc etc.
Brokers act for the client NOT the insurer. If you don't like their remuneration, take it up with them or go direct. There are brokers or intermediaries in a wide range of industries - what is a supermarket, chandler or boat broker?
There's a good chunk of tax - take that up with the government.
I'm assuming that you accept that all commercial businesses need to make a profit and provide a return to shareholders in exchange for providing capital. I'm sure your management consultancy built in a nice profit margin (which is of course quite right - we allwant to earn a dollar )
Cheers
Bristol
P.s. self insurance is great in theory - until you sink that $2million boat
My guess is the premiums are based on a national basis, and we have seen a lot of boats breaking away from swing moorings in storms and just lack of service. There are thousands of shonky moorings IMHO just around NSW. Compare with marinas which are usually properly managed.
So it looks like once again the good guys pay for the sinner's evils.
Select to expand quoteBristolfashion said..
A scam! Them is fightin' words.
Firstly, a good definition of a management consultant is "someone who borrows your watch and then charges to tell you the time". Now that IS a scam. By the way, this is meant to be light-hearted - you did call my whole career "a scam".
Secondly, all industries have a range of costs. It's like saying that coffee shops are a scam 'cos only 20c goes on the coffee - the rest is wasted on cups, coffee machines, staff, tax, advertising etc. In the same way, you've gotta have underwriters to take on the risk, claims staff etc etc.
Brokers act for the client NOT the insurer. If you don't like their remuneration, take it up with them or go direct. There are brokers or intermediaries in a wide range of industries - what is a supermarket, chandler or boat broker?
There's a good chunk of tax - take that up with the government.
I'm assuming that you accept that all commercial businesses need to make a profit and provide a return to shareholders in exchange for providing capital. I'm sure your management consultancy built in a nice profit margin (which is of course quite right - we allwant to earn a dollar )
Cheers
Bristol
P.s. self insurance is great in theory - until you sink that $2million boat
You're right, I did make some money telling people the time with their watch. They either couldn't tell the time on their own, or, the answer was only obvious when I told them what it was.
Yes there are costs in any industry but the inefficiencies in the insurance industry are so far out of line with the other industries I worked in that I see it as a scam. The inefficiencies cause the poor ratio of premium paid to risk covered and mean that wherever possible self insurance is preferable.
Sometimes the risk is such that it is necessary to lay it off to someone else through insurance, but not as often as the industry would encourage the consumer to believe.
I made and have some good friends in the industry who are I regard as highly ethical and honourable people, one is the current IAG CEO. My problem is not with the individuals but the structure of the industry.
I write this not to argue about insurance but rather to encourage boat owners to really think whether paying for insurance, or too much insurance, is an effective use of their capital.
Hmm, $400 a year v.s. the chance of losing everything thing I have. Seems a reasonable price.
Remember that intermediaries in all industries don't get something for nothing. In insurance they aquire the business and administer it - the commission reflects that reduced cost to the insurer which is why direct insurers are not so much cheaper.
At a gross level (i.e. before reinsurance costs), I would more commonly have seen a claims to premium ratio of 55% and a commission rate of 20 or 25%.
Don't forget that the government charges significantly as tax plus levy plus duty which isn't really the fault of the insurer.
And, of course, the reason that I want all of you to have insurance is that, when you run into me, there's someone to pay up! I've seen what happens when self insured people try to deal with a claim where they are at fault - they argue over perfectly sensible repair methods & costs, want "their mate" who does a bit of fixing up to do the work etc. The only sensible option then is to let your insurer handle your repairs and let 'em chase the other bloke for the cash.
The only sensible application of self insurance is taking a larger excess to reduce premiums. To think that you could build up a pool to defend a multi million dollar liability claim is not possible. Insurers have access to top legal advice, know when to settle out of court etc.
Cheers
Bristol
P.s. you must have been the exception that proved the rule. I dealt with management consultants a lot - they always seemed to send in a team of 25 year olds with MBAs to ask people who worked in the business what the solutions were - these were then presented to the Board/Senior management by some impressive sounding bloke in a flash suit as their own. Not much value or original thinking. We always reckoned they just charged by the inch thickness of the report - which explained the proliferation of charts, diagrams, graphs and appendices.
