Guy, computer scientist, 60 years old, is not crazy about driving. He has been driving for 30 years without an accident… Which should allow him, he thought, to obtain advantageous rates on the insurance of his vehicle. But against all odds, his insurer, Foyer assurances, claimed an amount 25% higher than last year on the insurance premium for his car. “Why such an increase?”asks the father of the family via the orange Alert us button.
Guy’s insurance premium in 2021
600 euros instead of 480
Five years ago, Guy decided to insure his two cars — a Hyundai Tucson and a Citroën Berlingo — via Groupago, a group buying site for car, motorcycle and home insurance in Belgium. “They had given me good conditions and so I went to them”, he says. Last year, Guy paid 480 euros for the insurance of his Hyundai Tucson. This year, his insurer is asking him for 600 euros.
Confused, Guy contacted Solidas Assurances SPRL, the company that created and manages Groupago. This insurance comparator had no explanations to provide on the reasons that motivated Foyer Assurances to such an increase. Solidas Assurance simply sent him a new proposal from another insurance company, AG. “It was the same price as what was offered to me. Even more expensive”he says.
Guy’s insurance premium in 2022
His insurer justifies the increase by his move
So Guy went directly to Foyer assurances, a company based in Luxembourg. “They said to me ‘ah but sir ‘you have moved’. I say ‘yes’ and then?’ ‘And then you pay more because you live in another locality'”, we explained to him. Indeed, Guy moved from Lobbes to Fontaine-L-Evêque, two towns in the province of Hainaut 10 kilometers apart, the second having 18,000 inhabitants, or 3 times more than the first.
Due to the density of traffic in cities, claims are more numerous there
“The calculation of the car premium depends on many factors, including the place of residence. This has an impact on the price, explains Nevert Degirmenci, Assuralia’s spokesperson. A city presents more accident risks than a village where the traffic is less important. Due to the density of traffic in cities, claims are more numerous there; which constitutes an additional risk”.
Statistical techniques are developed by insurers to ensure the profitability of goods sold
Each insurer offers rates that may differ according to its own segmentation criteria. How are these criteria determined? Sophie Civilio, product manager at Foyer Assurance, explains the tariff segmentation: “We are carrying out statistical analyzes by determining what are the characteristics of people with few or many claims. The more we favor people with few claims, the more we will have to increase the rate for people with many claims”.
The segmentation criteria are therefore based on statistical and actuarial studies. “This is how we find that people living in certain municipalities have more or fewer accidents than those living in another municipality, continues Sophie Civilio. This can be explained by the density of traffic, the proximity of large cities, the sinuosity of the roads, …; in flight, by the proximity of major highways (there are indeed more thefts in neighborhoods near major highways or highways)”.
Many other criteria are taken into account when calculating the price of compulsory vehicle insurance. And Sophie Civilio to shell: “The age of the drivers (young people have a higher frequency of claims), previous claims (we find that people who have already had accidents recently are more likely to cause accidents again), the power of the vehicle (powerful vehicles have more accidents than less powerful vehicles), etc.” The legislator asks insurance companies to be transparent about the criteria used for underwriting and pricing contracts. We thus find the list of criteria on the Assurance Foyers website.
A reduction of 25 euros, little consolation for Guy
Guy finds it difficult to swallow the argument of the change of address put forward by his insurer. Certainly Lobbes was “a little more countryside”he concedes, but he also lived there on a large causeway. “25% increase, I still find it shocking”, he confides. Finally, Solidas Assurances contacted Foyer assurances and obtained a reduction of 25 euros for its client. A proposal that Guy accepted, reluctantly. “It’s always 100 euros increase”, he laments. And for his second vehicle, Guy expects the same price…