Why do some motor insurers specialise in just lady drivers?

Some insurance companies may insure only young drivers, as they can charge high premiums to people with no insurance history, no possibility of no claims bonuses, and a high risk premium, hoping that the claims they make are less than the premiums paid in. Some may only want to insure high performance cars, as they can charge high premiums to cover the costs of vehicle maintenance and repairs after an accident, which may also take place at high speed, causing worse accidents. Some companies will insure any kind of driver. But there is a group of companies now who target low risk insurance customers.

They do this by pointing out to those low risk insurance customers that their premiums are higher as they have to subsidise the higher risk customers. They insist that if you are a lower risk customer, and you join together with other low risk customers, you can all get lower premiums. This is why there are companies who specialise in women drivers, trying to get as many of them as possible to insure with them by offering lower premiums that they would be able to get elsewhere.

The reasoning behind this is that women may make a similar amount of claims to men, but their claims as less likely to be of the same size as those made my men. If you are insured by the same company as insure men, then you subsidize those men's claims.

The reason that women's claims are cheaper is because they have less serious accidents. The motor vehicle that they drive is likely to be damaged less, the other cars involved in the accident are likely to be less damaged, and properties suffer less damage. The fact that there are lower claims leads to lower premiums. Women have been proved to drive differently to the way men do. They take fewer risks, they don't drive as fast, and they are less likely to be showing off to their mates with fancy driving manoeuvres that on many occasions only end in tears.

But how do insurers justify a business model where lower premiums are involved? Well, it's really quite simple. Profit is made by adding up the total of the premiums and subtracting the total of the claims. If the margin per customer is small, what an insurance customer needs to do is to get as many people on their books as they can, which can make the small margins add up to a decent profit. Women make up half of all drivers, so targeting all women, in an attempt to prise them away from their current insurance company, makes sense. It must work, because quite a few companies have joined this targeting exercise.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Motor Insurance

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