How Do I Start A Car Insurance Company In The Uk ?
I want to avoid red tape ( a tough ask I am aware !). Wouldn’t it be possible to get a Lloyds underwriter to take on the risk/ regulation leaving an “entrepreneur” free to just do the selling of a policy acting as a “broker” with an enhanced fee for each policy sold? Would that not reduce the red tape involved?
You might also like :
Advertisement
August 10th, 2009 at 9:54 pm
If you wish to start as an insurance intermediary you will have to get authorisation from the FSA – they will check your record and ensure that you meet all their requirements – have a look at the FSA website for their handbook. If you print it off it is about 6 ft tall. There are also fees you have to pay as well.
If you want to start up a car insurance company then you will need approval from the DTI as well as the FSA. Part of this is ensuring that you have adequate re-insurance (if you don’t know what this is forget it!).
I would add that insurance companies have NOT made a profit out of car insurance for many a year and with the advent of aggregators this is likely to continue. (Many brokers offer policies on these site below cost!) Almost certainly you would not have the resources to fight a trade war with the big boys.
The usual reason why someone wants to set up a car insurance company is the large premiums that they see young drivers have to pay. Believe me insurers are STILL losing money on young drivers! If they were making a profit then more insurers would come in forcing down the price so it is just economical for them to offer policies.
August 11th, 2009 at 1:26 am
You ask how to start an insurance company, then in the details section you describe the duties of an insurance broker. You do realize there’s a difference between an insurance company an an insurance brokerage/agency right? A broker/agent sells the policies that are being underwritten by an insurance company and is paid a commission by the company for each policy sold/renewed. Both the broker/agent and the insurance company are required to undergo strict regulation and inspections.
You may want to post additional details of what your “plan” entails as right now it just sounds like what goes on now.
August 11th, 2009 at 3:04 am
In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance. Today UK law is defined by The Road Traffic Act 1988, which was last modified in 1991. The act requires that motorists either be insured, have a security, or have made a specified deposit (£500,000 as of 1991) with the Accountant General of the Supreme Court, against their liability for injuries to others (including passengers) and for damage to other persons’ property resulting from use of a vehicle on a public road or in other public places.
The minimum level of insurance cover commonly available and which satisfies the requirement of the act is called third party only insurance. The level of cover provided by Third party only insurance is basic but does exceed the requirements of the act.
Road Traffic Act Only Insurance is not the same as Third Party Only Insurance and is not often sold. It provides the very minimum cover to satisfy the requirements of the act. For example Road Traffic Act Only Insurance has a limit of £250,000 for damage to third party property and does not cover emergency treatment fees. Third party insurance has a far greater limit for third party property damage and will cover emergency treatment fees.
August 11th, 2009 at 5:35 am
There is more red tape and regulation involved in starting an insurance company and what red tape are you talking about .I go on line fill in a two page questionnaire and in seconds get a quote one click and I’m insured no hassle no red tape this is a non starter