Cruisers Forum
 


Join CruisersForum Today

Reply
 
Thread Tools Rate Thread Display Modes
Old 29-08-2011, 17:41   #1
Registered User
 
wolfaroo's Avatar

Join Date: Mar 2010
Location: UK South Coast
Boat: Unknown MFV 60ft
Posts: 111
Forum-Based Cooperative Insurance . . .

Sorry if this has been aired before but... seems to me like insurance premiums are on the march again (aren't they always?) and loss adjusters are driving even fancier cars than ever before (the last one I met, in South Australia, drove a Ferrari, and thats the truth).

So with premiums rising, payouts reducing, terms tightening and profits soaring, would it be such a bad idea to launch a cooperative amongst the community on this forum with the aim of providing a fairer, more economical product for us all?

I'm guessing yes (as there isn't one) but can't work out why.

Or has this bottle of Rioja turned me into a damn communist?
__________________

__________________
"It is good to have an end to journey towards; but it is the journey that matters in the end."
Ursula Le Guin
wolfaroo is offline   Reply With Quote
Old 30-08-2011, 06:28   #2
Moderator Emeritus
 
GordMay's Avatar

Join Date: Mar 2003
Location: Thunder Bay, Ontario - 48-29N x 89-20W
Boat: (Cruiser Living On Dirt)
Posts: 31,596
Images: 240
Re: Forum-Based Cooperative Insurance . . .

You want to form an insurance company?
__________________

__________________
Gord May
"If you didn't have the time or money to do it right in the first place, when will you get the time/$ to fix it?"



GordMay is offline   Reply With Quote
Old 30-08-2011, 06:51   #3
Armchair Bucketeer
 
David_Old_Jersey's Avatar

Join Date: Oct 2006
Posts: 10,013
Images: 4
Re: Forum-Based Cooperative Insurance . . .

I always like new business ideas but I don't see this as a flyer due simply to CF being such a small pool of premium payers.

That's leaving aside that for some folk who appear on CF I wouldn't get on any boat they were in command of - I certainly would not want to risk paying for there learning curve / stupidity
David_Old_Jersey is offline   Reply With Quote
Old 30-08-2011, 07:13   #4
Registered User
 
wolfaroo's Avatar

Join Date: Mar 2010
Location: UK South Coast
Boat: Unknown MFV 60ft
Posts: 111
Re: Forum-Based Cooperative Insurance . . .

Quote:
Originally Posted by GordMay View Post
You want to form an insurance company?
Well a co-operative, but why not? Reading through the related threads on this site and others reveal marine insurance is very much hit & miss and I very much doubt whether cruisers are actually getting good value for money, let alone a decent product. So I was just thinking out aloud really, floating the idea of a Co-operative - afterall, there are more than enough members on here to form one.

A co-operative is a business, but more than this, it acts together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically. Co‑operatives are not about making big profits for shareholders, but creating value for their members. Their top priority is to provide the best possible services for their members and to invest in their community.

I'm convinced it would lead to much cheaper insurance for cruisers & generate reasonable dividends for us all too...
__________________
"It is good to have an end to journey towards; but it is the journey that matters in the end."
Ursula Le Guin
wolfaroo is offline   Reply With Quote
Old 30-08-2011, 07:17   #5
Armchair Bucketeer
 
David_Old_Jersey's Avatar

Join Date: Oct 2006
Posts: 10,013
Images: 4
Re: Forum-Based Cooperative Insurance . . .

Are you already in the insurance industry?
David_Old_Jersey is offline   Reply With Quote
Old 30-08-2011, 07:24   #6
Registered User
 
wolfaroo's Avatar

Join Date: Mar 2010
Location: UK South Coast
Boat: Unknown MFV 60ft
Posts: 111
Re: Forum-Based Cooperative Insurance . . .

Quote:
Originally Posted by David_Old_Jersey View Post
Are you already in the insurance industry?
Nope. But thats just detail If the overall goal is there, details are easy to work out given a group of capable folk.
__________________
"It is good to have an end to journey towards; but it is the journey that matters in the end."
Ursula Le Guin
wolfaroo is offline   Reply With Quote
Old 30-08-2011, 07:55   #7
Senior Cruiser
 
osirissail's Avatar

Cruisers Forum Supporter

Join Date: Feb 2009
Location: A real life Zombie from FL
Boat: Gulfstar 53 - Osiris
Posts: 5,416
Images: 2
Re: Forum-Based Cooperative Insurance . . .

About as close as you will come to a "co-op" type insurance for cruisers is I.M.I.S. and that is not very close. But they have insurance products specifically tailored to cruising couples on cruising boats. Historically other marine insurance outfits required more than 2 people on a cruising boat for passages.
- - On the other hand, you could start up an Edward Williams type clone which has dirt cheap premiums and even writes for ferro-cement . . .
__________________
osirissail is offline   Reply With Quote
Old 30-08-2011, 08:51   #8
Registered User
 
denverd0n's Avatar

Join Date: Jun 2008
Location: Tampa, FL
Posts: 3,954
Images: 6
Re: Forum-Based Cooperative Insurance . . .

The "why not?" is pretty simple: too small of a pool of investors.

Insurance companies spread their overhead and underwriting across thousands upon thousands of policy-holders. Here on CF (heck, even if you included all of the other cruising forums on the internet!) you would probably not get more than a couple of thousand at most. How high would the premiums have to be in order to cover one member suffering one catastrophic loss during the first year?

Sorry, but the numbers just do not add up.

There's also a bit of a chicken and egg problem. Who is going to commit to paying the premium unless they know how much it will be, exactly what it would cover, and are certain that the co-op will have the resources to pay off a claim? And how will the co-op be able to determine how much premiums will be, what sort of coverage it can offer, and guarantee that it has enough members to pay off claims until a substantial number of people commit to paying the premiums?
__________________
denverd0n is online now   Reply With Quote
Old 30-08-2011, 10:22   #9
Registered User
 
wolfaroo's Avatar

Join Date: Mar 2010
Location: UK South Coast
Boat: Unknown MFV 60ft
Posts: 111
Re: Forum-Based Cooperative Insurance . . .

Admittedly it would be a very ambitious goal!



And yep, there would be a number of significant hurdles to overcome - the chicken & egg being a major one of those. But none of them are insurmountable, with the exception of the numbers involved as you pointed out.



I guess we're not there yet. But I don't believe we are a million miles away either... 65,000 members on CF and counting, >10% with boats?? I don't know. But, very crudely*, 10% would be enough to sustain at least 90 total losses per year at an annual premium of 1.5% boat value, and produce a fund easily able to generate a revenue stream in excess of 10 further total losses per year. 100 total losses /6500 boats (1.53%) is a massive safety margin... I would suggest the actual data shows <0.1% total losses. In any case, anything less than 1.5% total losses is sustainable & profitable.


*before pulling these numbers to bits please note this is just a crude/simplistic model to demonstrate that the numbers involved may not be as far away as one might suspect! Assuming >10% CF members have boats that is...
__________________
"It is good to have an end to journey towards; but it is the journey that matters in the end."
Ursula Le Guin
wolfaroo is offline   Reply With Quote
Old 30-08-2011, 10:33   #10
Armchair Bucketeer
 
David_Old_Jersey's Avatar

Join Date: Oct 2006
Posts: 10,013
Images: 4
Re: Forum-Based Cooperative Insurance . . .

Quote:
Originally Posted by wolfaroo View Post
Nope. But thats just detail If the overall goal is there, details are easy to work out given a group of capable folk.
Just a detail? A man after me own heart
David_Old_Jersey is offline   Reply With Quote
Old 30-08-2011, 10:45   #11
Senior Cruiser
 
Cheechako's Avatar

Cruisers Forum Supporter

Join Date: Aug 2006
Location: Skagit City, WA
Posts: 19,376
Re: Forum-Based Cooperative Insurance . . .

I think what you're talking is a group. You can then negotiate insurance rates and terms yearly. Groups get better rates and terms. (tried to buy individual health insurance lately?) Most businesses in the country do this already. Many change companies every couple years to the best bidder when they go out for bids. There are in-between entities who handle it for smaller companies. One of those might even handle a group like CF... dont know. Trouble is, someone would have to be the CF person and it would be a full time job.
__________________
"I spent most of my money on Booze, Broads and Boats. The rest I wasted" - Elmore Leonard











Cheechako is offline   Reply With Quote
Old 30-08-2011, 10:56   #12
Registered User
 
avb3's Avatar

Cruisers Forum Supporter

Join Date: Jul 2010
Location: Florida/Alberta
Boat: Lippincott 30
Posts: 9,913
Images: 1
Re: Forum-Based Cooperative Insurance . . .

Co-op insurance is a great idea.

One would have to define the underwriting requirements, and if there are 20,000 participants, I bet there would be 123 different requirements or wants.

Basic liability is an easy one.

Insuring for property is tougher.

One probably could off-set policies through a re-insurance company such as Swiss Re, which mitigates the co-ops risks.

It would be interesting to hear from insurance pro's on this one.
__________________
If your attitude resembles the south end of a bull heading north, it's time to turn around.
avb3 is offline   Reply With Quote
Old 30-08-2011, 11:58   #13
Registered User
 
martinjrichter's Avatar

Join Date: Dec 2010
Posts: 71
Re: Forum-Based Cooperative Insurance . . .

The biggest hurdle besides the massive amount of money you need in "reserve" is getting lenders to accept the company's products. Lenders set up a series of requirements insurance policies must meet and I am sure there is some sort of insurance rating you must attain before the policy is accepted.
__________________
martinjrichter is offline   Reply With Quote
Old 30-08-2011, 12:13   #14
Registered User
 
avb3's Avatar

Cruisers Forum Supporter

Join Date: Jul 2010
Location: Florida/Alberta
Boat: Lippincott 30
Posts: 9,913
Images: 1
Re: Forum-Based Cooperative Insurance . . .

Quote:
Originally Posted by martinjrichter View Post
The biggest hurdle besides the massive amount of money you need in "reserve" is getting lenders to accept the company's products. Lenders set up a series of requirements insurance policies must meet and I am sure there is some sort of insurance rating you must attain before the policy is accepted.
Hence the Re-insurance.
__________________
If your attitude resembles the south end of a bull heading north, it's time to turn around.
avb3 is offline   Reply With Quote
Old 29-11-2011, 18:35   #15
Registered User
 
BillAU's Avatar

Join Date: Feb 2009
Location: Corio
Boat: Careel 22
Posts: 452
Re: Forum-Based Cooperative Insurance . . .

Quote:
Originally Posted by Cheechako View Post
I think what you're talking is a group. You can then negotiate insurance rates and terms yearly. Groups get better rates and terms. (tried to buy individual health insurance lately?) Most businesses in the country do this already. Many change companies every couple years to the best bidder when they go out for bids. There are in-between entities who handle it for smaller companies. One of those might even handle a group like CF... dont know. Trouble is, someone would have to be the CF person and it would be a full time job.
I'm guessing Cheechako has hit the nail right on the head with his post.
Group insurance is working well for groups here in Australia. The bloke/s with the idea form the group in their neighbourhood get others to join (it's free to join) Once the group grows to, say a thousand members or more, the group puts out a tender for the supply to members for electricity, gas, solar, phone/internet service or whatever, and by all accounts, as reported on Australian TV programs, the group is saving major bucks as they get great deals, much better deals than individual negotiated deals for the same service. I see no reason why the same idea would not work for boat owners but...I could be wrong

Bill
Australia
__________________

__________________
No-one knows but...You could be dead for a long time! So treat others as you would have them treat you! Go out in the world and enjoy your life
BillAU is offline   Reply With Quote
Reply

Tags
insurance

Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off




Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -7. The time now is 14:04.


Google+
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.