How to choose the best insurance company?

Reliability of the insurance company

This concept is very broad and worthy of attention. Indeed, in order to determine the reliability of a company, it is necessary to study in detail its financial indicators (the size of the authorized capital, the volume of insurance reserves, the level of payments, etc.), the origin, reviews of the company’s work and much more. For an ordinary citizen who has never been associated with finance and does not have a special financial or economic education, this is not an easy task.

Ratings that are produced and published by independent special agencies can help in the study of financial reporting. They analyze all the above-mentioned indicators and draw conclusions, making ratings depending on the indicators, insurance industry, type of insurance services, etc. However, you cannot trust them 100% either, because everyone can be wrong, and such ratings are not always so objective. Indeed, most often they are based on data provided by the insurance company itself and on its own order, and here we must rely on the insurer’s honesty and honesty. In addition, the ratings are assigned for the indicators of the past periods and do not reflect the current situation in the company.

Nevertheless, the main financial indicator of the reliability of an insurance company can be considered its solvency, that is, the number of free funds of the insurer should be equal to the number of obligations assumed under insurance contracts. It is quite possible to obtain the information you need by analyzing the financial condition of the insurance company on your own.

It is advisable to pay attention to those companies which have the highest level of payments (the ratio of payments to premiums). Poor ICs have low payouts across all types of insurance. The ratio of the collected premiums to the number of insurance payments is also important.

It makes sense to study financial indicators for several periods – in dynamics – if insurance reserves grew simultaneously with the growth of premiums – this is a good sign. But a sharp decline in the volume of reserves suggests that the company has already begun to have problems.

An important factor that affects the reliability of the insurer is the portfolio of insurance services – the number of insurance programs for which it has licenses and which are actively operating in the market. The more, the better. Because then the portfolio is balanced and in case of failure of one direction, the company will be able to survive at the expense of others.

The openness of the insurance company

An important benchmark should be the indicator of the company’s openness. How much does it advertise its activities, its owners, its financial performance, insurance conditions, etc. After all, if nothing is known about a company, how can you trust it? An indicator of openness is the existence of a website on the Internet. On the company page, you can find out almost all the information, starting from the date of creation, owners, ending with financial indicators, a list of branches and a work schedule.

Customer reviews and partners

Check reviews on the internet. The fact is that the situation in this market is changing at lightning speed and the insurance company, which paid everyone last year, may now be experiencing financial difficulties and be no longer able to fulfil its obligations. Therefore, it is advisable to carefully review the thematic sites on which consumers exchange reviews about insurance companies. At the same time, special attention should be paid to the realized insured events, that is, situations when the client received compensation and was satisfied.

You can also ask about the portfolio of clients with whom the insurance company already works – if there are large multinational companies among them, this is a good sign.

There are a number of other important factors that influence the choice of an insurance company. For example, partners with whom the insurer works. Firstly, banks, since insurance companies place their funds in bank accounts, it will be important to find out which institutions the insurance company cooperates with, whether they are problematic and whether they can be trusted. Second, reinsurance partners. After all, an insurance company cannot independently cover especially large risks but cooperates with reinsurers, so it is important to find out the popularity and reliability of these companies.

Price policy

It should be noted right away that the lowest insurance rate is not a good indicator and guideline when choosing a company. Indeed, in fact, the tariff consists of two parts – the costs required to fulfil obligations (insurance compensation), and the costs of the insurance company for activities. So, if the tariff is deliberately lowered, then this means that the company either does not pay its employees a salary or does not expect to pay you compensation for damage in advance. At first, the company will pay compensation at the expense of the received insurance premiums, then it takes over the reserves, and then … there is no money and the company is bankrupt. Also, it is not uncommon for a situation when a large number of restrictions and exceptions are hidden behind low rates, according to which the insurer will refuse to pay compensation. There are also types of insurance where the insurance rate is the same for everyone, regardless of the policy of the insurance company, so such a guideline for choosing a company seems completely irrelevant.

Insurance conditions

It is necessary to take into account the terms of the insurance contract, namely: the scope of liability of the insurance company, the list of risks that the contract covers and exceptions to which the coverage does not apply, the presence and amount of the deductible, the terms and conditions for considering insured events, as well as the procedure for obtaining insurance compensation. Without this information, choosing an insurance company will be not only difficult but almost impossible.

Service level

And finally, what will accompany you during the entire duration of the insurance contract and is of great importance is the service of the insurance company. Indeed, now, when the competition is huge, it is impossible to attract customers only with favourable rates, service plays a decisive role. The company should pay attention to each visitor, politely, efficiently and quickly answer all the client’s questions. Service becomes especially important in the process of claims settlement – how quickly the insurance company reacts to the insured event, how it solves this problem, in what time frame and under what conditions it pays compensation, the availability of high-quality assistance and much more has a great influence on the client’s attitude to the insurance company and the possible its further retention.

How to choose an insurance company with good assistance?

Assistance plays an important role when choosing insurance, especially when it comes to car insurance or health insurance.

Assistance structures are either owned by insurance companies or working with them by agreement. It is impossible to judge unequivocally which assistance is better. Just as a large insurance company that owns an assistance division can have a frankly lousy service, so a small one that works on a partnership basis can have high-quality and efficient service. It all depends on what goals are pursued by the owners and management of the insurer: to provide the best possible service to the client or simply “knock out” money from him.

But, in any case, the direct interaction of the company with the client is directly terminated at the moment of signing the insurance contract, since after that the entire service:

• call-centre operation;
• the departure of the emergency commissioner;
• damage and loss assessment;
• maintenance;
• Medical support and much more. 

5 symptoms of illness of the insurance company

1. Bad rumours – in the media and on internet forums, they say the company is not making amends.
2. Problems with reports – information about insurance assets is closed.
3. Narrow specialization – auto insurance occupies more than 60% of the portfolio.
4. Dumping – offers policies at a price 20-30% lower than the market average.
5. Staff turnover – The media publishes information about the constant change of directors.

The choice of an insurance company is a rather sensitive issue that sooner or later any person is puzzled by. Whether it is life, health or property insurance. Insurance is a unique opportunity to gain confidence in the future and a guarantee of compensation for losses. But at the same time, one should not forget that insurance companies are also not charitable organizations and take this factor into account in your choice. Follow the advice of those you trust and check the economic data. Pay attention to the publications of specialized sites and publications, as well as to the information activity of the insurance company. It is these actions that will help you choose a “healthy” and “honest” insurance company, which will provide you with confidence in the future for more than one insurance period in a row.