THE HISTORY OF CAR INSURANCE

Car Insurance: 1940 -

More choice in Car Insurance and early cheaper premiums
The non-tariff insurance companies thus seemed to offer more to the insured and were able to do this by being more selective in their underwriting (only first-class car risks were acceptable on normal terms to non-tariff insurance companies, whilst certain 'tariff' insurers had the reputation of being a depository for almost any type of undesirable car insurance risk; the tariff had set the rate for the risk and the 'tariff' insurance companies almost seemed to feel obliged to accept any car insurance risk for which a rate had been fixed).

In their attempt to attract car insurance business the non-tariff companies often allowed rates of commission to car insurance agents and car insurance brokers which were rather higher than those allowed by tariff companies.

Car Insurance at Lloyds
Lloyd's car insurance underwriters, for their part, followed neither the 'tariff' nor the 'non-tariff' insurance companies. The flexibility of approach and economy of operation which have come to be almost synonymous with Lloyd's meant that the latter could set their own rules and still attract large volumes of car insurance business.
Lloyd's traditionally has specialized not only in individual car insurance but also in group car insurance schemes for motor insurance, e.g. a Civil Service scheme, a Police Force scheme, a scheme run by a particular brand of car association, and so on, whereby the underwriters receive large volumes of premium income with comparatively low expense ratios and the result, for the insured, is a premium somewhat lower than would have been applied had he arranged his insurance individually and outside of a scheme. Thus the Car Insurance Broker with Lloyd’s placement facilities was born and flourished prior to and following 1939.
Lloyd's has continued to operate in its rather special way regardless of the battle, which raged between the 'tariff' and 'non-tariff' car insurance companies over the years and despite its recent traumas and changes.

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