Update.
I've met with execs at 2 insurance companies so far and all I've really got is an education on how they look at motorcycles. Here are a few observations (if it's in
"red and quotes", it's exactly what they said to me):
1) Most insurers really don’t care to insure Motorcycles.
"Two primary reasons: 1. the high value rides, especially the Harleys, get stolen quite often and 2. when there is an accident, both the physical damage to the bike and the Bodily Injury (BI) claims are quite large on average. It’s all about the math – dollars in verses dollars out. Most personal lines carriers want a client’s personal lines business (Home & Auto for example) but really only offer MC coverage to be able to attract a larger set of customers – hence the statement; it’s a necessary evil - a very disrespectful choice of words in my opinion."
I asked both why actuarial data from places that require transparency proves their case that payouts are double that of car accidents BUT bike claims happen in in less than 2% of all policies where car claims are above 12%. Neither could explain, both said that don't really look at the details.
2) Both confirmed they don't do a lot of actuarial work on bikes, they look at premiums and losses and as long as the former is greater than the latter they move on. Car insurance pricing is closely tied to the vehicle and owner profile that is backed up by detailed vehicular and demographic data. MC insurance is based on a lot of unsubstantiated "we thinks" and demographics of car drivers.
This explains why 55 yr old heavy cruiser riders using their bikes 5K/year make up the largest number of insured riders yeyt pay the lowest insurance.
3) When asked "how many, how much to get your attention".
"Hard to say but I’d say at least 1000 or more. Let’s say the average bike premium is approx. $2,000 and you have 1000 members, so you bring $2,000,000 to the table. An association would need to represent the riders and any insurer looking at this would want to know how belonging to the Association is going to reduce the potential for loses verses just insuring someone walking in off the street. Basically you would have to show over a 3 to 5 year period how these numbers would work out. This is not an easy thing to do and would require someone with some actuarial knowledge to crunch the numbers and then sell the proposal to the insurer.
When asked "If the $2m was reachable, what else would the insurer need to understand?"
"Consider two things:
- Can I demonstrate to an insurance provider that there a reasonable profit to be made by taking on the Association’s members?
- Will the membership be loyal and stay with the program over many years even if rates go up? As members come and go there would have to enough critical mass to keep the profit/loss ratio in order.
If the answer is no to any of the above, you be maybe pushing that string!"
In summary, to get an insurer to consider doing something:
Minimum $2Mill in NEW premiums - can be bike, auto, home
Show them how the payouts are less than 75% of the premiums collected
Show them how risk is mitigated by forming an association: i.e membership qualification based on riding/driving record, age, etc
Show them how this is sustained over time, particularly if premium
ayouts ratios force increases in premiums.
