Don’t have your Nedbank ID yet?
Nedbank ID single sign-on gives you full digital access to Nedbank’s banking and lifestyle products and services on the Money app or Online Banking.
Log in
Log in to Online Banking or another one of our secured services.
Get in touch
Find us
- Login & Register
- Online Banking
- Online Share Trading
- NetBank Business
- NedFleet
- Nedbank Greenbacks
- Nedgroup Investments
- Nedbank ID
- Bank
- Accounts
- Credit cards
- Greenbacks
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Explore Bank
- Accounts
- Everyday banking
- Kids accounts
- Youth banking
- Seniors accounts
- Private Clients
- Private Wealth
- Digital wallet
- See all accounts
- Premium banking
- Get help choosing
- Goal saving
- Family Banking
- Foreign nationals
- FAQ
- How-to guides
- Discontinued accounts
- Everyday banking
- MiGoals Premium
- MiGoals Plus
- MiGoals
- Kids accounts
- MiGoals4Kids
- Youth banking
- MiGoals Premium
- MiGoals
- MiGoals Plus
- Seniors accounts
- MiGoals Premium Senior
- MiGoals Plus
- Private Clients
- Pay-as-you-use
- Young Professionals
- Private Bundle and Private One
- Private Wealth
- Private Wealth Bundle
- Digital wallet
- MobiMoney
- American Express
- Amex Gold
- Amex Platinum
- Greenbacks
- Exclusive discounts
- FAQ
- How-to guides
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Save & Invest
- Accounts
- Investment services
- Share trading
- Explore Save & Invest
- In 24 hours
- JustInvest
- PlatinumInvest
- Tax-free Savings
- MoneyTrader
- EasyAccess Fixed Deposit
- PrimeSelect
- In 32 days
- Electronic 32Day Notice
- 32Day Notice
- End of term
- Tax-free Fixed Deposit
- Electronic Fixed Deposit
- Electronic Optimum Plus
- Platinum Fixed Deposit
- Fixed Deposit
- OptimumPlus
- Investment services
- Share trading
- Borrow
- Personal loans
- Home loans
- Student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Explore Borrow
- Personal loans
- Loan consolidation
- Personal loans
- Home improvement loan
- Exclusive short-term loan offers
- Explore loans
- FAQ
- How to guides
- Loan consolidation
- Personal loans
- Home improvement loan
- Exclusive short-term loan offers
- Home loans
- Buy
- Build
- Switch
- Manage
- Further lending
- Explore home loans
- Request a call back
- Track application
- FAQ
- How to guides
- Buy
- Explore buy
- First time home buyer
- Repeat buyer
- Renewable energy financing
- HomeVision
- Home-buying Toolkit
- Edge properties
- Repossessed properties
- Switch
- Explore switch
- Further lending
- Explore further lending
- Student loans
- Explore student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- We have payment solutions to get you back on track
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- We have payment solutions to get you back on track
- Insure
- Life cover
- Funeral cover
- Short term insurance
- Credit Life
- Travel insurance
- Business cover
- Secure investments
- Explore Insure
- Life cover
- Get a call back
- Explore MyCover life
- Funeral cover
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Get a call back
- Explore MyCover Funeral
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Alternative energy insurance
- Legal expenses | Nedbank Insurance
- Get a call back
- Explore MyCover short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Alternative energy insurance
- Legal expenses | Nedbank Insurance
- Credit Life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Get a call back
- Explore credit life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Travel insurance
- Business cover
- Secure investments
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Get a call back
- Explore MyCover Funeral
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Plan
- Financial planning
- Estate, wills & trust services
- Nedbank Private Wealth
- Speak to a financial adviser
- Explore Plan
- Financial planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Estate, wills & trust services
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Nedbank Private Wealth
- Speak to a financial adviser
- Learn
- Blog
- Explore Learn
- Blog
- A financial adviser can help you plan your future
- Everything you need to know about student loans
- A financial adviser can help you plan your future
- Everything you need to know about student loans
- Contact us
- Talk to us
- Find us
- Explore Contact us
- Talk to us
- Find us
Understand insurance loss ratios and why they matter
Too many consecutive claims on your insurance policy can increase your premiums.
If you’re serious about making better money choices, you’ll understand the value of having personal and business insurance to protect everything that’s important to you. Think of it as investing in your own peace of mind. Buildings, house contents and vehicles are significant assets, so it’s wise to insure them against loss or damage, whether it’s caused by accident, fire, theft or legal liability.
Likewise, because we can never predict the future, you’ll also want to protect your income and your lifestyle against unexpected threats, while ensuring that your family is equally secure if you should pass away suddenly. For that, you might consider income protection insurance, life insurance, credit life insurance (with retrenchment and disability benefits) and funeral insurance. Key-person insurance, business interruption insurance and third-party liability insurance offer similar protection to businesses.
In return for covering you against the insured events listed in your policy, your insurer charges you a monthly premium, and you may also have to make an excess payment on any claims. Insurers calculate your premium according to several risk factors, so the amount you pay will vary according to your unique risk profile and claims history.
Insurance as a safety net: Finding the right balance
Knowing that you’re covered against losses is a great reliever of financial stress. However, the relationship between policyholders and insurance companies is a difficult balance. Understandably, as a policyholder you want to be covered against as many losses as possible for the most affordable premium. But you’ll also understand that to stay in business and continue offering you a safety net whenever you need it, in the long run your insurer needs to earn more than it pays out – that’s a basic rule of business.
That’s why the loss ratio is an important factor that insurers consider when calculating your premiums.
How the loss ratio affects your premiums
The loss ratio is simply a measurement of the amount the insurer has spent on a policy (the claims paid out plus adjustment expenses) as a proportion of the premiums the insurer has earned from the policyholder.
Insurers calculate a loss ratio using this formula:
(Insurance claims paid) + (adjustment expenses) / (Total earned premiums)
Reducing the loss ratio is essential to maintaining a healthy insurance sector. It’s obvious from the formula that as a policyholder, you will drive up your loss ratio if you make frequent claims on your policies.
Insurers see a history of consecutive claims as a sign that you’re likely to claim again and again. Most insurers have a more tolerant attitude to claims caused by extreme weather or other natural disasters, but if you tend to claim regularly for the same type of loss, or you file many claims in a short period of time, you may become known as a multi-claimant. Different insurers will apply different standards when deciding how many claims are too many, but consecutive claims could push your loss ratio up to an unacceptable level. Your insurer will be forced to increase your premiums – or may even choose not to renew your policy.
If your life changes, you might need to change the amount of cover you have
You may be thinking, ‘Well, why should I get insurance if I’m not going to use it?’ but that’s not what we’re suggesting. As with all things, balance is the key. Yes, you can submit an insurance claim whenever you’ve suffered a loss covered by the policy. But first, consider all the factors contributing to the situation. Is there anything you can do differently, or any habits you could change, to make it less likely that you’ll suffer the same kind of loss over and over again? Do you want to claim when you could replace the loss for less than the excess you’d pay?
All we’re suggesting is that you be mindful of your choices and aware of all your options before you make a claim. If you consider all the factors including your loss ratio, you can make decisions that deliver the best outcome for your financial management overall.
Tips to avoid excessive claims
What can you do to lower your loss ratio? Consider the following strategies:
- Make prudent claims
Only claim for losses or events that have a serious effect on your finances. It might be more cost-effective to handle small or regular costs yourself. - Reduce risks
Add safety features like security systems to your home, keep your property well maintained and learn how to drive defensively. You help lower the loss ratio by making insured events less likely to happen. - Review your policy regularly
Talk to your insurance consultant about your insurance policies every few months to make sure they still meet your needs. If your life changes, you might need to change the amount of cover you have. - Know the terms of your policy
Get to know the terms and exclusions of your insurance policy. Knowing the limits of your cover, what is not covered, and how to file a claim can help you make smart choices. - Keep an emergency savings fund
Set up a backup savings account and keep it topped up. If you can cover small, unplanned costs yourself, especially if they’re less than the excess you’d pay on a claim, you won’t have to file claims as often.
You can help make the insurance market fairer and more balanced by using risk-mitigation techniques, being aware of when and when not to file claims, and working with your insurer to minimise losses.
If you have questions or need help with your insurance, contact Nedbank Insurance.
