Wednesday, April 15, 2009

Confusing the meerkat

It’s a funny thing, insurance. Well, it is until you you have to pay for it.
Or indeed, until you have to explain it to someone who never has had to pay for it.
“Daaaad, what’s car insurance?” ask the little ones, as yet another price comparison advert comes on the telly. How best to explain while protecting their innocence?
Well, a good way to teach is in parables: you use an example of something that your pupil is already familiar with in order to explain something more complicated and abstract that they don’t yet understand.
And luckily the younger brethren have a ready-made example right in front of them, in the form of the Grand National.
For was it not their very own dad who a couple of weeks ago forked out his hard-earned dosh on a number of promising nags (well, their names sounded promising), all but one of whom ended up as also-rans, and the other of whom (top grammar) brought home the princely sum of £3 as a disappointing each-way shot?
They understood that all right – or at least they understood the post-race cursing. So why shouldn’t they understand premiums, no-claims bonuses, excesses and courtesy cars?
Because, with apologies to Terry Pratchett, and his “inn-sewer-ants” joke, insurance is nothing more than institutionalised gambling.
You have a middle-sized car and a comparatively small amount of money. The insurance company has a comparatively large amount of money and maybe a courtesy car, which is never as good as yours.
You bet your money that your car will get nicked, or hit by someone else’s dodgy motor after they left the handbrake off at the top of a hill, or blown away to the Land of Oz in a tornado, or one of the other nasty things that insurance companies threaten you with to try to make you sign up with them.
The insurance company bets big money that none of these things will happen, and that your car will survive the year without being TDA’d, scraped or twistered.
You pay your stake (sorry, premium), and if you win the bet you can claim the big payout, which you then get to spend on another car.
The insurance firm meanwhile has taken your money, bundled it up with all the other punters’ dough and laid off an enormous bet on the re-insurance market, which is not explicable by graphs, pie charts, Venn diagrams or any other means at the disposal of your average parent.
Not even rich godfather, who works in it, has ever been able to explain said market to anyone’s satisfaction.
By this point though the kids are starting to lose interest, if not the plot. “Daaaaad, what’s a meerkat?” they venture. “Daaaaad, why are all those scary people staring into webcams on”
Again, these questions are best answered in parables.
For it came to pass that a company looked upon the profits made by the insurance companies and saw that they were good, yea even amid a crunching of credit.
And the company said “Lo, let us dress up a cute desert-dwelling member of the mongoose family in a velvet smoking jacket. And lo, let us give it a fake middle European accent and put it in an advert, for verily the punters can’t get enough of that anthropomorphic stuff, like unto the tea-swilling chimps and the bogroll-unrolling puppies. And lo, let us take a tithe of the insurance companies’ wonga even unto ourselves. Lo, lo and thrice lo.”
And the people did look upon the advert, and saw that it was passing good, at least the first time they saw it. But verily, after threescore viewings and ten, they grew vexed and weary with it, and threw the cat at the telly.
A lightly trimmed version of this is due to be my column in The Bath Chronicle on April 16 2009. Or April 19, as I keep thinking of it for some reason.

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