Blog: Urban mobility - the differentiation battle zone

car hire

The current credit hire regime has no place for choice other than a hire car for the duration of repair, even though that might not meet the needs of the claimant. James Roberts, business development director for insurance at Europcar Mobility Group UK, argues that increased mobility after an accident might become a differentiator for insurers in the future.

The best minds in motor insurance are already grappling with how to manage the new risks that come from evolving automotive technologies – from connected and electrified vehicles to full-blown autonomous motoring. The big changes taking place in urban mobility are also giving the sector some equally challenging headaches. 

At the heart of these is what customers want to meet their mobility needs after an accident. For urban policyholders is the focus more on transport, rather than simply a replacement car? And how well equipped are insurers to offer customers the choice of the right mobility solution for their short-term needs. 

Insurers are always looking for differentiation, and giving customers more choice could be the next big differentiation battle. But the question is – what sort of choice and how will that be delivered.

On the recent webinar I participated in with Post, we debated the attitudes to changing mobility needs – both from customers and insurers – and how the marketplace is adapting. Take, for example, the ability of insurers to give policyholders choice of mobility options after an accident.

Those listening to the webinar were asked to confirm if they were already offering policyholders a mobility voucher, setting a spend limit but also allowing them to top up in the event they wanted to upgrade their replacement vehicle, or travel first class on a train. A little disappointingly – but perhaps not surprising – just 4% said yes. A massive 70% said no. 

My instinct is that this response is as much about back-office systems infrastructure, as it is about an insurer’s willingness to give policyholders choice. But if a supplier can provide a white-labelled interface that gives the customer choice – without the insurer having to make significant IT investment – surely that has to be a win-win on all fronts. And that choice should encompass as many forms of mobility as possible – from traditional car rental to car share, chauffeur drive or taxi and even public transport. And don’t forget choice of fuel type too.

But that, raises another important question relating to the collaboration that needs to exist between insurers and their suppliers. This subject came up in the context of whether it makes sense to have primary and secondary providers of key services – including replacement vehicle hire. Interestingly, when listeners to the webinar were asked if they would consider a second supplier of vehicle rental to ensure their offering includes access to alternative transport solutions, 75% said yes. 

I find this encouraging. But I am concerned that there are still several barriers that are holding back a truly integrated mobility offering, which is the standard default when it comes to looking after a customer after an accident. It remains the case that the current credit hire regime has no place for choice other than a hire car for the duration of repair, even though that might not meet the needs of the claimant. And despite every effort being made by government to encourage low or no emissions adoption, there is no specific vehicle category in the Credit Hire General Terms of Agreement for EV, hybrid or other alternative fuelled vehicles, with it potentially being a matter of guess-work into which GTA vehicle category a vehicle should be placed for a credit hire claim. 

Yet the insurer community are keen to see this change. In fact, 85% of the webinar audience said that they believe now is the right time to implement a specific vehicle category in the Credit Hire GTA for these vehicles. So what are we waiting for?

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