How do we adapt the way motor claims are sorted in a world where the sharing economy is gaining traction? James Roberts, business development director for insurance at Europcar UK, offers his own thoughts, but questions whether his proposal would be commercially viable.
At the heart of the motor claims process is keeping the policyholder mobile. But what does that actually mean?
The policyholder rightly expects the claims journey to be seamless, from dealing with the first notification of loss to arranging vehicle repair and any legal services. The conventional approach has been to provide a replacement vehicle regardless of the policyholder’s circumstances. But does that necessarily fit with what today’s customer needs and wants?
For those living in rural and remote locations, a personal vehicle is essential. But car ownership in towns and cities is starting to become a different challenge. The insurers that recognise this in how they deal with urban claimants could be the real winners in the customer retention battle.
A new wave of mobility solutions is being developed by those in the automotive and transport sectors that are being embraced by a growing proportion of the UK population. And a new breed of mobility innovators is emerging, tapping into the technologies that are empowering many forms of social engagement.
Car sharing, which first hit UK streets in the early 2000s, is at last starting to be accepted as a genuine alternative to car ownership, especially for those living in big towns and cities. Everyone is getting on board with this concept, from the big manufacturers to the emerging disruptors. With new technologies giving users access to vehicles via smartphone and membership cards, combined with a more receptive consumer attitude to the shareconomy, smart thinking insurers could be introducing a whole new dimension to the claims process too.
The need to stay mobile has become even more important in an ever-more globalised world, and the customer is becoming more comfortable with having access to a variety of means to do so. Insurers could, therefore, be giving their customers that flexibility, as part and parcel of the claims process. Instead of a car, it could simply be the technology to access the various forms of public transport available in cities and towns.
The raft of intelligence already held about a customer could be used by claims handlers to identify the urban policyholders who might prefer to simply have access to a vehicle when they need it – rather than face the challenge of parking from day to day. And it could all be managed via their smartphone or by using a membership card or voucher to pick up and drop off the car whenever they need it. The policyholder is in control of the transport solution that works for them – with the insurer managing the cost.
The same approach could also be taken where insurers aim to assist the ‘not at fault’ driver. As well as creating strong brand equity, insurers could achieve significant cost savings by offering the not at fault driver an alternative to conventional car hire. A mobility voucher – where the insurer sets a limit on the mobility spend, with the remainder being paid to the not at fault driver, perhaps as a gift voucher, loyalty points or cash – could cut out the risk of high costs.
But, of course, there is one barrier that needs to be overcome if this new customer-centric, mobility focused approach is taken. Under the existing credit hire regime, there is no place for choice other than a hire car for the duration of repair. However, that doesn’t necessarily meet the needs of the claimant. Yet it is highly unlikely that a credit hire company will offer a taxi, car share or rental only on the days needed even though they may wish to offer such services. There is simply no way of making this commercially viable.
The question is, therefore, how does the industry drive change so that the customer is offered the best solution for their needs?