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Spotlight: The evolution of mobility: Expert view

Motor evolution

A new decade sparks urgent need for motor insurance providers to adapt to the needs of a changing motoring community writes James Roberts, business development director for insurance, Europcar Mobility Group UK.

The motor insurance sector is facing interesting times. Challenges are coming from all corners – from the repair cost implications of the growing market of advanced driver-assistance system enabled vehicles to how to tackle the theft threat of keyless cars. And that’s all while addressing the age-old conundrum of how to achieve customer satisfaction – and retention – while keeping an eye on costs and profit. 

One area where customer satisfaction could be enhanced – particularly in relation to the claims experience – is by offering more choice of mobility options to the policyholder when their car is off the road. The argument for more choice is clear. While policyholders have made the decision to own a car for their day-to-day lives, if the vehicle is off the road for a period of time they may want the flexibility of having another way of getting round, but not necessarily be tied to a car that may not actually be similar to their own.

First and foremost those living in urban conurbations may well have chosen the engine size of their car based on local parking and congestion rules. If they suddenly find themselves in a car that isn’t of the same spec, could they face fines or increased parking costs?  There’s also plenty of data that shows that urban drivers do significantly less miles than those living in rural locations. 

A Department for Transport study from 2015/2016 found that people living in rural areas travelled on average 10,200 miles compared with 5,200 in urban conurbations. When travel as both a driver and as a passenger is considered, 88% of the distance travelled by people living in rural locations was made by car compared to 69% in urban conurbations.

Plus, data from the DfT for 2016/17 showed that people living in rural areas made more trips and travelled further than those living in urban areas. Indeed, those in the most rural areas travelled almost twice as far on average than people in urban conurbations (including London), with the difference in overall trip rates between types of residence mainly due to a difference in the levels of car use.

Electric revolution

And what about the growing electric revolution? Early adopters of electric vehicles are passionate about their choice. They probably made it for ethical as well as economic reasons. So how will they feel if the replacement vehicle they’re offered isn’t electric – and could even be a diesel. All the benefits of electric motoring – free parking, no clean air zone fines – could suddenly disappear.

But there are definitely barriers that the insurance sector needs to overcome to adopt a more flexible choice-driven approach to replacement mobility. 

First and foremost, insurers need access to a range of mobility options, ideally all from one platform. Some customers might welcome the chance to simply use mobility vouchers to access car share or car clubs – including electric car clubs. Others might be just as happy to use public transport.

The credit-hire regime also presents challenges. Currently there is 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. 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 other big hurdle the sector needs to jump is the current structure of the General Terms of Agreement. As it stands, there is no specific vehicle category 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. Maybe now is the time to recognise this and award electric vehicles their own GTA vehicle category. That seems like a practical approach and an easy way to remove opinion and frictional cost from the claims process.

Don’t get left behind

The DfT’s Urban Strategy has identified walking, cycling and active travel as the number one option for short journeys but, thankfully for the motor industry, longer trips will inevitably need vehicles which must spearhead the transition to zero emissions. As e-mobile solutions become the remit of the early majority and not just innovators, the insurance sector is in danger of getting left behind.

Motor insurers must ensure that their repair supply chain is not only properly qualified but sufficiently comprehensive to support the wider low emission vehicle take-up. And the sector needs to know how to respond when a policyholder’s electric or hybrid vehicle is in an accident. Will they be satisfied with traditional fossil-fuelled vehicle as their courtesy car?  The answer is likely to be no. Motorists have made the change for a reason – be that ethical or financial – and insurers must appreciate that, or risk losing the respect and brand loyalty of their customer base.

Post and Consumer Intelligence undertook some research [see below], which clearly shows that motorists’ expectations are changing. The insurers that don’t respond to those changes could well get left behind. The key is to have a supply chain that can step up to the mark. For example, what plans do replacement vehicle providers have in respect of hybrid and electric vehicle availability? And what are the capabilities of the repair network to ensure that vehicles are dealt with as efficiently as possible?


Using a sole supplier for convenience is no longer an option. One supplier cannot meet everyone’s needs and insurers need to avoid being duped into believing they can. With the coronavirus pandemic upon us and a significant percentage of businesses supporting the insurance industry having to furlough their staff, those insurers who buy on a multi supplier basis will be reaping the benefits of continued supply at a time when we are all being forced to instigate our business continuity plans. This market needs to remain competitive and it’s the insurers’ job to ensure that happens. 

Replacement car providers must take responsibility too. It’s up to us to make sure our fleet matches the changing car park so that we can truly add value to the customer experience for insurers. n

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