The mo­tor book

Finweek English Edition - - FOCUS ON THE INSURANCE INDUSTRY -

FOR NEARLY all short-term in­sur­ers the mo­tor book is a big prob­lem area, es­pe­cially in per­sonal lines busi­ness. It’s not hard to see why. In many ar­eas road con­di­tions are de­te­ri­o­rat­ing, im­ported spare parts are in­creas­ingly ex­pen­sive, the tech­ni­cal so­phis­ti­ca­tion of ve­hi­cles is in­creas­ing and there are more ve­hi­cles, of­ten driven by rel­a­tively in­ex­pe­ri­enced driv­ers, on the roads. But per­haps most alarm­ing is the statis­tic from Min­is­ter of Trans­port Sbu Nde­bele that 65% of the 8,5m cars on the road are unin­sured.

For Denise Shaw, MD of Stan­dard Bank In­surance Ser­vices, this means that if one of her clients is in­volved in an ac­ci­dent there’s a two-in-three chance the other ve­hi­cle will not be in­sured. “It’s a ma­jor prob­lem for the in­dus­try. The num­ber of un­li­censed, un­road­wor­thy and unin­sured ve­hi­cles on our roads – to­gether with the law­less­ness: ie, drink­ing and driv­ing, com­bined with fraud and cor­rup­tion in the sup­ply chain – needs a col­lab­o­ra­tive ef­fort from the in­dus­try and Govern­ment to do some­thing about it: no sin­gle com­pany can do it alone.”

The South African In­surance As­so­ci­a­tion is lead­ing ini­tia­tives to try and deal with mo­tor in­surance, but Shaw says it needs the whole in­dus­try – in­clud­ing in­ter­me­di­aries and sup­pli­ers – be­hind it. Stan­dard Bank In­surance Ser­vices has turned its mo­tor book around, partly through more so­phis­ti­cated rat­ing and in­creased risk man­age­ment. “But as an in­dus­try, to­gether with Govern­ment and other key stake­hold­ers, if we can stand to­gether and turn things around ev­ery­one will ben­e­fit, in­clud­ing con­sumers.”

Shaw is very aware that for many clients in­surance re­mains a grudge pur­chase. “ There’s cyn­i­cism about in­surance com­pa­nies – the kind of talk you hear around din­ner ta­bles.” But what can be done about that? “Clients must be made aware that we’re here to pay le­git­i­mate claims – that’s what we do. We strive to do that with min­i­mum dis­rup­tion to our clients. Hope­fully, then in­surance won’t be seen as a grudge buy.”

Shaw be­lieves con­sumer ed­u­ca­tion, es­pe­cially in plain lan­guage, is a route to mak­ing peo­ple un­der­stand what their in­surance is for and what they should get out of it. “ There also needs to be more con­sumer ed­u­ca­tion in what the clients’ re­spon­si­bil­i­ties are – about look­ing af­ter their as­sets.” For many clients in­surance re­mains a grudge pur­chase

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.