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6 MOTOR TRADE INSURANCE MYTHS BUSTED

The motor trade business can be risky. Therefore, making sure you have the right insurance at the right price is vital. Every insurance provider has heard their fair share of myths and misconceptions about getting motor trade insurance. Below, we will look at some of these myths and misconceptions, helping you know what is right and what is not regarding your motor trade insurance.

 

Myth: Renewing with Your Current Provider Is the Best Way to Go

While there is something to be said about loyalty, a lot of motor trade insurance providers do not reward loyalty. Instead, they might decide to raise your premiums if they see you do not pay attention to your insurance coverage and premiums. This is why it is so important to keep a close eye on your insurance coverage and premiums

 

Myth: Getting Insurance from a Provider Directly Is a Good Option

Most motor trade business owners do not want the hassle of going through third parties to get insurance. They think that getting their insurance directly from a provider is the best way to go and is also the cheapest option. In fact, the reverse is sometimes true, which is why every business owner should go to a comparison site to see if they can get a better quote than they could get from their current insurance provider.  Quotezone is one such comparison website that allows you to compare different insurance providers and see their quotes. All of these quotes from the top providers can help you get a better deal and find a provider who is better aligned with your business and budget.

 

Myth: Leaving Some Drivers Off an Insurance Quote Will Make It Cheaper

This may be true but the risks outweigh the benefits. If one of these drivers gets in an accident while driving your or your customer’s car, your insurance provider will not let you claim compensation for either the driver or the car. If they are stopped by the police without insurance, it could mean legal trouble for them, you and your business.

 

Myth: A Part-time Motor Trader Gets Cheaper Insurance Quotes

This is not true for most insurance companies. They will often give you the same quote that you would get if you trade full time.

 

Myth: The Motor Trade Insurance Covers Any Vehicle I Drive

The insurance covers cars you own, that are registered to you or that are in your custody, control or care. It does not cover any vehicles that are not owned by you or under your business.

 

Myth: Leaving Some Cars Off the List Is Fine

If you have a car that you do not use often, it can be tempting to not list it on your insurance quote. If you do not get cover for this vehicle, you can be fined heavily if a police officer finds out that your car is not in the motor insurance database.

Always remember to remove any vehicles you sell from the insurance database because if you do not, that car belongs to you and you are responsible for whatever happens with the car.

Myths surrounding motor trade insurance should be discussed and busted. This makes it easier for business owners to know what is right and what is not and helps keep them out of trouble with the law.

 

Top 10

TIME TO THINK OUTSIDE OF THE BLACK BOX

Mike Brockman, CEO, ThingCo

 

If you have the unbridled joy of parenting a teenager you’ll probably know what telematics insurance is.  In very simple terms, telematics or ‘black box’ insurance enables insurance companies to track driving behaviour using technology fitted to the car or via a smartphone app.  It is the first practical example of IoT – machine to machine communication of real-time data.

Telematics has been crucial to helping thousands of young people get experience on the road who would otherwise have found the cost of insurance too high.  When you look at the number of road casualties in the UK over the last nine years there is a clear correlation between the rising adoption of telematics and a fall in young driver casualties[i].  The problem is that as soon as they can, young drivers chuck in telematics and take traditional insurance.  As such telematics insurance has got stuck firmly in a rut.

So why is that a problem?

First, telematics saves lives – think what it could do if more drivers had it.

Secondly motor insurance costs are linked to claims costs – if we can bring down the cost of claims through the engagement, speed of response in accidents and anti-fraud benefits of using telematics data to its full potential, everyone could access cheaper insurance.

Mike Brockman

Thirdly we are living in a world deeply impacted by COVID-19.  Travel trends were already altering prior to the pandemic but have changed and could remain significantly changed for the foreseeable future.  Consumers are beginning to think more deeply now about their motor insurance and value for money.  This may create demand for motor insurance cover that is more responsive to people’s individual driving behaviours – why pay an annual premium when you only use the car once or twice a week?  On the flipside, those nervous of using public transport could see an increase in their car use.  Telematics allows insurance providers to offer insurance based on actual rather than predicted use.

The fundamental reason for telematics getting stuck in a rut is insurance companies are not offering something consumers actually want and they are not deriving value from their investment in the technology.  Different telematics devices give different qualities of data and that data determines the economic equation they have to resolve in terms of how much they pay for the technology and what value they get from it.

Another key factor is that if you give something away – as the insurance industry has done with telematics ‘black boxes’ – you are sending a strong signal to the customer that the technology is of no value to them and only there to serve the insurer’s need.

You need to make the device a desirable piece of technology that consumers would value in their own right – rather than something that is imposed on them to get cheaper insurance.   By introducing new technologies into these devices such as Voice, camera, ADAS, black spot warnings, it becomes a truly connected device that not only helps the driver but also creates incredible amounts of data that’s useful to the insurer to manage risk and provide better customer services.

With next generation telematics, the data is no longer a one way street direct into the insurer.   You can feed that data back to the customer and develop additional services such as a voice alert when they have been driving for too long without a break, an incentive of a coffee at the next rest-stop.

Telematics also transforms the claims process for the customer and the insurance provider. A crash alert can kick in and activate a voice command in the device and that will ask the driver if they had an accident, whether they need help and will alert emergency services if necessary.

This is where the data brings huge value to the insurance provider providing a whole range of detail – like a liability assessment, video footage, fault, g-force etc.  This data is dynamite to First Notification of Loss team with an insurance provider.

But the biggest difference next generation telematics offers is it really strengthens the relationship with customers and insurers can make it fun as well.  Insurance and fun aren’t usually two words you see in the same sentence but unlike traditional insurance, or old school telematics, it allows engagement and the opportunity to provide incentives without any big brother feeling about it.

Technology has changed massively over the last ten years, the quality of devices has developed and the Cloud has opened the potential for telematics products to be designed for customers in the most attractive way.   Barriers around trust and big brother can be broken down by being absolutely clear that the data belongs to the driver – they can choose how it is used to their benefit, spelling out the advantages, being transparent and flexible.

COVID-19 is providing an opportunity to stand back and think about telematics differently – how to make it customer friendly and how to make the economics work.  By leveraging next generation telematics technology the insurance market has a window of opportunity to turn the motor insurance grudge purchase into something consumers really start to value.

 

[i] https://blogs.lexisnexis.com/insurance-insights/2019/04/the-road-to-safer-driving-infographic-how-telematics-can-be-directly-linked-to-reducing-casualties/

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Banking

BRANCHES ARE THE HUMAN FACE OF YOUR BANK?

Sudeepto Mukherjee, Senior Vice President, Financial Services Lead EMEA & APAC Publicis Sapient

 

Branches have always played a pivotal role in a bank’s ability to acquire and service customers. Historical surveys have consistently pointed to the fact that proximity to branches is one of the key reasons that determine who consumers choose to bank with. Even with the increased adoption of mobile banking in the past decade, research from data specialists CACI had found that surprisingly, the decline of branch visitors has been modest, equating to less than 2% per year, with digital channels supplementing the customer experience rather than replacing it.

The COVID pandemic has changed all of that. It has suddenly forced consumers away from branches into call centres and web/mobile channels to meet their banking needs. So the big question is what role should branches play as we recover from this pandemic? Will branch centric business models like that of Metro Bank still thrive or will the digital only banking offerings like those from Starling and similar win out?

Banks will always have 2 different faces to consumers. The first face is one that is human and relationship based. This is the part of the bank that consumers rely on to get advice on how to manage their life savings. The face that they call upon when they are in financial distress and need help overcoming that. The face that helps them make product choices on what credit type would best suit their circumstance. The second face is that of the bank as an efficient machine that uses the best available technology, data and AI to meet transactional needs quickly. This is the face that consumers rely on to make payments in real time and conveniently. The machine that provides the ability to quickly respond to queries around account balances and transaction history. The machine that alerts consumers when certain actions are performed on their accounts. Customers expect both these faces from their bank. However, the financial crisis and the PPI scandals saw banks loose the trust and credibility of customers as they were seen to be driven more by internal profits rather than consumer needs. The human face of the bank was no longer visible to most consumers and the machine failed to live up to the expectations set by the Big Tech giants like Apple and Amazon that seamlessly provided services via their digital platforms.

The Bank Branch can play a pivotal role going forward in re-establishing this human side by helping a bank build trust and become the primary advisor for our financial needs. Instead of just meeting transactional needs like check deposits and account openings, banks can now transition branches into relationship centres where their employees are 100% focussed on financial advice and well-being of their customers. They are teachers and coaches, life-cheerleaders and financial partners – they are many in number.

Historically this model has been difficult to achieve because of the high cost of such personalised service at scale in branches. However, advancements in technology/AI coupled with the propensity of customers to use digital channels for transactional needs now make this imminently within reach .

 

This transition will require a fundamental shift in 3 big areas:

  • Creating a strong digital infrastructure to enable an omni-channel service: Banks will have to double down on their digital transformation efforts and build an infrastructure that can serve most transactional needs seamlessly via digital channels and call centres. The operational burden on both call centre and back office staff will have to be significantly reduced by automating as many processes as possible and providing the right tools and insight to help consumers efficiently.
  • Culture and Capability: This will also require a big shift in both capability and culture. Every function of a bank (like risk, finance, product control) will have to get more comfortable in leveraging technology to do a majority of the tasks currently done by humans while investments will be needed in new capabilities so front line staff can focus on building relationships at scale and provide good advice to consumers.
  • Bringing customers along on this journey: All this will work only if there is also a strong focus on educating customers on how best to interact with a bank and use branches only for the most complex needs while relying on other less expensive channels for day-to day banking services.

 

Making this transition will not be easy. Constrained finances and a higher compliance burden, have resulted in a large technology debt and complex operating models in most banks. Banks have to take a more ambitious approach to “jump” to this new model. Digital leaders like Amazon and Netflix have shown how a shift from physical stores to a more digital centric ecosystem can not only be more efficient but also create value for consumers.

Now is the time for banks to seize this opportunity to redefine the role of branches and re-establish them as essential advice centres for meeting their communities financial needs.

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