Joining the fast lane

Connectivity, driverless cars and the claims regulatory landscape were topics at the heart of Post Motor Claims 2015 conference — Joining the Fast Lane. bodyshop’s Mark Hadaway reports.

Opening the day’s proceedings, director of content at Post, Jonathan Swift said, ‘In recent years, talk has been that motor claims volumes are declining and premiums are reducing but in 2015 things seem very different.’ He then questioned if the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) was already losing some influence with bodily injury claims rising again and premiums likely to follow. ‘No doubt the headlines will encourage the regulators to take another look at an industry already deemed too difficult to sort out,’ suggested Jonathan.

The keynote address of the day came from Aviva’s, global claims strategy and innovation director, Rob Townend who questioned, ‘Have we, as an industry, been good enough at putting customers at the heart of the claims process? If we’re honest, probably not.’ Rob then provided delegates with an engaging corporate video Aviva has produced in which it depicts how technology will serve to link all aspects of individual lifestyle choices to create a ‘financial passport’ and host of data from which all risk can be assessed. Rob said, ‘Claims has been a laggard in deploying technology for customers. I think we can massively speed up the settlement process for customers by deploying technology.’

Referencing the period 2005-2013, Rob highlighted how there had been a 30% reduction in the number of reported road accidents, yet personal injury claims had risen by 62% with a 73% increase in the average cost of a bodily injury claim. ‘There are simply too many spurious claims,’ said Rob, ‘the resources we have need to be directed to where they are really needed, and that is in managing genuine claims.’ Highlighting other nation’s low levels of personal injury claims and the benefits it has on the market as a whole, Rob questioned, ‘Have we, in the UK, really got the weakest necks in Europe?’

Manufacturers

Chris Holmes, campaign and retail incentives manager, Vauxhall Motors gave delegates a vehicle manufacturer’s view of insurance. He claimed, ‘we use it tactically’ highlighting how it has helped the business segment the market and target specific demographics with 40,000 active policies at present. Chris suggested that as the manufacturer of the vehicle, Vauxhall is also best positioned to protect it.

Chris then went on to discuss OnStar, General Motors’ connected car system, which will be standard on all Vauxhall vehicles in UK by the end of 2016, including 4G connectivity capability. ‘Data privacy is a barrier, therefore connectivity needs to add significant enhancement to the customer/driver experience,’ explained Chris. Already, OnStar has six million customers worldwide.

Opening his session, Ronnie Simmons, head of partnership development (UK) at Maiden Insurance Partnerships spoke of how megatrends can collapse, disrupt and transform business – the connected car very much offering such potential. ‘Insurance will always be a grudge purchase but a claim is the moment of truth – technology will allow us to turn-up the dial of customer service,’ explained Ronnie.

Rob, Chris and Ronnie were then joined by Niall Edawards, partner, head of national motor group, Kennedys and Jonathan Hewett, chief marketing officer, Octo Telematics for panel session to discuss the latest trends within the sector.

The debate saw mention of inflated third party claims costs following the Hetherington Vs Coles case; a call to put aside rivalries to make the most of future opportunities; a debate around ‘punitive excesses’ to persuade customers into insurer approved bodyshops, and the need for solutions to be found between insurers and manufacturers around vehicle repair.

Byron Shepherd, service delivery manager – MyLicence, MIB Group spoke of the activity currently underway to centralise and simplify driver identity, namely through the use of the driver licence number (DLN). He spoke of the MIB hub and how the key to combatting fraud is ‘tying industry data together’. He said, ‘As an industry we spend ridiculous amounts of money on tracing software, when the DLN is the one truly common identifier.’

Supply chain

In a session questioning; is the supply chain up to speed?, Simon How, global specialty markets director, Cunningham Lindsey offered his personal views and boldly proposed a five year time scale before fully automated cars become available. He predicted an ‘inevitable’ consolidation of the supply chain as margins squeeze and suggested manufacturers and software providers could own the repair market. ‘If we can prevent accidents, then we won’t need as many repairers or accident management companies,’ said Simon. ‘I don’t think people want to get in the supply chain,’ Simon continued, ‘I think people want to get out. Investment and consolidation is the way forward.’

An insightful session focusing on vehicle autonomy, connectivity, repair and complexity, saw Caroline Coates, executive partner, DWF; Jonathan Hewett, chief marketing officer, Octo Telematics, and Thatcham’s chief technology officer, Andrew Miller discuss the numerous challenges and opportunities around this emerging technology.

Caroline suggested insurance will see a shift from individual motor policies to issues around product liability, ‘as we approach an era of shared road space (between driver controlled and fully autonomous vehicles) who knows how apportioning liability will work.’ She identified one of the big challenges faced by vehicle manufacturers as being how they will provide the driver with the necessary information/training required to operate an autonomous vehicle. Jonathan pointed out that in all of this, ‘the customer is key’ and that ‘vehicle manufacturers are still car guys’ with their main passion being car design and engineering. Andrew Miller suggested the industry is in an age of ‘sink or swim’ with ‘big opportunities and big risks’ however he told delegates not to panic, as although the full autonomous vehicle was coming, it is still a long timescale. Delegates were also provided with a scenario of a road traffic accident (car to car) of the future and debated where the liability might lie – the outcome being that there was no clear answer.

Automated

A session on automated driving technologies heard Mike Lowe, senior engineer, international vehicle standards, Department for Transport explain how the main benefit of driverless technology was safety but also how it was of great interest to the chancellor and treasury due to the potential attractiveness of foreign investment. He also described how, with 46% of 17-30 year olds without a full driving licence, the societal impacts could be great.

Kenny Leitch, global telematics director at RSA, explain why the insurer was backing the Gateway driverless car testing programme. ‘The focus for us is on the learning,’ said Kenny. ‘Driverless technology is a bit of a strategic challenge but it also opens up opportunities.’ Simon Baker, head of commercial motor, AXA Insurance, another insurer backing driverless car trials, said, ‘We believe these vehicles are here and the material benefits of the projects are to understand its capabilities.’

Huw Evans, director general, Association of British Insurers discussed the priorities for the industry in gaining support from a forthcoming government. ‘We need to embrace innovation and meet the needs of the customer,’ said Huw, ‘this makes it easier to have conversations with government and ministers.’

He continued, ‘Improving trust and the reputation of the industry is vital to gaining the support of the government.’

Rounding off the day, Sulabh Soral, innovation and advanced analytics, Deloitte, suggested the autonomous vehicle was ‘no longer the future, it is the now’ but in order for it to be a ‘viable product’ it needed a supporting eco-system. Looking ahead to 2023, Sulabh predicted a very heterogeneous vehicle parc with 50% of vehicles still without advanced safety technology. ‘Yes, this technology will be disruptive but there is significant uncertainty with regards to timescales,’ said Sulabh. ‘The motor insurance industry, and its supply chain, is certainly not going to die a sudden death.’