Body Magazine Insurance and Work Provider News.

Here's the latest Insurance and Work Provider News from BODY Magazine.

The Prospects for Motor Insurance

Standard & Poor Analysis
Proposed legislation by the U.K. government to reduce the cost of motor insurance civil claims are unlikely to improve insurers’ underwriting profitability over the longer term, says Standard & Poor’s Ratings Services today in the report ‘U.K. Motor Insurers Are In Recovery Mode, But Face Obstacles Ahead’.

While such legislation should reduce claims costs, possibly quite considerably, the reforms anticipate that insurers will also reduce their prices to reflect the lower costs, the report says. However, the speed at which insurers adjust their prices may depend on their confidence in accurately understanding the new claims environment, the report says.

‘We see a risk that insurers could initially overestimate the benefits of the new civil litigation, leading to underpricing’, said Standard & Poor’s credit analyst Nigel Bond. ‘We further believe that a more equitable regime, which establishes a greater degree of certainty about the quantum of costs, may entice new and existing insurers to increase the capacity they allocate to motor insurance, thereby driving down industry returns’.

The report also envisages a further risk from these changes, as well as from another piece of legislation, the European Court of Justice gender directive, to be introduced in late 2012. The UK motor insurance industry’s underwriting performance (premiums collected less claims and expenses incurred) has been poor in recent years, but will likely improve in 2011 and 2012 - albeit not to breakeven - largely as a result of its recent price hikes. Nevertheless, Standard & Poor’s believes that this improvement will be shortlived. The underwriting cycle may already have passed its peak because price increases have nearly stopped and claims costs are still rising, the report says.

E&Y Analysis
Ernst & Young has predicted a significant improvement in the motor insurance industry’s 2011 results following analysis of the UK market’s Q3 statements. According to the accountants, the market suffered losses of more than £5bn across 2009 and 2010, but premium rate increases and a stemming of inflation on non-injury claims could lead to the results improving this year by 20%. Price increases in 2010 and early 2011 were the key driver in the expected 20% improvement along with greater control of claim costs.

Catherine Barton, partner and actuary in the financial services division at Ernst & Young, commented: ‘A decade ago bodily injury costs were around a third of total claims cost, they are now rapidly approaching two thirds and the uncertainty this causes for insurers in anticipating their underlying performance is posing increasing challenges to their business model. We suspect that bodily injury inflation will continue to be a problem, but insurers now appear to be more focused on the risks’.

She added: ‘The arrival of supermarket brands in the sector, together with many other insurers striving to become big market players, is expected to introduce a period of fierce competition. Another concern for the industry as the profits improve is that the recent pressure from consumers and politicians about the lack of affordability of motor insurance will be increased’.

Accident Management Company News

  AvaAssist in Scotland
  Miller Samuel LLP, Solicitors are  delighted to partner Avassist in their  product launch in Scotland.  Miller  Samuel   provide  a full spectrum of  legal services and have specialised in  Road Traffic Personal Injury Claims for  40 years. As Avassist continue to  grow throughout the UK, Miller  Samuel are excited to be a part of  their Scottish launch.

 

Celebrating VBRA Supplier Members

VBRA members benefit from a range of great partnerships with selected supplier companies.

Beko Technologies Ltd supply the full package for compressed air and condenstate treatment, compressed air technology ‘at its best’. They offer comprehensive services, such as the cleaning and maintenance of your compressed air plant, volume flow, pressure and leak measurements, and online calculation tools for the efficient planning of your compressed air system. Their service portfolio also includes interactive learning, acquainting you with the most important aspects of compressed air technology. All their engineers are f-Gas certified and are happy to produce a professional tailor made compressed air audit.


Safetykleen UK’s exclusive strategic partner for waste oil processing, M2 Malary, has become the first company in the UK to be awarded a quality mark for the production of Processed Fuel Oil. This standard is awarded under the joint Oil Care Campaign and Oil Recycling Association Code of Practice Scheme. The achievement underlines the company’s commitment to pioneering standards in the production of environmentally-responsible processed fuel oils as an alternative to virgin fuels.

For a current list of VBRA Supplier Members, please contact Su Bradd: 0113 2898606; su@vbra.co.uk

Mazda Write-Off Scheme
Mazda is pioneering a new programme known as 'Save It' - a write-off avoidance scheme designed to offer discounted repairs on cars that are on the margin of being written-off by insurance companies due to the value of the repair.

Although the winter months tend to see around a 20% increase in work for repair centres from the summer months (*Mazda Approved Accident Repair Centres 182 vehicles per month October-March versus 154 vehicles per month April-September), Mazda UK aftersales director David Wilson-Green believes there is scope to drive more work through the Mazda dealer network and the 146 Mazda Approved Accident Repair Centres.

‘Scrapping a car is hugely inconvenient for a customer and will invariably cost them money’, David explains. ‘Customers also have to wait for an insurance company to pay out and then rush to find a replacement vehicle at a time usually inconvenient to themselves. While customer satisfaction and convenience is paramount, it also makes good business sense for our dealers who supply the parts for the repairs and our approved accident repair centres to do the work, it also keeps a customer in their Mazda for potential future servicing and parts sales’.

The scheme is available for Category D damaged vehicles; if the vehicle is worth saving, Mazda can decide to discount both the price of the parts and negotiate the cost of labour with the Mazda Approved Accident Repair Centre (MAARC) for the long-term customer benefit of keeping the car on the road. The customer decides whether to have the car repaired or written-off. If they decide to have it repaired, they have the use of a courtesy car while the work is carried out. Benefits to the Mazda Approved Accident Repair Centre include:

•    MAARC retains a repair.
•    MAARC can still profit from labour and paint sale.
•    Completing the repair means the MAARC can recoup or offset costs already incurred such as storage, recovery, courtesy vehicles etc.