FIAR 2019: Motor Insurance Conference - Part II. Main statements

During the second part of the Motor Insurance Conference from FIAR 2019 - the International Insurance and Reinsurance Forum, specialists debated, among other topics, the trends in damage management, the impact of technologies or "the right of use".

Some of the speakers:
  • Michael THEILMEIER, Re/Insurance Expert
  • Calin RANGU, Director, ASF
  • Madalin ROSU, President, BAAR
  • Sorin GRECEANU, General Manager, BAAR
  • Alexandru GRIGORESCU, Specialist Motor, Insurance section, UNSAR
  • Steven M. LULEWICZ, Vice President, Global - Strategic Markets & Clients Broadspire Services
  • Cristian MICU, Country Manager, EUROTAX
  • Maria GANEA-BOGHIAN, Deputy General Manager, ASISOFT
  • Radu CHITU, CRM & Operations Manager, Drive2U Romania
The event was supported by BROADSPIRE, EUROTAX and ASISOFT and it took place with the support of RECREX.

(The first part of the conference can be found here)



MAIN STATEMENTS:




Radu CHITU,
CRM & Operations Manager, Drive2U

  • There is one situation for courtesy cars and there are services which abuse the legislation and there are lots of rent-a-car services which are providing this service without being very transparent with the prices
  • The customers are asking for a curtsey car in auto services - even car manufactures are giving courtesy cars in case of loss of use; I can assure you that all customers are asking body shops to provide them with a courtesy car or they will not repair their car there
  • A few years ago, in Romania, everybody was using the prices they wanted for spare parts (before having the AUDATEX system, for example). Similarly, we should have a reference price for renting cars and to use this in order to stop abuses; I believe we can find the right solutions




Steven M. LULEWICZ,
Vice President, Global - Strategic Markets & Clients, BROADSPIRE Services, Inc.

  • BROADSPIRE is wholly owned by Crawford & Company, one of the world's largest independent provider of claims management and claim related solutions to the risk management and insurance industry. Founded in 1941, our global headquarters is in Atlanta, USA and we employ 9,000 employees in 70 countries across 700 locations.
  • We are a stable and financially secure independent organisation, making Crawford the ideal long term partner
  • We are identifying and implementing a strategical claims philosophy, aimed at controlling and reducing indemnity spend.
  • We target a reduction of 2.5% in claims settlements
  • We have a single platform worldwide, multi-currency/ we allow for online notifications
  • Data is the most important element of a claims programme to enable true understanding and achieve targeted improvements across the book of business. Data identifies and evidences performance outcomes. BROADSPIRE is using a powerful analytics tool which is transforming data into actionable business intelligence
  • We continually look to improve our claims services to achieve better outcomes both financially and for the customer.
  • Innovation in any industry happens when we question fundamental concepts - Continuous Improvement Process (CIP)
    BROADSPIRE is offering a fixed fee pricing, which is providing certainty and transparency of fees




Cristian MICU,
Country Manager, EUROTAX

  • 2018 was again a good year for the Romanian new car market with an upward trajectory following the trend of the bigger family, the EU.
  • Romanian new passenger car sales reached 130,919 units - a growth of 23% compared to 106,387 units in 2017.
  • Fuel wise Romanians react slow to ditch Diesel powered vehicles, in 2018 Diesel units were 53,228 vs 2017 with 53,755 a mere -1%. This compares badly to -18.3% across EU. One explanation is that a big % of all new car sales are fleet and company owned cars and for various reasons (sometimes objective other times because of tradition) Diesel still looks like an interesting proposition.
  • However, industry wide there is no doubt that the trend for Diesel sales points downward for passenger type vehicles, the demise is just a question of time.
  • Light Commercial Vehicles - vehicles defined as having allowed total weight of 3.49 t. - the EU overall finished 2018 with a 3% growth compared to 2017 while Romania was at a 9.8% growth. This is a good indicator for the economy.
  • 2019 Residual Values & Forecast:
    • Although times are moving against Diesel powered vehicles, in Romania these types of vehicles are still held in high esteem by buyers because of low consumption
    • Thus, while in 2018 the new Diesel car market was at -1% compared to 2017, the used car imports more than balanced this situation with 358,359 Diesel powered used vehicles compared with 111,548 for Petrol.
    • Overall we see the Romanian market as being stable in terms of fuel type war. However big imports from EU countries to RO are pressing downwards the depreciation patterns of all used vehicles.
    • Germany is one of the most important countries, both regarding enacted legislation to limit Diesel access as well as available car park source for exports.
  • Romania reported a 88% increase of hybrids & plug-in hybrids in 2018 (3845 vehicles) compared with 2017 (2039)
  • Since the average car park in Europe is around 505 vehicles per 1000 inhabitants, Romania sits at around 261 vehicles per 1000 inhabitants the lowest figure in EU. These numbers show that there is a need to grow the local car park, in order to satisfy basic mobility needs. Until future concepts of carpooling gather traction on a wider scale, the near future will see a growth of the local car park both in terms of passenger cars as well as commercial vehicles.
  • Regarding car sales, second hand imports are leading in terms of growing the car park but new car sales also are on the upward slope, and we see constant growth (this based on both local as well as EU economic context) in the near future.
  • For 2019, when it comes to new passenger cars, we forecast a growth of between 12%-18% and for light commercial vehicles a growth of 3%-5%




Michael THEILMEIER,
Re/Insurance Expert, Germany

  • Should we use more standardization or more individualization for motor insurance pricing?
  • Areas of change along the overall process of risk development and risk handling for motor vehicles: Driver assistance, sharing vehicles, semi-automatic claims settlements and highly automated administrative processed, BD&AI and automated analysis based on very few starting data, usage-based data
  • Standardization - two-question insurance;
  • Individualization - based on actual driving records, using genetic footprint of every individual; what data are we using? Where does this data come from? Such data might led to discrimination
  • Driver versus vehicle based parameters for risk selection
  • Telematics might indicate that a driver who is driving slowly, only during the day, without sudden maneuvers is a good driver... even if the driver is a 90 year old person
  • In 2010 we thought that we will start seeing automated cars on the roads starting with 2015 and by 2030 almost all the global fleet would be automated. Now we can realize that the automation of the global fleet of cars will not happen as soon as we first believed
  • Parameter selection for pricing should be as simple as possible, but as differentiated as necessary
  • Insurers need to be boring - they need to work slow and be careful, to have a solid business




Richard NATHSCHLAEGER,
Executive Senior Advisor, Solera Europe

  • Big Data enables a high level of individualization, but as insurers we need to be slow, we need to concentrate; We need to do business in a very sound and rational way
  • Research has shown that Diesel cars are becoming more efficient - these cars will continue to exist on the market
  • Electric cars will take a lot of time for developing; there are still many questions regarding electricity - where do we get the electricity for cars?




Maria GANEA-BOGHIAN,
Deputy General Manager, ASISOFT

  • The insurance industry wishes for happy clients
  • The clients wish a fair and happy relationship with the insurer
  • I think we can offer equitable solutions for the clients in Romania. Also, I think the legislation can be worked-around



Panel "right of use"




Michael THEILMEIER,
Re/Insurance Expert, Germany

  • In Germany, for rent-a-cars and right of use there is a table since 1966 with updates minimum once a year, categorizing all types of cars into 11 groups (A to L); this helped to keep rent-a-car costs contained
  • Basic daily rates for right of use vary from EUR 23 (A) to EUR 175 (L); some more parameters for rent-a-cars; For cars older than 5 years one group lower; for cars older than 10 years two groups lower. Itis a very straightforward approach
  • In Germany, we have the legal case of unlawful enrichment - which protects against abusive cases




Calin RANGU,
Director, ASF

  • All the different examples presented here underline the same issue
  • The problem is that all the parts involved in the issue do not talk to one another
  • The current law specifies that the client must decide whether they want money or a rent-a-car/ right of use solution
  • Each undertaker should have a procedure to deal with situations like these. Thus, these abuses are also stimulated by mistakes of undertakers; the undertaking is not being active in solving such issues
  • I think all of us should work with the same standards and I think we should be more transparent towards the consumer
  • There are many undertakers which do not have such issues with right-of-use; only a few undertakers report such issues
  • Each of us need to work on solving the problems, even before the changing of legislation





Madalin ROSU
,
President, BAAR

  • In our case, not the client is requesting this rent-a-car/ right of use: this request (this bill) comes from the auto service
  • There is no law regarding what car can be rented - the bill is sent by the auto service; the relation between the insurance company and the client is broker - the client is currently represented by the auto service
  • There are certain auto services (body shops) which are misusing the right of use/ rent-a-car - the client doesn't even know the value of the bill in the end; there were even fraudulent cases when the auto service billed the rent-a-car but the client didn't even receive the car
  • The current legislation needs to be changed as soon as possible




Sorin GRECEANU,
General Manager, BAAR

  • The new provisions of the law leaves room for some abusive practices
  • I would like to make the distinction between rent-a-car and the right of use
  • In Romania, we have 8,1 million registered vehicles; out of them, only 600,000 are between 0 and 4 years of age
  • You can have an old car, which you damage, and then you can benefit from a new car when renting it
  • If we continue to cut bridges, to cut discussions, we will remain without the wood to build bridges out of. We need a certain balance. We need, in the legislation, some points of balance, some points such as the obligation to mitigate the loss - not to abuse them, but to bring balance and to protect the consumer, in the end




Alexandru GRIGORESCU,
Specialist Motor, Insurance section, UNSAR Romania

  • The actual legal frame in Romania doesn't specify what documents the third party/ the client who rents a car needs to show to the insurer to prove that they rented that particular car
  • ASF, UNSAR and other stakeholders are working on changing the current legislation - let's hope that, in a few months, we will have the best solution on the European market



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