2015 Star Ratings Motor Fleet Insurance Discussion Paper

Transcription

1 2015 Star Ratings Motor Fleet Insurance Discussion Paper Defaqto Limited All rights reserved. No parts of this publication may be reproduced in any form by any means, whether electronic, mechanical, optical or any other, or be stored in a retrieval system without the express written permission of the publisher. The publisher has taken all reasonable measures to ensure the accuracy of the information and Ratings in this document and cannot accept responsibility or liability for errors in or omission from any information given and for any consequences arising.

2 About this document This document outlines the key developments and trends that will inform the criteria we use for the 2015 Star Ratings for Motor Fleet Insurance and, based on these, sets out the areas where we would like to consult the industry as part of ensuring that our Ratings process remains robust and transparent. 2

3 Key developments and trend The market We have reviewed developments in the Motor Fleet Insurance market, considering legislation and regulation, provider changes, and Motor Fleet Insurance products and have concluded that there has been no significant changes. Legislation and regulation There has been no legislation or FCA review into the Motor Fleet Insurance market that would make us reflect our thinking towards the Star Rating criteria that is being considered for Providers We reviewed how the make-up of distribution has changed over recent years, comparing 2014 to Total distributor numbers have increased by around 8% over the period, with 37 distributor brands today, compared to 32 in 2010 In summary, we cannot detect any marked change in the overall types and quality of cover being offered, so feel no need to change our Star Rating criteria on this account Products/propositions We looked at the way in which providers' products and propositions are changing over time In addition to the increase in providers it is also noted that some have increased the number of products available each offering differing levels of cover aimed at different type of fleet customers. None of these is yet sufficient for us to amend our Star Ratings criteria for

4 Key implications for the 2015 Ratings process Product area weightings The criteria have been split into the following areas in order to show the weightings for each within the Ratings: Rating Area No. of Features (2014) 2014 % Share of Features No. of Features (2015) 2015 % Share Policy Cover 30 47% 28 46% Policy Excesses/Terms 7 11% 7 11% Accident Management Services 21 33% 21 34% Policy Add ons 5 7% 4 7% Helpline Services 1 2% 1 2% Total % % We will continue to place most of the emphasis on the policy cover provided and accident management services, which account for over three-quarters of the criteria used. What does good look like? For 2015 we have amended the core criteria for 4 or 5 Star rated products from those which are currently being applied in respect of European Cover. Rating Area Core criteria set for the following Policy Cover Property Liability Cars Property Liability GCV Windscreen Limit Theft of Keys Limit ( ) Personal Effects European Cover Limit Accident Management Services Vehicle Rescue Cover Courtesy Private Car Helpline Services Emergency Helpline 4

5 Areas for discussion These are the areas where Defaqto would like to discuss their proposals, and receive any feedback that you might have. Changing the DNA scoring method for features to reflect only the quality rather than the availability of the feature No other changes to product features studied Driven by our view that whether an add-on is provided as standard or optional is simply an issue of price, reflecting the way the distributor structures the product sale, rather than the underlying quality of the product. Our intention is to give products credit for the levels of cover available. This will lead us to remove the features New Vehicle Cover, Uninsured Loss Recovery Cover and Full European Cover from the 2015 Star Rating criteria We carried out a major review of our DNA scores for 2014, and have not seen any dramatic market changes that would require us to reconduct this review for 2015 Ratings. There are no obvious elements of policy cover that might emerge over the next 16 months. We cannot see any reason to remove any of the existing elements of cover from our Ratings because of market changes likely to happen in the next 16 months 5

6 Appendix: Proposed 2015 criteria Based on the above analysis, we propose including the following criteria in our assessment process for the 2015 Ratings (core criteria are in bold text). 6 Proposed criteria Property Liability Cars Property Liability GCV Indemnity to Owners Indemnity to Principals Contingent Liability Cross/Joint Liability Unauthorised Movement Unauthorised Use Unlicensed Drivers Towing Attached Trailer Cover Detached Trailer Cover Breakdown Pay on Use Emergency Helpline Claims Reporting Online Own Repairs Authorisation Recommended Repairers Repairs Guarantee Bodywork Repairs Guarantee Period (Years) Vehicle Rescue Cover Accident Transport Accident Transport Maximum Distance Accident Max Passengers Message Relay New Vehicle Period Cars (Months) Alternative Transport Costs ( ) New Vehicle Period GCV (Months) Emergency Accom. Limit Per Person ( ) New GCV Max Weight (Tonnes) Emergency Accommodation Total ( ) New Vehicle (%) New Vehicle Mileage Limit Windscreen Limit Windscreen Limit Non-Approved Repairer Audio limit Manufacturer Audio Limit Non-Manufacturer Sat Nav Limit Manufacturer Sat Nav Limit Non-Manufacturer Loss of Keys Limit ( ) Theft of Keys Limit ( ) Personal Effects European Cover Limit Customs Duty Uninsured Loss Recovery Cover Breakdown UK Breakdown Europe Courtesy Private Car Courtesy Car Defined Class Courtesy Car Period (Days) Courtesy Car Guarantee Courtesy Car Enhanced Vehicle Courtesy Car Total Loss Courtesy GCV Courtesy GCV Period (Days) Courtesy GCV Defined Class Courtesy GCV Guarantee Driver Under 21 Excess Inexperienced Driver Excess Windscreen Replacement Excess Windscreen Repair Excess Cancellation Return Level

7 The table below sets out the 2014 criteria that we are planning to remove for Criteria planned for removal New Vehicle Cover Uninsured Loss Recovery Full European Cover 7