Insurers will have to adapt to bring ‘value’ to the consumer beyond insurance, says insurer managing director
Insurance is evolving and technology is “fundamentally changing” the safety of vehicles. To embrace this “changing marketplace for the future”, insurers need to “evolve [and] adapt to the fact that cars will be crashing less”, said Heather Smith, managing director for direct insurance at LV= General Insurance (LV=GI).
Moving forward, “it will be about brand, reputation safety and other factors around value – the value you can bring to the consumer beyond just the insurance”, she continued.
“We see that as being a really responsible part of our future.”
This could include, for example, aligning organisational goals with customers’ personal values around sustainability and the environment.
Earlier this year (April 2021), LV=GI launched its new ethical Green Heart Standard across its branded bodyshop network in a drive to become more environmentally sustainable.
As part of this, LV=GI’s bodyshops around the UK are implementing six new principles that are aligned to the insurer’s social purpose pillars of environment and sustainability, diversity and inclusion, wellbeing and responsible business.
Now, car salvage agent Copart UK has joined the initiative, building on the businesses’ partnership that has so far lasted for over a decade.
Collaborating on social purpose
Speaking exclusively to Insurance Times, Smith explained that “social purpose is so important” but that the insurance company “can’t do it on [its] own” - therefore the value of partnerships is “absolutely critical”.
LV=GI send approximately 30,000 cars to Copart every year.
On behalf of the insurance company, Copart deals with policyholders’ cars that are too badly damaged to be repaired.
Discussing Copart’s role in dealing with cars in an environmentally friendly way, managing director Jane Pocock explained that the salvage firm strives to repair around 75% of the vehicles it receives.
She said: “From a carbon impact point of view, making sure those vehicles are repaired in the best way possible and they get to the right places is one of our main jobs. Then the 25% that are so badly damaged they need to be broken for parts – that they go to equitable breakers.
“I think the latest generations are more aware of the impact on the planet and do think more about recycling.
“As companies, we need to embrace that, enjoy it and adapt accordingly.”
Taking advantage of EV growth
To meet consumer demand, and given the future trajectory of the UK government’s plans, LV=GI is offering customers electric vehicles (EV) when arranging courtesy car hire.
Pocock explained that although EVs have already been present on a small scale, this is “evolving really rapidly” thanks to the government’s 2030 deadline to reduce the UK’s carbon emissions by at least 68% compared to 1990 levels.
As a result, LV=GI are “doing a lot in consumer education, help, advice [and] guidance on that total EV ownership”, added Smith.
Pocock continued: “The knock-on effect is great because electricity is clean energy to supply and it has a massive impact on noise pollution because the cars are so quiet in comparison.
“So, the long-term benefits are great and, meanwhile, the infrastructure in the country will change.
“Fuel stations that are currently selling diesel and petrol will have charging points instead, so it’ll be interesting for us to watch all of that evolve.”
Technology is also transforming transport in respect of safety. Smith explained that insurers can expect to “see far fewer crashes in the future” because cars are “so much safer”, with features such as lane control and braking devices.
She continued: “All of that will mean far fewer crashes [and] lots of technology going into the car from the original manufacturers giving data points and information like we’ve never known before.
“You can see fundamental changes in how we use our cars, what our cars do for us and what consumers understand about the safety and the data that the car is telling them, so we see a really changing marketplace for the future.”
“Consumers want to know that you are having a positive impact on society and you’re doing what’s right – not what’s easy, but what’s right.”
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