Non-standard motor lines attract careful customers

Online sales and the arrival of comparison websites in the early 2000s has changed the way motor business is written. It’s in the niches that personal relationships and tailored underwriting still count, and where - unlike the core motor market - fraud has failed to flourish.

As a result, Groupama, for one, decided in 2009 to invest in niche business such as classic cars, modified vehicles, motorbikes, 4x4s, vans and motor homes.

Personal lines director Kevin Kiernan says: “We have been switching from standard to niche - 50% of our book in 2011 was ‘non-standard’ motor. In the niche car business it’s genuine enthusiasts, often through brokers who are linked to car clubs; it doesn’t lend itself to an aggregated solution.”

The “genuine enthusiast” profile also means that the insured is less likely to take risks, or in the case of some classic car owners even to drive at all.

Katrina Clowes of 2gether insurance, a niche motor broker, says: “We’ve seen good growth in the 4x4 market and in imported cars. We can look at competitive premiums because most of the niche products we write are for people who are really passionate about their hobby … they keep their vehicles in a garage, keep them relatively well maintained and they’re not on the roads as much.”

2004

January
Pay and display cover quashed
A private member’s bill to have insurance discs in car windscreens made a legal requirement met with resistance as the AA suggested it would add £35 to every policy sold.

August
Broker starts aggregator
Motor broker Auto Direct established new aggregator Quote and Buy for personal and commercial motor products.

2005

November
Police empowered
The government cracked down hard on uninsured drivers, with police forces given automatic number plate recognition cameras to spot and ultimately seize and destroy cars being driven without insurance.

2006

September
Mobile quotes introduced
Swiftcover launched a new service enabling customers to obtain a motor quote texted directly to their mobile phones within five minutes.

December
Lloyd’s cover race series
Lloyd’s broker Thompson Heath & Bond went into partnership with Renault motorsport, covering every driver in the Renault Sport UK championship race series.

2007

February
Phone fines rise
Harsher fines were introduced for drivers caught using their phones at the wheel. The fixed penalty went up to £60 with three endorsement points on drivers’ licences.

August
Sports car broker bought
Aon announced the acquisition of specialist vehicle broker Firebond, which provides bespoke cover for specialist personal risks including prestige sports and classic cars.

2008

June
Telematics pilot crashes
Norwich Union withdrew its pay-as-you-drive telematics policy after less than two years owing to low take-up.

August
4x4 scams multiply
Soaring fuel prices provoked an increase in the number of staged thefts of gas-guzzling 4x4 vehicles as owners found it difficult to either run or sell them.

2009

April
Road safety enhanced
The Department for Transport introduced more 20mph zones and more rigorous driving tests in a bid to cut annual road deaths from 3,000 to 2,000.

2010

June
Caravan comparisons offered
Aggregator site Confused.com entered the market for touring and static caravans, aiming to take on specialist brokers.

November
Iphone claim app launched
Aviva introduced MyClaim, an iPhone app enabling policy holders to file motor insurance claims and accident details.

2011

March
Age rating allowed
The government announced that insurance companies could continue to use age as a criterion for setting premiums.

April
F1 contract win
Aon won the McLaren F1 contract from Willis, to place insurance for racing drivers, pit crew, transport logistics, property and casualty.

2012

May
Whitehall backs telematics
At a whiplash summit in Whitehall, transport minister Justine Greening encouraged insurers to develop telematics-based products to cut premiums for young drivers.

2013

What’s next?
Goodbye gender pricing
The EU gender ruling comes into force at the end of 2012, likely to raise premiums for women as insurers are prohibited from using gender as a specific rating factor in the calculation of insurance costs.

Telematics future
As privacy concerns wane, and costs recede, research by Celent indicates that telematics-based insurance will become less focused on high-level risks and burst onto the insurance mainstream.

2014

What’s next?
CMC crackdown
Justice secretary Ken Clarke is pushing for whiplash claimants to have their medical evidence put before independent panels of doctors as the government prepares a crackdown on ‘no-win, no-fee’ ambulance-chasing claims management companies.