The Effect Of Ongoing Changes In Vehicle Insurance Legislation: How Should Firms Respond To These Shifting Goal Posts?

Two elderly people nesr car with keysIt seems legislation is always in a state of flux. The summer of 2011 saw the introduction of CIE regulations. Late 2012 saw a European ruling on the gender imbalance. The list goes on and that’s unlikely change any time soon.

The fact is such laws and regulations have had many effects on society as a whole, expected and unexpected. Female drivers are annoyed at having to pay more than they’re used to and male drivers are unsure about whether this has any real effect on them. Fresh rules aren’t going to alter the oft ignored emotional component of insurance.

Often the average citizen has little clue as what these rules mean, or whether they’ve even come into effect yet. Improving information distribution chains could lead to more custom. Assuring people that such changes are indeed intended to help them and not hinder them is a good place to start, but there is much to be done.

Standard CMS systems are equipped to identify such consumer issues and deliver products accordingly, more or less, but there are many difficulties in generating clear measurable returns from an information-based, advice-focused education initiatives.  This need not be a reason to avoid them.

It was recently mentioned that the model used by banks to target students for tailor-made accounts could be applied to the insurance industry. Banks have found a way to specifically target those they know will lap up the products offered. Vehicle insurers should take note and develop innovative ways to reach those most at risk.

A step in the right direction?

I recently had the pleasure of sitting in on a Pass Plus lecture for research purposes. It seems erroneous ideas that telematics are uncool, don’t work, or “a product of the nanny state”, still gain traction each year. It doesn’t look likely that this will change, unless governments and the financial sector alike make a much stronger effort. This is something legislation can’t change…short of making telematics a legal requirement. It’s no wonder young people choose to risk it.

A good friend of mine is a Pass Plus-registered/advanced driving course instructor, serving both young drivers and the police force. He once told me a surprising portion of drivers he meets seem to think the left hand lane on a dual carriageway is only for HGVs and slow people; that using it will somehow affect their cool points. It got me thinking of all the strange ideas people still hold on to in this day and age, and how, if we address these concerns, more people might insure.

Directly driving targeted yet wide reaching information channels that appeal more to the layman could be the answer. Indeed some companies have in this sense had huge success with novelties and gimmicks, but that can only go so far.

Attitudes vary: it’s too difficult to figure out, too difficult to find the best cover, too difficult to pay for it all…the real key is not to deliver vapid incentives, cuddly toys, or gimmicks, but no nonsense, easy to understand education initiatives that engage people in the way they are used to; through channels they understand and in fact prefer. Informal blogging is just one possible option.

A missed opportunity?

New partnerships on educating drivers about their responsibilities, rather than making purely reactionary efforts, could solve our problems and drive an increase in turnover. The same can be said for coping with the constant march of the shifting goal posts. Getting ahead of the curve can be difficult, but by no means is it impossible.

It’s one thing to manage your data effectively, and another can of worms entirely to integrate all these changes into an innovative customer-focused experience. In a world where people will always find a loophole, isn’t it better to instead target the attitudes people harbour? At this stage in the game, it’s clear that only those in the insurance industry itself can affect direct positive change.

Author bio: With an interest in how the future unfolds before our eyes, Charles Farnham regularly writes about advancement in technology in so far as it can relate to current business practice across various industries. He often uses the websites of companies like SSP Limited as the first port of call in keeping up-to-date on new developments.

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