Board approval imminent for scheme to save millions with new dedicated trading company
AA/Saga plans to take its credit hire arrangements in-house in an attempt to save millions of pounds.
The move could trigger insurers to follow suit as frustration grows at the level of expenses incurred in the process.
A spokesman for AA/Saga refused to comment but said that an announcement was expected in the next seven to 10 days. The move is thought to be subject to board approval next week.
A source close to the firm said that a separate trading company is to be set up and run by technical claims manager Chris Nelson. The source said: “It is likely that AA/Saga will put its current credit hire provider on notice and then begin to get cars sourced from Enterprise with Helphire providing any overspill.”
It is understood that the new business is to be called Claims Fast.
The source added that a legal case involving RSA last year had set a precedent for insurers to move the function in-house. The source added: “I understand the necessary application has also been made to the ABI technical committee which would facilitate the move.”
It is estimated that AA/Saga could currently be paying up to £5m a year on credit hire.
Writing in Insurance Times two weeks ago, AXA chief executive Philippe Maso said that market inefficiency and increased customer prices in credit hire was a unique issue for the insurance sector. He said: “All insurers agree it is a problem that needs to be dealt with but none have been prepared to take the steps required to deliver real change.” Maso called for a concentrated effort from insurers to work with government, brokers and the ABI.
However in a letter to Insurance Times, Ai Claims Solutions commercial director Chris Shaw countered that not all credit hire companies had adversarial relationships with insurers. He said: “Mr Maso makes the assumption that insurers have a God-given right to manage their policyholders’ claims. They do not. Insurers provide indemnity against loss.” He added that the issue was not about referral fees but about hire durations (Letters, 9 July).
See analysis: A new dawn for credit hire