Highway admits to low standards

Lower standards of customer service at Highway were "necessary pain" caused as new IT systems were put in place, said managing director Andrew Gibson.

Gibson admitted that service levels dropped earlier this year as the company installed new systems covering its personal claims assessment, central processing and accounting.

Trouble with GIOS, Highway's central processing system from Oracle, were to blame for the deterioration in service.

Gibson said: "It set the fundamentals for the business.It was necessary pain."

He is looking to the investment in IT to help cut costs across the business, after claims costs increased, despite an improvement in claims frequency.

He was commenting after the broker-only, motor-only insurer announced what he called an "adequate" set of first half financial figures.

Profit before tax was £5.1m compared to £5.7m in the same period last year.

Operating profit on continuing operations was £5.7m compared to £5.8m in the same period last year.

An apparent crash in premiums written to £41.4m from £95.5m was due to a move to a co-insurance deal with an AIG subsidiary. Highway had previously used reinsurance to expand its capacity. Gibson said reinsurance became too expensive after 11 September.

The operating ratio for the period improved to 98.1% from 99.3% last year, with the expense ratio at 27.9%.

Highway has stopped some business, such as taxi cover, and streamlined 13 products into its new Highway Choice.

The change has led to the company writing more comprehensive business, older cars and drivers under 35.

But it has also meant an end to its old system which favoured some brokers.

Gibson said: "In the past Highway used to give discounts to its favoured brokers. "Now we're giving them a product that in certain sectors is much more competitive."

Brokers should also expect Highway to put its rates up.

Gibson said: "I'm hoping we're going to keep putting rates up, although not at the speed we did in the past."