Insurance Times catches up with Zurich’s UK chief claims officer to find out what motor claims trends should be on the industry’s radar this year
Supply chain challenges could be set to hit the motor insurance sector in 2022, following windscreen shortages last summer, according to David Nichols, UK chief claims officer at insurer Zurich.
Issues in global supply chains have been well reported during the Covid-19 pandemic, with particular problems arising around the delivery of raw materials and property repair supplies as national lockdowns halted factory production and goods deliveries.
Data published by the Office for National Statistics in December 2021, for example, found that of firms trying to get goods and materials between 4 and 31 October last year, 17% of respondents were unable to get goods from the European Union, while 11% were unable to get goods from within the UK.
Although this trend is heavily impacting the property insurance sector, Nichols believes it could also have ramifications within the motor sphere, making it a “trend that we need to watch” because “you can imagine it fast following” the trajectory seen in property insurance.
Speaking exclusively to Insurance Times, Nichols explains that Zurich’s key suppliers spoke about difficulties sourcing and delivering windscreen replacements last summer.
This was due to the “real compression” of Brits flooding the UK’s roads as lockdown restrictions were lifted – yet families were not heading abroad for their annual summer holidays - as well as some supply chain staff needing to isolate and be absent from the workplace as a result of coronavirus infections.
“Windscreens, there was a real demand. I just have my eyes open to a parts challenge further downstream,” he says.
One way to mitigate this potential roadblock, however, is through the use of green parts, Nichols adds. “Green parts has been quite a favourable component because being able to reuse some of the parts from vehicles where they’re not damaged has been a real bolster in that particular space,” he explains.
Nichols admits he will also be keeping a close eye on trends surrounding electric vehicles (EVs) and advanced driver assistance systems (ADAS) “because you can see trends of accidents being prevented through the use of ADAS and that’s only going to continue as [car parts] continues to evolve in the UK”.
Automated driving is another key area for the insurance industry to keep abreast of this year, especially as Nichols predicts that technology such as an automated lane keeping system (ALKS) could hit UK roads in 2022 – especially as the government wants the UK to be a leader in this field.
However, Nichols believes there are “some big questions still to be dealt with” when it comes to ALKS.
He says: “You can see some positive benefits to it, but there’s a danger that we all try and go too fast without fully understanding what it really means.
“There are quite important insurance considerations still to come in this space where the vehicle is completely autonomous. Who’s responsible – the driver? The vehicle?”
Another concern Nichols flags is around the repair and recalibration of technologically advanced car parts used in EVs or cars geared for automated driving – he adds that repair centres will need to ensure they have the relevant skills to undertake this type of work, also bearing in mind that the threat of cyber attacks on connected and digitally-savvy vehicles is “realistic” for the future.
As for e-scooters, Nichols says this is an area he plans to “watch intently because there’s more and more data emerging where e-scooters have been involved in accidents”.
The government is currently trialling e-scooter programmes across a number of UK cities - many of these schemes started in summer 2020. Nichols confesses to being “really interested to see how the pilots are perceived”.
He continues: “It feels like the legal framework against legal scooters is far too light versus other forms of transport – that’s a slight concern.”
Rush hour removal
One continuing trend linked to the Covid-19 pandemic is around the times claims are notified – with rush hour time slots pre and post standard office hours fading fast amid the pandemic-driven homeworking boom, Nichols says claims departments may need to spread out their resources differently.
He explained: “There’s a slightly different trend around peak hours now [compared] to what we used to see.
“In terms of claims notified and the times that they’re occurring, we’re seeing a slightly different trend, slightly away from the normal commuter belt that perhaps we would have once seen.
“I think it’s too early to say that’s the new norm, but it’s certainly a trend that we’re watching on the motor side of things. It’s still the same claims volume - it’s just making sure that you resource at different times of day I suspect.”