The product will ‘give retailers and customers much more confidence in GAP’ following years of unrated underwriting, says head of ancillary motor
MGA Avid Insurance Services has launched its first A-rated guaranteed asset protection (GAP) insurance product for the retail auto market.
The product, which has received approval from Lloyd’s, will be initially offered to customers through three online retailers.
Steve Duxbury, head of ancillary motor at Avid, said: “It’s vital for market confidence that we provide stability for ancillary segments and apply the same disciplined approach to underwriting as elsewhere - achieving this will attract more A-rated paper and create a virtuous circle for the MGA model.”
Duxbury further highlighted that using online retailers as sales channels is beneficial because of the four-day deferral period introduced by the FCA in 2015, which enables customers to shop around rather than have to buy GAP cover from a car dealer.
He also expects customers shopping for insurance online will “become the norm, driven by the success of [car retailers] Cazoo and Carwow, and the challenge is for mainstream dealers to catch up, including how they sell financial services add-ons like GAP.”
He continued: “Previously GAP insurance has often been underwritten by offshore, unrated GAP insurers [that] withdrew from the market when they stopped making money. Our A-rated product will give retailers and customers much more confidence in GAP.”
The next step for the business is building a range of A-rated ancillary products.
Avid specialises in travel insurance schemes, social housing, the leasehold and contingency sectors, as well as delivering expertise in equine, motor sport, leisure, gadget and student contents insurance.