AXA's claims boss reviews the discussion
Insurers must take the blame, in part at least, for what I see as possibly the least efficient and most unnecessarily complicated and expensive of all the arrangements we deal with as part of our daily claims handling lives.
Following a road accident that had kept a damaged vehicle off the road for a long period of time, it was agreed that alternative mobility was needed. Insurers didn’t have a solution, so Credit Hire Operators (CHO’s) stepped in to the breach and over the years it has become increasingly difficult to administer and no longer reflects what the customer needs.
Whilst insurers should have been looking to tackle the situation and improve the process, we have been party to an agreement that has seen rates rise steadily while control of the process has become a bit of a laughing stock. A gentleman’s agreement with no teeth, so if there are abuses nothing happens – people don’t even bother to complain, it appears from a comment at the Insurance Times Credit Hire Conference that there had only been 3 lodged to date!
AXA’s departure from the GTA was met with disappointment as we were apparently the ‘Best’ at sticking to the rules, paying promptly where monies were genuinely due, more fool us, perhaps, as some other parties seemed more keen on using the agreement to hamper efficiency than move things properly forward.
I genuinely hope the changes to the GTA make it more effective, but can’t say I’m convinced there will be a massive change. We have all seen those ‘exceptional’ cases, 164 days hire on a three and a half hour repair job, £100,000 plus hire bills on vehicles that cost less than £5,000, exceptional perhaps, but often coming from the same CHO’s.
Ignoring the ‘exceptions’ the process itself requires the man in the street to unwittingly sign up to a Credit Agreement that can leave them out of pocket or, increasingly, having to appear in court, often vague, dazed and confused by the whole process.
The time has come to make a stand, and for companies to lead by example. That doesn’t mean everyone needs to exit the GTA, we feel that is the best way for US to deliver a more cost effective solution that truly delivers what the customer and third party needs, and that is why we took that serious step. I would however ask every insurer to look very carefully at themselves, analyse their practices and decide if they want to be part of the solution, or continue to be feeding the problem.
David Williams is managing director of Claims at AXA Insurance.