The insurance industry is constantly facing new challenges, and one of the most pressing is the rising trend of motor theft. COVER recently hosted a live session with insurance professionals to discuss the challenges and trends in the industry.
The panel included Garth De Klerk from The South African Insurance Crime Bureau, Charles Morgan. The following is a summary of some of the highlights from the discussion.
The motor industry has always had to deal with crime and theft trends, but the issue has become more sophisticated in recent times. Criminals have become more advanced and are now able to bypass the security measures put in place by manufacturers. The high level of motor theft is a risk not just for vehicle owners but also for insurers.
The increased risk has led to insurers implementing additional security and safety measures for high-risk vehicles. However, criminals are innovative and have access to syndicates and technology that allows them to capture remote signals and jam security systems. The South African Insurance Crime Bureau is tracking these developments and working with the industry to reduce the risk.
One of the main causes of motor theft in South Africa is poverty. Desperate individuals are stealing vehicles to earn extra money. The insurance industry, crime bureau, South African Police Service, and vehicle security and tracking companies must work together to combat this problem.
Late-model cars are particularly vulnerable to contactless theft, which is a growing trend. Some shopping centres have become hotspots for theft, with criminals exploiting vulnerable situations, such as when a person is at a hairdresser or school.
As a result of the growing trend in motor theft, insurers are requiring tracking devices for certain models, and clients are suddenly driving vehicles that are categorized as high-risk. The challenge is that there is not much that an individual can do to change their risk profile once they fall into the high-risk category.
Insurance technology with a difference.
The end-to-end insurance platform that puts your customers first.
While there is no silver bullet solution, insurers are implementing additional security measures to combat the growing problem. Vehicle owners must take all necessary precautions to protect their vehicles, and the industry must work together to reduce the risk of motor theft.
Insurance companies have come up with a new policy that requires two trackers in high-risk vehicles. However, this reaction seems to be a little knee-jerk, and the question remains, what next? Should insurance companies require three trackers, and will it lead to an arms race?
Although most insurance companies have taken this step, some decided not to go that route. It is a cat and mouse game, and it is all about outsmarting criminals. Insurance companies have identified certain makes and models and areas where they require a tracking device. They have chosen not to require a double tracker, but if a client asks, they would recommend it.
The question is, why are clients still resistant to installing tracking devices or satellite tracking devices? These devices are cheap, and the service is not expensive. Another question is, what can a client do to make themselves less vulnerable? Is there not a bit of responsibility to assist in this regard?
The panelists discussed the matter and suggested that insurance companies need to do more than just require tracking devices. They need to think out of the box and look at other solutions. Physical security is essential, such as using a Faraday bag to stop the key from transmitting to the vehicle, steering wheel locks, and gear locks. Some manufacturers have approved technology that can activate remotely and still find the car remotely.
The panelists also suggested that educating clients is crucial. They need to know which cars are high-risk and what they can do to reduce the risk. Insurance companies need to tell them more and look at other solutions. One of the panelists, Garth, shared that he drives a white Prado, which is a high-risk vehicle, and he bought a steering wheel lock to make it more difficult to steal. This is an excellent example of looking out of the box.
In conclusion, the insurance industry has taken a step in the right direction by requiring tracking devices in high-risk vehicles. However, more needs to be done to outsmart criminals. Insurance companies need to look at other solutions and educate their clients. It is all about making high-risk vehicles less vulnerable and reducing the risk of theft.