The fascinating developments in motor insurance

I had an interesting conversation with the spokesperson for Old Mutual Insure, Lizo Mnguni, about the fast-changing motor insurance environment. 

Old Mutual Insure has been providing car insurance for decades and Lizo has seen the changes that have happened in the vehicle insurance space over the years. 

At present, he says, the global automotive industry is experiencing a myriad of challenges, such as supply-chain disruption and high inflation of new and second-hand vehicle prices, which have completely transformed the industry and are impacting every vehicle owner.

Lizo says that, with the price of new vehicles skyrocketing due to limited supply and increased interest rates, people are keeping their vehicles for longer and want to keep them in showroom condition. A few years ago, the thought of a vehicle as an investment would have raised eyebrows.

He says that, usually comprehensive insurance provides cover for vehicles against accidents and other mishaps, but it is not always enough. Now some insurers, including Old Mutual Insure, have launched new smart mobility lifestyle insurance solutions to help vehicle owners keep their cars in showroom condition, for longer, with for example Extended Warranty, Scratch & Dent and Tyre & Rim personal lines cover. 

Lizo notes that there has been a lot of innovation in the insurance industry in this sector, as well as in motor vehicle manufacturing. As vehicles have become more technologically advanced, they have also become more expensive to repair and replace.

One of the major changes that have occurred is the introduction of technology in cars. This technology has made them more sophisticated, but it has also made them more vulnerable to theft. Criminals have become more savvy in how they hijack vehicles, which has led to an increase in the theft of cars. Insurers have responded to this by introducing conditions onto insurance policies for additional trackers on cars. This is particularly important for high-risk vehicles. Criminals have also become smarter in how they use signal jammers to jam remote locking devices and tracking systems, which has created a need for further innovation in this area.

Mnguni believes that it is still possible to insure high-risk vehicles, even though there has been a rise in theft rates for certain makes of cars. The events are still unforeseen, and it is not a certainty that a car will be stolen just because it is a certain make or model.

One of the challenges in the industry is educating customers about these risks and how to mitigate them. While some insurance providers have tried to keep the lines of communication open and inform policyholders about how they can avoid falling victim to criminal syndicates, more needs to be done. There is a need for a more concerted effort to explain to people exactly how these things work and what sort of mitigation strategies they can have. Mnguni believes that brokers still have a pivotal role to play in the insurance markets, and there is still a lot of scope for them to make vehicle insurance part of their portfolio.

In conclusion, Old Mutual Insure has seen significant changes in the vehicle insurance space over the years. With the introduction of technology, cars have become more technologically advanced but also more vulnerable to theft. Insurers have responded to this by introducing conditions onto insurance policies for additional trackers on cars. 

Mnguni believes the industry still needs to do more to educate clients about these risks and how to mitigate them, and brokers have a pivotal role to play in the process.