Strengthening Motor Insurance, Step by Step
The Emirates Insurance Association’s (EIA) Motor Technical Committee (MTC) is gearing up for a sustainable motor insurance industry in its 2021 business plan. Chairman of the MTC Issam Mouslimani speaks to Premium in this regard.
Striving to bring equilibrium and a state of fairness and awareness with respect to motor insurance, the Emirates Insurance Association’s Motor Technical Committee has come a long way in being the voice of the industry and conveying this voice to the regulator and the consumer alike. Premium spoke to chairman of the committee, Issam Mouslimani on topics relating to awareness, innovation, technical programs and so on. Below is an excerpt of the interview.
How is the Motor Insurance Committee adding to the Emirates Insurance Association’s efforts in educating the public on insurance awareness, or in turn advising insurance companies to engage in such activities?
Motor insurance, as a mandatory line of business (for Third Party Insurance), is of interest for almost everyone! Having said that, and for many reasons, insurance awareness is too low in terms of even the basics for which the MTC does always come up with many awareness and educational initiatives in addition to the challenging technical topics. The MTC business plans have been always rich in many technical and educational programs. We recently participated through local media to explain more about the new changes for the Motor Unified wording (Third Party and Own Damage) by highlighting the purpose and value added of each to customers and insurance companies.
The last motor insurance conference held by the EIA mentioned the need for an introduction of a clause naming all drivers within the insurance policy. How close is the insurance industry in achieving this development?
As per the current motor unified wording, with the insured’s permission, any licensed driver can drive the insured vehicle for which the original underwriting assessment made on the Insured’s profile becomes of not much technical value as another person operates the risk. In one of our previous conferences, we did highlight the importance of Named-Driver practice to help insurers to assess the risk based on reality and at the same time to appreciate prudent drivers by encouraging them to keeping a good driving experience record. In the absence of Named Driver practices and also Mandatory No Claim Discounts, most of people find it of no strong sense to carefully keep a good driving experience. Even for those who usually do have accidents, they can always jump and move from an insurer to another to keep enjoying a fair insurance premium as long as no loading is technically mandated and also no discounts are necessarily missed!
What is your opinion of a fully digital claims system? Will this curb fraud?
A fully digital claims system is a big statement for no clear actual experience! This needs to be well explained in terms of the entire claims journey starting from the first notification of loss, to documents exchange/review/validation including: police report, repair invoice, invoice payment, customer’s discharge receipt and many other touch points and business requirements that have dependencies on many internal and external elements. A global ecosystem platform is key to linking various businesses and industries in specific transactions! For sure automation and smart systems will always be helpful in filling the gaps for fraud. Using smart digital solutions and resources will never allow for a full anti-fraud solutions but will definitely be helpful.
How has digitisation helped in solving the issue of recovery in insurance?
The Market Motor Recovery Agreement has been always identified as one of the key requirements for all insurance companies to speed up processes whether for repairs or even the payments and collections. This Agreement has been expanded to include the digital platform to help for notification, pre-approval commitments and timelines in addition to the business rules, as well as for efficient dashboards. Transformation can only be accomplished by embedding the business rules into smart digital solutions to reduce the cost; improve the quality of work and efficient turnaround time.
What is your take on the introduction of telematics regulations in the near future?
Telematics is one of many key factors that can help underwriters to know more about the driving behaviours and facts provided a transparent mutual agreement/acceptance is in place between both the insured and insurer. The privacy part is currently quite challenging for which the expected launch of telematics will be linked at the first stage into the commercial vehicles and commercial activities.
How can aggregators play a role in ensuring retention for insurance companies?
Aggregators stand as a unique marketplace for many of the customers and insurers; such a marketplace is focusing now on the price comparison and for me this should move into a new level in terms of the quality of covers and services as well as the quality of buying experience. This will help the customer to make the right decision. Aggregators will certainly become a major player as a prospective insurance channel. However, transformation is also needed to allow for an automated process driven by the global ecosystem.
What is the motor insurance industry missing today? What trends are you seeing in the global landscape that you would like to bring to the UAE in your action plan for the future?
Motor insurance is in a better position when compared with the situation, say, 10 years ago; however, it will always be in need more corrective and new regulations, knowledge, skills and investment (in technology in particular) to move into its ultimate shape as a mandatory product that is interesting for everyone. It needs more efforts among all stakeholders to raise awareness of careful driving and compliance with regulations and authorities to help the people using the road to remain safe against any property damages or bodily injuries.
A lot has been done already and there is much more to come. For 2021, we have planned many road safety initiatives revolving around inspection certificates, integration with insurers and traffic/RTA departments, mandatory NCD and automated claim records, Named Policy proponents to be included among others. Our educational and awareness campaigns will target young drivers and drivers possessing high black points etc. We will also be addressing fair competition and aggressive competition market practices driven by commission capping for Third Party and Comprehensive as well as actuarial pricing. We are also looking at forming potential agreements among insurance companies for many initiatives.