Product innovation will broaden vehicle insurance coverage

FA NEWS: Could you tell us a bit more about Saver: What makes the product unique?

Shaun: Saver gives consumers the flexibility to design their own insurance package and thereby exercise control over their monthly premium. We designed the product to bring quality entry level car insurance within the grasp of price-sensitive and previously-uninsured consumers. This is great news when you consider we have approximately 2.8 million insured parties in a car pool of up to 10 million registered vehicles.

FA NEWS: How does Saver work?

Shaun: Saver consists of a Core (entry level) product, which is the prescribed part of the solution, plus several "Buy Up” options. The additional covers are individually priced to ensure complete transparency across the solution.

The Core product is a package of assistance benefits including:

• Accident Assistance: Towing to the nearest panel-beater and storage for five days;

• Medical Assistance: For emergency response by road or air ambulance, transfers of lifesaving medication or blood, and repatriation of mortal remains

• Legal Assistance: Access to qualified attorneys for legal and tax advice;

• Claims Recovery Assistance: Assistance from Auto & General in recovering accident repair costs when an accident is not the policyholder’s fault;

• Assessment and Repair Assistance: For the assessment of damages to a vehicle and a quotation for repair;

• Road Cover: Assistance with injury claims against the Road Accident Fund as well as legal assistance; and

• Loan Assistance: Access to short term loans.

Once the Core is in place consumers can choose from up to six insurance "Buy Up” options according to their needs. These include:

• 3rd Party Liability Cover;

• Accident Cover (R10 000, R15 000 and R20 000);

• Total Loss Cover;

• Hail Cover;

• Windscreen Cover; and

• Tracker.

Customers choosing any of the first three options can also "Buy Up” Radio Cover and Car Hire.

FA NEWS: How flexible are the ‘Buy Up’ options? Can consumers change their options from one month to the next?

Shaun: Yes, provided the requirements are met. New Clients will have the ability to add the additional cover options after selecting the Core product. And existing Auto & General customers will have the ability to buy down from a comprehensive policy and select cheaper cover options. Each product element is individually priced to ensure that the customer can see how the decision impacts on monthly premium.

FA NEWS: How should brokers and their clients view Saver? Is it similar to the short-term motor policies currently offered by major insurers countrywide?

Shaun: The product is not intended to provide typical short-term insurance cover. It offers limited risk cover at significantly reduced premiums so as to allow customers to have some cover in certain situations...

FA NEWS: How can the short-term broker make sure that his client understands that Saver is not "normal” insurance?

Shaun: We have an SQA in place in our broker sales call centres. One of the questions reads: "Did the consultant inform the customer that this is not comprehensive insurance”?Brokers will be in a position to understand their customer’s requirements and circumstances and from that, will be able to offer the most appropriate product.

FA NEWS: The question most potential policyholders will want to know is how much the solution costs versus comprehensive covers?

Shaun: A 30 year old male residing in KwaZulu-Natal who drives a 5-door 2008 Ford Focus 1.6SI (parked in a locked garage overnight) would pay around R1603.34 per month. With the full Saver product, including R10 000 accident cover, the customer would pay R1102.90. The Core product (Assist) with Total Loss and 3rd Party Cover would cost R331.47.

A 24 year old female who lives in Gauteng and drives a 2008 Mazda 2 1.3 dynamic 5-door (parked in an access controlled area) would pay a premium of R1419.26 per month (comprehensive cover). Her premium for the Saver solutions outlined above would be R949.64 or R273.04.

FA NEWS: Have you received any feedback from brokers to date?

Shaun: Auto & General Saver is a key innovation to target customers with uninsured vehicles. The product clearly fulfils a need in the market and we have experienced rapid uptake.