Precious protection

Ana Paula Nacif discovers how Hiscox's bespoke motor insurance is looking after its customers' most treasured possessions

The marketplace for motor insurance has always been a tough one, with insurers and brokers fighting hard for their share of business. Now that premiums are rising, brokers are working even harder to find new ways of holding on to their clients and ensuring new business comes in.

A relative newcomer to the market, Hiscox’s motor insurance product, which was launched last April, has kept its premiums in check and performed well, despite the fact that the economic downturn has dampened the market for high net worth products.

“We entered the market when rates were falling, which was thought of by many as a brave move,” explains Ashley Cole, Head of Motor at Hiscox.
“We built our strategy with consideration towards pricing, and geared our product to focus on those clients with multiple vehicles and more cars than drivers, meaning that we were able to respond more effectively to the price expectations of our customers from day one.”

Exclusive product
Hiscox’s multi-vehicle focus has helped the insurer respond to the pressure on premiums without diluting coverage or service. This means that its motor insurance remains attractive to those who have a focus on both their premium and cover. “The more cars than drivers that clients have, the more our price becomes competitive, especially considering the breadth of our policy,” says Ashley.

But responding to the pressure on rates is not the only factor that has kept Hiscox motor insurance’s competitive edge. Being an exclusive product, it offers benefits that are not readily available in the general retail market.

“If a customer has a Bentley and has an accident, we give them a Bentley as a courtesy car,” explains Ashley. “This is what they expect. Brokers catering for this segment of the market not only have the advantage of a great product, but also the reputation of our claims service and the strength of our brand.”

Value added
With the market getting tougher, if brokers are to keep their existing market share and even boost their business, they will do well to offer more added value to their clients and focus on keeping their existing customers satisfied.

The good news is that Hiscox motor insurance is only available through the broker channel. “We are committed to our brokers and we acknowledge that the success of this product is in their hands,” Ashley says. “The opportunity for brokers is massive, especially through cross-selling. The more coverages insured under one policy, the more likely they are to hang on to their clients. Also, having just one policy for vehicles and household means that administrative costs go down.”

At the moment, Hiscox has a total of 29,000 policyholders in its private clients division. Although the high net worth market is not booming and this type of client may be more aware of price than before, quality remains a definite factor when choosing insurance.

“Prior to developing our motor insurance offering, we sought consumer insight, which confirmed that our customers expect Hiscox to offer the best product available and that they are willing to pay for the benefits.” says Ashley. “One customer insured his Maserati with us for £3,500 when he could have paid £2,700 elsewhere. This is an extreme example, but it illustrates that customers are still looking for products that not only meet their needs but also fit in with their lifestyle.”

Crucial partnership
Lifestyle is one of the cornerstones of Hiscox’s product. It offers features such as an unlimited number of foreign trips, personal plate cover, a similar courtesy car and cover includes named household residents and anyone else over 30 years old.

Hiscox also writes each policy individually. This bespoke underwriting approach means that brokers can get a policy that is perfect for their clients. “A lot of insurers have stringent underwriting rules with little or no flexibility,” explains Ashley. “We look at every single case and always try to find a way to write an account with fair terms at a fair price for our coverage.”

Hiscox motor insurance is available to all existing private household customers and also on a stand-alone basis for multi-vehicle policies. “We are willing to work with brokers who have clients who fit our criteria – they just need to contact their regional underwriting team,” says Ashley. “We have the resources and desire to work with brokers who are serious about cross-selling.”

Ashley recognises that there will be challenging times ahead for brokers and insurers in the motor market, but he is bullish about Hiscox’s proposition and brokers’ ability to raise their game. “Our partnership with brokers is crucial and, with so much market potential and a unique product, I have no doubt that brokers will grab this opportunity and strengthen their business.”