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December 4, 2020

UK motor insurers need to start preparing policyholders for the implications of a no-deal Brexit

By GlobalData Financial

As the European Commission continues to withhold the UK’s statutes under the Green Card Scheme, motor insurers need to start preparing drivers for a no-deal Brexit.

A few players dominate the personal motor insurance space. These insurers will set the standard for how to rapidly address consumers’ needs and changing service delivery requirements under a no-deal Brexit. Based on GlobalData’s UK Top 20 General Insurance Competitor Analytics, the top five UK personal motor insurers made up 49.4% of the market share by gross written premiums in 2019. These providers were Direct Line, Aviva, LV=, Munich Re, and Admiral. Beyond these leading five, GlobalData also finds that the top 10 made up 77.2% of the UK market share in the same year.

With only days left until the Brexit transition period comes to an end, the likelihood of no-deal is increasing. Should this be the case, from 2021, UK nationals will have to physically carry a green card (proof-of-insurance document) when using their vehicle in the Republic of Ireland and other EU states, just as those in other non-EU and European Economic Area (EEA) countries are required to. This will create a series of challenges for UK drivers.

Challenges include administrative paper work, whereby UK citizens will have to notify their insurers a month prior to their travels in Europe; renewal of the green card when the policy expires or if consumers change providers; as well as further administrative barriers to processing a claim if consumers have a road traffic accident in the EU/EEA.

Beyond communicating with consumers regarding the potential need for a green card, UK insurers should also streamline the process of authorizing them, ensuring all policyholders are made aware of all possible new requirements as well as reducing customer pain points in the facilitating of documents. UK insurers must also consider ways to decrease administrative issues in claims processes should a UK driver have an accident in the EU/EEA area. Without improving such issues, motorist dissatisfaction will increase and they will face even higher premiums should insurers pass on the greater administrative costs.

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