Insurance Association organises workshop for motor agents

Friday, 31 October 2014 01:33 - - {{hitsCtrl.values.hits}}

The apex body of the insurance sector in Sri Lanka, the Insurance Association of Sri Lanka (IASL)’s General Insurance Forum, organised a timely and relevant workshop for the industry’s motor insurance assessors in a bid to provide a prominent platform to discuss pressing issues in the motor insurance sector. The gathering of industry professionals and motor repair agents witnessed discussion and debate on a host of challenges faced by the two sectors. One of the key highlights at this workshop was a discussion about how repair costs are calculated. Participants argued that while in the earlier days repair costs were negotiated with the repairer and settlements made directly, the same practice is not possible today due to the diversity of vehicles and disparities in repair charges as quoted by the repairers, which makes it difficult for the application of uniform standard rates across the board. Furthermore, the difference between permit vehicles and zero mileage imported vehicles or almost new vehicles versus the brand new vehicles was debated at length in a bid to gain a universal understanding of what each one constitutes. A common refrain at the IASL workshop was that the cost of the repairs and spare parts were the same, even though there was enormous difference in the price of such vehicles. It was agreed that on this matter, the discretion will be with the insurers on the treatment of such vehicles. It must be noted that the there is a vast difference in the premium charged for the vehicles, that is, brand new vehicles with full taxes and permit/zero mileage vehicles. The Chairman of IASL suggested that as the insurers were losing valuable premium, when such permit/zero mileage vehicles are insured compared to showroom brand new vehicles, to either advice the client to insure it for brand new value or impose a loading similar to duty free vehicles. The reason behind the suggestion was that the cost of repair and replacement was same for both types of vehicles. During the workshop, insurers elaborated on the principle of indemnity and the discretion given to the insurers under the policy conditions (repair, replace or payment by cash). In the course of the event, agents agreed with insurers to support the insurer’s decision to repair as against replace parts of vehicles. On a question raised by the insurers that the repair agents charge various labour costs in repairing/replacing body parts, the agents mentioned that they cannot arrive at a uniform costing as, although the repair/replacement seems to be minor, many vehicle body parts had to be dismantled to repair/replace the damaged section. IASL also called on the Motor Traders Association/Agents to compile a standard market value for vehicles as there was considerable difference in the market value by registered valuers and the Pre-Accident Value recommended by the insurer’s engineers. This workshop by the IASL provided insights into how the insurers, policyholders and agents can find solutions to practical challenges facing them on a daily basis. IASL continues to provide though leadership to the insurance industry by organising thought provoking and dynamic seminars and workshops to confer with all industry stakeholders on the best path to tread to take the industry to a higher level.