Operating with an average 86.87% claims acceptance rate for its SMART (cosmetic car repair) insurance, AutoProtect Group has reported a 25.1% increase in SMART payouts during the cost-of-living crisis, reflecting an uptick in SMART sales.
SMART sales have risen as motorists seek to mitigate the costs of dents, dings, and scratches that are common in modern driving. Despite careful driving, these minor damages are often unavoidable. In this context, AutoProtect Group noted that SMART insurance offers several advantages.
Multiple claims can be made without affecting a car insurance no-claims bonus. Potential wear and tear costs at the end of finance agreements can be avoided, and the car's value as a part-exchange can be enhanced. Additionally, maintaining the car's appearance is appealing to drivers.
“This latest claims insight underlines the potential value for car drivers of SMART insurance,” said Alasdair Thomson (pictured above), chief data officer.
“Almost half of all motorists suffered minor damage to their car last year, and half of those experienced multiple incidents, according to independent research we commissioned. Now we know for certain that increasing numbers are successfully claiming on our SMART cover,” Thomson said.
The opportunity for dealers is highlighted by the fact that only 22% of surveyed individuals were aware of SMART insurance and its benefits in covering the costs of minor cosmetic repairs.
“More people are buying our SMART insurance, and more are claiming. The potential positive outcomes for customers introduced to SMART insurance by their dealer are evident,” Thomson said.
A recent report from EY noted that new figures show that UK motor insurers have endured substantial underwriting losses for the second consecutive year in 2023, leading to significant premium increases for consumers already facing financial strain.
Car insurers’ net combined ratio — the percentage of claims and costs relative to premiums — hit 112.8% in 2023, the worst performance since 2011. This figure, up from 111.1% in 2022, indicates that insurers are paying out more than they are earning in premiums.
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