The GAP Insurance Market is Changing – so should YOU

Date: Mon 2nd September 2013   |   Author: Natalie Ridgwell | Google+

GAP Insurance is a key profit centre for many dealerships; however it is important to recognise that the landscape for GAP insurance is changing rapidly. I am writing to urge you to take stock of your business’ own GAP sales strategy at the earliest opportunity.

The new regulatory authority, the FCA (Financial Conduct Authority) has taken over from the FSA and immediately initiated a review of the 'add-on' insurance market, specifically including GAP insurance and related products. Alongside this, we are seeing changes in the supply chain.

It is becoming increasingly apparent that a number of significant suppliers are reviewing their approach to GAP. We are aware that at least one major finance house is withdrawing from the sale of GAP entirely; whilst we understand that a major supplier to the sector has started to withdraw 'protected' dealer commission. This has the very real potential to mean that in the event of customer cancellation, dealers could face on-going debit back of commission.

These changes relate to moves in insurance to adopt fully transparent products and processes that ensure the customer is treated fairly and provided with options to cancel policies and receive appropriate refunds of premiums paid. Inevitably this raises the issue of debit backs.

These issues were addressed in the ABI Good Practice Guidelines published in September 2011. Created in consultation with the FSA, SMMT and FLA they were specifically designed to reflect TCF principles.

The guidelines were and are about promoting insurance ethically and fairly, allowing customers to choose the products they value and providing the flexibility to cancel and gain a refund of unused cover. As a significant distributor, in September 2011, AutoProtect launched a new range of GAP products embracing the ABI Guidelines with the insurer assuming the responsibility of the cost of any customer refunds.

Now really is a good time to review your GAP strategy to ensure you have the best product for both you and your customers. AutoProtect has been formally voted the GAP supplier of the year for the last two years by UK motor dealers and offer an efficient, high integrity approach, with an energetic sales development team on hand nationwide and an IT system that will integrate with your systems, reduce administration and provide valuable real time management information.

I really do believe speed is of the essence, so please contact me on 07787 117297 or email me at MMacaulay@autoprotect.net I know that we can help secure the long-term future of GAP in your business, adding value to you and your customers.

Mike Macaulay

Head of Corporate Sales