#insurance industry at a crossroads. #insurancefocus, care of bodyshop Magazine featuring Motorclaimguru's Tim Kelly
A flat VAT rate of 16.5 per cent was introduced in April 2017 for limited cost traders
To assist new founders with understanding their responsibilities with HMRC, we take a look at the difference between flat rate and standard VAT to help you work out which best suits the needs of your company.
Having a solid grasp of the difference between flat rate and standard VAT return is among the most important aspects of running a small company. HMRC takes non-compliance seriously, and the latest Finance Bill included penalties of £10,000 for owners avoiding VAT.
What is VAT?
Value-added tax (VAT) is a tax added to the majority of goods and services, paid for by your customers. To automatically qualify for VAT, your company must have annual “VATable” turnover of £85,000 and above. For example, domestic UK sales exceed £85,000.
As a qualifying sole trader, freelancer or self-employed business owner, it is your responsibility to add the national VAT rate to the price of your products and submit a VAT return to HMRC every quarter. A return must be sent even if no VAT is owed to the tax office.
The VAT return is a calculation of how much VAT is due from revenue minus how much VAT you can reclaim on business expenses. A completed return will either show how much you owe HMRC, or how much you can reclaim. If you can reclaim more VAT than you have brought in, HMRC will refund you the difference.
For most goods, VAT is currently set at 20 per cent. A reduced five per cent rate is added to home energy and, for example, goods such as children’s car seats. VAT is not added to property stamps, most food, children’s clothing or property and financial transactions.
Your business has annual turnover of £90,000, so you are required to submit a return every three months to HMRC using the 20 per cent rate.
Sales in that period were £50,000, so the VAT owed is £10,000
You are able to reclaim £1,000 VAT back on business expenses
The total VAT owed to HMRC in that quarter is £9,000
Voluntary VAT registration
The tax office does allow companies below the threshold the register for VAT voluntarily, with a number of potential benefits to smaller firms.
VAT registration can reflect well for a business in terms of clients, investors and lenders, giving the impression of significant turnover. Some firms may also be hesitant to work with a non-VAT registered business, so business owners paying voluntarily can put their VAT number on invoices and websites, for example.
Voluntary registration can be backdated up to four years, provided HMRC can see the necessary evidence. However, small business owners should be aware of the negatives, such as the added administrative strain and the potential for a large VAT bill if more VAT is generated from sales than expenses.
What is the flat rate VAT scheme?
The flat rate scheme was introduced by HMRC to simplify VAT returns for small business owners, but also to offer the smallest firms the chance to profit. It is available for firms with an ex-VAT turnover of £150,000 or less.
Under the flat rate scheme, your business pays a fixed rate fee to HMRC. Unlike the standard scheme, you can’t reclaim VAT on your purchases – except for certain capital assets of above £2,000 – but you can keep the difference between the VAT on sales and what you pay HMRC.
In terms of your own invoices, you will still charge VAT as usual and clients will see no change.
The fixed VAT rate depends on the type of business you own. As a general rule, the more you spend on goods and materials, the lower your flat rate VAT will be.
View the full breakdown of flat rate VAT by business type on GOV.UK
For businesses considered “limited cost traders”, i.e. those spending little on raw materials, a higher flat rate of 16.5 per cent was introduced on 1 April 2017.
HMRC defines limited cost traders as:
Those with VAT on goods of less than two per cent of VAT on annual turnover
Those with VAT on goods of greater than two per cent of VAT, but under £2,000 per year
Read our previous article on further guidance on limited cost traders
Working out your flat rate
To calculate the VAT owed to HMRC, multiply your flat rate percentage with your VAT-inclusive turnover. VAT-inclusive turnover means all sales including the VAT paid on that income.
For companies within the first year as a VAT-registered business, a one per cent discount to the fixed rate is given by HMRC.
If you are running a photography business and charge a client £500 for an event, you will invoice them for the £500 plus the national VAT rate of 20 per cent – totalling £600
Your flat rate is only 11 per cent, but the business is only six months old, so reduce the rate to ten per cent
You will pay HMRC ten per cent of £600 – or £60
Work out your own flat rate on GOV.UK
The difference between flat rate and standard VAT
The key difference between flat rate and standard VAT is in the multiplier added to your income for the VAT return.
The flat rate scheme considers how much you are likely to spend on raw materials, setting a rate based on your business type. It gives small firms beneath the entry threshold the chance to profit on VAT, and simplifies the relationship with HMRC.
However, whether you are using the flat rate scheme, or your company turnover qualifies for standard VAT, you always need to be charging 20 per cent VAT on all sales.
For small firms starting out and managing cash flow and overheads, the flat rate scheme might not be suitable and could limit the commercial success of your goods and services.
Now you’re aware of the difference between flat rate and standard VAT, find out everything you need to know about your first self-assessment.
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While economic, regulatory, and political challenges have all taken their toll this year, there has been an improved performance in the industry overall – which should continue into 2018, according to consultancy EY.
Following an “undoubtedly tough” year for insurance in 2016, there has been an uplift across the industry overall this year; and looking ahead to 2018, motor insurers will be “the greatest beneficiaries” following the proposed Ogden rate revision announced in September, says Tony Sault, UK general insurance leader for the firm.
The UK motor industry saw its prospects “improve dramatically” after the release of the revised personal injury discount rate proposal, according to Sault. While that was tempered somewhat by the Justice Committee’s recommendations for the government on the issue, the market is still expected to be firmly back in the black next year.
“The Justice Committee’s report cautioned against an Ogden rate as high as +1%, as suggested by the Ministry of Justice in September, which it warned would put vulnerable claimants at risk of under-compensation,” he said.
“It also suggested a number of further hurdles should be cleared before the Bill is laid before Parliament, including further studies into how claimants invest money in practice and whether fair compensation is being achieved by current legislation. We believe the most likely outcome is now for the review to result in approximately £1.5 billion reclaimed from last year’s £3.5 billion losses, and a likely fall of up to 3% on average premiums, saving up to £14 annually for the average motorist.”
In addition to the Ogden changes, 2018 could also see the passage of the Civil Liability Bill, Sault said.
“This would reduce the costs associated with bodily injury, potentially reducing premiums by an additional 8-10%, totalling a £59 per year saving once both reforms are fully implemented,” he outlined. “Given these important changes in legislation, we now expect the motor insurance sector to be facing a far rosier 2018 compared to 2017 and predict a Net Combined Ratio (NCR) of 98.5%.”
But the picture isn’t all rosy, Sault warned, adding that there will still be difficulties to contend with.
“With inflation of 3% – high compared to recent years – and likely to continue, consumer spending is likely to weaken which is expected to reduce demand for big tickets items such as cars. In fact, we are already seeing signs of a slowdown with The Society of Motor Manufacturers and Traders reporting a sharp 11.2% year-on-year drop in new registrations in November,” he said.
“We believe this will lead to a 5% reduction overall in 2017 from the record 2.69 million sales last year. Housing transactions are also predicted to rise by just 4% next year, which is less than half the average rate seen in the last four years. Repeated recent increases in Insurance Premium Tax, now at 12%, are providing an additional challenge to the industry by reducing affordability and demand for insurance.”
Article is care of www.insurancebusinessmag.com the original article can be found here.
NEED TO KNOW
The questionable practice of marking up at-fault repairs continues, despite resistance in some quarters. Will this status quo ever be challenged?
In the national press and on social media, insurers are being accused of inflating repair cost invoices on third-party claims. The truth about the practice is more nuanced, but the accusations against insurers remain strong. Tim Kelly, director of Motor Claims Guru, said: “It isn’t that insurance companies are inflating repair costs, it’s that insurers are profiteering to the detriment of repair shops. They’re basically stealing the profit that a body shop would have earned out for a repair for themselves.” Post explores both sides of the issue.
Abuse of power?
Insurers that procure competitive rates with repair firms and suppliers, an issue raised by Channel 4’s Dispatches in 2013, charge invoices to at-fault insurers at market rates, before receiving a rebate from the repair firms to make up the difference.
An anonymous group of repairers, who go by the Twitter handle ‘Real Repairers’, have taken to social media in recent weeks in an attempt to highlight the issue.
“The issue for Real Repairers is that true and fair rates are suppressed through a process of abuse of power with big corporates and small suppliers,” said a spokesman for the group.
“One could argue the current market has all the hallmarks of a rigged cartel. One thing is sure, so-called invoice inflating does take place and many insurers are content to operate unethically by stitching each other up.”
A source described a situation whereby an insurer with its own repair network would issue invoices to at-fault parties at its internal break even rate.
“It was giving its profits away to the extent that it was repairing cars cheaper than other insurers could themselves through their own networks,” the source said, adding it soon realised what it was doing and the status quo was restored.
The framework for today’s practices was formed in the Court of Appeal in 2013, when a judge presiding over the case of Coles v Hetherton – which centred on a dispute between RSA, Allianz and Provident – ruled that charging market rates to at-fault insurers, rather than the actual cost of the work, was legal.
Axa’s technical director David Williams said: “Going back to before we were even aware of it, people started to notice that claims from RSA seemed to be higher than expected. A couple of companies started investigating these things, and we came to the conclusion that something was going on that wasn’t appropriate.
Talking pointThe number of body shops in the UK has fallen from 20,000 to less than 6000 in the past 20 years.
The practice was examined in a 2014 Competition and Markets Authority investigation, which found insufficient evidence of competition concerns in
post-accident repair for it to intervene.
“It transpired that if a claim was being submitted to an insurer, RSA would put a mark-up on top of the cost to it of the repair work. It would effectively be making a profit on the repair work. We were quite appalled by this, most of the insurance industry was appalled by this. We immediately stopped making any payments to RSA.
“In the court at first instance, the judge described the whole thing as being ‘as close to fraud as anything I’ve ever seen, but I can’t believe it is’. It found in favour of the other insurers, but RSA was confident in its legal position. It was challenged and on appeal the courts decided that you could indeed recover more than your outlay.
“We and most of the industry weren’t very happy with that. Still to this day, I believe that it’s inappropriate behaviour.”
A spokeswoman for RSA said: “To manage not-at-fault claims, we use our own repair network to complete work, and create bilateral arrangements with other insurers that agree to reimburse repairs to one another at cost price.
“There are a variety of other models used by insurers and intermediaries when settling claims, many involving accident management companies, credit repair companies and body shops, and this can drive complexity and cost for the end customer. The case in 2012 reviewed how not-at-fault motor repairs were handled across the market, and found in favour of our approach.”
According to Kelly, the number of body shops in the UK has fallen from 20,000 to less than 6000 in the past 20 years partly as a result of the introduction of these practices.
A spokesman for the Association of British Insurers said: “It is a practice that is prevalent in the motor insurance market, probably no different from any other large provider, obtaining discounts through economies of scale.
“In terms of detrimental impact to customers, it is going to be very small fry indeed compared to other cost pressures such as insurance premium tax and the discount rate.”
The spokesman added that the practice helps non-fault insurers manage their costs, which in turn can be reflected in pricing to customers. “If you’re a non-fault insurer today, tomorrow you could be an at-fault insurer,” he said. “There’s an element of swings and roundabouts to this.
“Having said that, there are a number of insurers that do not really feel happy with the way the system is running at the moment. It’s not perfect, we would be the last to pretend it is.
“No one is pretending it’s a perfect system, because in any ultra-competitive market, such as motor insurance, there are going to be elements of it that appear to
The Real Repairers’ spokesman said: “Does this matter? Yes, it does. Lack of profitably has a direct effect on consumer safety.
“If it were not for the hard work and commitment of real repairers and their commitment to consumer safety, a terrible incident would have occurred already. That cannot be guaranteed in perpetuity.”
In breach of regulations?With concerns over consumer safety, and body shops undoubtedly losing out financially, there is a potential pitfall waiting for insurers also.
Kelly explained how the Financial Conduct Authority’s Insurance Conduct of Business regime could be leaving insurers in breach of regulations: “Insurers are defrauding consumers from their lawful entitlements,” he said.
“ICOB states that if insurers profit from providing service to you, they have to declare it to you as a consumer. So if I sold you a policy as a broker and got commission on it, I would have to declare it to you. This isn’t happening with insurance claims. Insurers are forgetting this completely, they don’t see it as relevant because they don’t want you to know how they make money on the side.
“It’s far from being transparent, it’s actually the complete opposite, and it’s so murky it’s embarrassing.”
The spokesman for the ABI responded: “No insurer would seek to do that, and insurers are very mindful of FCA rules. In terms of regulations and requirements, insurers should be following every regulation and requirement that they’re obliged to.”
SolutionsMany insurers are undoubtedly uncomfortable with the practice, and feel forced to follow the lead of others so as not to be at a competitive disadvantage. A solution to the issue is difficult to envision, however, with competition regulations restricting the action insurers can take.
A spokeswoman for Co-op Insurance said: “When this practice first started to become widespread, we sought to influence the insurance market not to adopt this model by providing a response to the Competition Commission’s issues statement.
“We made two suggestions at the time. The industry could switch to a first-party insurance model, which would mean that insurers are responsible for all repairs on their customers’ vehicles, regardless of whether they’re at fault or not. This would, however, require a change in the law and new legislation.
“The second suggestion was for insurers collectively to agree not to differentiate between the repair rates charged for fault and non-fault repairs.
“Ultimately, this cannot be solved by one insurer. Both of these suggestions require industry collaboration in order to work effectively for customers.”
Williams said: “The problem is, if we were to stop doing it as an individual company, we would be disadvantaged by that, so we’d need to come to some sort of an agreement.
“If a load of insurers get in a room and come to an agreement on something that impacts pricing, that’s in breach of competition regulations, so we’re not allowed to do that. I can’t even have conversations like that with another insurer because it would directly impact pricing, and that’s considered price fixing.
“The reason this has been raised now is because a couple of keyboard warrior repairers think that it’s unreasonable that motor repairers get lower rates on certain claims from insurers. They’re having a go at the people that are the loudest critics of this, but they’re doing it because they’re angry they’re getting screwed down on rates.
“They want us to pay more in our rates in general, which clearly would have an even bigger impact on insurance premiums.
“We spent tens of thousands of pounds challenging this, and we made ourselves very unpopular with some people as a result. But you can only do so much. It’s an unfortunate practice that we would be very happy to see changed, but it would, from ours and our customers’ perspective, have to change across the entire industry.”
Article is care of www.postonline.co.uk and this article can be found here.
#Brokers urged to help drivers avoid #car #insurance traps/ reports of people being pulled for #noinsurance if not covered for #commuting.
As you know, even all-risks cover isn’t really all-risks; and in the world of insurance, it’s never safe to assume. Now multiple reports are looking at significant issues related to motor policies, and brokers better check that clients indeed have the protection they believe they do.
As a Metro report shows, not everyone knows a policyholder might not be insured to drive his or her car to work. The report cited an incident where a motorist was stopped because of insufficient cover. This solicited several reactions from netizens, who apparently aren’t aware that this could be the case.
“To use your vehicle to get to and from work, your policy will need to cover use for commuting,” explained MIB in October. “This is often referred to as ‘social, domestic, pleasure, and commuting’.”
“You can find out if you are covered for commuting by checking your insurance certificate and schedule. This essential document explains what uses of the vehicle you are covered for.
MIB added: “Policies that include commuting will cover you to drive to your ‘usual’ place of work, but if you drive to another place of business, such as a meeting, conference, or an event elsewhere, your policy will need to include ‘business’ use.”
That means even a policy that covers commuting won’t be enough to insure you for the abovementioned cases. Meanwhile policies that don’t include commuting at all only cover driving not related to work.
How about driving in snow? Again, it’s best to know for sure.
“If your area is likely to be hit with the brunt of this week’s snow and icy weather conditions, it would be wise to double-check exactly what your car insurance policy covers,” Kris Jones, product expert from comparethemarket.com, told Express.co.uk. “While many comprehensive insurance policies include damage caused by bad weather and storms, this isn’t guaranteed.”
But how much of the above is true?
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Motorclaimguru win's "motor insurance advisory of the year" at the Wealth and Finance international, awards.
October 8, 2017
Author: Mike Lawlor
5 min read
BUSINESS TRENDS COLLISION CLAIMS COLLISION REPAIRVehicle complexity has exploded in the last decade, and continues to accelerate. Collision repair used to be about sheet metal, headlamp and bumper replacement; now it frequently involves sophisticated electronics. From adaptive front lighting to regenerative braking, today’s auto body repair includes increasingly complex systems and electronic components. According to SearchAutoParts.com, “There can be anywhere from 40 to 100 computer controls to operate, communicate and in some cases, record information about the operation of a system or systems that can be used later for diagnosis.” Today’s repairers must be prepared to fix, and heed the advice of, a computer network on wheels.
We’ve gone from the days of using scan tools only when a Malfunction Indicator Light came on, to an era in which most collision repairs require the recalibration of electronic systems to assure a safe, quality repair. Collision repairers can’t even replace a mirror or a windshield on newer models without a diagnostic recalibration to ensure that all componentry is functioning as intended.
Safety ConcernsEven when there is no visual damage and systems appear to be operating correctly, a collision can jar a vehicle’s electronics and create significant hazards. If a sensor on a blind spot detection system is even slightly disrupted and rendered out of system calibration tolerances, it may mean the driver is not alerted to a motorcycle in the lane next to them. Which in turn, could be the difference between a simple lane change and tragedy.
This is where scan tools come in. Body Shop Business cites a good example of the need for scan tools with the Occupant Classification System or “OCS” on newer vehicles:
“If the system is not recalibrated or re-zeroed, the seat could read an incorrect weight. The system will be operating correctly, so no MIL will be set on the dash, but it won’t be correctly calibrated. This could lead to an airbag deploying when it shouldn’t, which could lead to the injury or death of a child. Knowing when to recalibrate these vehicles becomes a critical factor.”2
OEM Position StatementsIn 2016, only eight OEMs had position statements on vehicle repair scanning; as of March 2017, there are few automakers yet to formally address the need.
Vehicle Repair Scanning
Source: oemonestop.com/position-statementsHonda’s recent position statement includes a chart listing items needing recalibration after repair. Per Honda, “The chart at the top of the next column shows damage areas where driver assistive system components may be located in close proximity. Collision damage in these areas should be given particular attention because certain repairs and/or parts replacement may require aiming procedures to be done.”
Source: collision.honda.comMany other industry participants are announcing positions on pre- and post-repair system scanning as well. According to the Equipment and Tool Institute (ETI):
The electronic safety systems on today’s vehicles are very important for occupant safety and must be checked after a repair for proper functionality. The pre-scan is now necessary for the repair facility to be able to help scope and estimate the repair processes required for a safe and complete repair.
To Scan or Not to ScanThere are many in the industry who contend that the OEM position statements go too far and that not every vehicle needs scanning during collision repair. This debate is likely to continue until standard industry practice is established in this area. Most all agree that heavily optioned late model vehicles in moderate to severe collisions require a pre-and post-scan to properly complete the repair. The collision repair industry has a need for diagnostic systems that can quickly complete the diagnostic portion of the repairs and properly document the process for its stakeholders.
Four Current Options for RepairersCurrently, there are four options for repairers seeking to assure a safe and quality repair has been completed:
Reasons for Not Scanning VehiclesIn a recent CRASH Network survey shops cited the following reasons for not scanning a vehicle post repair:
While some of these may have been valid reasons for choosing not to scan vehicles a decade ago, failure to use diagnostic scanning on a late model vehicle with damage that involves ADAS and other safety systems is now a serious issue.
Where Do We Go From Here?If collision repair facilities truly want to provide the safest and most complete repair services to their customers, a high quality diagnostic solution is an absolute must. Unfortunately, most existing scan tools were designed for mechanical repairs and there hasn’t been a diagnostic system specifically designed and developed to meet the need of collision repair shops. The Equipment and Tool Institute’s position statement says it best, “the need for affordable access to the tools that are essential to perform safe, complete and accurate repairs is extremely important.”
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Information is the Key to Proper & Safe Vehicle Repair. The importance of following #oe #repairmethods
November 1, 2017
Author: Debbie Day
6 min read
BUSINESS TRENDS COLLISION CLAIMS COLLISION REPAIR TECHNOLOGY TRENDSA much-discussed topic at SEMA 2017 was a recent court case in Texas and subsequent verdict that found that previous vehicle repairs had deviated from OEM recommended repair procedures and thereby contributed to occupant injuries. This may well represent a watershed moment for our industry. It presents an opportunity for every party in the collision repair ecosystem—OEM, insurance company, collision repairer and suppliers—to reevaluate what is necessary to deliver a proper and safe repair. Ultimately, we all have a stake in ensuring a vehicle has been properly repaired, that it is once again roadworthy, and that the vehicle owner can feel confident that it is safe for them and their passengers to occupy.
“While it may seem obvious, accessing the appropriate repair data, when and where it is needed, is not always straightforward.”
Based on conversations with our customers and Mitchell Advisory Council members, I know proper and safe repairs are top of mind. And as a general manager of an organization that serves as an active participant in this ecosystem, the role we all play weighs heavily on my mind. It is my belief that one of the important things we can do as an industry to support collision repairers in delivering proper and safe repairs is to encourage open access to the most current data required to repair a vehicle to OEM standards. While it may seem obvious, accessing the appropriate repair data, when and where it is needed, is not always straightforward.
Following OEM Repair ProceduresAs technology advances and onboard computers, sensors linked to vehicle safety systems, special materials, etc., are becoming more prevalent, repair procedures are becoming increasingly specialized and complex. There are more that 263 million vehicles on the road in the U.S. as of 2015, the last year for which numbers are available, and the definition of what constitutes proper and safe repair varies widely between every make, model and year. Current estimates indicate that a collision technician needs to reference more than 500,000 pages of repair information to correctly execute repairs today, up from just 5,000 pages a decade previous. It would be a tall order for even the most experienced repair technician to keep up with all of that information—and each new model year brings more.
The good news is that almost every automotive manufacturer currently provides repair procedures for their vehicles, and those that don’t are well down the path of developing them. OEM repair procedures detail what is required to repair a damaged vehicle based on original manufacturer repair standards. They cover everything from critical safety issues like when and where a vehicle should be welded, as in the Texas case, to cosmetic issues such as painting instructions. By following repair procedures, collision repairers are better able to deliver proper and safe repairs, return the vehicle to pre-accident function and appearance while ensuring its roadworthiness.
Accessing OEM Repair Procedures — Easier Said than DoneHaving access to repair procedures is only the first step. In order for a repair shop to be able to incorporate them into their workflow, they need to be able to access them when and where they need them—essentially in context, while creating the estimate and doing the repair. Again, this is more complex than it seems.
Often, when a collision repairer creates an estimate, they have to look up each repair procedure one-by-one outside of the estimating system and then modify the estimate based on what they find. That may mean going back-and-forth between multiple software systems and sorting through massive amounts of information that is not relevant to the current repair. This is time consuming, complex and potentially error prone.
Above is how not to do it.
Here’s what’s needed: an open, secure, and cloud-based system that allows the most up-to-date repair procedures to be accessed by collision repairers so that they can quickly and accurately access just the information they need from within the estimating system. That information could then become an artifact within the system that then becomes a part of the vehicle’s repair record, encouraging transparency and accountability across the ecosystem.
Putting Vehicle Sensor Calibration to the TestAt Mitchell, we believe OEM repair procedures aren’t the only sticking point when it comes to proper and safe repairs. The average late model vehicle has 60 to 100 computer control modules and sensors, with that number growing to over 200 as cars become increasingly more complex. Many of these sensors directly link to safety systems—think backup cameras, blind spot detectors and occupant classification systems that use sensors to identify passengers who do not meet minimum weight requirements and prevent airbags from deploying.
While sensors and control modules were not a part of the Texas lawsuit, ensuring they are properly calibrated is essential to proper and safe repair. The impact of a collision, even one that does not directly strike a sensor, could be enough to push the margin of error on a sensor calibration out of the tolerance zone. How serious is this? Think of it this way: an improperly calibrated backup camera or sensor could mean the difference between backing out of your driveway safely or backing into a pole, or worse yet, a person you didn’t see.
Just recently I had my car in for routine maintenance. I thought it was running fine: it looked great, ran great and no dashboard lights indicated there was any cause for concern. Imagine my surprise when we plugged my car into Mitchell’s Diagnostics system and more than 30 diagnostic trouble codes fired. In my case, it was a low-voltage condition that activated the trouble codes. But consider this—a mere visual inspection of a vehicle is no longer enough. Whether post-accident or routine repair, when working on vehicles with advanced driver assistance systems and other electronic safety systems, the use of pre- and post-repair vehicle scans is an important part of ensuring a vehicle is safe to put back on the road.
Mitchell Is Committed to Doing Our PartAs I said at the beginning of this article, we all have a stake in ensuring a vehicle has been safely and properly repaired.
READ MORE ABOUT PRE-AND-POST-REPAIR
VEHICLE REPAIR SCANNINGAt Mitchell, we’re committed to doing our part. Initiatives like Program Freedom, which encompasses delivery of a cloud-based and open platform to the APD industry is a part of this. As the APD industry faces unprecedented challenges due to increasing vehicle complexity, technology, collision frequency, and severity, Program Freedom is designed to help the industry face these challenges. Freedom is based on Mitchell Cloud Estimating, our new cloud-based estimating and communications platform. We integrated Mitchell Diagnostics into Cloud Estimating this summer. As of December 2017, in-context repair procedures will be reality within Mitchell Cloud Estimating. On January 17th, we’ll be demonstrating for customers and partners how Program Freedom offers the solutions best suited for executing safe and proper repairs. You can register here: The Program Freedom Experience.
We believe, and continue to actively invest in, the open and free data exchange to aid our industry in the delivery of proper and safe repairs using the latest in data security technologies.
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Is #careless #driving on the increase?
Research shows more drivers undertaking awareness courses.
Rule 264 of the Highway Code states ‘You should always drive in the left-hand lane when the road ahead is clear. If you are overtaking a number of slower-moving vehicles, you should return to the left-hand lane as soon as you are safely past. Slow-moving or speed-restricted vehicles should always remain in the left-hand lane of the carriageway unless overtaking.’
Seems simple enough to understand, but middle lane hogging is continuing to cause much frustration to other road users on motorways as slow, clueless drivers continue to dawdle in the middle lane completely unaware of what’s going on around them, causing avoidable congestion and potentially dangerous situations.
Frustration leads to tailgating
With drivers refusing to drive in the usually an empty first lane, this is where road rage is triggered as some choose to then sit right behind the middle lane hogger and flash their lights to make them aware of their presence and highlight the danger they’re causing due to their lazy driving. Frustration and anger boil over, but drivers aren’t often aware that this is then another cause of careless driving known as tailgating, which will also suffer the same penalty.
Careless driving penalty
In June 2013 Road Safety Minister Stephen Hammond, brought in changes so that careless driving (middle lane hogging and tailgating) would be an offence with drivers given a fixed penalty of £100 along with three points on their driving license.
At the time he commented, “Careless drivers are a menace and their negligence puts innocent people’s lives at risk. That is why we are making it easier for the police to tackle problem drivers by allowing them to immediately issue a fixed penalty notice rather than needing to take every offender to court.”
“Hurrah” we all shouted as finally there would be a clampdown; middle lanes would be free from careless drivers and motorway driving would be a pleasant, easy experience. But, and it’s a big but, it took until two years after the new law was brought in for the first person to be prosecuted.
Clampdown is still needed
So is handing over some money and a few points on your licence enough to stop it?
Judging by the increase of drivers still hogging the middle lane we don’t think they have and it almost looks as though they bought in the law to actually scare drivers into thinking they might get caught, as up to last year just 135 drivers had been issued with tickets for the misdemeanour since it got introduced nearly four years ago.
Police do give drivers the option to go on the What’s Driving Us? Course, the National Driver Offender Retraining Scheme managing this on their behalf providing it as an alternative to prosecution. Even though the course is completed by drivers that have committed a wide range of offences, not just middle lane hogging and dangerous driving, but in 2013, 65,031 people had undertaken the course compared to 2016 which saw a huge increase to 125,583.
So with the numbers up, more drivers have been caught driving carelessly but is there more that can be done from your early years of driving?
Further education needed for safer driving
Motorway lessons have never been compulsory once you’ve passed your test, so should they be to avoid the problem of the middle lane hogger and tailgater? Previous research from the AA showed that just 3% of drivers had undergone any motorway driving tuition at all!
However, plans were confirmed by Transport Minister Andrew Jones in August this year, that in 2018 learner drivers accompanied by an approved instructor and driving a car with dual controls will be able to take motorway lessons before they’ve passed their test, ensuring they had the necessary training for driving at higher speeds, joining and leaving the motorway correctly and overtaking and using lanes properly.
He said, “We have some of the safest roads in the world and we want to make them even safer. These changes will equip learners with a wider range of experience and greater skill set which will improve safety levels on our roads.”
So, we want to know what you think of middle lane hoggers and tailgaters, does it enrage you? Are you guilty of rage yourself and what do you think could be done to solve this problem? Should motorway lessons be compulsory to new drivers?
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Would insurance firms pay out if your driverless car got hacked?AEV Bill "Pointy-headed technocrats" behind autonomous vehicles tech are worried that a proposed new law won't protect the public from huge financial claims if a mass hack of a driverless car fleet occurs.
Expert submissions to the committee of MPs considering the Automated and Electric Vehicles Bill are full of concerns on a range of issues: mainly who pays in the event of a crash, but also privacy and driver training concerns.
Legal academics from Exeter University warned that a mass hack scenario, where a group of the same cars is hacked by malicious actors and used to cause mayhem, may not be covered by insurers. Making certain that insurance companies pay out for driverless car accidents, instead of individual drivers and owners, is the whole point of the AEV Bill.
The same professors also pointed out that the current wording of the bill “refers to a limit of liability for property damage by reference to ‘any one accident’, but it is not clear whether the damage suffered by each item of property involved is an ‘accident’ or whether the word is intended to have an aggregating function. Such caselaw as there is on the word ‘accident’ suggests the former, which is unlikely to be what was intended.”
Meanwhile, Neil Greig, director of policy and research at the Institute of Advanced Motorists, told the committee that car makers ought to be responsible for teaching drivers how to handle their auto autos.
“We believe that car manufacturers should have a responsibility to fully train drivers in the safe operation of Level 3 cars,” said Greig. “This is particularly important in a world where software upgrades can be applied remotely – the car that you parked in the evening may have a whole range of new functions added overnight.”
Level 3 refers to the American Society of Automotive Engineers’ table of vehicle autonomy levels.
In addition, the British government itself may be at increased risk of international espionage from driverless vehicles, as the British Vehicle Leasing and Rental Association warned. The association's Patrick Cusworth said it had been told that most driverless vehicle software updates would take place "over the air" and explained that "several BVRLA members have indicated they will not accept [this] as this means that sensitive customer, driver and/or vehicle data could be accessed by the manufacturer, negating both privacy and customer confidentiality."
The Ministry of Defence is a big customer for leased vehicles that it uses in its so-called "white fleet" of minibuses, coaches and lorries. These are used to inconspicuously drive personnel and military equipment around the country.
The MoD’s policy of self insurance – the department has no insurance, instead paying damages straight out of the defence budget for accidents it causes – is also causing headaches for BVRLA members, who said that, under the AEV Bill's current wording, "liability for accidents [with driverless vehicles] … would fall upon the vehicle owner/provider – i.e. the BVRLA member – rather than either the driver or the vehicle manufacturer."
Though the government's Centre for Connected and Autonomous Vehicles told the BVRLA this would not happen and liability could be shifted to the MoD through leasing contracts, the association is not convinced.
Most amusing of the expert submissions was the Association of Convenience Stores' suggestion that its 9,000 forecourt members should be given "incentives" to "invest in ULEV infrastructure".
ULEV stands for Ultra-Low Emission Vehicle. Definitions of what this means vary, but most seem to agree that it means cars which emit a much lower level of carbon dioxide gas than current cars. Most importantly, hybrid cars fall under the ULEV definition – in other words, vehicles such as your petrol-fuelled Toyota Prius.
Just to really hammer the point home about wanting a petrol and diesel-only future, the ACS added this:
ACS does not support Clause 10, which would mandate a minimum provision of EV charge-points and hydrogen refuelling. Currently only 2.6% of forecourts have EV charging points on their site, equivalent to 225 forecourts which host 465 electric charging points.
More thoughtfully, the association highlighted the cost of forced upgrades: "It costs in the region of £50,000 and £60,000 to install electric vehicle charge points and this is heavily dependent on the existing fuel site’s capacity and connection to the National Grid."
While Labour MP Clive Efford's cruel description of these and other experts who gave evidence to the committee as "pointy-headed technocrats" was a bit much, the points they raise are vitally important. If driverless cars are to work, the AEV Bill needs to nail down the areas of uncertainty now.
Leaving it to the courts would doubtless enrich a lot of lawyers – but it would significantly harm public confidence if a precedent was established that allowed insurance companies to weasel out of claims caused by inept robot drivers. ®
Source: The A Register
FCA slaps Bluefin Insurance with £4 million fine, Insurance companies giving incorrect advice?"nah Never"
It may have been plain sailing for Bluefin Insurance since its takeover by Marsh – but today the insurance broker has been stung with a significant fine relating to its past ownership.
The Financial Conduct Authority (FCA) has fined the firm an eye-catching £4,023,800 for having “inadequate systems and controls” and for failing to provide information to its customers about its independence “in a way that was clear, fair and not misleading.”
The issue relates to the fact that, according to the FCA, from March 09, 2011-December 31, 2014, Bluefin held itself to be “truly independent” in terms of the advice it offered and the insurers it recommended despite the fact that it was then owned by AXA UK Plc.
According to the FCA’s statement on the matter Bluefin “failed to implement adequate systems and controls to manage the conflict that arose from Bluefin’s ownership. Bluefin’s independence was compromised by its culture which promoted business strategies, including a policy which focused on increasing the business placed with its parent company, over treating customers fairly.
“Bluefin brokers did not disclose this policy, so customers risked being misled into believing they were dealing with a broker who would conduct an unbiased search of the market.”
The regulator did point out, however, that it makes no criticism of any member of AXA Group other than Bluefin itself.
“Insurance brokers must promote a culture in which they act in their customers’ best interests and provide them with the information they need to make an informed decision,” noted Mark Steward, executive director of enforcement and market oversight. “This is central to the relationship between the industry and its customers.
“It is also unacceptable that firms hold themselves out as independent when they are not.”
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Number of speed cameras in UKThe UK’s fixed, permanent, speed camera deterrent works at half capacity as hundreds of cameras have been switched off in a move that concerns safety campaigners. Press Association freedom of information request data – that comes via 36 of 45 police forces – suggests only 1,486 of the 2,838 cameras have been turned on (52%).
Consider Northamptonshire Police, Cleveland Police, Durham Constabulary and North Yorkshire Police, for example. These forces have no fixed speed cameras in use. AA President, Edmund King, cites the reduction in road safety grants as a contributing factor.
Mr King adds: “It is also reflective of the fact that proceeds from cameras are no longer allowed to be ring-fenced then reinvested into yet more cameras”. The freedom of information request also confirms which forces use a fraction of their cameras. For example:
BrakeSafety charities want other police forces to follow suit as they consider cameras a critical tool that reduces casualties. Brake Director for Campaigns, Jason Wakeford, says: “1,800 people lost their lives on British roads last year and speeding is a factor in thousands of crashes. Speed cameras are a proven, cost-effective, way of reducing collisions and it's critical they are operational.”
IAM RoadsmartNeil Greg, IAM Roadsmart Director of Policy and Research, adds: “The ultimate deterrent (to speeding) is knowing that if you flash that camera, you're going to get a ticket through the post. It's very important that drivers aren't tempted to take a chance to maybe have a go and see whether that camera is active”, he reveals.
Safe SpeedSafe Speed – in stark contrast – calls for speed cameras to be replaced with police officers that patrol the streets. Co-founder, Claire Armstrong, argues the freedom of information request data "proves police forces do not believe” in speed cameras. She states:
“Forces are conning the public into thinking cameras are there for road safety. If they really thought that every one would be on. They are a flawed safety policy. I am glad there are only 52% working”, Ms Armstrong confirms. “We'd actually like to see less.”
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“He’s not a fit person to ever hold a licence.” That’s what Judge Keenan Johnson of Portlaoise Circuit Court in Ireland remarked when the camp of Sean Coss tried to appeal a recent sentence of a five-month imprisonment and a driving ban for 20 years. The appeal, which Coss’s lawyer himself admitted to having no merit, resulted in an increase to the ban.
Now the 25-year-old – whose record consists of over 120 traffic violations – not only has to spend nearly half a year behind bars, he is also disqualified from driving for a good four decades, according to a report by Leinster Express. His most recent offence? Driving without insurance – the 28th time he’s been caught doing so.
“Twenty-seven convictions for no insurance? That must be a record,” said the Circuit Court judge, as quoted by the report.
Coss’s previous motoring offences include driving while disqualified and having no licence. His latest ‘no insurance’ offence was discovered in St Michael’s Park, Portarlington in October.
According to Ireland’s Citizens Information, driving without insurance in the country is generally punishable by a fine of up to €5,000, five penalty points, and a term of imprisonment not exceeding six months.
“The court may decide that you be disqualified from driving instead of incurring penalty points,” it noted. “In that case, you will be disqualified for two years or more for a first offence and four years or more in the case of a second offence committed within three years of the first.”
The cost of car insurance is said to have increased by 70 per cent over the past three years.
It is interesting to look at the extraordinary rise in the cost of car insurance through the prism of the data available from the Personal Injuries Assessment Board (PIAB).
The cost of car insurance is said to have increased by 70 per cent over the past three years and, according to the Central Statistics Office, to have jumped by 38.3 per cent in the past year alone.
Explanation for such an unsustainable surge in the cost of premiums has included comments from the insurance industry that they reflect a rise in the size of court awards, and an increase in the number of cases going to court.
Yet the PIAB has not recorded any major change in the number of people who are refusing to accept the assessments suggested to them by the board. The board assesses the value of all claims where liability is not contested, and if the parties are not happy with the assessments, they are free to go to court and try their chances there.
Had there been a dramatic increase in the size of awards being given out in the courts, one would expect this to contribute to an increase in the percentage of PIAB assessments being rejected by claimants who chose to go to court instead. But this is not the case.
The assessments arrived at by the PIAB come from its so-called book of quantum – a guidebook on how much should be awarded for particular injuries, based on data from insurers, the State claims agency, the courts and the board itself. So they are, in essence, assessments based on market data, and they haven’t been rising at anything like the rate of car insurance premiums.
Also, a massive differential developing between the size of awards in the book of quantum and those available from the courts would be expected to persuade more people to risk the cost of going to court. But that hasn’t been happening. Furthermore, since 2014, the courts have been instructed to use the book of quantum as a guide for their awards.
Another suggested driver behind the rise has been the alleged increased involvement of solicitors. Some 90 per cent of the cases that come before the PIAB involve the use of a solicitor, but that has remained steady in recent years. The cost is paid by the claimant and does not influence the assessments.
There was a 6 per cent rise in applications to the board last year, to 33,561, of which three-quarters were road traffic accidents. If there is an increase in the numbers driving, there is surely also an increase in the number of people taking out car insurance. It is hard to see how that can be a factor in driving up premiums so spectacularly.
Other factors mentioned include historical underpricing during the boom, the cost of paying for the collapse of Setanta Insurance, low bond yields, and other factors that mean insurance companies have to rely more heavily on premiums to create adequate reserves and profit margins that make the insurers sustainable.
Unlike many other jurisdictions, including the UK, the Irish car insurance market does not have publicly-available aggregated information on issues such as the number of claims each year, their average size, the legal costs associated with processing the claims, etc.
If we want to diagnose what is wrong with the car insurance market here, a good place to start would be with a reliable examination of the patient. That might allow the contributors to the huge rise in premiums to be identified, and each to be given a relative weight. What to do about the crisis could then be addressed.
With the European General Data Protection Regulation (GDPR) effective date pinned at 25/05/18, the UK is gearing up for tougher fines and stricter regulations, across all industries. GDPR regulation for small businesses is a hot topic, but are you prepared for the changes?
Read our GDPR key points for small businesses and get clear on your responsibilities.
Here’s our quick definition and overview, followed by a checklist to keep handy.
What is GDPR?What does GDPR stand for: a meaning and definitionThe European General Data Protection Regulation (GDPR for short) is built around two key principles.
The government has confirmed that Brexit will not affect the GDPR start date, or its immediate running. It’s also confirmed that post-Brexit, the UK’s own law (or a newly-proposed Data Protection Act) will directly mirror the GDPR.
Hanging on to old data?One of the key principles of GDPR is to require companies not to hold on to personal data for longer than necessary, or process it for purposes that the individual isn’t aware of. Identifying your data categories – what personal data you have, and why – will be very helpful in ensuring you’re compliant with the GDPR.
How does the GDPR define ‘consent’?Customer or individual ‘consent’ has been redefined and become much tighter, as a result. On top of this, requests for consent can no longer be hidden in small print but must be presented clearly, and separately to other policies on your website or communications – so no more pre-ticked boxes.
Consent may not be required for pre-existing personal data, as long as you have a legal basis that’s compliant with the current legislation (the DPA).
The principle here is that inactivity is no longer a legitimate way to confirm consent. Remember, this applies to you too, as a consumer with personal data rights of your own, and may be a welcome change!
Fair processing noticesIt may sound complicated, but a fair processing notice is about giving people clear information about what you’re doing with their personal data. Your fair processing notice should describe:
GDPR is so complicated – why should I care?It’s easy for small companies with a stack of to-dos to see the GDPR as a burden. But in reality, it’s something that can be used to your advantage, adding value to your business.
By proving to potential and existing customers that your organisation is compliant with new laws that protect the rights of citizens just like you (and your customers), you could bring in more business.
No one likes having their data lost, stolen, damaged, misused or shared without proper consent, and doing everything you can to protect your customers and grow their trust could be a unique selling point.
So, from fines to compensation claims, there are certainly serious reasons to get GDPR-compliant. But on a real-world level, see it as being worth your while to get organised behind the scenes, earn your customers’ trust, and be the company that respects personal data, rather than letting it sit on a long-forgotten spreadsheet.
Will the GDPR apply to my business?GDPR applies to any business that processes the personal data of EU citizens. This includes customer, supplier, partner and employee personal data.
So the first question you need to ask yourself, is how often does your business deal with personal data? This includes your customer data of course, but have you factored in supplier data? Past and present employees? And is there anything else you’ve collected, that doesn’t fall into any of these groups?
If you’re collecting any of this data routinely, you’ll need to comply with the GDPR, whether the data is on a spreadsheet, on your computer network, your mobile phone, or in the cloud.
Another key question, is whether your business currently falls under the DPA. If so, the ICO has confirmed that the GDPR will apply to you, but remember, the GDPR is much stricter than the DPA.
I employ fewer than 250 people. What should I do? Being a small business doesn’t mean you fall out of the GDPR scope, even if you don’t need to employ a DPO. It’s recognised that small businesses have fewer resources and pose less of a risk to data protection, so there may be more leniency by the ICO in relation to any non-compliance.
However, you’ll still want to ensure you’re compliant with the principles of the GDPR. This is because your business must still comply if it’s involved in regular processing (which includes collecting, storing and using) of personal data. It’s easier to follow the GDPR and get compliant, than to spend time figuring out how you can avoid complying, especially if you’re working without legal guidance.
It’s also important to note that even if your company falls under one of the exemptions, if you’re contracting with a larger company that conducts large-scale processing you may also be subject to the harsher end of the GDPR’s regulation.
Aside from the law, responsible data handling is a basic principle of good business upkeep. If you’re a one-person band but aware that your records are a bit all over the place, have you thought about how you’d explain a breach to your trusted customers?
Abiding by the principles now means that you’re ready for the legislation, day-to-day risks, and any changes that may make the rules a bit tighter for small businesses, as the GDPR settles in.
What data does the GDPR legislation apply to?You’ll see a lot about ‘personal data’, when reading up on the GDPR. It’s now got a more detailed definition, and the regulation has clarified that things like an IP address (the unique string of numbers that identifies every Internet-communicating computer) count as personal data. There are lots of other things though that will fall into the personal data category, so make sure you’ve checked the GDPR itself (using the handy links at the end of this article).
Quick check: Focus on your lists. Does your business hold HR records, customer lists and contact detail records, for example? Most do.
This is confirmed by the ico.org.uk, who state; “You can assume that if you hold information that falls within the scope of the DPA, it will also fall within the scope of the GDPR”.
Manual vs. auto-filingWhether it’s you keeping a spreadsheet of customer contact details, or an automated digital capture system, the GDPR will apply.
Is your data ‘sensitive’?Article 9 in the GDPR defines ‘special categories of personal data’ and this includes personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership. They also cover genetic data, biometric data, data concerning health and data concerning a person’s sex life or sexual orientation. Generally, you’ll need explicit consent from individuals whose special category personal data you want to process, although Article 9 sets out a number of exceptions to this rule.
How is the GDPR law different from the DPA?There are similarities between the upcoming GDPR and current Data Protection Act (DPA). However, crucial developments and rulings within the GDPR mean you’ll need to get clear on the new legislation, whether you’re up-to-date with the DPA or not.
The GDPR changes your accountabilityOne thing that really sets the GDPR apart is the changes made to the ‘accountability’ of data processors. This is a change from under the DPA, which placed more responsibility on the data controller (note, it’s still worth brushing up on your DPA compliance, as lots of its basic principles are pretty much repeated in the GDPR).
These are basic principles you’ll need to think about. Don’t get too hung up on whether you’re a controller or processor as both parties are required to make changes in order to comply with GDPR. At this stage, the key thing is to think about the personal data your small business collects, holds, uses and shares, and how confident you are that the new principles hold true.
Am I a data controller or a data processor?The GDPR will apply to data ‘controllers’ and ‘processors’. In general, processing is defined as any operation performed on personal data, such as storing, collecting, recording, organising, sharing, erasure, consulting, etc. A controller is a data processor too, but they will also decide the purpose of the data processing activities.
For example, if you’re a small business offering a plumbing service and your customer details are managed using a contacts management app on your phone, hosted by a third party, this would generally make you the controller and the third party the processor. If on the other hand, you manage all of your data on a spreadsheet you’ve built yourself, you’re both controller and processor.
If you’re a data processorFor processors, the GDPR carries a specific set of legal obligations some of which will require you to:
As a data processor, the severity of your penalty will reflect how serious the consequence of your failure to comply with your obligations placed on you by the GDPR or followed the instructions of your data controller. These obligations include ensuring sufficient security measures, and you’ll suffer further penalties (see ‘What are the GDPR penalties?’ further down) if you fail to report the breach within the given time frame (a maximum 72 hours).
As well as this, if you’re a data processor and have paid compensation that the controller is partly or fully responsible for, you may be entitled to claim back the relevant damages from the controller themselves if you have a contract in place that states this. This area of claims is where cyber or professional indemnity insurance can come in handy, although you’ll always need to match the policy to your activities.
If you’re a controllerAll controllers are by nature also processors and therefore subject to the same basic requirements. As a controller, the GDPR places obligations on you and your business to ensure any contracts you have with processors are compliant. Take a look at the section for processors above – it may be worth checking that their security measures and processes are GDPR-compliant before signing or renewing any contract.
Are you inside the EU?The GDPR applies to businesses that process personal data of any EU citizens, so far regardless of developments with Brexit. It also applies to organisations outside the EU which offer goods or services inside the EU.
How can I check my suppliers are GDPR-compliant?Working with GDPR-compliant suppliers and contractors will reduce the risk of being impacted by a data breach, and any consequent fines and claims.
You could ask suppliers and contractors to complete a form that confirms the security measures they have in place, or you could conduct an on-site visit. If their existing measures aren’t sufficient, you should review your relationship to ensure they are compliant with GDPR.
Where your suppliers (as processors) are processing personal data on your behalf (as a controller), you have an obligation to update your contracts with them to include a number of mandatory clauses that can be found in Article 28(3) of the GDPR. These ensure that processors are contractually obliged to provide GDPR-compliant data protection standards.
GDPR consent – how do I get consent from my customers to use their data?It’s great that you’ve started thinking about this, as consent is a key concern tackled by the GDPR.
The ICO has a dedicated ‘in-progress’ page on its website covering consent, but guidance is still in draft form. You can keep an eye on the page and in the meantime, their Consultation: GDPR consent guidance gives a helpful at-a-glance overview.
GDPR consent checklist and principles (at-a-glance):
Businesses in breach will see a dramatic increase in fines with penalties reaching an upper limit of €20 million or four per cent of annual global turnover, whichever is higher.
Insolvency will be a real risk for non-compliant businesses as a result of these fines. But bear in mind the possibility that individuals can also sue you, if they suffer as a result of your data management. This could be for material damage or non-material suffering, such as distress.
GDPR compliance checklist, helpful links and resourcesICO resource centre (small organisations and the GDPR)
ICO 12-step checklist
The website and checklist above are great resource for small businesses looking to step in-line with the GDPR.
From there, these more general websites can give a good overview.
ICO GDPR overview
EU GDPR portal
Do you expect the GDPR to impact your business? Let us know what you think below.
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I highly recommend you visit it.
Britain’s largest motor insurer Direct Line is offering Tesla Inc drivers in Britain a 5-percent discount for switching on the car’s autopilot system, seeking to encourage use of a system it hopes will cut down on accidents.
The move – confirmed by company representatives in response to Reuters’ questions – is Tesla’s only tie-up in the UK and comes at a time when the company is trying to convince insurers that its internet-connected vehicles are statistically safer.
Direct Line said it was too early to say whether the use of the autopilot system produced a safety record that justified lower premiums. It said it was charging less to encourage use of the system and aid research.
“At present the driver is firmly in charge so it’s just like insuring other cars, but it does offer Direct Line a great opportunity to learn and prepare for the future,” said Dan Freedman, head of Motor Development, at Direct Line.
Direct Line sells insurance policies to customers introduced to it by Tesla. Tesla then provides information on the features and capabilities of its vehicles to help Direct Line set insurance prices.
According to Tesla’s website, some of the autopilot functions include matching speed to traffic conditions, automatically changing lanes without driver input and even self-parking. The car can also be “summoned” to and from a garage.
“Crash rates across all Tesla models have fallen by 40 percent since the introduction of the autopilot system … However, when owners seek to insure their Tesla vehicles, this is not reflected in the pricing of premiums,” Daniel Pearce, financial analyst at GlobalData, said.
“The insurance industry will gradually respond to these developments,” Pearce added.
Direct Line, which is enjoying soaring motor insurance prices in Britain, said it sets premiums for Tesla drivers based on the risk they present, including who is driving, their age, driving experience and claim history.
“We aim to offer competitive premiums and we’ve welcomed a good number of Tesla drivers in the UK,” Freedman said.
Tesla declined to specify how many vehicles with autopilot capabilities currently are on British roads but industry figures pointed to UK data on imports, which suggest the number is more than 4,500.
"[Direct Line] sells insurance policies to customers introduced to it by Tesla. Tesla then provides information on the features and capabilities of its vehicles to help Direct Line set insurance prices."
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French Uber rival Blablacar has reached a billion dollar-plus valuation by attracting more than 50 million drivers and passengers to its ride-sharing app. Now the company is exploring how it might capture the insurance value of its vast ride-sharing business.
A team of 10 at Blablacar’s Paris headquarters is experimenting with an insurance brokerage business that would sell packages tailored to ride-sharing, as the company expects more and more drivers and riders to seek additional protection for individual trips, over and above the cost of insuring a vehicle. Blablacar has collected large volumes of data from about 10 years of connecting drivers and passengers, including peer reviews, route information and identity checks.
“The long-term vision is that we could become an insurance broker based on driver ratings and other data we collect about travel routes,” co-founder and Chief Executive Officer Nicolas Brusson said in an interview. “We could become a new distribution channel for insurance on the Blablacar user platform. It’s a side business that could dominate revenue.”
Blablacar is experimenting with several ways to leverage its user base. It has a partnership with carmaker Opel and ALD Automotive to offer leasing packages to drivers who have achieved “ambassador” status – based on number of rides and ratings among other criteria – on the Blablacar platform.
For insurers, Blablacar’s move is part of a broader debate on whether people will keep buying their own cars or shift instead to alternatives like ride-sharing, car-pooling and “robotaxis”. To adapt, Axa SA has forged links with companies from Uber Technologies Inc. to Deliveroo and has a unit called Axa Partners dedicated to growing revenue from such partnerships. It has a deal with Blablacar, and Axa’s protection is included in every trip booked in France, the U.K., and elsewhere in Europe.
“We bring reassurance to these platforms to help them acquire new users,” Axa’s chief in France Jacques de Peretti said last month in a BFM radio interview. “Having a big name like Axa bringing its protection, it helps business at these platforms.”
A venture into brokerage would rely on Blablacar’s core ride-sharing service and the company’s ability to use trust indicators collected on its platform as a steer for packaging, and maybe even pricing insurance offers. It would expand the company’s revenue sources from the current fee-driven model and beyond just France.
GM Cruise through San Francisco halted by a taco truck(not a good start to the launch of your new car) #autonomousvehicles
This week saw automotive giant General Motors giving reporters rides in cars from its self-driving unit, Cruise Automation on the streets of San Francisco.
A self-driving Chevrolet Bolt vehicle, kitted out with the company’s latest autonomous systems slowly drove itself more than two miles through crowded San Francisco roads, but double-parked cars and orange traffic cones tripped up the automation on several occaisions before a taco truck stumped the vehicle completely, forcing the human safety driver to take over and keep the show on the road.
“Our mission is to bring this technology to commercial deployment at scale, with safety, as soon as we humanly can do that,” GM President Dan Ammann told reporters. He repeated Chief Executive Mary Barra’s promise in October that GM would roll out self-driving cars within “quarters, not years.”
During a roughly 15-minute ride in a busy area of San Francisco over a 2.2 mile trip, the Cruise-enhanced electric Bolt carrying a Reuters journalist encountered 117 people, 4 bikes and 129 cars, according to the car’s sensors.
The car, never moving more than 20 miles per hour, navigated urban traffic, a tram line, construction zones, pedestrians crossing streets and many double-parked vehicles. Urban environments are as much as 46 times more complex than suburban areas, Cruise CEO Kyle Vogt said.
As with all automation systems, the Bolt reacted more conservatively than a human driver, for example slowing to a near stop after sensing a bike approaching in the opposite lane.
“Looking for a clear path” screens facing the driver and passengers read several times during the trip, when the car stopped next to some traffic cones or behind double-parked vehicles. After pauses, it restarted and passed the obstacles by itself.
A taco truck was too much, though. The Bolt’s human backup driver disengaged the system and took the wheel after the car waited for more than a minute behind the truck where construction workers ordered lunch.
Vogt said those issues would improve over time and that the winner of the self-driving car race would be the one that first launches at “massive scale” rather than just being the first to market a model.
#Volvo Cars announces bold subscription service for its new XC40 including insurance, service and wear and tear for one price
Volvo has used this week’s LA Auto Show to take a bold step into the emerging car-as-service market with the launch of its new Care by Volvo monthly subscription service.
The Swedish automaker, which is owned by China’s Zhejiang Geely Holding Group, says it wants to make having a car as easy as having a cell phone. This means allowing customers to choose a car online and make one inclusive monthly payment that covers insurance, service, and maintenance. The subscriptions will last 24 months. During that time, customers will be given the chance to change cars and sign up for a new 24-month subscription as early as one year into the agreement.
Subscription customers will be covered under a premium personal insurance policy issued by Liberty Mutual Insurance offering $250,000 bodily injury protection per person and $500,000 bodily injury coverage per accident. A $500 deductible applies to both comprehensive and collision coverage. Care by Volvo will also feature 24/7 customer care and concierge services, including roadside assistance.
In launching its new service Volvo has joined a small but growing group of automakers developing subscription services that gives customers access to cars for a monthly fee. The big difference with Care by Volvo however is that at $600 per month for a new XC40 SUV, it’s nearly half the price of other services that have launched this year.
The new service is a logical precursor to Volvo’s expectation that it will be offering driverless vehicles to customers in the not too distant future. With their higher initial cost and complex maintainance and update requirements, driverless vehicles are more likely to be offered on a lease, rental or on-demand basis. Just last week Volvo announced a deal to supply ridesharing giant Uber with up to 24,000 of its flagship XC90 SUVs over the coming three years.
Volvo’s Anders Eugensson will be speaking at next February’s Insuring Autonomous Vehicles conference in London, providing an update on the company’s ambitious DriveMe test programme and its ambitions to provide a range of premium autonomous vehicles and mobility services to consumers throughout the world.
CMC which failed in its due diligence over text messages loses bid to overturn regulator’s £50,000 fine
A claims management company (CMC) has failed to overturn a £50,000 fine imposed by the Claims Management Regulator (CMR) last summer for breaching the rules relating to third-party referrals, misleading information and keeping proper records.
UKMS Money Solutions, based in Birmingham, argued that it had already been punished by the Information Commissioner’s Office (ICO), after it was fined £80,000 in 2015 for sending over 1.3m spam texts in only three months.
Rejecting the CMC’s challenge to the fine, Judge Peter Lane, sitting in the First-tier Tribunal, said the “only way” in which the penalty imposed by the ICO could be relevant to the levels of penalty set by the CMR was if it threatened the company’s continued existence.
However, Judge Lane said the CMR gave “specific consideration” to the effect on UKMS of the two penalties.
“It is clear from the turnover figure and the large sum of £466,695 paid as ‘consulting fees’ to the director of the appellant, that a further penalty of £50,000 would not be reasonably likely to result in the appellant going out of business for that reason. The company could cope.”
Judge Lane said the tribunal “expressly” endorsed the view of the CMR’s consistency panel that the seriousness of the company’s offence should be upgraded from low to medium, raising its fine from £20,000 to £50,000.
In relation to many of the calls, UKMS was unable to provide sufficient evidence that the recipients had opted in to receive them.
For example, some 600,000 records had been purchased from a company trading as ‘Buffalo’. UKMS’s own due diligence questionnaire indicated that Buffalo was unable to declare the source of all its data because of non-disclosure agreements.
Judge Lane said: “The appellant, we find, undertook nothing that could remotely be described as due diligence. The appellant took no proper action to investigate what was being done on its behalf by the various data suppliers, on whom it relied.
“That lack of diligence led, we find, directly to the breaches comprising the sending of misleading SMS messages.
“As we have already noted, the appellant has no idea how many of the 2.222m messages contained such misleading statements. This state of affairs is a direct result of the appellant’s failure to perform due diligence.”
The tribunal heard in UKMS Money Solutions v Claims Management Regulator (CMS/206/002) examples of the texts sent by UKMS.
One of them began: “EVER had loans or credit cards? There is a HIGH chance you’re STILL due a PPI refund! UKMS can check for you No Win No Fee.”
The tribunal found that there was “no substance” in the company’s argument that it was being punished twice for the same offence, in breach of the non bis in idem principle and the European Convention on Human Rights.
“In any event, the substance of the respective actions of the two regulators is distinct. It is plain from the materials relating to the Information Commissioner’s decision-making that his penalty was based on the sending of unsolicited SMS messages.
“The mere fact that the messages were unsolicited constituted the breach. The number of messages sent, over 2.2m, indicated its seriousness.
“By contrast, the [CMR’s] decision to impose a penalty lay, in part, upon the appellant’s failures regarding due diligence. The other part related to the misleading nature of the messages sent.”
Judge Lane went on: “The appellant sought to make much of the fact that the respondent could not establish that all of the millions of messages sent contained misleading content.
“That is true but it misses the point. Given the wholly inadequate systems operated by the appellant at the relevant times, there was plainly a real likelihood, at least, of these misleading messages being sent in very great numbers.”
The tribunal rejected most of the CMC’s appeal, but upheld it to the extent that the instalment payment provisions in the CMR’s decision needed to be changed, given that the original deadlines had already passed.
From the bad old days of cars being stolen for joyriding and so on, the incidence of vehicle theft has reduced year on year as a result of improving vehicle security, Thatcham research has found.
In recent years, it’s become easier to break into a property and steal the car keys, than to break in to and take the car without the keys.
However, ABI data reported in the Insurance times suggests theft volumes are again on the increase. ‘Theft claims rose to £68m in the second quarter, up 21% from the same quarter last year. The number of claims, at nearly 13,000, is at its highest quarterly level since early 2013. The rise has partly been fuelled by the increasing use of high-tech devices enabling car thieves to steal cars without forcible entry’.
Full impact of Ogden not yet seen, says wholesale broker.If your a Taxi driver, your premiums are going to go up.
The full impact of the Ogden rate change has not yet been felt, according to independent wholesale insurance broker Citynet.
While the London-based Lloyd’s broker has seen an impact in both its casualty and motor divisions from the rate revision, the looming reinsurance season at the beginning of next year means there is likely to be more change ahead.
“There is the potential for a double hit next year, because January 01 is reinsurance season,” Matthew Carlick, broking director at Citynet, told Insurance Business.
In the casualty space, the broker has seen instances of individual claims rising significantly – sometimes by millions – on the back of Ogden, particularly in high-risk trades such as construction and haulage, according to Carlick.
Meanwhile within motor, while some rates have “clearly gone up,” others have actually gone down, according to Graeme Flynn, motor director at the firm.
“I think there’s a clear split between the types of risks that are going up, and others that are actually reducing,” he commented.
“The real impact in the motor environment is obviously on third party personal injury claims, which are more likely to happen on hire and reward risks, so people that are carrying passengers for hire and reward, or carrying goods for hire and reward – those rates are going up,” Flynn continued.
However, on own goods car and van business, rates have tended to go south: “They are actually reducing, because everybody wants that business, as the impact is less there,” Flynn said.
Again – reinsurance season could change all that. Flynn echoed Carlick’s sentiments that the ripples of the rate change are still moving.
“I believe we are yet to see the full impact, and that 2018 will be the true barometer of how much rates are going to go up on the back of this,” he said.
As for 2018, both Carlick and Flynn expect to see another rate change – though not necessarily any time soon – and as a 100% wholesaler, the business is in a good position regardless.
“I think that towards the end of 2018, there will be too much pressure on the government not to change it,” Carlick said.
Flynn added: “The reality is, it’s not a priority for the government at the moment. They have Brexit to deal with, so the Ogden rate will be dealt with when they have the time to deal with it. But it will definitely be revised, it’s a question of when they actually get around to doing it.”
Article is care of http://www.insurancebusinessmag.com/uk/news/auto-motor/full-impact-of-ogden-not-yet-seen-says-wholesale-broker-86371.aspx
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