Insurance and customer loyalty

Despite working for a magazine in the automotive industry, I don’t drive often.

My wife and I only have one car. She works in suburban Macquarie Park and I work at Surry Hills.

Public transport from our home to Surry Hills is great, while on the other hand, to Macquarie Park, it’s not so great. As a result my wife drives the car to work, and I catch the bus and train.

So it’s not all that often that I take the car for refuelling, but just the other day I did. It was a Coles Express outlet on the main road I was travelling down. I pulled in there because I needed petrol, plain and simple. It was not because I had discount vouchers, it was because this was the first servo I came across once I’d taken the decision that the car needed fuel.

Whilst I’m standing at the counter to pay for the fuel, I noticed a pamphlet promoting Coles Car Insurance.

In this day and age of customer loyalty, discount vouchers and so on, here is another example of companies looking to take as much money from our wallets, or bank accounts now with electronic transfer of funds, as is physically possible.

To make sure that Coles Car Insurance is a real winner with the punters, Coles is offering to triple the normal four cent a litre discount once a month for the first 12 months of the policy.

So, who is insuring your ride or drive when you chose Coles Car Insurance? It is, of course, Coles’ owner Wesfarmers, through its Wesfarmers General Insurance.

A quick visit to www.coles.com.au/insurance reveals that Wesfarmers is peddling both car and home insurance under the Coles brand.

I know it is not unusual to be able to source insurance cover from many and varied points of sale. And I know that buying Coles Car Insurance is no different from buying car insurance direct from Wesfarmers, as it is no different from sourcing insurance cover from any of the other insurance companies competing for the consumers’ dollar.

But do we need another place to buy car insurance? Is it that necessary that when we’ve finished at the bowser and wander into the servo’s shop to perhaps buy a litre of milk, loaf of bread or a cool drink, that we want to even consider car insurance?

We can now buy it at the post office, service station and many other places. What’s wrong with going to an insurance broker or the insurance company itself and arranging and paying for your insurance?

Perhaps one of the greatest risks, especially when the likes of Coles offers us car insurance online, is that the customer is only looking at price. But are we getting what we want? Does the customer understand the process once they have purchased this product online?

I went through the exercise of obtaining quotes from Coles Car Insurance, and the major insurer I have cover with. The difference was about $700 with Coles being the cheaper.

But I know what I get with mine: choice of repairer, among other things.

Coles also offers choice of repairer, provided your repairer is not more expensive than Coles’ authorised repairer, and if you use your own, Coles will not give a lifetime guarantee on the repair.

These are the types of things customers do not notice when they purchase things like insurance online.

It is buyer beware, but is also industry beware, because these types of policies are, for all intents and purposes, forcing people to use particular repairers, rather then the repairer of their choice.

I’d also be interested to know which repairers are Coles Car Insurance authorised repairers, and find out what they had to do to be granted this authorisation?

But it’s not just the collision repair industry that is facing this situation.

A prominent health fund offers its customers discounts when they use a “member’s choice provider”.

It seems that the “loyalty” works in both directions: the provider of the cover wants to keep its customers by offering discounts, and also wants to keep its suppliers by ensuring they get work.

What needs to be maintained is the connection between the service provider and the customer. This will ensure ongoing work for repairers.

But repairers will have to look at how they can maintain their links with their customers, and that will mean dealing with insurers. It’s how the industry chooses to deal with insurers that will determine if collision repairers can keep their customers.

Just because it was done a particular way before, does not mean it will continue to be done that way in the future.

The smart repairers out there will realise this (or have already) and will adjust their business operations accordingly.