Vehicle insurance solution to benefit Vehicle and Asset Finance

As auto sales across South Africa continue in a spiral decline, the ripple effect is being keenly felt across all auto-related and support industries. The South African motor and insurance industries report they have seen a remarkable increase in insurance policy cancellations as consumers cut back on fixed expenses to keep up with the necessities of everyday life.

While insurance is obligatory and therefore instituted at the time of vehicle financing, it is often cancelled after a few installments, increasing the risk to the credit provider. In the incidence of financed vehicles, the spill-over impact for the vehicle and asset finance sector could potentially run into millions of rands worth of losses.

In an effort to mitigate this risk, TransUnion, working with the vehicle and asset finance and insurance industries, developed a solution that compares vehicle finance data with insurance information. Using integrated data files, TransUnion’s Asset Monitoring Solution, compares and monitors changes to insurance policies, helping the industry effectively manage changes to existing policies and track cancelled ones. Now, vehicle and asset finance houses will have the advantage of knowing when a policy has been cancelled, upgraded from third-party to comprehensive insurance or reduced from comprehensive to third-party insurance.

“This is a powerful solution that will help to streamline alerts on vehicle insurance defaulting in an increasingly dynamic environment. Vehicle and asset finance houses will be afforded more control over the process, faster responses and reduced losses over the long-term,” says Chris van Rensburg (pictured above right), TransUnion Executive: Insurance and Direct to Consumer.

Policy information on the Insurance Data System* facilitates the monitoring of financed vehicles. If there is a match found between the financed vehicle and the policy information, participants are alerted to the change, enabling them to take the appropriate corrective action. These alerts can be issued on a monthly basis, allowing participants to react quicker and more efficiently when a finance contract has been breached.

* The Insurance Data System, developed under the auspices of the South African Insurance Association, is a database of all personal lines claims, policy and vehicle information, pooled by participating members of the short-term insurance industry. Managed by TransUnion, in collaboration with the insurance industry, the Insurance Data System holds information on over 4,9 million claim records and 1,4 million policies.