Tag Archives: Drive Assist

UK insurers fail to assess their own risk

A company called Drive Assist went into administration last month owing Swinton £2.5m, eSure services c£1.4m and Aviva a mere £714k, as part of their whopping £43 million debt.

But aren’t insurers supposed to be diligent barometers of risk? It’s worrying that these three (and there are more insurers out of pocket of course) couldn’t even manage their own risk in key contracts for services they presumably commissioned?

And how come insurers are out of pocket anyway, not the car hire providers or leasing companies?

The way I see it, any contract between Drive Assist and the likes of Swinton should surely state

“DA to provide x services on our behalf in exchange for y payment and z referral fees.”

DA would then presumably contract its own car hire and/or repairer solutions and make sure that there was a healthy cash flow gap between invoicing Swinton and then paying the car hire/repair companies providing these services.

But obviously it wasn’t as simple as this.

I’d also like to understand who pays for the reported £43m debt in total and whether this’ll be added to insurance premiums in time?

Either way it sounds very odd to me. I’ve read the figures of course but find them a little light on interpretation…

Sadly it’s yet another criticism of the insurance industry’s claims handling process that’s going through the reputation wringer at present. But let’s hope lessons will be learned for the future.

FOXY

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