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Procurement, problem-solving and partnership

Reading Time: 3 minutes

We are all, I think, aware of the global chip shortage.  Pandemic shutdowns and increased demand, trade wars, drought and a factory fire all contribute to a challenging production environment.  REDTAIL has met these challenges head-on with lead from Terry Warwick our Supply Chain Manager, who has exemplified our core values of problem solving and partnership in meeting the demand of our valued customers.

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Problem Solving

REDTAIL Telematics devices for both Stolen Vehicle Tracking & Recovery and Usage-Based Insurance having around 760 components, all of which can be impacted by the global shortage.  Terry (based in Cambridge) is in the office early each day to understand the very latest on component supply and pricing from our assembly partner in the Far East, and yes it does change daily, and it is rarely good news!

‘It is a game of 3D solitaire!’  says Terry; ‘and entirely unpredictable.  I can receive an email with a particular shortage very first thing, which will set off a chain of detective work to find that particular part which is usually sorted out, but sometimes not always with a satisfactory outcome.’

REDTAIL has seen lead times quoted of as much as 60+ weeks; even 52 weeks is becoming more commonplace, and price hikes in the region of 10%.  At times, the lead times have been unacceptable, in which case we turn to our design engineering colleagues to look at a change in specification to get around the absent component.

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Partnership

REDTAIL has enjoyed a 17-year relationship with our manufacturing partner Clarion Malaysia.  (Please see my previous blog on what Partner means to us).

The honesty and transparency fundamental to that relationship has enabled us to move the pieces around (3D solitaire remember?) as we have found fixes for a particular component supply.  Volumes and lead times have been flexed to the max, but throughout (I should say so far, this is not over!) we have sustained a positive dialogue, action plan and outcome.  The last word should be with Terry:

‘Paramount, of course, is sustaining our customers’ businesses.  They depend on us to fulfill devices (and of course valuable data from those devices) in support of policy or vehicle sales.  We’ve been able to do that through the quality and determination in our approach.’

Well quite.  Procurement is served by problem solving and partnership at their best.

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Are you ready for the new car insurance regulations – Jan 2022?

Reading Time: 5 minutes

On the 1st of January 2022, the Financial Conduct Authority (FCA) will bring into effect new insurance rules for vehicle and home insurance.

These changes are to prevent “price walking”.  The term “price walking” describes what insurers do when they increase renewal premiums for existing customers while offering new customers the best deals.  Essentially, loyal customers are penalised for being loyal instead of shopping around.

The Money Saving Expert, Martin Lewis, has warned that this will be a “monumental shake-up” across the insurance industry. This change will affect vehicle and home insurance customers across the UK.

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If you own a vehicle (car, motorbike, van – doesn’t matter what type of vehicle), these changes will affect you!

The changes also affect home insurance customers (whether you have home and/or contents insurance – this change will affect you).

Sheldon Mills, Executive Director, Consumers and Competition at the FCA commented on the new rules:

‘These measures will put an end to the very high prices paid by many loyal customers. Consumers can still benefit from shopping around or negotiating with their current provider – but won’t be charged more at renewal just for being an existing customer.

‘We are making the insurance market work better for millions of people. We will be watching closely to see how the market develops in the future and to ensure firms continue to deliver fairer value to consumers.’

Obviously, these changes have the potential to has huge impact on the car insurance industry.

It’s got me thinking about telematics. If customers will no longer be able to reduce their insurance costs by shopping around, how will we find ways to save money?

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Have you ever shopped around for cheaper insurance when you receive your renewal notification?  I do.  I check the latest costs every year to ensure I get the best deal.  I think this year was the first year that I stayed with the same insurer, and that was only because they managed to price match the best alternative option.

So, how can we ensure we get the best deal when insurers can’t offer us low premiums as incentives like they have in the past?  This goes back to what I said before about how this news got me thinking about telematics.  Perhaps this will lead to a new rise in telematics uses or reliance.  Will insurers start relying evermore on our driving data to determine whether we are a low risk and therefore worthy of a lower premium?

Perhaps more importantly, how many of us would trust our driving behaviour enough to truly believe we would reduce our insurance costs by relying on telematics?

While there are areas of my driving that could be improved, I believe I am a good enough driving that I would be happy to use my telematics data to inform my car insurance premium.  However, I know many who would feel the opposite.  Whether they are good/safe drivers or not, they still seem to be very against the prospect of having telematics “forced” upon them.

Alternatively, if you don’t drive many miles each year, maybe you could consider pay-by-mile based car insurance to reduce costs.  Companies like By Miles, on of our partners, offer a type of insurance where you literally “pay by miles” driven.  Each mile costs a set amount.  So, at the end of each journey, that cost is multiplied by the miles recorded during that journey.

I thought it was a brilliant idea when I first heard it.

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I would have loved that type of insurance offering.  If it had been around a few years earlier, I would have definitely used it and would have almost certainly saved money.  I think I drive far too many miles for it to be cost effective for me now.  There are plenty of motorist who could save money this way though!  Could you?

I suppose the follow-up questions then are, why are so many still so against telematics?  Furthermore, could these new regulations be a catalyst?  A catalyst that starts to bring telematics into more favourable light?  A catalyst that means it can become the new way to help us reduce our insurance costs?

I think it is too early to speculate.  I do, however, hope that this could well be the case.