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Management Investigation

The United Kingdom established a law in 1930which stated that every vehicle on Britain’s road should be covered by at least the third party car insurance. There are 32 million cars in the United Kingdom and thus the increasing demand for car insurance. There are many companies in the car insurance company of the United Kingdom and the competition is cut throat. Cost cutting is an essential component that gives a company a competitive edge over its rival. Car insurances can be disseminated in various methods, the most common being via intermediaries.

An intermediary can be an agent or a broker who sells the insurance to the customers on behalf of the company. Direct Line, in 1985 founded another way to distribute car insurances using direct communications (telephones). Most of the insurance companies are represented by the Association of British Insurers (ABI). It deals with all the industry related issues. The financial services companies are regulated by the Financial Services Authority (FSA). The United Kingdom boasts one of the most active insurance industries in the world. More than 600 companies compete in that market to get customers.

However, majority of the revenue in this industry is generated by the top 5 companies

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which include: Norwich Union, Zurich Financial Services, Royal & SunAlliance, Allianz &Cornhill and NFU Mutual. Direct Line started operations in April 1985. At that time they had only one product: Car Insurance. They had only 63 employees when they started. They used only one communication mode: telephones. From that they have come this far and has become the leading car insurance dealer in the United Kingdom (Direct Line, 2009). They now have more than five million customers and a wide variety of products.

Their business is now in three more countries besides the United Kingdom. These are Germany, Italy and Spain. They believe that their success is because of their products, services, pricing and employees. In just twenty years Direct Line has become the best direct car insurer in the UK. It sells a policy every 10 seconds. It receives customers claim notification every 30 seconds and provides 13,000 car insurance quotes every day. Direct line, now a part of Royal Bank of Scotland group, is the perfect symbol of the modern insurance companies.

The leadership of Peter Wood has helped direct line become the market leader in car insurances and has been appreciated by many marketing gurus. It has been very efficient when it comes to finding gaps in the market and reaching out in the market. Direct Line has made car insurances easy to access and easily affordable. Some other products of Direct Line include offer life insurance, travel insurance, business insurance, pet insurance, breakdown cover, European cover and van insurance(RBS, 2009). There are many discounts offered by Direct Line which make it a favorable option for customers.

The named driver no claims discount is probably the most popular among customers. The history of all drivers is stored on their system and customers can take advantage of this policy just by giving their details. On identification customers get a 5 year discount policy. Customers can also get a discount when they insure more than one car. On every additional car customers get an extra discount. Discount is also available on claim free driving of a company car. Direct Line awards discount if the customer has given up the company car. Customers can also save their money by using the multi-car discount.

10 percent discount in the first year and 5% discount in the second year is given when a customer has multiple cars (CarInsuranceUK, 2010). The uninsured promise sees to it that if a customer claims that he was not at fault in an accident in which he was hit by an uninsured driver, he will not lose his No-Claims discount and would not have to pay the excess. Direct Line will only need the vehicle registration, driver details and the make and model of the car. It is bound to help Direct Line to confirm who was at fault during the accident. Vandalism is one of the most common insurance claims.

If the customer is a victim of vandalism his or her vandalism cover is standard by default and saves the no claim discount. Direct Line not only mends the damages but also recommends garages and auto shops (Direct Line, 2009). The comprehensive car insurance policy of Direct Line covers the customers is his or her car is stolen, damaged by fire and accidently damaged. The third party fire and theft insurance policy covers the customer if other people have claim against him or her and the customer’s car is either damaged by fire or stolen.

The third party car insurance policy covers the liability to the third parties; when third parties have a claim against customers for damaged property or bodily injuries. Some other services of Direct Line include 24 hour accident helpline, accident action pack and windscreen repair. There are 32 million cars in the United Kingdom and thus the increasing demand for car insurance. There are many companies in the car insurance company of the United Kingdom and the competition is cut throat. Car insurances can be disseminated in various methods, the most common being via intermediaries.

Direct Line, in 1985 founded another way to distribute car insurances using direct communications (telephones). There are many discounts offered by Direct Line which make it a favorable option for customers. References CarInsuranceUK, (2010), Direct Line Insurance Review, retrieved from: http://www. carinsuranceuk. co. uk/direct-line-car-ins. php Direct Line, (2009), about us: History, retrieved from: http://www. directline. com/about_us/history. htm Direct Line, (2009), about us: Welcome, retrieved from: http://www. directline. com/motor/uninsured. htm

Direct Line, (2009), about us: Welcome, retrieved from: http://www. directline. com/about_us/welcome. htm Direct Line, (2009), Car Insurance: Cover Options, retrieved from: http://www. directline. com/motor/page02. htm Direct Line, (2009), Car Insurance: discounts, retrieved from: http://www. directline. com/motor/car-insurance-discount. htm Direct Line, (2009), Car Insurance: uninsured driver promise, retrieved from: http://www. directline. com/motor/page03. htm Direct Line, (2009), Car Insurance: vandalism promise, retrieved from: http://www. directline. com/motor/vandalism_promise.

htm Home Approve (2007), UK Car Insurance Industry Watch, October 2007, retrieved from: http://www. homeapproved. co. uk/industry-watch-1007. htm RBS (2009), Annual Report 2008-09, retrieved from: http://files. shareholder. com/downloads/RBS/922912935x0x364242/e1a0271d-f62e-42e6-b794-769a9dc27d6a/RBS_plc_Full_Year_09. pdf RBS, (2006), Highlights of 2006, retrieved from: http://www. rbs. com/microsites/annual-review/divisional_review/rbs_insurance/ RBS, 2010, RBS Insurance, retrieved from: http://www. rbs. com/microsites/gra2007/divisional_review/rbs_insurance. asp

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