BVRLA Rental Industry Outlook Webinar 3 Nov 20 - presentation slides

Rental Industry Outlook BVRLA Webinar 3 November 2020

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Competition Law: Do’s and Don'ts All BVRLA meetings and calls are subject to the application of competition law and therefore must be conducted in compliance with competition law.

Attendees are reminded that failure to comply with competition law may bring with it serious consequences for them as individuals and their companies. Such consequences include heavy fines and, in certain cases, the imposition of criminal penalties and sentences.

Members must refrain from exchanging any commercially sensitive or strategic information between competitors, either directly or indirectly via a third party, can result in an anti-competitive agreement. BVRLA has developed the following guidelines to help you adhere with the competition rules.

If you have any doubt, then you should seek advice – BVRLA senior staff are at hand should you have any questions.

DO NOT  Discuss individual company prices, price changes, terms of sale and profit margins.  Discuss information as to future plans of individual companies, production, distribution or marketing plans, including proposed new territories or customers.  Discuss matters relating to individual suppliers or customers or any commercially sensitive information.

BE WARY YOU MUST SEEK ADVICE IF: You receive information from another competitor, or are asked to provide information, that you believe is confidential or commercially sensitive.

ALWAYS:  Ensure a detailed agenda has been circulated in advance and is followed closely and minutes of the meeting are recorded and kept.  Begin the meeting with the reminder that the attendees should not discuss commercially sensitive information under any circumstances.  Be prepared to halt a meeting if conversations cross into potentially unlawful territory.

NO PROBLEM  Discussion on any matter relating to the aims and objectives of the committee – for example issues of law and policy affecting the industry.  Discussing BVRLA policies, lobbying tactics & strategies, and other BVRLA activities.  Discussing information about industry activities obtained from third parties or other media sources provided the availability of the information has not been arranged with a competitor.  Discussion with other trade bodies or organisations which will be of general benefit to the industry.

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Welcome and Agenda Margaret Speirs, Head of Operations, Arnold Clark Car & Van Rental

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BVRLA Update Rachael Hewish, Public Affairs Manager and Mark Pow, Head of Learning and Development, BVRLA

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Policy Big Picture The Government's key priorities in Q3 & 4 will be ensuring a viable EU Exit, mitigating the impacts of the ongoing COVID-19 pandemic, protecting jobs, regaining control of state finances and beginning to deliver on its election promises (levelling-up, net-zero economy, investing in infrastructure).

With the Government expected to make an imminent announcement on a new phase out date & ahead of the launch of the Transport Decarbonisation Plan the BVRLA continues to work closely with the Government on solutions which address concerns relating to Supply, Demand and Infrastructure.

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The BVRLA also continues to work closely with local authorities and with the Joint Air Quality Unit as it prepares its payment portal ahead of the first Clean Air Zones. Bath will be the first to ‘go live’ on 15th March followed by Birmingham on 1st June.

Our Priorities 1. Maintaining the supply of affordable asset finance.

2. Provide a tax and incentive regime that supports our sector.

3. Focussing on the key levers for road transport decarbonisation.

4. Preparing for Clean Air Zones.

5. Promoting the future role for car sharing.

Top Priorities

1. Car rental 2. Cost of forbearance

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Policy

Latest Lockdown From 5 November • New national restrictions will apply across England until Wednesday 2 December, replacing any local restrictions currently in place • Furlough scheme extended until December • DVLA have confirmed driving tests are to be suspended in England and Wales until 2 December

Key BVRLA Actions • Letter to Grant Shapps urging the Government to reconfirm that vehicle rental outlets can remain open • Continued collaboration with other trade bodies (NFDA and NAMA) to ensure the whole automotive supply chain functions as normal Sign up to receive the daily Covid-19 bulletins on the BVRLA website

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HOW CAN THE BVRLA HELP SUPPORT THE RENTAL SECTOR?

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HOW CAN THE BVRLA HELP SUPPORT THE RENTAL SECTOR?

Nora Leggett - Director of Human Resources, BVRLA nora@bvrla.co.uk

Rental Focus Group bvrla.co.uk

BVRLA: Rental Outlook Latest insurance trends - Covid-19 presented by

Sentinel is Authorised and Regulated by the Financial Services Authority

What was happening pre-Covid?

Let’s look at the markets?

What was happening pre-Covid?

Claims inflation Allianz UK Claims Data - + % Change in Costs (20182019) – Labour 6.7%

– Paint 7.5% – Parts 6.9% – Repairs 8.1% – Other + 22.9% Inflation will vary by claim based on vehicle types and damage. This illustration is based on average calculations and is based on Allianz’s experience over the last two years.

Average cost per claim

• 2018 – £5,295 • 2019 – £6,110 • 2020 – £7,219 These figures reflect combined AD (Accidental Damage) & TP (Third Party) costs, but exclude large losses in excess of £0.5M. Claims data compiled 15.09.20 from market sources.

What was happening pre-Covid?

Motor Insurers Bureau (MIB) All insurers pay an annual fee (a percentage of each insurer’s premium) to the MIB - a central fund that provides compensation to people involved in accidents with motorists that are either uninsured or that can’t be traced.

In 2020, the MIB levy is set to increase due to several factors: – Claims following acts of terrorism - now picked up by the MIB – The change in the Ogden Discount Rate – Claims inflation for large claims

What was happening pre-Covid?

Reinsurance – All insurers buy reinsurance cover – they carry the risk for insurer’s largest claims.

– In the backdrop of large losses and the impact of the Ogden Discount Rate has seen a general downturn in the number of reinsurers providing motor capacity. This has contributed to increased prices due to less competition.

Covid-19 - Lockdown Almost immediate impact:– on trading levels across the entire UK. – Action required to offer assistance to those affected.

– Willingness of insurers to assist - policy covers agreed on an individual basis to reflect ‘exposure’ and therefore premium spend.

– Response from ‘Premium’ funders agreed on an individual basis to assist in cash flow.

Covid 19 – During Lockdown Trading conditions varied across the country:– Influenced by geographical location – Fleet mix – Client’s own customer base and demand – Own ‘staff’ situation – Accident frequency dropped – less vehicles on the road

Covid 19 - Post Lockdown For vehicle rental operators:• Demand for vehicle rental services had grown month on month and for many, returning to pre-lockdown levels.

• For some, recovery has been slow influenced by their own customer base but also geographical position.

• Minibus demand all but dried up – many are simply SORN and laid up.

Covid 19 - Post Lockdown For Insurers:• • • • • • •

Road usage back to near on normal levels.

Accident frequency has increased.

Fraud and ‘fronting’ is very much a threat.

Frequency of large losses has increased.

Whiplash Reforms postponed.

Delays in vehicle repairs and therefore increased claim settlements.

Aggressive approach by some Third Party service providers.

What action can you take?

Fair Presentation of Risk • This is a legal obligation. • Engage with your insurer so they underwrite your risk correctly and knowingly.

What action can you take?

Don’t become a victim:• Be extra vigilant with customer qualification and risk management processes.

• Is your Rental Agreement correct along with necessary ‘documentation’.

• If in doubt don’t hire – seek advice.

• There’s good luck and bad luck in rental – don’t make your own!

What action can you take?

• Accidents will happen so provide the hirer with instructions on what to do before they leave your rental location.

• If there’s been an accident/incident remember the importance of First Notification of Loss (FNOL) • Tell your insurer and follow their guidance.

• Secure completed Accident Report Forms and provide supporting documentation to facilitate progression of claim.

Thank you & be safe!

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Panel Session Facilitated by Margaret Speirs.

Panellists: • • • •

Andy Bartlett, Senior Development Manager at United Rental Group Mark Pow, Head of Learning and Development at BVRLA Toby Kernon, CEO & Founder at Wagonex Tony Matthews, Director at Sentinel Insurance Solutions Please use the Q&A box on your screen to ask any questions regarding the information in today’s webinar.

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Final Thoughts Thank you to our speakers and you for participating in today’s webinar.

An email will be sent out containing the slides and a link to the recording so you can listen/watch again.

Recordings: all webinars are available on the BVRLA Website.

Events: will be run virtually for the remainder of 2020. The events calendar is on the BVRLA website Virtual training suite: all L&D courses are online, a mix of e-learning, instructor-led and written work for a variety of topics (SM&CR, Fair Wear & Tear, Selling Contract Hire). View the training calendar on the website.

More information on travelling abroad, VE103s and Fair Wear and Tear can be read on the BVRLA Website.

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