Expert Opinion: Our top motor vehicle insights

Cars at night on the road

The Allianz Automotive Division keeps its finger on the pulse of the motor vehicle insurance sector. We provide insurance solutions to over 67 per cent of new car franchised dealerships and works with seven of the top 10 manufacturer brands. We spoke to Stephen Charles, Allianz Head of Automotive Partners, about what he has learned over almost 12 years in his role and the trends he’s seeing at present.

Not all insurance policies are created equal

The question we ask a lot of the dealership business managers is: Are you comfortable allowing your customers to walk out of the dealership knowing they may not have the full picture about their level of cover? Because not all insurances are the same in terms of the benefits they offer.

One key thing for us is our ability to offer genuine new parts, which not all policies have. If you’re letting your customers go through the car purchase process and their insurance isn’t fit-for-purpose, you’re potentially setting them up for disappointment.

Even if it’s counter-intuitive, sometimes slowing the sales process down can really help customers fully understand what genuine parts and other important features mean.

Insurance talk needs to happen early on

The conversation about insurance needs to start at the emotive stage when the customer is in the mindset of buying a car. That way the customer makes a mental investment in the insurance cover as well as the car purchase – and makes the link between the two.

When we ask a customer what’s important to them about their car purchase, they are likely to say they want to keep the car genuine and ‘as-is’. So, if something unforeseen happens, you can bet they want to preserve the integrity of their car by having features such as choice of repairer and genuine parts contained in their policy.

Bringing insurance into the emotive stage of the car-purchase journey allows customers to make a proactive decision about protecting their vehicle purchase.

Effective training reduces compliance risks

The positive thing about Comprehensive Motor Insurance is that it’s exempt from the Deferred Sales Model legislation [which stipulates that there must be a pause in the sales process between purchase of the primary product and the purchase of add-on insurance]. Any add-on products will, however, need to comply with the deferral period, which gives business managers less flexibility in introducing the conversation.

Despite this exemption, it’s critical that dealerships present insurance in the right way – for example, we need to be confident that there’s no chance of pressure selling or misrepresenting the product.

We have invested heavily in ensuring the sales process is as easy as possible. The training program in place with dealer partners prioritises getting the compliance steps right when selling our comprehensive policies. The system guides sales staff every step through the process, giving them confidence they won’t get caught out misrepresenting the product in any way.

Consumers need a policy ‘guide’

The Automotive team will tell you: “Price is only an objection when the features and benefits of a policy aren’t fully explained or understood.”

The current digital landscape makes it easy for anyone to purchase insurance online, but not so easy for them to understand what they’re getting. That’s why it’s important for business managers to guide consumers through the insurance-buying process and advise them of what’s important – such as genuine parts – and why.

For instance, a genuine windscreen can cost much more than an aftermarket part – we’ve seen differences of $3,500 versus $500. Genuine windscreens are fitted and designed to ensure that wind noise is kept to a minimum and they work optimally with a head-up display. It’s worth thinking about the impact non-genuine parts can have on the vehicle after an accident. It could be that a policy with genuine parts as an inclusion costs a little bit extra, but it can make a lot of sense to pay it.

Having someone explain the features and benefits can help the customer overcome their hesitation of paying more for their insurance.


This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 (“Allianz”). Information contained in this article is accurate as at 4 February 2022 and may be subject to change. In some cases information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way. Any opinions expressed constitute our views at the time of the issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.