Extended warranty product numbers increased substantially over the last 5 years, with Defend Finance selling 35 000 policies in past 12 months only
Prague, May 29, 2014 – Defend Finance provided more than 35 000 used car mechanical breakdown insurance policies on the Czech market, and gathered 80 dealers in its portfolio. The product which had been a tradition in Western Europe for more than 40 years is now becoming standard for Czech professional used car dealers.
“Used car warranties started in the UK in the 1970’s – they’re very common and nowadays most manufacturers and large dealer groups run them with their used-car programs. In the Czech Republic, we just did our 35,000th policy and we currently cooperate with about 80 dealers on the domestic market,” says Andrew Quirke, Commercial Director of Defend Finance s.r.o. Only those dealers, who keep strict criteria for used car buying and the stock quality can qualify for the insurance. “Historically we’ve cancelled lots of dealers – there are many who only sell extended warranty when they know the car is a claim-waiting-to-happen. We monitor every dealer’s loss ratio and cancel the obvious abusers regularly,” adds Quirke.
Largest number of policies on the domestic market is being provided by Defend Finance for AAA AUTO Group under the name “Carlife”. The “Carlife” Insurance program was first launched in October, 2003 and has established itself as an integral part of AAA’s customer offering, with more than 400,000 insurance contracts issued to date and more than 30,000 claims processed. It was previously provided by several insurers. “Defend Finance is fortunate to have been providing administrative and claims services on behalf of the program’s current insurance provider, Lloyd’s of London, since February 2013,” said Andrew Quirke from Defend Finance. Lloyd’s of London, the world’s leading specialist insurance market with a 325-year history, provides the insurance under the regulatory supervision of the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Local intermediation of the program falls also under the jurisdiction of the Czech National Bank (ČNB).
“The program has evolved from its beginnings as a simple 3-month mechanical breakdown insurance to today’s 24-month comprehensive insurance program with multiple levels of coverage for various types of vehicles. I am glad we were eligible for Defend Finance program, which was thanks to our high car buying inspection standards, which were confirmed this spring by obtaining the ISO 9001 certificate,” says Karolína Topolová the CEO of AAA AUTO Group.
As CEE market-leader in insured “Extended Warranty” programs, Defend cooperates with a large number of automotive dealers in the used-car markets of the Czech Republic, Slovakia and Hungary. These programs are available to buyers at the point of purchase of new and used cars and trucks and recently, even for high-performance luxury vehicles.
For the used-car dealer, the ability to offer customers an “Extended Warranty” contract on eligible vehicles can greatly assist in securing a sale, reducing uncertainty and providing comfort to the buyer that the vehicle has been found eligible for the program and, if it does happen to break down, that insurance coverage is available to compensate the buyer for the potentially high cost of repair. The very important point is, that while the current legislation covers only the responsibility of the seller for hidden faults, the insurance covers majority of the faults which can develop over the term of the policy, normally 2 years.
“As can be expected, breakdown frequencies in the wider used-car market can tend to be high, as virtually all man-made machines do eventually break down; so premium levels are sensitive to the performance of these programs from dealer to dealer - even in a market that’s so competitive. Fortunately, in addition to careful attention to quality, as the market leader, AAA enjoys an economy of scale that has kept premiums well below market average,” said Topolová.
Pavel Vojtek, CEO of Defend Finance s.r.o., commented: “Defend highly values this opportunity to be working with AAA as Administrator of the Carlife program. It’s refreshing to see a company that is not only “selling” insurance, but one which fully embraces the customer-service elements of the program as a part of their corporate culture. We can see why “Carlife” has had such a long and successful run and we look forward to expanding our cooperation.”
Contact: Dana Rothová, dana.rothova@defend.eu
