A new company has entered the motor insurance market with a product targeted at young drivers, owners of powerful cars and motorists who have lost their no claims bonus.
XS Direct says it will offer big savings on premiums to motorists with its first product, which is also aimed at drivers who are moving from a company car scheme. However, policyholders will have to take a higher policy "excess" to compensate for the lower premium.
Excess is the initial element of a claim that it is carried by the driver. The excess rate that will apply to male drivers is €4,000 while the rate applying to female drivers is €2,000.
The company argues its approach incentivises policy- holders to be more sensible and cautious in their driving because of the higher initial rate of exposure. "Driver behaviour invariably dictates whether they are involved in accidents."
XS Direct said it was specifically targeting its product at drivers who pay annual premiums of more than €1,000. The company will not operate a no-claims discount system, arguing that such schemes have very little basis in probability.
"Rather than having high premiums and offering discounts to customers for not claiming, XS Direct has a flat premium structure, making it more attractive to drivers paying high premiums."
XS Direct said a male driver quoted a renewal premium of €2,000 might secure a premium for €1,400 with it. "If he claims under XS Direct, he must pay the first €4,000 of the claim. If he was to claim under the original policy and lose his 50 per cent no claims bonus, he will pay a penalty of €6,000 [ additional premiums over the next five years] before he recovers his no-claims bonus."
The management team at XS Direct includes insurance specialist Chris McCann, who was treasury adviser to the General Re reinsurance group, Stephen Gunning and John Prosser. Marketing consultant John Walsh is also on the team.
XS Direct has appointed up to 30 brokers to sell its product. The underwriting on the policies will be carried out by Wexford firm Wrightway Underwriting. A spokesman was unable to say how much money had been invested by the company's backers.
