Reducing Auto Claims by Embracing Sustainability

There is a misconception that sustainable solutions cost more. The reverse can be true, especially in auto claims and repair.

Vehicles on a road at golden hour

It may have started with changing the plastic straws at restaurants to paper ones, but sustainability is expected to continue trending in a much bigger way in the new year driven by consumer demand. Not only are consumers shifting behavior to embrace sustainability in the retail sector, but we’re also starting to see the popularization of B2B companies prioritizing sustainability. In fact, a global survey by Solera recently found that 75% of drivers are willing to switch insurance providers for a greener policy. While some companies might look at this finding as a challenge to overcome, it’s more aligned with a golden opportunity for insurance companies to prioritize sustainability goals and, contrary to popular belief, improve their bottom line.

See also: We Need to Rethink the Future of Cars

Challenge vs. Opportunity

While 99% of insurers recognize the importance of prioritizing sustainability, they are up against some seemingly large hurdles. For example, there is a misconception that it will require a larger budget to invest in sustainable solutions. However, by understanding the cost-reduction benefits associated with adopting sustainable practices, especially in auto claims and repair, this myth can be easily dispelled. Even small things like switching office lights to be more energy-efficient or implementing a recycling initiative can start to accrue cost reduction over time.

On a larger scale, sustainability is becoming a much heavier regulatory requirement with the E.U. Corporate Sustainability Reporting Directive (CSRD) set to take effect in 2024, among other sustainability initiatives across the globe. Stateside, we’re also seeing regulations like Senate Bill 261 in California apply pressure to companies to report climate-related financial risk. In fact, as these changes begin to mount, a sizeable 61% of insurers don't consider themselves "very well prepared." Staying proactive can help avoid large fines and any potential blows to your company’s reputation, which can result in decreased revenue. 

However, staying proactive is made harder with the lack of available data to leverage in the insurance industry, auto insurance specifically. For example, Scope 3 emissions measures indirect emissions occurring in the organization's value chain, such as those produced in the vehicle repair process. Despite it being a critical metric, only 53% of auto insurers surveyed across Europe currently monitor Scope 3 emissions. This could indicate a glaring gap in knowledge of a company’s carbon footprint.

Better tracking and management of emissions data can provide the information needed to make informed sustainability decisions, which can in turn reduce cost if done effectively. For example, using green parts can reduce cost in repairs for vehicle owners and their insurers while also cutting down on CO2 emissions in the manufacturing process. 

Good Intentions Only Go So Far

While demand for eco-friendly practices in auto claims and repair is certainly surging, good intentions alone won't suffice. The future is sustainable, so it’s imperative companies make moves toward sustainability, especially if they want to stay ahead of impending regulations. Fortunately, there are things that can be done to get a head start. 

See also: The Journey to Sustainable Aviation

Start by implementing a recycling process or, even better, a paperless process altogether. This can help reduce waste while saving money and improving the user experience. Companies should also seek out a partner to help reduce carbon emissions in their auto claims and repair process. There are also tools available to improve measurement of metrics like Scope 3 emissions, which can make a huge difference in implementing effective carbon footprint reduction initiatives. 

It is obvious there has been a significant shift in consumer preferences and a pressing need for insurance companies to align with sustainability goals. Embracing sustainable practices is no longer just a responsible choice but also a necessary one. The future is green, so the sooner companies hop on board, the better. 

Bill Brower

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Bill Brower

Bill Brower is senior vice president, industry relations and North America claims sales, at Solera.


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