In May 2008, Trafik försäkrings föreningen (TFF), the insurance association for Sweden, announced that it had made an agreement with Thatcham to integrate the UK New Vehicle Security Assessment (NVSA) into its insurance rating process.
TFF began making public announcements of its inspection results in March 2009. The next round of announcements will take place in September 2009 and will see a slight change in format.
Chris Vargyas, SBD Senior Security and Cost of Ownership Specialist, explains how the rating system works and what the September changes mean in terms of vehicle security in the Swedish market.
Q: What’s going to change in September?
Chris Vargyas: In a press release, TFF highlighted that to date a number of Vehicle Manufacturers (VMs) have failed to submit the necessary documentation required for the new process. As a result of the non-submissions, TFF has decided to add the “U” rating to the possible security suffixes a vehicle can be given. The “U” rating will be used to signify VMs who have failed to submit the necessary documentation needed by TFF to give a vehicle a security rating. It is likely that TFF will make a recommendation to the Swedish insurers to heavily penalise any vehicle awarded a “U” rating.
The security suffixes will no longer be published on the TFF website (the insurers are concerned that it is too confusing for consumers). However, the security suffix will be used by the insurers to calculate a customer’s final premium and will be shared with the VMs so that they know what effect the result will have on their vehicles insurance ratings. The decision has been made because the Motor Committee believe publishing the star ratings and the security suffixes is too confusing for customers (it needs significant explanation to describe the impact of the security suffix).
Q: How does the Swedish rating system work?
CV: TFF carries out a visual security inspection of the volume selling version of each new model. The inspection covers the body security, electronic security and vehicle identification and is supported by a questionnaire completed by the VM which details whether the security specification is the same as a UK spec model. TFF then consult with engineers from Thatcham to compare the Swedish vehicle to the equivalent UK vehicle and then between them they generate an official NVSA result.
The NVSA result is then used to calculate the star rating and security suffix (E, A or D and from September a U).
Q: Why is Sweden using the UK NVSA?
CV: Historically, TFF had their own security criteria but the VMs had difficulty understanding it and because of the relatively small size of the Swedish market they were inclined to ignore it.
TFF’s rationale for adopting the UK NVSA was that all the major VMs are already aware of the requirement so they shouldn’t have difficulty understanding the requirements; they will also already have solutions available to meet the requirements and it should in most cases be simple to adopt UK RHD security features on to Swedish LHD models.
Q: In SBD’s original report, “Car theft and insurance requirements in Sweden”, it wasn’t clear whether the major insurers in Sweden would be following the guidance from TFF – has this changed?
CV: It is my understanding that the majority of insurers are following TFF’s guidance. However, the insurance industry is traditionally very competitive so it is possible that by shopping around consumers may not be noticeably affected by the new rating system.
Some insurers may be prepared to offer lower premiums because their claims experience tells them a vehicle is a very low theft risk even if that vehicle is judged to have a poor security performance during the TFF security assessment process.
Q: Vehicle Manufacturers often group the Swedish market with the rest of the Nordic countries when they consider vehicle specification. Are any of the other Nordic states expected to follow Sweden’s lead?
CV: The rest of the Nordic states are understood to be watching the Swedish market with interest. If TFF’s security assessment process and star rating scheme is successful it is highly likely that insurers in Norway, Finland and Denmark will make similar agreements with Thatcham to use the UK NVSA criteria. Adoption may be slower than we originally predicted in SBD’s 2008 report because of the global economic crisis but it is my expectation that we could see the other Nordic states announcing similar schemes in the second half of 2010.
“Car theft and insurance requirements in Sweden”, is available now and helps the industry understand how it can benefit from these changes.
Please register your interest in this report by contacting Juanita Appleby on jappleby@sbd.co.uk.