VEHICLE INSURANCE Gibraltar's Mini-Boom

The escape from the chills and rain of northern Europe to Spain's sunnier ; and warmer climate by tens of thousands British, German and Scandinavian car-owners has generated a mini-boom for "niche" financial players such as Gibraltar's Ibex Insurance.

Since setting up in a small rented office almost three years ago with a staff of five.. but also with solid links toa Lloyd'ssyndicate— Ibex has become a major and suc cessful player in Spain's competi tive vehicle insurance market. It now employs more than 40 staff in Gibraltar—includingtwo full time lawyers and a motor assessor — has recently introduced a sophisticated IT infrastructure and has twice ex panded its premises in Neptune House, each time buying the ac commodation.

"Business has developed to such an extent — particularly in the past year — that we are considering en tering into partnership alliances with some Spanish insurance pro viders," Ibex's founder John Harrison tells me. "And next year we will set up an 'approved re pairer' network in Spain."

In spite of skepticism in the local insurance industry when Harrison set up Ibex to handle basic insur ance across the border, from the outset he was optimistic that the expatriate market on the Costas was rich in potential. He "head hunted"two local insurance experts who shared this view — David Evans and Clarke Russell — and their initial optimism has been "more than justified", Harrison says. product lines."

"Motor vehicle insurance has re ally taken off -.so much so thatsome of the products which we originally planned to offer have had to be put on the back burner... at least for the time being,'he adds.

Nor, if official Spanish growth projections are correct, is this an unattainable target. According to the Spanish Commercial Office,by the end of 2005 Spain will be the home (or second home) of some four million expatriates... mainly from the UK, Germany and Scan dinavia — Ibex's main customer base.(In fact the volume of German

By the end of this year Ibex expects to have about 50,000 customers on Its books

In two years the company has written more motor policies than its main competitor, the Spanish arm of the UK Calls Direct giant, can boast after four years operating in the sector, Harrison says. And by the end of this year Ibex expects to have about 50,000 customers on its books."We are looking to have an ex-pat client base of about 100,000 by 2005. With that sort of volume we can 'grow' our clients and put the emphasis on other personal business has grown so substantially since Ibex began its operations in Spain that all of its documentation, including application and claim forms, is available in German as well as in English.)

Although Ibex's premiums are not as low as those of some of the firm's Spanish competitors, where the Gibraltar company scores over its rivals is not only in the product it offers,but in the shared language of its clients, Harrison admits.

"Whether their vehicles are UKor Spanish-registered, the Brits ob viously prefer dealing with a sys tem that they am familiar with,par ticularly when it comes to handling claims," Harrison points out. "We offer what they arc used to. Span ish insurers handle things some what differently - and, of course, the loss ratios for Spanish nation als is considerably higher."

This also tends to push Spanish premiums higher, though Ibex along with most other insurers also re-assesses premium rates on a quarterly basis. "Claims and loss ratios are the tightest rein we have in controlling the business," Harrison explains.This has become vital in the climate of "blame and claim", particularly as the majority of Ibex's clients are British - notori ously encouraged by a steady diet of television advertisements which urge viewers to claim at no cost to themselves.

Here Spain's "Paremo Scale" which lays down the level of dam ages which can be claimed at a pre determined rate is "a much more satisfactory way of dealing with claims", Harrison adds.

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