November 2009 - MMA launches adjustable premiums for a managed budget

With this new product, any estimated mileage not actually covered during the year is refunded to the insured upon request, or carried forward to the following year.

In response to consumers’ growing preoccupation with controlling their expenditure in a context of purchasing power crisis, MMA has launched a new motor insurance solution that is flexible, fair and innovative.
The basic concept is a mileage-based flat premium which is later adjusted according to the actual mileage covered, without limitations.

The car – second biggest item in household budgets

While the car is the second biggest item of household expenditure, and despite rising running costs (+5%*), the French are not willing to give up their cars, 73% of which are used every, or nearly every, day*).

Faced with purchasing power constraints as they have been for the last few years, households are cutting back on their annual mileage (12,800 km in 2008 as against 13,300 km in 2005), mainly in order to reduce the annual cost of running a car, which for many of them remains an everyday necessity.

Starting out from the finding that consumers wish to gain better control of their motoring expenses, MMA has devised and launched a new motor insurance policy based on six mileage-based flat premiums** of a new type: adjustable motor flat rates.

MMA “adjustable flat rates” for a managed budget: “just what’s on the clock” insurance, with no unwelcome surprises

How exactly does it work?

- On first taking out insurance:

The insured chooses the mileage-based flat rate corresponding to the vehicle’s estimated mileage and declares the mileage currently shown on the odometer.

- At the end of the year, if the actual mileage is less than that estimated, the insured can opt: 

either to receive a refund for the mileage not covered, upon request through http://www.mma.fr or through his MMA General Agent,

or to carry the unutilised mileage forward automatically to the following year, without any formality, eventually to be either used or refunded.

Example:
A customer usually covers between 10,000 and 13,000 kilometres per year. He chooses the 15,000 km flat rate, but ends up doing only 10,000 km this year.
Thanks to the adjustable flat rate, at the end of the year he can choose to receive reimbursement for the 5,000 km not driven, or to carry them forward to the following year.
In the end, the client will have paid the premium corresponding to the number of kilometres actually covered (10,000 km in this example).

If the insured finds that he is going to exceed the mileage corresponding to the flat rate chosen, he has only to contact MMA and ask to move up to the next level. The premium will be recalculated for the following period based on this new fixed rate (no adjustments to the period already elapsed, so no nasty surprises in the budget).

According to Christian Baudon, Managing Director of MMA: “With this new motor offering, MMA distinguishes itself once again. We propose a formula that is simple, flexible and above all fair. Thanks to the adjustable flat rate, it is now possible for our clients to gain better control of their motor insurance budget and to pay the right price for the miles actually covered.”

A fair and equitable system

According to a study by the LH2 polling institute commissioned by MMA, more than seven out of ten insured parties are interested in the idea of adjustable motor flat rates.

This method of charging is considered equitable by 79% of those questioned, fair by 78% and innovative by 73%, while 69% thought it would help control their motoring costs and two thirds of those surveyed found it easy to understand.

Advantages of adjustable motor flat rates:

· a controlled budget, known in advance, and therefore no unpleasant surprises in the invoice

· unused mileage refunded or carried forward to the following year

· flat rate adjusted upon request if the insured exceeds his mileage estimate, with no adjustments to the period already elapsed

· a system without constraints, based on trust: no onboard electronic device to install, no vehicle downtime or expenses for installing and uninstalling, no appointment with the garage, no annual declaration of metered mileage by the insured.

Another advantage of the new MMA motor insurance

The right to be wrong, an exclusive MMA feature rewarding its customers’ good driving and loyalty. After three years with no at-fault claims with MMA, even if they have not yet qualified for the special “Bonus 50” rate, drivers will not lose their no claims bonus upon the first at-fault claim.
Moreover, insured parties who have been on the “Bonus 50” rate for at least three years with no at-fault claims will keep their “Bonus 50” status with MMA definitively, even in the event of at-fault claims.

The new MMA motor offering proposes three levels of cover, from minimum third party cover to fully comprehensive.
Optional extras enable drivers to adapt their policies as closely as possible to their needs by increasing the sum insured and providing a replacement vehicle to ensure uninterrupted mobility.

For more on the new MMA Motor offer, please visit: http://www.mma.fr/assurances/367/default.aspx

Media Contacts:
Marie-Pierre Michel – Tel. +33 (0)1 53 10 63 57
Sophie Bagdikian – Tel. +33 (0)1 53 10 65 12