New MD discusses launching a new way of handling credit hire

It's time to do things more ethically…

New MD discusses launching a new way of handling credit hire

Motor & Fleet

By Mia Wallace

Over the years she has spent working in the litigation space, Kirsty McKno (pictured), MD of the newly launched Cogent Hire, has seen the best and the worst that credit hire has to offer, and she firmly believes that there is an ethical way for credit hire to be done differently.

Portfolio management company handl Group is behind the launch of Cogent Hire, a credit hire company for the post-reform world which aims to reduce credit hire bills by at least a quarter and targets zero litigation via alternative dispute resolution.

“We want to go out there and collaboratively work with insurer partners to prove that credit hire can be done differently,” she said. “To be able to offer this is a very powerful position to be in, especially in credit hire because it’s not the usual position for insurers and credit hire companies to get along. It has been seen as a necessary evil for many years, even going back to when the CMA investigated the industry, but we’re saying: ‘let’s take the evil out of it and just make it something that’s necessary’.”

The business model is founded on the premise of ethical credit hire which seeks to remove the friction between insurance companies and credit hire companies and replace it with collaboration. She and the Cogent Hire team have spent substantial time with insurers across the industry to understand the best path forward.

As it stands, credit hire disputes tend to end up in a place of litigation because mistakes are made throughout the process, or frictional processes are adopted. Cogent Hire is looking to work with insurers to examine the pain points and look at new solutions that are mutually beneficial to all involved. Of course, there will be some cases where liability is in dispute, but McKno believes that litigation is not the way forward in those cases.

“We’re very mindful of reforms and all the aspects of the change occurring within the industry and for that reason, we want to use arbitration,” she explained. “We don’t believe that we need to take a customer through the trauma of attending court and the delays that that involves when arbitration is a really swift way of resolving the problem.”

Currently, the team is working with several undisclosed insurers who are looking for solutions that will enable a new approach to credit hire, which McKno noted is well-timed with the pricing changes coming through the industry. Post these reforms, it is likely that prices will generally be quite similar so new value propositions will have to be crafted. A bad claims experience is one of the main reasons that people would choose to go to a different insurer, but a positive experience offers a real opportunity for differentiation.

For McKno and her team, the pace of growth ahead is slow and steady and they not looking to start big. Right now Cogent Hire is working on lots of projects with insurers and on proofs of concept which show how the model works. Over the course of the next 12 months, the business will look to enter new contracts.

“The reaction to our model will be interesting,” she said. “And I think it’ll be both positive and negative, because we’re ripping the plaster off for some people. We’re in a unique position and starting at an unusual time because accident frequency is at an all-time low. Yet we’re starting without the legacy of doing credit hiring in an old-fashioned way, so we don’t have that pain behind us and we don’t have a bad reputation behind us.

“We can just say, ‘here we are, let’s do it differently’. So for some credit hire companies, adopting a new way of doing things may be very difficult for them, but I hope that we can prove it can be done. I think that change is in the air.”

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