Robert McDonald, Manager IAG Research Centre, spoke with Fleet Auto News’ Caroline Falls about the insurer’s contribution to safe and autonomous vehicle technologies.
FAN: You came to McMillan Shakespeare in 2008 as MD of the RemServ business unit from a long career at insurance giant AAMI. Is there an abiding lesson from the insurance industry for the vehicle leasing, salary packaging business?
Mike: Direct insurers succeed or otherwise on their value proposition, innovation, customer service and value for money. These are all principals that underpin what we do across the McMillan Shakespeare Group and our various businesses. Clearly, the customer must be at the core of everything you do.
FAN: You have been CEO at McMillan Shakespeare for 18 months now? What have been some of the main challenges in that time and what have you tried to bring about?
Mike: McMillan Shakespeare has been a very successful organisation for many years and our challenge is to continue that growth within our traditional businesses whilst also growing revenues from non-traditional streams.
Notably key acquisitions in Australia in the finance, insurance and warranty broking sectors over the last 18 months have well placed us in terms of our diversification journey. Furthermore, through organic growth and recent acquisitions our combined UK business provides a strong integrated asset finance and asset management offering, developing a strong platform to grow our share of what we consider to be an important market.
Our customers remain our highest priority and we are committed to continually challenging the way we deliver our products and services to ensure a better experience for our clients. This has led to us more recently investing in the development of technology enabled enhancements that allow our salary packaging customers to interact with us when and where they like, 24 hours a day, seven days a week.
FAN: In April, McMillan Shakespeare announced the Qld Govt had reappointed your unit RemServ to provide salary packaging services for another three years. How big a client is that and how important an appointment was that?
Mike: McMillan Shakespeare, through our RemServ business, was confirmed as one of two salary packaging providers to the Queensland Government on 1 April 2016. We have provided services to the Queensland Government and their employees for the last 15 years or so. They are a significant and highly valued client of RemServ and we look forward to continuing that relationship for many more years to come.
FAN: Trends towards asset sharing must be inhibiting growth. Can you comment on the challenge this presents to your company?
Mike: Asset sharing is a relatively new concept in Australia and we are yet to see an impact on car ownership with the private buyers that we provide services to. In saying this, you always need to be aware of potential influences within the market and think about how we can play a part in that growth, rather than being a victim of it.
The concept of asset sharing in fleets is more the norm and we already provide solutions for our clients today, whilst also looking to see how we may play a role in supporting those innovative companies who have been early movers in this space.
FAN: You are a Director with National Automotive Leasing & Salary Packaging Association. What are some of the key issues the association is concerned with?
Mike: The National Automotive Leasing and Salary Packaging Association (NALSPA) represents the combined interests of Australia’s major vehicle fleet leasing and salary packaging providers.
The association was formed in 2014 to provide focus on key policy matters relevant to its members and to the thousands of organisations and employees who rely on the products and services provided by the sector.
It also aims to play a fundamental role in communicating the macro economic benefits arising from the existing motor vehicle fringe benefit tax (FBT) policy settings.
FAN: Labor campaigned for changes to fringe benefit arrangements that would have affected car leasing in its 2013 bid for election. Are you concerned they or any other party will include similar plans in their current election campaign, particularly as everyone seems to be desirous to cut the budget deficit? Do you have a plan to fight back if they do?
Mike: NALSPA has been engaging actively with both major political parties and we are confident that there is no appetite to re-visit the current FBT regime at is applies to employer provided motor vehicles (ie novated leasing arrangements).
This is supported by a recent letter from the Opposition Leader, Bill Shorten, to NALSPA confirming that the FBT framework as it applies to employer-provided motor vehicles and all other salary packaging arrangements will be retained under a Bill Shorten led Government, if elected.
Importantly the sector has worked hard since 2013 to better educate stakeholders as to the importance of this policy instrument to the broader Australian economy, the Australian automotive sector, charitable organisations, the public sector and private sector employers of all sizes across Australia.
Given that the current FBT policy regime drives close to one in 10 of all new car sales in Australia, it plays a fundamental role across the automotive sector and the domestic economy.
FAN: Novated leasing has been a big contributor to McMillan Shakespeare growth in recent years. Do you see continued strong growth from that area or is it being exhausted?
Mike: Our growth in the novated leasing sector has been solid and our market share has benefited from organic growth via increased participation and through new contract wins.
Whilst it is a competitive market, we believe that the overall market is still relatively under penetrated with many employers not having a benefits program available for their staff – the challenge is to continue to educate employers as to the benefits available and how these benefits play a part in attracting and retaining quality employees.