Cell captive vs car hire administrator vs car rental company

Within the short term insurance industry here are three alternatives available when enting an insurance replacement vehicle for your client. Each facility has beneficial aspects, and various factors should be considered when deciding on which option would suit your business and your clients

Cell captive administrator

Cell caps would be suitable for small to medium sized insurers and underwriting managers. Premiums are collected by the insurer or underwriting manager and paid over to the cell captive. In essence the full car rental function is outsourced; all reservations and management of the car rental process would be done by the owner of the cell. The main focus would be on maintaining costs and keeping loss ratios to a minimum, achieved by the cell operator being in constant contact with the broker, claims technician, panel beater, car rental supplier and

insured. Having a niche operator focused on a single function of a motor claim would be a viable option for the underwriter, as claims staff are often focused on the higher value items within the claim. By splitting off the premium charged for car rental to a separate administrator, the insurer is ensured of a correct rating which often gets skewed when coupled with the motor premium.

Car hire administrator

Administrators focus on creating a   seamless process for all concerned. By linking the insurer,underwriting manager, broker, insured and car rental company  via one common portal, an efficient service offering is created.  The cost of using an administrator is usually in line with what car  rental companies charge directly. A comparable analogy of a car  hire administrator would be that of an insurance administrator orunderwriting manager whereby premiums charged are market  related. An added advantage of using a car hire administrator is  that insurance cover on the rental vehicles is usually more  extensive as opposed to that of car rental companies’ vehicles.


Some insurers opt to deal with car rental companies  directly, as they have the resources and infrastructure to  administer all aspects of the rental: arranging the rental,  extensions, management of accidents to the rental vehicles and  collections of related excesses, and settlement of the rental  claim. Usually, the total premium charged by insurers to the  insured for motor vehicle insurance would include a car rental  premium and would be viewed as one premium.

All of the above become academic if the service received from  any of the above supply models is less than exceptional. Car  rental is a critical service to your client, so your provider must  have all their bases covered. Over and above which option suits  your company, consider the equally important factors of service levels and ensure that the cell cap or car hire administrator  provides vehicles via a reputable car rental company which operates countrywide and has at least 5 000 vehicles on fleet to  avoid availability issues.