18 Nov Taking the wheel on transport insurance
To view any sector of insurance as a monolith would be a mistake, but that’s especially true when it comes to transport. The scope of this segment is tremendous – the risks and the insured assets are big and expensive, and the losses can be, too. While the transport sector faces many challenges, insurance products help to mitigate its financial risks and protect its assets. Accordingly, insurers need to offer flexible products and provide services that are tailored to the unique needs of their customers.
Brokers should equip themselves to educate their clients about the needs of the industry and the changes that occur, says Glenn Lambert, managing director at GT Insurance. Staying up to date is crucial – best practice is continually evolving in line with technological shifts, and recent changes to Australian law have affected transport and logistic responsibilities.
“All transport companies are different, as are transport insurance suppliers,” Lambert says. “Insurance can come at a significant cost, and cheap is not always best.”
Lambert expresses similar sentiments, emphasising that brokers need to work with an organisation that can provide the relevant service to clients, not simply write a policy that’s effective on paper.
“Ensuring the right cover and structure is in place, a fast and efficient claims process, as well as a supplier who is capable of understanding the business’s needs should be the key considerations,” he says.
The risk profile of businesses within the industry serves as an excellent example of the complex nature of the challenges that brokers must navigate. As with any other field of insurance, Lambert explains, a transport company’s risk profile determines the type of insurance program and premium price. That risk profile is dictated by a variety of factors, including the company’s track record, current safety initiatives and the nature of the transport work involved.
“Employee safety in the workplace is paramount – it gets more complicated when the workplace is the cab of a truck, bus, motor vehicle or plant and equipment,” Lambert says. “The ultimate goal is to get the driver back safely to the depot at the end of each shift.”
Certainly, technology has proven valuable in providing better data to help insurers assess risk profiles. Telematics are increasingly common; many vehicle manufacturers provide them as a standard option. In combination with emerging technologies such as Seeing Machines, there are also active initiatives to help reduce accidents.
Future insurance planning
Looking ahead, Lambert expects the transport insurance market to remain relatively stable over the next 12 months. He believes ridesharing in its many forms will continue to evolve, as will more efficient pricing models based on data-driven solutions, particularly in small fleets.
“The better-managed transport companies will see the benefits of their risk management efforts, where others will see significant increases if the loss ratio is loss-making over time,” Lambert says.
However, that doesn’t mean the whole process will be smooth sailing. “Companies that are continually working on managing or reducing their operating risks – and there are many of them – are reducing their insurance spend,” Lambert says. “The move to self- insurance in its various forms is increasing.
Accordingly, insurance providers must be able to deliver a complete set of services that includes management of all claims covered under client insurance policies.”
In a roundabout way, it will be business as usual in this inherently challenging field, where brokers must equip themselves to respond to a constantly shifting landscape.
“Transport is a tough, competitive segment of the insurance industry,” Lambert says. “I don’t see that changing anytime soon.”
*This article was written and originally published by Insurance Business.
Original article source: https://www.insurancebusinessmag.com/au/features/exclusive-features/taking-the-wheel-on-transport-insurance-191554.aspx