Fuss-free insurance

Are you counting sheep each night because of vehicle insurance? CLAIRE RENCKEN speaks to some companies that aim to put your concerns to rest, along with the sheep.

Traditionally, insurance terms for transporters are based on previous history and claims trends. “Insurers are generally unaware of the factors that have an influence on the risk profile of the transporter, such as change in contracts, fleet managers, fleet size, driver behaviour and so on. Some of these risk factors are also unknown to many transport owners.

“These unknown aspects influence the premiums, excess and other costs associated with a loss such as down time, loss of revenue and potential loss of transport contracts,” explains Wayne Phillips, chief operating officer at Lynx Heavy Commercial Vehicle Underwriters.

“Considerations should include road conditions, number of vehicles on the road, driver education and behaviour, port conditions and the pressures of delivering loads on time and at an economical cost,” he says.

Over the years there has been substantial development with regard to monitoring risks. These include cameras in trucks, tachographs and the dissemination of information by certain tracking companies, which monitor speeds, harsh breaking, excess idling and long driving and working hours.

These developments have come at a cost to the transport industry and are not always effective. The primary limitations are the costs involved in implementing a variety of systems in order to obtain all the relevant information, and the time taken to sift through and analyse all the data.

Lynx Transport Underwriting Managers – a specialist underwriter for goods in transit and heavy commercial vehicle insurance – has developed a product that addresses all these aspects. Together with the broker, Lynx engages with the transporter, highlighting certain areas of risk that may not be obvious, even though they have a major impact on the risk profile. Lynx utilises a management platform called Lynx Vital. It is free to all Lynx clients and requires no upgrades or extra cost to transporters who already have a tracking device.

Phillips adds: “The focus of the platform is to highlight, to the owners and fleet managers, the primary risks to which their fleet is exposed on a daily basis, in a summarised and concise format. A detailed analysis can be done by logging onto the website and identifying specific vehicles and addressing the risk areas in a controlled environment, while debriefing the driver and changing the driving culture.”

The platform covers risk aspects that influence premiums and excess and includes maintenance costs and savings. Lynx has generally found that by assisting the owner to decrease the average speed of the drivers, the saving is up to eight percent of the transporter’s monthly fuel bill.

With the ever-increasing diesel price, this saving for a truck operator running 20 trucks can be up to 10 000 litres of diesel per month. By eliminating excess idling, the transport operator saves up to R250 per hour. Addressing the matter of harsh breaking reduces the risks of collisions with vehicles travelling ahead and can save up to eight percent on maintenance costs.

“The total potential cost saving to a transporter is well in excess of 18 percent of the current operational cost, making the cost of insurance negligible. The cost saving due to risk mitigation is exponential, as premiums are reduced, due the decrease in number of incidents and the associated costs such as excesses and down time,” says Phillips.

Furthermore, the system allows the fleet operator to determine his optimum fleet size and vehicle utilisation. “All in all, Lynx’s offering is so much more than traditional insurance of vehicles and goods in transit; it forms an integral part of a transporter’s business,”
he adds.

Sid Beeton, divisional manager, transport insurance at One Insurance, has some interesting insights to add: “Last year was a very bad year for the insurance industry. Weather-related claims and the ever-increasing cost of repairs on motor vehicles, took their toll. So transporters should prepare themselves for increased premiums and tougher terms in 2014.”

He continues: “Our focus at One Insurance is on developing long-term relationships with our broker network and our mutual transport clients. The purchase of vehicle and load insurance should not only be about price. We look to add value and to become partners with our transport clients.” The company achieves this through the following initiatives:

• Truck Assist: clients have direct access to a 24/7 call centre;

• AutoTrak fleet tracking and management;

• Subsidised pricing for DriveCam installation; and

• Funding and profit share options.

As an experienced underwriter in the field of transport-related insurance, Beeton offers some valuable advice to vehicle owners:

1. Build a relationship with your insurers; you will need them in these tough times.

2. Don’t be tempted to leave for cheaper premiums. If the deal sounds too good to be true, it probably is. Accidents on our roads and the severity of damage, are both on the increase. You don’t want to be with a new risk carrier when the paw-paw hits the fan.

3. Foreign drivers do represent a greater insurance risk. Most insurers have additional excesses which apply. There have been a number of incidents reported where, on their maiden trip, foreign drivers have disappeared across the border with a vehicle and its load, never to be seen again.

4. Embrace technology. The days of sending a driver on a two-week trip with only a cellphone as a contact and control mechanism are over.

OUTsurance believes in getting to know its clients and their unique needs. “What works for one client, may not work for another. With this in mind we created products that can be tailored to each client’s specific requirements,” explains Natasha Kawulesar, head of client relations for the company.

She continues: “We cover all types of commercial vehicles, including passenger vehicles, light delivery vehicles, heavy trucks and buses. Our standard vehicle cover allows for protection from a variety of perils – from damage caused in an accident or in a hail storm, to theft, hijacking and third party liability cover.”

If the standard cover is not sufficient, OUTsurance has further optional cover available. “For example, our ‘business use in countries outside South Africa’ cover. And our ‘vehicle loss of use’ cover, which indemnifies our clients for financial damage they have suffered as a result of a vehicle claim, for a maximum period of 45 days, while the vehicle is being repaired,” Kawulesar explains.

She concludes: “Our clients can have our standalone vehicle cover, or, if they have a fleet of 10 or more vehicles, they can take advantage of our fleet cover. Individual profiles are considered in determining premiums.”

So entrust your insurance needs to the professionals and go and get a good night’s rest.