With the cost of business in the transport sector increasing, the continued notion of increasing insurance premiums is adding further stress to the industry and the message is this will continue.
This article tackles the key issues of why this is occurring and identifies what you can do to mitigate the impact on your business.
So why are premiums increasing? The combination of an increased number of vehicles on the road and the costs associated with in-vehicle technology means that the average cost of replacement parts for commercial and heavy motor vehicles is constantly increasing.
As a result, the average cost of repairs has risen significantly, in particular with newer aged models.
The last several years has seen a higher frequency of claims in New Zealand due to our population growth.
Given this and the increased repair costs, multiple insurers have updated their tariffs, resulting in increased premiums on almost all vehicle makes and models.
Sam Baker from insurance broking firm Crombie Lockwood explains what can be done to help combat this.
“Without a claims history, insurers won’t provide terms and on the rare occasion they do, they will have unknown calculations built in which isn’t favourable for the client.
“If you come to us and want an option, there are several good motor insurers that we can approach, all who have unique offerings that can help your overall fleet risk management.
The more information we have about your fleet and claims history the better, as this allows us to do the analysis that we need to do in order to achieve an effective result for you.
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Having the claims history and discussing the findings with you works two-fold:
1) It allows us to dissect and understand patterns and trends.
This then allows us to understand what you are getting out of your insurance investment and aids us in implementing certain strategies to tailor your policies to help stabilise your premiums and investment.
2) It helps you understand further – where claims are occurring, why they are happening and therefore why your premiums maybe going up.
It also allows you to understand if there is an opportunity to reduce the cost of repairs via other means vs the cost of insuring.
If you’re still doing the same thing you were 3-5 years ago then it could certainly be time to undertake a review.
“By undertaking this process we can help you manage your risk so you can implement strategies to bring down the claims and stabilise premiums,” Baker says.
A simple example of this in action:
“We recently picked up a client from another broking house whose premiums had ballooned but they hadn’t received a lot of advice around their fleet and any strategies they could consider implementing to improve claims or why the premiums were what they were.
“We had the claims history; from there we were able to provide a multitude of strategies and solutions from this and saved them thousands,” Baker says.
“Given today’s market conditions, the value of our broker expertise has never been greater.
Unlike a lot of brokers who are often classified as a ‘jack of all trades’, our transport brokers are transport specialists so they understand that there are many ways to insure a fleet, and there are many ways to dissect and manage claims and keep costs down for our customers.
“If you still have the same old ‘off the shelf’ motor fleet policy you put in place several years ago, then your premiums have likely increased each year and you have been lumped into a portfolio underwriting approach.
“Moving forward, quoting or working out a solution for you without a solid understanding of your business and claims history isn’t going to work and it isn’t going to get the results you are looking for, it also helps having specialists who know what they are looking for.
“The claims history story is critical to what we as brokers can do to add value to your business,” Baker says.
*For more information contact 03 339 5283 or email sam.
baker@crombielockwood.co.nz for a free no obligation consultation with one the specialist brokers.
