We speak to Dean Robertson, the Managing Director of BrokerserV, about the challenges and opportunities of the HCV environment.
COVER: As with most insurance lines, heavy commercial vehicle insurance is not just as straightforward as insuring a truck. From your perspective, can you give us an overview as to what type of business heavy commercial vehicle insurance is?
Dean: It is fairly similar to other kinds of insurance, like commercial on steroids.., Your risk exposure is a lot bigger and your impact is a lot higher. Your truck, trailer, and your goods in transit are the main elements of HCV insurance. That is really what it is, so nothing too out of the ordinary, just in itself a bigger animal to what you would normally deal with. But everything else is basically the same. So, you just apply the same wordings, your limits are all there, it is just the same insurance structured on a different role.
COVER: In terms of complications, does a broker need specialist skills to be able to do that, or can they participate by migrating from normal business to including HCV in their portfolio?
Dean: I think, again, the concept is the same on all types of insurance. You should not be selling anything that you do not understand. So, whether it is just personal lines, commercial lines, or in this case, HCV, you need to fully understand the product that you are selling. The concept of the product is the same as any other insurance, you just need to understand the basic risks, understand the type of people you are dealing with, and what sort of elements are being dealt with for them. So, in terms of the understanding and being able to offer this product as a broker, I do not think there is any reason why anybody cannot get into it. You just need to understand that it has a few different elements to it.
COVER: The motor business, over the last 18 months, has had to adapt quite a lot, what happened from an HCV perspective, with regards to COVID and the lockdown?
Dean: I do not think that we can ring-fence HCV from how anybody was really impacted. I think we were all impacted, and the HCV guys were impacted similarly, especially when it came to the closing down of the cross-border routes between the provinces. You have taken somebody’s livelihood, his income. If he is not transporting, he is not earning. The only time that they are going to earn money is by transporting, so that was a big knock for the transporters. In terms of COVID itself, it is a reality for all of us, so we just have to get through it. Hopefully we do not go back into a hard lockdown, allowing the guys can recoup some of that money that they have lost.
COVER: Going forward from here, we have learned a lot over the last 18 months. It has made business a lot more flexible in terms of how we approach clients, or deal with individual clients and their problems, challenges. How do you see this going forward?.What are the challenges and opportunities?
Dean: I think there are a lot of challenges. Our road infrastructure is going to be a massive challenge. It already is. We see trucks often diverting from main routes to go through towns to avoid toll gates and we are talking about roads that have not necessarily been built with the mindset of big trucks coming through in vast numbers. I have actually y seen some of these little towns where the roads are being totally wrecked by trucks.
Being a smaller town, they are probably not really the most efficiently run areas, and there is no financial benefit for them. The trucks are just destroying their infrastructure. So, I think from that point of view, it is a massive problem. I do not know how we are ever going to get over that problem, so you might eventually find towns introducing their own little tolls for large vehicles, because that is how they are going to get money to fix that infrastructure. That is not coming from the government.
Our ageing trucks are also a problem. Operators are not able to afford to purchase new trucks and the fees that they get for running the jobs that they are doing has not kept up with the inflation of the truck necessarily. So, you find that we are dealing with guys that are running trucks that are 15-20 and plus years olde. If they have been well maintained, it is not necessarily a problem, but the problem comes in that these trucks have not kept up with technology. So, you are losing the benefit of what the new trucks offer. Your lane assists, your crash detection, that type of thing. Even something as simple as the air conditioner not functioning in the truck can become problematic. You have probably experienced yourself driving along and if you are getting too warm, you start feeling a little bit sleepy. If the driver falls asleep in a truck that is travelling, just for a second, that incident is quick and often devastating.
In terms of opportunities here, I have got to tell you, I am not overly bullish. Just given what we have, and all the challenges that have been mentioned, without economic revitalization, I cannot see a huge move going forward into changing these old trucks and getting our roads into a good state. Our licensing departments are not functioning properly, we are not even sure about the validity of a lot of the licenses that are being given to truck drivers. These are things, that for me, could be an opportunity if they were to get it rectified. But there are no signs of any effort being done. So opportunities, I am not the biggest bull on at the moment, to be honest.
COVER: Looking at brokers that are in this segment at the moment, and the new ones who are looking at it, why BrokerserV. Why work with you guys?
Dean: We only work through brokers, we do not do any direct business. We believe the systems that we have are all good and we give the brokers access to our systems. They can see their policies, their claims and everything is there for them to view. I believe that with working with Constantia, we have got a good product, good rates and the services we actually offer to the individual broker is basically a direct relationship to the company.
Often you find with your big insurers, your brokers are not really dealing with a person, you are dealing with multiple people, and we try and streamline that into dealing with a direct person that the brokers can actually get in a relationship with.