Insuring the movers of people

Rajen Govender, MD at Mobility Insurance Underwriting Managers, explains how they keep the wheels of commerce turning.

COVER: The types of covers applicable in the commercial passenger-carrying vehicle segment are not always straightforward, could you tell us what it is that you cover in this segment?

Rajen:  We focus on comprehensive insurance products specifically for mini/midi bus taxis and buses. Each segment varies in its needs with product add-ons being relevant in this regard.

The generic comprehensive cover is dealt with on both to cover the vehicles in each business. Product add-ons include those specifically designed to assist in business continuity, especially when vehicles are inoperable as a result of claims incidents.

Our bus product can be more flexibly structured considering the nature of these operations, operational risk management capability by operators, and cash flow management needs. Fleet thinking is a must for buses to adequately address exposures.

COVER:  How do you manage or mitigate the multiple risks that go with vehicles, especially those that are subject to very frequent and multiple driver use?

Rajen: This is a bit of a conundrum, of course. The taxi industry is considered a seriously high risk that is perceived to be far too wide and unpalatable. But, when one delves into the industry, as we have, the dynamics at play reveal much more than meets the eye. This industry plays a pivotal role in the economy itself, moving more than 15million passengers a day. They are by far the largest public transport element and this activity in itself brings a multitude of insurance risk exposures that require careful consideration.

What we find from a claim’s perspective, is that the real claims come in when the vehicle can no longer operate. Due to the income-earning nature of these vehicles, minor and cosmetic damages are generally not claimed. Despite this,  it is not as bad risk when compared to say private motor, in the normal conditions of course. Frequency is generally lower

The mitigants available are risk selection, premium pricing and claims cost management. It is very difficult to address the driver behaviour, as consistency in employing drivers is sometimes challenging. Ours is an open driver policy.

This is also a volumes game, and it is important to have the right set of volumes to address the claims in the high-risk exposed areas. In the metros, as Mobility, we tend to stay away, focusing more on outlying areas in the country. It is not as congested, like say, Durban Central or even Johannesburg central.

COVER: When it comes to COVID, in terms of your business and in terms of the taxis, how did that impact them and how did you manage that?

Rajen: The early days, March and April in particular, were horrendous because just about nobody could travel  As a result, it impacted the industry quite significantly. We responded with COVID relief measures by offering premium holidays and discounting heavily in order to keep the taxi owners in the position of having insurance, limiting cover in certain instances to accommodate what they could afford at the time. From late May, there appeared to be some glimmer of hope with lower passenger capacity allowed. Finance houses also offered installment payment relief and had to extend this several times. Regrettably, this still remains challenging in view of commuter trips still not being at levels enjoyed previously. We continue to take an open approach to assist where we can.

COVER: In terms of Mobility itself, your business and what differentiates you from similar businesses, what is your value proposition?

Rajen:  We consider public transport insurance to be a niche and there are very few competitors in this space.   In view of taxis being considered as the very sharp edge of the risk spectrum, our proposition revolves around our intimate understanding of this ecosystem, from vehicle acquisition to daily operation. Accordingly, our relationships extend widely and product responsiveness is key to preserving these. We have the utmost respect for our end client and view ourselves as strategic business partners to the taxi industry at large. We also have passionate and dedicated staff that are empowered to be solutions-oriented.

A delightful customer experience is non-negotiable and we’re constantly refining our processes and product to maintain effectiveness. Our primary objective is to minimise business interruption to the taxi owners, in this instance.

We have been careful not to adopt “a one size fits all approach. So, we do have areas of risk in which we would prefer to be a little more involved as this is beneficial to taxi owners. High-risk areas are avoidable, though not ignored. Our primary differentiation lies in our customer service, our intimate knowledge of what we do, and more importantly, to respond with products, specifically geared to the industry itself, both for the bus sector and taxi. We make every effort to always remain professional and consistent. Predictability is key in this business.

COVER:  Then finally, when it comes to distribution, and brokers, is there still space for the broker in the commercial carrying vehicle environment? And if so, how do they get to play there and expand the business into that segment?

Rajen: I think it’s all about customer service. This market commands face-to-face interaction and personal touch. It is my view, that this engagement model will persist for a long time, given the hand-holding and customer care required.

We work closely with our brokers, supporting them to expand in this space. We value collaboration for product co-creation/enhancements, always on the lookout for service improvement at every juncture. This is why we so dearly value our relationship with our underwriter, Constantia Insurance Company as well. Our ethos and philosophy are clearly aligned.

For brokers getting into the space, you must really be in tune with your client, you have to handhold a lot. There’s undoubtedly a lot of manual work, specifically from a customer engagement perspective and which is unlikely to go away anytime soon. Relationship management is fundamentally important.