Curtis Davey, Divisional Director at Natsure Underwriting Managers
The world of heavy commercial vehicles (HCV) and goods in transit (GIT) insurance is a vital yet often misunderstood aspect of the insurance industry.
It plays a crucial role in ensuring the smooth functioning of transportation and logistics, which are the lifeblood of many economies. Over the years, the industry has seen significant changes, and as someone deeply involved in this sector, I’d like to shed some light on the current trends, challenges, and opportunities within this fascinating field.
The evolving landscape of heavy commercial vehicle and goods in transit insurance
Over the past two decades, the transportation industry has undergone tremendous growth and transformation, primarily due to infrastructure limitations in alternative transport methods such as rail. The result has been an increase in demand for HCVs to move goods across long distances, making GIT insurance a crucial aspect of the industry. One of the most significant changes I’ve observed is the growing emphasis on risk management within the fleet owners’ operations.
In the past, fleet owners often neglected risk management strategies, and if they faced problems with their insurance, they would simply switch to another insurer. However, this approach has evolved. Nowadays, insurers have tightened their criteria, making it harder for insureds to jump from one provider to another without addressing underlying issues. As a result, fleet owners have started to implement robust risk management measures, such as telematics, cameras, and other technologies, to improve their operations and reduce potential losses.
This shift towards greater risk management has had a profound impact on how we, as underwriters, assess and price insurance for HCVs and goods in transit. We no longer rely solely on a proposal form or a simple assessment of loss ratios, as was common in the past. Instead, we take a much more comprehensive approach.
We now examine how fleet owners manage their operations, including how they train their drivers, monitor fatigue levels, and maintain their vehicles. Additionally, we assess the technology they have in place—telematics systems, tracking devices, and onboard cameras—to gain a deeper understanding of their risk profile. These tools provide valuable insights into driver behavior, vehicle usage, and potential risks, allowing us to offer more tailored pricing and coverage options.
Moreover, we pay close attention to the type of vehicles in a fleet and the availability of spare parts. For example, if a fleet relies on imported vehicles with limited access to replacement parts, this can significantly drive up the cost of repairs and claims. By taking these factors into account, we can ensure that we provide appropriate coverage that reflects the actual risk exposure.
Assessing Full Value and Claims
When it comes to determining the value of a loss in the event of an accident or claim, we rely on a combination of documentation and technology. For GIT insurance, we use load limits specified by the insured to determine the maximum value covered during transit. In the event of a claim, waybills, loading weights, and other documentation help us verify the actual value of the goods at the time of the loss.
For HCVs and trailers, we determine the value based on retail values from trusted sources such as TransUnion. This approach ensures that we accurately assess the value of the vehicle or goods being transported and provide fair compensation in the event of a loss.
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The Rising Challenge of Looting and Security Risks
One of the most pressing challenges facing truckers today is the risk of looting, especially when trucks are involved in accidents or breakdowns near residential areas or informal settlements. It’s a distressing reality that, once a vehicle has been compromised, looting can occur within minutes, resulting in significant losses.
The lack of security on the roads makes it difficult for fleet owners to protect their cargo, and in many cases, drivers are left to fend for themselves. This situation is far from ideal, as it exposes drivers to potential harm and increases the likelihood of complete loss of goods. While tracking systems and telematics can help monitor routes and alert fleet managers of deviations, they are not always enough to prevent looting once an incident occurs.
Given the limitations of our current security infrastructure, fleet owners must be proactive in managing their risks. This includes using technology to create safer routes that avoid high-risk areas and employing real-time monitoring systems to track their vehicles’ movements. Unfortunately, even with these measures in place, looting remains a significant challenge that the industry must continue to address.
The Vital Role of Brokers
Brokers play a crucial role in the value chain of HCV and GIT insurance, acting as the primary point of contact between insurers and fleet owners. They add value by educating clients about the various risk mitigation strategies and insurance options available to them. A knowledgeable broker can make a significant difference in helping a fleet owner implement effective risk management measures, such as installing cameras or telematics systems to monitor driver behavior.
Brokers also serve as an essential link in communicating with fleet owners about the importance of these measures. By providing clients with insights into driver behavior—such as speeding, harsh braking, or excessive cornering—they can help fleet owners identify and address potential risks before they result in costly claims. This proactive approach not only helps clients manage their risks but also supports insurers in maintaining more sustainable loss ratios.
Despite the challenges, there is still ample opportunity for growth in the HCV and GIT insurance industry. With the rail infrastructure struggling to keep up with demand, the reliance on road transportation will continue to increase. This creates opportunities for insurers, brokers, and fleet owners alike to expand their operations and explore new ways to manage risks.
We are seeing a surge of new entrants in the industry, many of whom are securing business from larger contractors. This dynamic environment offers brokers a chance to develop new relationships, offer value-added services, and help clients navigate the complexities of risk management in the trucking and goods in transit space.
The heavy commercial vehicle and goods in transit insurance industry is an ever-evolving landscape filled with challenges and opportunities. As fleet owners become more sophisticated in their risk management strategies, and as brokers continue to play a vital role in guiding their clients, the industry is poised for growth and innovation.
At Natsure Underwriting Managers, we remain committed to adapting to these changes, offering comprehensive solutions, and working closely with brokers and clients to ensure they are well-protected in an increasingly complex world. By staying ahead of emerging trends, implementing effective risk management strategies, and embracing technology, we can continue to thrive in this dynamic and essential sector of the insurance industry.