The road ahead

The road ahead | Insurance Business

The road ahead

For many  in  the  motor  insurance  space,  2020  was  the  year  in  which  working  from  home  became  the  norm.  For  their  clients,  however, this certainly wasn’t the case.

“Overall,  road  usage  decreased  since  a  majority  of  Australians  stayed  at  home,”  says  Tony  Dodd,  CEO  of  GT  Insurance.  “Road  freight transport during the pandemic, on the other hand, was relatively unaffected last year from a workload point of view.”

Dodd   sees   2021   as   a   year   in   which   “increased  use  of  our  roads  will  present  diverse  business  opportunities.  Government  infrastructure  will  ensure  that  the  roads  are  kept busy, while the return of tourism will see demand grow in these areas.”

For  Nick  Dendrinos,  head  of  the  motor  portfolio at NTI, one of the unexpected effects of COVID-19 was on vehicle ownership.

“We’ve found that since some people don’t necessarily  want  to  catch  public  transport,  car  ownership  has  increased  in  Australia,  even  as  road  use  has  decreased,”  he  says.  “As  SMEs  continue  to  diversify  their  businesses  and  offer  goods  and  services  online,  we’re  also  seeing  an  increased  number  of  lighter  rigid  trucks  in  urban  and  suburban  areas.  It’s  been  largely  driven  by  a  switch  to  online  shopping  and  parcel  delivery  –  people  are  wanting to stay home, while SMEs and larger retailers  are  looking  for  ways  to  keep  their  own businesses sustainable.” 

The evolution of rideshare insurance

Though  it’s  only  been  around  for  a  few  years  at this point, rideshare insurance is becoming an  essential  product  in  today’s  on-demand  economy.  The  dip  in  rideshare  usage  in  2020  is  unlikely  to  be  a  consistent  trend,  and  as  companies  such  as  Uber  and  DiDi  diversify  their  portfolio  of  services,  more  drivers  will  need to be protected. 

“The  [sharing]  economy  is  a  growing  industry,”  Dodd  says.  “It  has  evolved  signif-icantly  over  the  past  decade  to  become  a  trusted  industry  with  Australian  consumers,  and this evolution has presented many unique business  arrangements  as  asset  owners  look  to leverage the use of their assets.”

Among  its  products  and  services,  GT  Insurance  o  ers  a  form  of  rideshare  insur-ance  specifi  cally  designed  to  cover  the  needs  of  drivers.  Dodd  believes  this  makes  the  company  “well  suited  to  continue  to  support  the rideshare segment by taking the initiative in  our  approach  and  staying  adaptable  in  a  versatile industry”.

Looking forward, the addition of food and parcel  delivery  services  to  the  gig  economy  is  something  NTI  sees  as  an  area  of  growth,  Dendrinos says.

“Something  like  Amazon  Flex,  which  allows  people  to  use  their  own  vehicles  to  pick  up  and  deliver  Amazon  packages,  is  defi  nitely  a  point  of  focus  for  NTI,”  he  says.  “It’s  e  ectively  a  type  of  rideshare  service  for  transport  and  logistics,  and  it  could  be  disruptive  to  the  industry,  particularly  in  the  light  parcel  space.  From  an  insurance  standpoint,  we  need  to  think  about  how  we  can craft a product to cater for these types of emerging, non-traditional risks.”

Combating driver fatigue

It’s  no  secret  that  best  practice  in  motor  insurance  requires  staying  up  to  date  with  technological  developments,  particularly  if  they  have  the  potential  to  improve  driver  safety and reduce claims frequency. One way Dendrinos  cautions  against  thinking  of  it  as  a panacea. “

Companies  that  have  utilised  this  tech-nology  shouldn’t  consider  it  to  be  a  silver  bullet,”  he  says.  “But  if  they’ve  employed  it  alongside  a  really  good  safety  and  risk  management  program,  those  two  things  together  can  absolutely  work  to  reduce  the  rate of fatigue-related events.”

For  Dodd,  the  rapid  pace  at  which  auto-mated  and  intuitive  driving  technologies  are  progressing  is  a  development  that  GT  Insurance  welcomes  through  its  customer-centric approach.“

Distraction and fatigue, along with incor-rect  speed,  are  the  major  causes  of  incidents that   have   facial   recognition   technology   installed in their vehicles.”

Dendrinos  concurs  with  Dodd  on  the  benefi  ts  of  these  driver-assisting  technolo-gies.  “For  heavy  and  even  light  vehicles,  it  could  become  a  standard  part  of  the  equip-ment as we move forward,” he says. “Though truck  driving  is  essential  to  keeping  many  parts  of  the  Australian  economy  moving,  it  can be a dangerous industry at certain times. Making sure that your fl eet’s drivers feel safe is of paramount importance.”

A changing climate

Though  the  integration  of  technological  innovations  is  helping  motor  insurers  lower their  clients’  accident  risk  profi  les,  changes  in  climate  and  associated  weather  patterns  are having a dramatic e ect on motor insur-ance  premiums.  Both  Dodd  and  Dendrinos agree that weather events such as hailstorms, fl  oods  and  cyclones  have  caused  widespread  damage   and   affected   motor   insurance   premiums,  so  brokers  need  to  ensure  their  clients  are  properly  covered  to  mitigate  the  e ects of these events.

“Motor  insurance  is  highly  susceptible  to  extreme  weather  events,”  Dodd  says.  “In  my  opinion,  the  increased  frequency  of  these  events,  and  the  damage  that  they  cause,  will put pressure on the sustainability of the premium  pool.  This  will  see  some  increase  across  the  board  in  the  catastrophe  allow-ance to ensure long-term viability.”

Dendrinos points to the fact that supposed once-in-a-generation  natural  disasters  are  happening  more  often  than  ever.  “We  need  to be thinking about these weather risks and incorporating  them  into  our  loss  models  to  ensure  that  motor  insurance  remains  a  sustainable industry,” he says.

Given  the  frequency  of  claims  in  the motor  insurance  sector,  Dodd  says  brokers  should look for an insurer that, above all else, provides  products  that  can  help  minimise  their clients’ risk.

“We  recognise  insurance  brokers  as  our  customers,  and  part  of  this  process  is  to  ensure  we  provide  fl  exibility  with  regard  to  policy  and  claims  processes,”  he  says.  “We  need  to  be  trustworthy  and  fair  in  all  our  dealings  and  should  be  o  ering  access  to  staff  who  are  responsive  and  knowledge-able.  Of  course,  providing  value  for  money  is  an  important  part  of  the  conversation  –  you  don’t  need  to  be  the  cheapest,  but  you  should  be  offering  a  great  product  at  a  reasonable price.

”NTI’s  value  proposition  to  brokers  and  their clients is centred on its specialist nature, according  to  Dendrinos.  “We’re  all  about  moving  the  Australian  industry  towards  a  safer, more sustainable future,” he says. “We’re specialists  in  the  fi  eld  –  transport,  logistics,  and  mobile  plant  and  equipment  insurance  are all part of our DNA.”

 

ABOUT NTI
With more than 45 years of experience in the insurance industry, NTI is the company you can count on to protect your transport and logistics assets. Our award-winning combination of tailored products and services, experienced people, accredited repair and recovery networks, and industry advocacy have seen us become Australia’s leading specialist insurer, recognised as a leader in our fi eld. Yet insurance is just a piece of paper – a promise. It’s not until you really need us that you understand our point of di  erence. For more information, visit nti.com.au.


ABOUT GT INSURANCE
Founded in 1996 as Global Motor Underwriting Agency, GT Insurance’s founding directors wanted to use their experience and knowledge to establish an underwriting agency that could truly understand and address industry-specifi c brokering needs. They sought to build an underwriting agency able to provide a personal and profi cient service that would result in a successful outcome for both the broker and the client. In 2006, Allianz expanded its interest in GT Insurance from being the insurer of our products to also being a major shareholder in our business. This partnership formed the beginning of a much stronger company, better able to serve the needs of the transport industry. That company is the GT Insurance that exists and continues to expand today.For more information, visit gtins.com.au.