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.”
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.