Delta NZ sets new standard for commercial motor

"We are targeting where we think we can add the most value to the market."

Delta NZ sets new standard for commercial motor

Motor & Fleet

By Bennett Richardson

This article was produced in partnership with Delta Insurance New Zealand

Michael Hookham has specialised in commercial motor insurance in New Zealand for over a decade and considered it as being rife with opportunity to meet a changing market.

“It is not often that there is an opportunity to have a clean slate to develop your product and policy coverage,” he recently told Insurance Business New Zealand.

So, when he took up a position as head of a new commercial motor division at Delta Insurance last year, he decided the time was right to for a rev up.

“We do things a little differently at Delta, and that’s certainly the case with our CMV offering. Rather than taking an existing product and trying to modify it for a changing market, we've developed Delta’s Commercial Motor policy from the ground up, specifically for the current market, whilst considering the future needs of our clients as the motor market continues to change and evolve.”

Solutions designed for modern problems in commercial motor

Many of the features listed on the policy fact sheet for the new commercial product are to cater for emerging risks that are rapidly changing the current motor vehicle insurance landscape.

Autonomous vehicles, EVs, hydrogen vehicles, loss of property in transit, coverage if you accidentally fill a car with diesel exhaust fluid at the pump, and more are all explicitly covered under Delta, giving customers confidence and certainty making it a simple process at claims time.

Designing the Delta commercial motor policy from scratch has allowed the specialist insurer to cover these emerging risks.

Cover for third party liability is a standard $20m, reflecting clients’ needs for this level of cover to enter into everyday contracts to operate their vehicles when undertaking their business operations.

Under the hood

Another problem that the Delta commercial motor policy solves is the phenomenon of having to use a range of different policies for a single exposure. Hookham uses the example of damage to a mobile dental unit, which typically involves using a mix of a Material Damage exposure along with Business Interruption policy as well as a Motor policy with a loss of use extension.

“We will write that as a complete unit as a motor vehicle, and you can trigger your business interruption policy as a loss of profits extension under the motor risk.”

This keeps it simple for the customer and the broker, and speeds up the claims process, allowing the vehicle to be back into use much faster, which has knock on effect in terms of reducing business costs and future premiums.

“What we’ve tried to do is make sure that, where possible, you can bundle your cover into a motor product, which will mean that you've got consistency around cover, basis of settlement and excess that you might not have if you split that out between multiple products.”

The Delta policy also covers types of vehicles that might not be captured by other commercial motor policies. It has been designed to take into account the much broader diversity of vehicle types being used in New Zealand today compared to when many commercial motor policies were first drafted.

“There are more specialist vehicles on the road – many are purpose built for specific industry use”.

Plant machinery is also now quite often used as a ‘vehicle’ rather than being considered pure plant and would fall under commercial motor in such a case.

“Customer needs are changing around how vehicles are being used - our motor policy can now capture that,” said Hookham.

These types of specialist vehicles are also more complex in terms of repairs, a reality that traditional commercial motor policies have struggled to adapt to in terms of both supply chain and labour costs.  

“Repair costs and customer needs around how they operate their business are being driven a lot by [increasingly complex] vehicle technology.”

A local service designed for NZ

The Delta commercial motor team has over two decades of experience in the area and are based in New Zealand, meaning that if a customer needs assistance, they can get it in the same time zone.

Another unique feature of the Delta offering is a focus on customer service and direct contact from a 100% local company. “That extends from underwriting to claims: we don’t hand claims to a third party, so our brokers and insured parties deal with people they know, all of whom are part of the Delta team.” 

The claims handler and the underwriter sit in the same office meaning that information sharing happens with an exchange across a desk or stroll across the room rather than an email to an overseas manager.

Into the fast lane

Delta has entered the market with a focus on customers with large fleets. “We feel the customers that will benefit the most from the Delta CMV product are going to be your larger corporate fleets,” said Hookham.

This is partly because Delta has decided to operate outside of ‘knock-for-knock’ agreements whereby insurers in a motor accident agree to pay the losses sustained by its own policyholder regardless of who was responsible. These agreements are designed to save on administrative costs but may not reward clients who have invested in risk management or have higher than average fleet values.

Customers with large fleets generally have strong safety records for driving and maintenance as well as comprehensive training programs for drivers.

“We feel that having an offering in the market that sits outside of the ‘knock-for-knock’ can benefit these customers,” said Hookham.

Delta Insurance New Zealand CEO Andrew Beaton says the company is on a rapid growth trajectory not only domestically, but in Australia, and across Asia also.

“We’re providing insurance solutions that the market wants, constantly seeking out new opportunities to help people do business better. Our CMV policy helps the growing number of operators of unusual or specialised fleets to get the cover they need to conduct worry-free business,” he said.

Delta was established in 2014 to answer the call for insurance in new or specialised areas, with exceptional customer service - all underpinned by transparency and integrity. Today we cover over 30,000 risks in New Zealand, Singapore and Australia and are proud to have won ANZIIF’s Insurance Underwriting Agency of the Year award for the last five years for our continued focus on customers. As well as resolving claims we focus on prevention using a range of risk mitigation strategies, partnerships and solutions.

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