Where the rubber hits the road…
“Scale is not always best when dealing with motor fleet insurance because your broker or insurance agent needs to be nimble, accessible and personable,” says transport and logistics insurance broker Eamon O’Connor.
The founding director of specialist transport and trucking insurance brokerage O’Connor Warren says competition within the heavy motor segment has been heating up for around 18 months, and the arrival of start-up Ando Insurance Group has given the market a further shake-up.
“The commercial motor insurance market is more price competitive today than we have seen for a very long time, possibly even in 20 years,” says O’Connor.
“We see value as being a specialist in our field because transport customers need to align themselves with an insurance broker that not only offers good supporting services but has a core understanding of how to efficiently manage a heavy motor claim,” he says.
“It’s important that transport and trucking clients take the time to understand the value added from a broker, particularly when making a claim or seeking to renew a policy,” says Eamon.
“It’s important to weigh up the value, service and industry knowledge your current insurance provider offers before looking at a cheaper quote from another, and also to question what that product will deliver,” he says.
“There are very few Kiwi-owned insurance broking houses left operating in New Zealand,” says O’Connor.
“We continue to see the retirement of older broking directors and the subsequent sale and acquisition of their businesses into the international broking models,” he says.
“There is no doubt that this ongoing market trend leaves us as an attractive proposition for the insurance buyer.”
Managing sustainable premiums
O’Connor says that brokers do have a responsibility to help their clients to manage insurance premiums at a sustainable level.
But he warns that competitively priced premiums currently offered by some policies and providers may not be viable in the long term.
O’Connor also issues a note of caution around the new health and safety legislation which hit the market on April 4, as this will also affect the price of insurance premiums for transport operators in the future.
“We are acutely aware of the increased risks, and potential claims that will now be realised, given the greater responsibilities and liabilities to fall upon owners and directors of large and small businesses across all segments of the market,” he says.
“There is explicit responsibility under the new legislation on transport industry managers, company directors, and sub-contractors to manage risk and safety of their workers,” says O’Connor.
In preparation, months before the impending law change, the O’Connor Warren specialist team found itself carefully reviewing each client’s requirements and levels of cover.
“We are mostly recommending increases to the degree of insurance cover previously held by our customers,” says O’Connor.
“In regards to premium charges, we are carefully monitoring how insurers price their policies applicable to health and safety risks while ensuring the best possible coverage and terms, are provided to our customers and prospective customers,” he says.
“When in doubt, disclose it.”
O’Connor also recommends when completing a new insurance application or renewing a policy, that transport clients disclose all relevant information to an insurance company.
The simple rule of “when in doubt, disclose it,” is one he continually advises his customers to follow.
“Always answer all the questions on the insurance application in full, and ask your broker for clarification if you don’t understand any questions the insurance company is asking,” says O’Connor.
“Don’t guess randomly, as you may end not telling your insurance company something it needs to know,” he says.
“Even if you think something doesn’t matter, it more than likely does,” says O’Connor.
“You have a duty to disclose all information that may affect the acceptance of the insurance whether or not the insurer is asking a particular question,” he says.
This disclosure obligation will include any previous losses suffered and claimed against, any criminal convictions past or pending, any traffic offences past or present, including infringement fines, and non-driving related charges, and any vehicle modifications that are not following the vehicle’s original specifications.
O’Connor says disclosure at policy renewal time is of particular importance because the customer is obliged to disclose anything that has happened in the preceding period which may affect the insurance cover.
He says that as an example, a person with a previously ‘clean’ record may be convicted for drink driving or another criminal charge, or a vehicle may have been changed or modified in some manner.
According to O’Connor, all members of the insurance council will include a statement with their renewal notices that reminds customers of this obligation.