Transport and trucking insurance brokerage O’Connor Warren says several “material trends” in the heavy motor insurance space over recent months have led to some cost declines.
This includes more businesses electing to use fleet risk management tools such as driver monitoring systems which are beginning to reap the rewards of the investments.
O’Connor Warren senior account executive Isaac Mutu says operators are starting to see some competitive pricing on such technology as insurers compete for business. “Ultimately this is resulting in some operators seeing reductions in insurance spend for the first time in a number of years,” he says.
Some insurers are also electing to dispense altogether with “Single Vehicle Accident Excesses” known otherwise as “roll over excesses.”
Mutu says this has been a trend adopted by one of the largest general motor insurers in the market, but it comes with a word of caution. “The removal of these ‘roll over excesses’ is often being offset by an increase in annual insurance premium cost.“The need for analysis of operational risk such as geographic location and associated population density, freight type, and employee make-up and stability has never been more important.
“Insurance plays a critical part in securing not only your physical assets in the event of a loss, but also your liability associated with operating those assets.
“Engagement with you broker or intermediary is as important as ever,” Mutu says. In the asset finance space, particularly with respect to non-bank lenders, there’s been sustained new sales activity, with truck manufacturers and resellers setting new vehicle order records over the past 12 months. To manage this demand, lenders in both the intermediated and direct sales channels are providing competitive financing rates to operators with healthy balance sheets and evidenced, sustainable growth strategies.
On the flipside of the financing equation, transport operators with large lending exposures are starting to see lenders retain full sales proceeds of end of economic life vehicles or used trade sales, Mutu says.
“Historically, these sales proceeds will have been retained by the borrower with the intention of re-investing into new plant purchases. “However, lenders are currently paying particular attention to total portfolio exposures with a view to reducing their client’s debt-to-equity ratios.
“Just because you no longer owe anything on a particular individual unit, do not expect to be able to retain those sales proceeds by default if you have additional units with lending still attached to them,” he says.