Commercial fleets are big business for car sellers in Australia. According to VFACTS, a whopping 52% of new car purchases during 2017 were accounted for by business, government and rental buyers. Accordingly, commercial fleets also represent big business for insurance companies. It’s an area that presents its own set of unique challenges for brokers and providers alike, but nonetheless provides a valuable service to businesses all over Australia.
“We are seeing a flight towards quality across the fleet insurance market,” says John Hill, national underwriting manager for heavy motor at NTI. “Businesses are looking to their insurance representatives to provide advice on how to best protect their operations as a whole.”
Fleet insurance is constantly evolving as providers aim to better meet the needs of consumers. Recent examples of this evolution include new-for-old replacement, expediting expenses and driver repatriation.
“Price is still very important, but overall value for money has become more important,” says Tony Dodd, general manager of sales and distribution at GT Insurance. “Additional services outside of the traditional products, such as risk management, client engagement and flexible claims solutions, are being given increased importance.”
In some cases, policies even cover funeral expenses and trauma counselling services for drivers, family and staff following an accident. These are services that go well above and beyond the simple “repair and replace” policy that had previously dominated the market.
Steve Hamilton, general manager of client services for Fleetsure, cites four main factors brokers should consider when selecting a commercial fleet insurance provider.
“Consistency in pricing, depth of coverage, quality of security, and the level and speed of service are crucial when selecting an insurer,” he says.
Additionally, significant legislation changes will be occurring in the next few months that will have a substantial impact on commercial fleet insurers and customers alike. As noted on the National Heavy Vehicle Regulator’s website: “On 1 October 2018, the Heavy Vehicle National Law [HVNL] will be amended to provide that every party in the heavy vehicle transport supply chain has a duty to ensure the safety of their transport activities.”
For HVNL-participating jurisdictions, these legal reforms will significantly broaden the scope of who is considered part of the transport industry and what responsibilities they need to manage. This will likely result in significant concern from consignors about how they select transport service providers. However, there is an opportunity for fleets to leverage current and past investments in safety to gain an advantage when competing for work.
The reforms will also likely necessitate considerably more communication between parties in the transport industry. Fleet operators will need to consider how they gather information around risk management and compliance from employees and subcontractors. It will also change how they respond to safety-related issues and how they communicate them to their customers.
Most importantly, the new legislation will establish a positive obligation across the industry to mitigate public risk much more effectively. Ultimately, it will bring about a safer industry with more accountability and more responsible clients taking an active approach.
Aside from these legislative changes, the industry will also continue to adapt, driven both by client needs and external market forces. Broadly speaking, pricing will rise; modern vehicles are simply more expensive to repair. Occupations with a higher claims frequency will require innovative and nimble programs to manage their risk profiles. Congestion in the capital cities, along with driver shortages, will also continue to be a challenge for business owners.
“Ultimately,” Hill says, “these technologies will become more common and should lead to improved safety outcomes on the road.”
