As the insurance industry evolves and customer expectations change, insurers and brokers are no longer just product vendors. Both are increasingly stepping up to take an active role in managing the risks of their clients – even if that means a lower premium, and ultimately less profit.
One industry where this has been clearly demonstrated is commercial motor insurance – a significant book of business for most insurers, and also one where the risks can be the most frequent and serious. New Zealand’s biggest insurer, NZI, recently gathered with a number of industry participants at the RTA Conference, where speakers discussed the risks commercial transport businesses face on a day-to-day basis, and how businesses can utilise the latest technology to stay on top of compliance and risk management.
“NZI and Lumley have a large book of vehicle insurance policies, particularly in the heavier end of the market,” Ian Taylor, manager – commercial motor at NZI told Insurance Business.
“We don’t just want to take the premium and pay the claims either; we’ve got risk managers who go out and help clients with their business risk, and that’s not just about us trying to keep claims costs down. It’s just the right thing to do, and it’s also a great way to retain loyal customers.”
“Brokers are also recognising that they have to become more involved in the risk side of things, and they can no longer just be the arrangers of insurance,” he continued. “For a lot of brokers, that’s part of the appeal of working with us – they don’t have to be experts in transport risk, they just have to know that we are.”
NZI currently has four fleet risk managers on its team, and it has been offering the risk management service with its policies for over 20 years. Taylor says the demand for the service is noticeably increasing, especially since the New Zealand Transport Agency started to come down hard on businesses that are not compliant with the latest standards.
“In terms of compliance and risk management, the problem for a lot of businesses is that they just don’t know where to start,” Taylor said.
“We ourselves can help with things like best recruitment, training and driver monitoring practices. These things are important because, ultimately, very few accidents are down to technical incompetence – it’s usually a distraction or a fatigue issue, or down to another driver on the road.
“Motor insurance pricing is also very much based on individual risk, so if we can help customers get their risk down and lower their premium, then that’s what we’ll do.”
When it comes to businesses managing their own level of cover, Taylor says looking at things like sum insured and reviewing them on a regular basis is vital. Technology also plays a huge role in overall risk management, and NZI policyholders who install systems developed by companies like EROAD can potentially have their excesses waived in case of an accident.
EROAD sales manager Guy Hocquard, who also spoke at the RTA Conference, emphasised the importance of commercial motor businesses facing compliance head-on, and embracing new technology as a crucial support system to handle the admin and procedural work that it throws up.
“Compliance today is not just about ticking boxes and having all the necessary documents,” Hocquard said. “Auditors can now come into your business, interview your staff and get a sense of what your actual business culture is like, and whether you’re living the disciplines and procedures that you have in place.”
“Something like an audit can be a scary thing for some, and less so for others who might self-audit and see it as a journey to zero,” Hocquard continued. “And culture aside, you need to build up the evidence library – because if you can’t prove it, you didn’t do it.
“To do this efficiently, you need to embrace technology and look at opportunities to make that part of the process.”
Hocquard says that businesses should be looking at things like online training opportunities, driving simulators and peer reviews, and also systems that can be installed inside vehicles to provide accurate, real-time records of things like speed.
“We’ve found that drivers with technology in their vehicles which helps them be safe in real-time is far more effective than filing reports at the end of the month,” he explained. “The key message is that everyone needs to go home safely, and the processes and the culture in businesses need to support that.”
