In Depth: Haulage - a market in flux

The haulage industry poses many challenges to insurers, including a high volume of claims and a competitive rating environment.

 

Williams added Axa’s “strong internal risk management team” was important for this book of business.

In addition to a high inflation of personal injury claims, there are also cases where people have caused accidents and produced fraudulent claims, QBE’s director of motor Roger Ball said.

Tackling fraudulent personal claims is a major issue for the industry, but advances have been through fraudulent dishonesty rulings and the insurance fraud taskforce report.

“The challenge is the cost of larger claims,” Jonathan Dye, head of motor insurance at Allianz Commercial said.

“These include claims involving pedestrians, cyclists and motorcyclists with
life-threatening injuries. The size of vehicles in the haulage industry means there is a larger susceptibility to these claims.” Dye added.

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According to Green, the potential for larges losses to insurers operating in the haulage space is “substantial”.

“Haulage has an issue in that insurers want to avoid attritional claims. It’s expensive to service and often viewed as pound swapping,” he said.

“Rating is highly competitive at the current time for the better risks, the larger ones are written on a burning cost basis and vary greatly so it is difficult to talk about rate movements generally,” Williams said.

Ball said rates are firming due to the rise in personal injury claims. He said it’s “arguable” where inflation stands but the general impression is anywhere between 5% and 10%.

Green said the rating environment is particularly “tough for fleet”.

“Insurers are taking a tough line on renewal pricing and double figure rate increases are becoming the norm on even business with few claims,” he  commented.

Green said clients with losses are facing rate increases of 25% and more.
However, there is more than just a direct correlation between the rise in claims to the inflation of rates.

“From a motor perspective the frequency of claims worries insurers but it is the potential for bodily injury and especially serious injury that a number of insurers feel is inadequately provided for in general rating.”