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.

Main competition
According to Williams, the main competition lies within the medium-sized hauliers.

“The difficult area currently is that middle ground where competition seems to have increased tremendously in recent times, although we are still seeing successes in this segment as well,” he said.

“Small hauliers can be dealt with competitively on our various package style policies and the volume we have lets us underwrite this well. At the top end, while at times there is stupid competition we find we are able to build a good longer term relationship and work together with the broker and client on risk management measures that will improve the risk and lower the premium for the customer.”

“There are also challenges where people who don’t know what they are doing are dipping in and out of the market and at times quoting unsustainable rates to get a foothold,” Williams said.

“Though, as we have seen in the past, this more often than not will lead to losses and a u-turn in a couple of years’ time.”

According to Green, the main challenge “is having clients that understand the issues and don’t want to revert to just the cheapest [cover]”.

“Brokers who are able to show carriers leadership qualities in managing risks such as fatigue management, dealing with driving distractions, vehicle quality, use of telematics and training are best placed to meet the insurance needs of their customers.”

There is also the difficulty of finding consistency in this market. “You try to support a market that might one year be chasing down gross written premium aggressively and then the following year they want double figure rate increases on loss ratios of 50% to 60%, “ Green said. “Loyalty is a real issue – both ways.”