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.

Self-insurance
Another challenge is the trend of some choosing to self-insure in this industry, as a result of factors such as the rise in insurance premium tax, according to Ball. In the spring budget on 16 March, Chancellor of the Exchequer George Osborne announced a further 0.5% increase in IPT effective from 1 October.

The Brexit referendum will also have some impact, particularly if the UK votes to leave the EU, according to Ball, as the haulage industry employs a considerable number of drivers in Europe.

However, some insurers, such as AIG, prefer the majority of their haulage business to be in the UK rather than abroad.

But, despite the numerous challenges insurers face in what is a hugely competitive market, haulage does remain an attractive and growing business to be involved in.

Aon Affinity sector lead for transportation Paul Wakeford said: “Aon has seen strong growth in this sector in recent times through understanding and reacting to the challenges faced by the industry.

“Reputational risk continues to be a priority of our clients, and indeed our clients’ clients, along with driver shortages and the economic landscape.”

“The attractions are a large industry we know well which seems to be doing well coming out of recession with good growth opportunities,” Williams said.

However, Williams warned that “only insurers that understand and invest in proper risk management resources will be successful and still be in the market in a few years’ time”.

“For those that do it properly, yes it will be a good and growing sector. There will also be casualties, however, and those just looking to rapidly put in premium will probably end up with egg on their face. Insurers also need to really understand the market and look at the longer term and be ready for some quite dramatic changes in years to come.”

Insurers faced similar issues with the construction industry a few years ago, but the industry has since slowly become a more attractive and growing area.

So, is haulage the new construction? “Some insurers view the market as that,” Green said.