Industry performance will impact premiums

Friday, July 28, 2017



Interview with Ian Taylor, national manager commercial motor, NZI

News that motor vehicle insurance premiums are set to rise has everyone scrabbling to minimise the cost of insuring their vehicles.

NZI national manager commercial motor Ian Taylor says over the past two years the industry has experienced a considerable increase in motor vehicle claims costs, and premiums no longer reflected the risks insured.

“The price our customers pay for their insurance needs to accurately reflect the cost to provide them with cover,” he says.

Taylor says rather than a blanket increase across the board, the increases in commercial motor insurance would target different segments of the market according to the claims they made. He says fleet premiums would reflect the individual company’s claim results, something that was particularly true for the larger fleets.

Some of the key factors affecting costs are more vehicles on the roads – and more newer vehicles too – increasing complexity and technology in those vehicles and higher costs to repair, an increasing complexity in paint colours and effects, increased labour costs and a shortage of skills, and an increasing requirement for vehicles to return to authorised dealers for fault code resetting.

“Technology in vehicles continues to advance at a rapid rate, with electronics currently accounting for a quarter of a vehicle’s value,” says Taylor. “This is estimated to soon reach 40%.”

Taylor says anecdotally NZI had also experienced increased claims costs as a result of the shortage of drivers available to transport customers, which could mean operators had been forced to lower their recruiting standards in order to keep vehicles moving.

Although nothing can be done to stop insurance costs rising, Taylor says commercial fleet operators could reduce their premiums over time by sustainably reducing the frequency and/or severity of their claims.

“This may be achieved by better monitoring and training of drivers, managing fatigue issues, and improving the risk awareness and safety culture of an organisation.”

Taylor says research and data showed that fatigue is one of the leading factors in road accidents in New Zealand today.

“In 2015 fatigue was a factor in 43 fatal crashes, 119 serious injury crashes, and 45 minor injury crashes, at a total social cost of $363 million. According to the Ministry of Transport Report on Diverted Attention 2016, for every 100 drivers who died in road crashes involving fatigue, 21 passengers and 28 other road users died with them.

“We provide a fleet risk management service where our consultants can analyse a company’s performance and make recommendations as to how they can reduce their risk. NZI’s Fleet Risk Management Programme supports customers with driver performance, efficiency, and crash management to help customers perform better and be safer on and off the road.”

Taylor says one of the innovative programmes they offer uses the Guardian System’s lifesaving technology to prevent accidents caused by driver fatigue and distraction, and qualifying NZI or Lumley customers could take advantage of a free trial to see how Guardian works for them.

The Guardian System is fitted into the cab of the truck and has a camera that operates in real-time, 24/7. It monitors facial and eye movement to determine whether a driver is distracted or falling asleep at the wheel. If this occurs, a wake-up call is activated with a seat vibration and alarm that simultaneously notifies a dedicated call centre. The transport company is then notified that their driver has had an incident, so they can take appropriate action.

Visit NZI’s website for more information https://nzifleetfit.co.nz/