Feb

Urgent need to work together

2011-02-24 18:31
Bad road conditions are adding to the maintenance costs of operators and to the claims costs of insurers. They have a major influence on accident frequencies.

I would like to sincerely thank the participants who have contributed to this debate. I mention ‘˜debate’ because it seems obvious to me that there are no hard, fast and industry standard answers to our questions. There are no ‘˜definites’ that apply across the entire insurance industry, says Patrick O’Leary…

I think one of the most pertinent statements is made by Elaine Britz, LLB, of MLS Insurance Brokers when she says: “The only way to resolve the problem of unroadworthy vehicles is if all the roleplayers in the industry – the insurance company, the owner and the broker – all work together to find a positive solution. At the moment, most of the responsibility lies with the owner of the vehicle and very little with the insurance companies. We need to create a more balanced environment in which everyone can benefit.’

I would take that one step further and say it is perhaps time that all players from all three parties got together in one big room for an ‘˜indaba’ to find common ground on a number of issues and actions which could be implemented on a national basis to improve matters out there. I am not a big one on talk shops preferring to leave that favourite past-time to government agencies. But in this case, FleetWatch is all for it. Yes, I know this is a highly competitive industry sector and that companies do not swop notes. But surely the time has come to set aside self-vested interests and work on some programmes and action plans that will impact on the common good of all – as Britz says, “to create a more balanced environment in which everyone can benefit.’

Bad road conditions are adding to the maintenance costs of operators and to the claims costs of insurers. They have a major influence on accident frequencies.

Bad road conditions are adding to the maintenance costs of operators and to the claims costs of insurers. They have a major influence on accident frequencies.

Here’s one example that needs a common thrust. I know for a fact that insurance companies battle to audit fleets simply because they cannot find enough qualified personnel to do such audits. There must be a way forward on this. There are many retired professional, knowledgeable people out there who have years of experience in this industry who could be put to good use by insurers. And these people could then pass on their knowledge to young ‘˜apprentice’ newcomers and over time, a pool ofskilled fleet auditors can be created and called on to provide such a service to the insurers. One of South Africa’s most pressing needs is to create employment. Here is one opportunity for this industry to do so.

Another thing that stands out for me based on the responses is that there seems to be agreement across the board that ‘˜maintenance related claims’ are on the increase. On this point, I highlight Tom Halliwell’s statement that “insured vehicles have to be, and probably are, in a much better state of roadworthiness compared to uninsured vehicles’. While the statement sounds logical, the reality is that this is just not true. We have, on two occasions, served Discontinuation of Services Notices on vehicles operated by clients of one of our Brake & Tyre Watch partners, namely HCV Underwriting Management , and I know CEO Chris Barry won’t mind me stating that here. Those vehicles were insured but they were in no fit state or condition to be operating on the roads. They were downright dangerous and illegal – yet they were insured.

To HCV’s credit, fleetaudits were later conducted on both companies and when the one company refused to comply, it was dropped from HCV’s books. I often wonder whether that company merely approached some other insurer to take over his business. Probably! Is there a ‘˜black-list’ of such reprobates that can be shared among insurers , and also with traffic officials? Not that I know of. There should be and that’s another area of common interest that can be created. Another area of common concern is the lack of driver training. I refer here to Dr Frans Beetge of SAMIB Underwriting Managers who points out from the very interesting causational analysis of a sample of their portfolio (and thank you Dr Beetga for providing and sharing that information) that in Rand terms, 30% of the total value of claims can be attributed to trucks that overturn. He goes on to say that the causes of overturning were further analysed and indicated that in 83% of the cases, driver error caused the overturning.

Samib proposes satellite tracking as an effective risk management control tool to monitor drivers for speed and other violations.

Samib proposes satellite tracking as an effective risk management control tool to monitor drivers for speed and other violations.

FleetWatch has, for some time, stated that the lack of driver training is one of the biggest failings of this industry , and still there is no light on the horizon. The situation is just getting worse and especially so considering that South Africa is facing a critical driver shortage. Newcomers are not being attracted into the profession and those who are, come in young, inexperienced and untrained. It’s a dangerous situation and needs to be urgently addressed for without doubt, more lives are going to be lost.

On this point, in an article featured elsewhere in this edition titled ‘˜Road Transport , SA’s strategic imperative’, it is stated that “trucks drive the South African economy and if our politicians really have the interests of South Africa at heart, then it is well over-due that road transport be placed as a leading item on their agendas.’ Let’s face it, Government as a whole pays no heed to the trucking industry apart from blurting out the occasional ‘˜we must move goods from road to rail’ mantra that holds absolutely no water with those in the know. For goodness sake, Transnet has been without a group chief executive for the past 23 or so months! It’s a sorry joke.

Instead of dreaming about a utopian rail situation which is a long time away – if it ever does come , let the government rather take note of the strategic importance of the trucking industry to the economy and pay it the priority attention it deserves. Instead of pouring funds into countless and useless projects put forward by the tenderpreneur leech brigade, they could do the country far better by putting funds into a massive truck driver training project that would not only create numerous employment opportunities for our youth but also contribute to improving our road safety record and growing our economy on a globally competitiveness basis. That is another point for discussion at the ‘˜indaba’.

Universal consensus from insurers is that greater accent needs to be placed on driver training such as is done at Manline Logistics, Bakers Transport and other such progressive trucking companies.

Universal consensus from insurers is that greater accent needs to be placed on driver training such as is done at Manline Logistics, Bakers Transport and other such progressive trucking companies.

Serious action is urgently needed on the subject of driver training , as it is needed on many other fronts. As Chris Barry, CEO of HCV Underwriting Management (who I compliment for his honesty on admitting shortcomings in his response) says: “I acknowledge that our picture – and that of the insurance industry , is not pretty. Too little is being done! The actions required to get to ‘˜Best Practice’ are formidable!’

Yes, they are but so too were the actions required to get man to walk on the moon. The day came, however, when Neil Armstrong stepped out of the lunar module onto the surface of the moon and said: “That’s one small step for man , one giant leap for mankind’. The first step needs to be taken in getting all players together to find common areas of improvement and FleetWatch will commit itself here to taking that step. Watch this space.

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