The Australian Commercial Motor Insurance market is facing a series of emerging risks – some global and others unique to Australia. Brokers can help clients identify these risks and assist clients in understanding the impact these exposures are having on premiums.
Kangaroo Impact – with much of eastern Australia now in drought, impact collisions with kangaroos have and will continue to increase significantly. The presence of kangaroos, even during daylight hours grazing or moving along the roadside is much more common than in usual seasons. As well as country areas, outer urban areas now face a much greater risk of kangaroo collision. As an aside, European car manufacturers faced the unusual problem of writing software for Vision technology that could identify the unusual spring of the kangaroo, not just the 4-legged gait of deer and other northern hemisphere animal risks on the road. These same technologies that make vehicles safer, also result in much more damage from front or side kangaroo impacts. Skipometric, or macropod metrics indicates that the increase in these losses will continue.
Flash Tradies – The Fringe Benefit exempt status of utilities driven by many business people has seen a huge take up of “luxury utes”. The Hilux SR5 once the king of the high-end utility market, is being challenged at a similar price point by the “Euro-ute” contenders – VW’s Amarok and now the Mercedes Benz X Class. Insurers and brokers will have to deal with the repair cost impact of these very prestigious brands becoming much more common in fleet schedules. The days of $700 premiums for a tradies ute are gone along with the Australian made Holden and Falcon utes.
Theft of Exhausts – targeted theft of expensive catalytic convertors in exhaust systems, notably in Isuzu trucks, has increased dramatically. Thefts from truck yards of numerous exhausts has seen many claims of tens of thousands of dollars – a single unit can cost up to $12,000 to replace. A simple way to mitigate this risk has seen owners starting to spot weld the attachment bolts holding the exhaust units in place.
Metal Fatigue in ageing concrete pumps and reach stackers – many of the units imported to Australia a decade ago are starting to experience collapse losses from metal fatigue. The quality of metal alloy being used in certain countries of manufacture, while keeping original prices down, has seen a reduced life span of the machine and often experiencing collapse losses as the items age. Most insurers have now identified these units and cover is becoming harder and harder to source.
Traffic Control & Attenuators – the widening of existing motorways and new tunnel projects sees a huge amount of road work being undertaken alongside busy high-speed roadways. Attenuators (vehicle mounted crash barriers) used for protecting areas around road workers are becoming commonplace in the fleets of many civil and roadwork related accounts. These units are designed to absorb the impact of crashes and are a very cost-efficient way of avoiding injury and saving lives. However, these crash magnets are expensive to fix after being hit by a speeding car.
Free Windscreens – There is no such thing as a free lunch!
Excess free windscreen claims have historically had little impact on overall fleet claims costs and in turn premiums. Until a few years ago windscreen claims were generally a few hundred dollars, hence the excess free benefit being provided by most insurers. Windscreen supply companies have for years said to clients “claim your free windscreen from your insurance policy”. These replacements were usually undertaken without alternative quotes being obtained or an assessment process. With many vehicle windscreens now having inbuilt vision, temperature, light and rain sensors, replacement and claim costs have increased from a few hundred dollars up to a few thousand dollars in many modern & most luxury vehicles. These larger repair costs have a direct and substantial effect on premiums.
Free Hire Car – It was your fault so I want a free hire car!
The supply of Hire / Replacement vehicles to innocent third parties, has seen the birth of an industry (Credit Hire) of often unscrupulous vehicle providers who are attempting to gouge the “At fault” clients insurance policies. In addition to Third Party demands for repairs of their vehicles, demands are now being made for Hire Costs from Credit Hire Companies for replacement vehicles at exorbitant costs. Whilst most clients and the entire insurance industry happily accepts the liability for the fair cost of “making good”, the emergence of the gouging by vehicle providers is creating an unprecedented expense that will be built into premiums. We recently received a demand for a $45,000 car hire following damage to a 2014 Audi Q7 – the hire cost alone surpassed the pre-accident value of the damaged unit. The impact of these type of rorts will be ultimately factored into insurers pricing.
## Skipometric analysis is not a real thing ?