GT boss lifts lid on transport sector challenges

Dodd said his team has responded well.

“The sheer size of the event [the floods] means it’s all hands to the wheel,” he said.

GT provides tailored insurance covering heavy motor, bus and coach, plant and machinery, commercial motor, taxi, rideshare and hire vehicles.

“A significant portion of our book is heavy transport. We’re also a major player in plant machinery, bus and coach, taxis and hire vehicles,” explained Dodd.

The other curve ball: the sudden rise in fuel prices cause by Russia’s invasion of Ukraine.

Read more: Ukraine conflict adds to supply chain woes

“The recent rise in fuel prices at that level is unexpected and certainly another surprise for the budget of many operators, so those types of things need to be worked through,” he explained.

Like many industry sectors, transport is also feeling the acute impacts of pandemic related supply chain issues.

“The pandemic related business risk [for the transport sector] would be around the availability of parts and the availability of vehicles,” he said.

“I don’t know if you’ve tried to purchase a car lately, or heard the stories? If you add trucks into that mix or plant machinery, the delays are twice as long,” said Dodd.

So their brokers’ customers could be waiting months.

“So delays in repairs, it’s something that’s unavoidable,” he said.

However, Dodd said what businesses are doing to continue to operate under these difficult circumstances is “quite extraordinary.”

He hastens to add that he’s not suggesting transport and fleet companies are putting vehicles on the road that are unroadworthy, but he suggests the challenges they are currently facing are acute.

“Whether they’re recycling gear to fix existing vehicles or doing a makeover on a truck that’s not used as often anymore,” he said. These are some of the daily challenges facing trucking companies if they want to continue operating their business. For brokers working with GT, education about these issues is very important.

“I think it’s around making sure that brokers have an understanding that there is a shortage and there may be delays in repairs and what activities can their clients undertake to mitigate that risk,” said Dodd.

“So that might be taking the opportunity to purchase equipment when it becomes available,” said the GT CEO.

He said when vehicles are off the road, some of these downtime risks can be insured, for example with downtime business interruption insurance.

Read next: Trans-Australian railway reopens but supply chain strain continues

“There are also some downtime risks that can be insured when vehicles are off the road because of an accident and being repaired. In some cases, downtime is available to assist a business during that time,” he explained.

The difference today is the longer wait times – and that might require additions to the coverage.

“If a vehicle is off the road for a longer period of time due to circumstances outside their control, that may be an option for them to really investigate further,” said Dodd.

While, on the one hand, the pandemic has increased these wait times, it also decreased the number of vehicle claims coming in.

“I’m assuming that our competitors’ experience is similar to ours in that we’ve seen a decrease in the frequency of claims over the last couple of years,” said Dodd. “There’s been a lot less vehicles on the road so there’s been a reduction in the number of claims that have been submitted.”

However, with pandemic restrictions loosening across Australia during March, and, with it, life and business returning to normal, the frequency of claims, said Dodd, is coming back up to normal levels.

Two years of COVID-19 didn’t really change GT’s insurance offerings, he added. What it did do was change the types of insurance products brokers and their transport customers were seeking.

“I don’t think there was anything really new regards to COVID specifically,” said Dodd.

“There was more use of some of our existing products at the start of the pandemic when vehicles were off the road, things such as downtime business interruption cover,” he added. These offerings include coverage for a rental vehicle following an accident. “For example, to get a hire car, the standard [insurance coverage] might have been about 20 days cover, that might have been acceptable. But today we’re looking at, in some cases, extending that because of increased repair times,” he said.

One challenge for GT, has been pricing these extended periods.

“It is difficult to price,” he said. “Particularly if you look at hire cars because the rates are all over the place and there is a general lack of availability of hire vehicles as hire fleets reduce because of lack of international travel and travel in general.”

Dodd said hire car companies are looking to build up their inventories of cars again.

“But again, they’re facing the shortages that we are, that everyone is, in being able to build their fleets up,” he said.

However, despite flood impacts, the long claws of the pandemic and the rise in fuel prices, the GT CEO is quite optimistic about the year ahead.