First came the July 2021 riots,  then came the April 2022 floods

Trucksurance

Jan 1, 2018

The trucking industry – and its insurers – do not seem to get much of a breather these days. Just as businesses started recovering from the calamitous events and costly damage of the large-scale riots in July 2021, widespread floods hit KwaZulu-Natal in April this year – followed by even more rain a month later! 

We’ve all seen the harrowing and tragic cost to human lives and habitation, and Trucksurance sends its sincerest condolences to everyone affected by this tragedy.

On the business side of things, just like during the July riots, the trucking industry has been hard hit once again. First, because of criminal elements that took advantage of trucks being forced to a standstill owing to blockages in places such as the Marianhill area near Durban.

There were long queues of trucks stretching all the way to Hammarsdale, and people from impoverished communities surrounding the highway started targeting and looting them. 

 

 

A second huge impact was the damage to – and in some cases total destruction of – infrastructure important to the freight and logistics industry, including roads, bridges and the harbour in Durban. The harbour was closed and inaccessible for several days, leading to logistics delays and costly disruptions to business operations. Of course, trucks were also damaged and destroyed in the flooding.

The July riots were estimated to have a total cost of about R37 billion in claims to Sasria, the state-owned insurer of risks such as strikes and public violence. In this case private insurers will have to foot the bill, and although the total claims cost has not been finalised, it is estimated that it will run to hundreds of millions of rands. In fact, some industry insiders believe it might very well be the biggest natural disaster to happen to the insurance industry since the fires in Knysna in 2017.

Within days of the extent of the floods’ damage becoming evident, Trucksurance was hard at work dealing with the odd claim. “Fortunately, not many of our clients were affected and only a few vehicles were trapped in low-lying areas on the KwaZulu-Natal coast. 

Actually, we don’t have a concentration or risk down there as our clients are spread countrywide,” says Locke Purdon, executive director of Trucksurance. 

“Our major loss stemmed from a client’s vehicle being trapped inside their customer’s fast-flooding yard. Once notified, we were able to deal with that quickly and efficiently. It’s amazing to see how destructive water is – the truck was a write-off!” 

But while Trucksurance may be in a good position, the insurance industry is definitely suffering from the double whammy of poor premium growth and significant claims in the past two years. This has been the case since the start of 2020, when the Covid-19 pandemic and its lockdowns had a severe impact on claims because of lives lost, job losses and interruption to business. 

Add to this a mediocre investment performance for the insurance industry, and it’s no wonder it went from a total industry profit of nearly R22.1 billion in the 2019 period to a loss of R2.6 billion in 2020.

Fortunately, Trucksurance has been building a book of responsible truck owners for years now, doing it slowly and carefully. They really don’t like claiming, so they only claim when the proverbial hits the fan, and even then they work with us to keep costs down. 

These clients are all our partners in their insurance company, and those who have been with us for a few years have learnt just how controlling costs equals a big tranche of shares each year.

So, we are bucking the trend in the industry and still making good margins, which helps us keep premiums down while elsewhere, in general, they are trending upwards.

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Trucksurance

Jan 1, 2018

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