Win with COVER & Emperor Asset Management

AfricaRisk Management

Road Trippin’

photo of Petra Fordyce

Petra Fordyce

As infrastructure projects increase on the continent and retailers look to markets such as Nigeria, Ghana, Zambia, Kenya and Tanzania as part of intra-Africa trade expansion, the demand for road freight and the transportation of critical goods is increasing – but so are the risks associated with it. This has driven insurers to develop bespoke products and offerings in order to meet market needs. Here are three trends we expect will influence the sector going forward…

1. Highway robbery
We have definitely seen a rise in truck hijackings with the road freight industry reporting a loss of around R1.2 billion in 2014. Hijackers, often operating in large syndicates, are after the vehicle itself, the load it’s carrying or the vehicle’s parts. Trucks carrying everything from fresh food and cigarettes, to mealie meal and petrol, are targeted with high value goods like laptops, tablets and cellphones in high demand. Hijackers are also increasingly utilising jamming devices to try and counteract GPS signals so vehicles can’t be located and impersonating police at ‘road blocks’ in an attempt to get trucks to stop en route.

2. Cameras, cameras everywhere…
Despite the above, telematic innovations are offering even more comprehensive tools to help defeat criminals as technology moves forward. A number of fleet operators have installed cameras inside and outside vehicles to observe driver behaviour and record accidents or other events that could take place. It stands to reason that driver behaviour is one of the biggest risks to consider when insuring a vehicle or cargo. Cameras also ensure a smoother claims process as footage can be utilised to prove who was at fault during an accident as well as the circumstances surrounding it – was it day or night time, how fast was the truck going and where did the collision occur? In addition, dynamic telematic devices will send notifications when vehicles go over the speed limit, when a vehicle travels outside the parameters of its route or when a driver falls asleep or shows signs of fatigue. Emergency assistance can even be dispatched once the device senses that an incident has occurred. A driver can also send a signal to a control room if he/she is pulled over in case so called ‘authorities’ are actually imposters.

3. Border patrol
Insurance regulation and legislation can become tricky once borders are crossed. Therefore, customers need to consult insurers and brokers who are experts in cross-border cover and who have suitable in-country partnerships across sub-Saharan Africa. A truck will be covered by one policy until it reaches a country’s border, then a different policy may apply. Risks also need to be suitably assessed, so quality advice and an in-depth understanding of different markets cannot be discounted – rather be prepared for every eventuality and obtain the widest cover possible than experience severe losses when it comes time to claim.

There is no doubt that some bumps in the road lie ahead, but through stakeholder collaboration and technological advances, players in the sector will be able to overcome industry challenges. Of course ‘smart mobility’ will play a huge role in shaping and changing driver behaviour and in curbing criminal activities. Insurers and brokers need to remain just as innovative to keep up with the speed of developments and customer demands – but oh what a journey it will be!

Petra Fordyce, Portfolio Head Marine/Transport, Zurich SA

Related posts
Risk Management

ESG: What do boards need to know?


Innovative partnerships needed to tackle climate related disasters


The AFCFTA represents a tremendous opportunity for African Insurers

Risk Management

RSIS partners with natural catastrophe specialists for best-in-class African risk modelling