DRIVING INDUSTRY CHANGE
Together with a team that has doubled the business at Santam Heavy Haulage since he joined seven years ago, head Anton Cornelissen acknowledges that 2013 has been tough, with serious competition and downward pressure on margins. But this in- house specialist division has a few more tricks up its sleeve.
The number of transport underwriters in South Africa has more than tripled over the past five years, with around 16 now vying for market share. Cutthroat competition keeps premiums low, while a weak Rand and strong Dollar pushes up the cost of repairs ( by as much as 30 per cent in three years). Many trucks and parts are imported from the United States. Not the most profitable line of business at the best of times, profit margins are slimmer than ever, but Santam Heavy Haulage is keeping its head above water. “2013 got off to a bad start as companies attempted to generate additional profits in November and December, which are traditionally quiet months for the trucking industry. It took us four months to recover, but we rode it out and are once again profitable,” says Cornelissen. Contractors are also under pressure to make a profit and have few qualms about moving insurance providers in search of cheaper premiums. With the backing of Santam, Cornelissen can keep rates competitive, but providing great service to support this is insufficient in a market where everyone is competing on this front. Instead, Santam Heavy Haulage’s strategy is to offer the full range of solutions to heavy commercial vehicle contractors, from conventional, comprehensive cover to selfinsurance options. According to Cornelissen, it is unique in its capacity to do so. While it loses premium income on those clients who selfinsure, looking after their best interests secures future loyalty, which is difficult to achieve in a market where price is king. With 28 000 vehicles on its books and more than 7 000 incidents a year, a particular focus on truck drivers, which is where the highest risk lies, will stand it in good stead. Santam Heavy Haulage participates in government- arranged Wellness Days, together with the rest of the transport industry, including other underwriters. “It is encouraging that the whole industry is working together to promote driver training and road safety. As a general rule, drivers are well behaved, but many are overworked, which is often when accidents occur,” explains Cornelissen. A commitment to training drivers is evidenced by the fact that this division has taken on fleets that no one else in the market would insure, trained the drivers and seen a huge improvement in their risk profiles and loss ratio. It exudes the same passion for training its own staff, such as Annah Ketso who went from serving tea to running office administration and even doing some underwriting. With a total staff complement of 23, Santam Heavy Haulage is a tight- knit team that regularly spends time together outside the office environment. “I come to work for the people. We have a great team committed to our success. Nobody asks to be paid for overtime and I even have to force some people to take leave,” Cornelissen smiles.