Deteriorating infrastructure poses biggest insurance headache

Southern Africa’s deteriorating road network remains one of the biggest risk factors when insuring cargo – despite ongoing efforts across the continent to address infrastructure. “Our biggest challenge is poor road conditions as this is where the majority of the claims are still originating,” said Mike Brews, chief operating officer of Associated Marine. Be it major accidents in which both cargo and vehicles are damaged – or just the cargo – the impact of poor road conditions is being felt and is continuing to push up the price of insurance. “It is also a very difficult risk to manage as there is not much that a haulier or cargo owner can do about it. One is heavily dependent on the government of any given country in which one is travelling to be addressing infrastructure. And we are seeing a major effort being put into infrastructure, but we have had a particularly wet summer which means roads have taken an even worse beating.” He said the impact of road conditions on cargo was not likely to be solved as easily as when crime started impacting heavily on cargo insurance. That resulted in owners and hauliers putting heavy security measures in place to reduce the risk – but road conditions are a different story. “There is only so much money that is available to be spent on road infrastructure while volumes are continuing to increase every day. We have yet to see a real movement to rail transport. Most of the cargo we are insuring is on road. The volumes on rail remain minimal in comparison so we don’t have nearly the same amount of incidents on rail that we have on road.” Brews said while crime had not disappeared and they were still getting claims in that regard, it was not the majority. “That is because the security measures in place have addressed the risk factor significantly and continue to do so.” This was evident over the festive period when congested border posts across the region resulted in trucks being held up for longer periods of time. “Immediately these areas become theft hot spots as the trucks can’t go anywhere, resulting in an increase in claims. So the ability to reduce the risk factor plays an integral role in allowing you to transfer the risk that will ultimately then result in a reduction of cost.” INSERT We have had a particularly wet summer which means roads have taken an even worse beating.’ CAPTION Mike Brews … ‘Security measures have reduced crime-related claims.’