Speech by Mrs Natalia A. Polunina
Director Ingosstrakh, Russian Federation

1. Types of risk facing transport operations in Euro-Asian road freight

All of us who are involved in road transport have an interest in the development of trans-Eurasian land transportation corridors. Leading insurance companies can create a new insurance system to ensure successful Euro-Asian cargo transit. Individual components of the system have already been implemented but it is necessary to create a whole range of insurance services, which should include risk insurance itself, as well as additional services such as adjusters and surveyors at both points of destination (ports and rail stations) and over the whole route. This would allow insurance to be part of a package of transportation services that would give transport operators confidence in their financial protection, while cargo owners could be sure that their cargo is safe in case of incidents and that any losses will be quickly compensated.

What types of risk can a transport company have in cargo freight?

1. Risk related to losses suffered by the cargo owner where the cargo is destroyed, damaged or lost during transportation
2. Risk related to financial losses suffered by the cargo owner (delay in cargo delivery; delivery of cargo in violation of instructions to delay delivery; incorrect cargo delivery)
3. Risk related to causing a state, represented by its customs authorities, to suffer losses when goods are not delivered to the customs point of destination
4. Risk related to harm to life/health of people by the cargo, and also to damage to the environment

A transportation company may also have the following significant types of risk:

1. Risk related to the destruction, damage or loss of own or rented vehicles (accidents, theft)
2. Risk related to harm to life and/or health of people by a vehicle
3. Various expenses related to the aftermath of accidents (cargo salvage, damage limitation), organising expert assessments, protection of own interest etc, as well as expenses in the event of an accident or illness involving the driver.

2. The right transport company policy to increase safety and security of operations, the importance of the IRU goods transport security guidelines.

A transport company’s manager should anticipate and assess risks which may arise during cargo or passenger transportation and ensure the existence of compensation guarantees for those affected.

The significant moral and material damage to people involved in road traffic (drivers, pedestrians and passengers) and those involved in the freight process (consignors, consignees, road transport companies) that arises from traffic accidents, necessitates insurance for persons and legal entities who are directly involved in the conflict, as well as for third parties who suffer inadvertently as a result of an accident.

However, some transport companies prefer not to use insurance services and treat insurance premiums as another tax – money wasted. Most often companies like this set aside a certain amount for circumstances of force majeure and potential legal fees, essentially tying up that money and depriving themselves of the ability to use it freely. All this despite the fact that it is easier and cheaper to spend an acceptable amount on insurance and avoid the headaches, having transferred all legal and non-legal worries to reliable insurers.

The main areas for improving security and reliability of operations for a transport operator are:

1. compliance with legal and regulatory acts governing the freight process;
2. compliance with IRU instructions and recommendations pertaining to cargo freight safety, as well as recommendations made by the Association of International Road Carriers;
3. insurance of its liability for cargo regardless of cargo insurance (protection of own interests).

3. The insurance company’s tools to help risk reduction and compensation of losses

Global practice shows that insurance is an integral part of the transport service and an element that guarantees a transport operator’s financial stability. Today, insurers offer a large selection of insurance services, including several types of insurance from the same insurance risk category, related to the use of vehicles.

The main types of insurance for road transport are: insurance of vehicles, insurance of vehicle owners’ civil liability, insurance of transport operators’ liability to cargo owners and customs for safe delivery of cargo, insurance of cargo itself, and life and health insurance for drivers and passengers in case of accidents.

A company can choose any types of risk from the offered package and together with an insurance specialist decide on the best insurance protection approach at an acceptable insurance premium. In any event, the cost of insurance simply doesn’t compare to the potential losses. Choosing the right insurer means choosing peace of mind.

As for measures insurance companies can take to reduce risk, they include, first and foremost, investment in the service system, which will support policyholders on any issues that arise.

The second field of business is participation in improving the legal base in order to make life easier for international road carriers. It is no secret that imperfections in certain legal acts create obstacles for international co-operation.

The third field of business is supporting R & D companies involved in developing innovation in transport, including those working on satellite navigation systems for land vehicles, which are one of the most effective preventative measures.