Higher Insurance Costs are Barrier for New HGV Drivers

A career as a professional driver can be an attractive choice for many people, and drivers are in high demand across the UK. Even so, challenges exist for newly qualified drivers. One barrier to entry is that insurance is often higher for people with less experience, which can cause haulage companies to think twice before hiring newly qualified drivers.

John Keelan-Edwards, Managing Director of Driver Hire Training comments on this issue, and what the UK can learn from international systems that have removed this barrier to entry. "With a large portion of the UK driver cohort retiring in the next 5 to 10 years, the industry needs an influx of new drivers," says John. "Higher insurance costs for less experienced drivers can pose problems for companies, and as a result impacts much needed new drivers finding work." Insurance is higher for less experienced drivers

"We all know that for car drivers, insurance companies often charge more for young or inexperienced drivers, or may even choose not to offer cover. The same is true for professional drivers," says John. "This is because they predict a higher frequency of claims, and those claims may be more severe if they occur." "This creates a cycle where newly qualified drivers, whether holding a Class 1 or Class 2 licence,  may struggle to find jobs because they lack experience, but cannot gain this experience because of difficulties with insurance.

At a time when the UK urgently needs more drivers entering the industry, this creates a real barrier to entry." Comparing the UK's approach to other parts of the world "Most countries in the world have HGV drivers, but not every country reports this issue.

For example, in Germany, it is the truck itself, which is insured, not the person, and multiple drivers can be added to the policy. This means there are no higher premiums for adding less experienced drivers, and these drivers are looked after by employers and gradually build up their experience," says John. "In the Netherlands, the problem of higher risk drivers is handled in a similar way.

These drivers come under one policy within the business, and the costs for insurance do not change depending on how many inexperienced or young drivers a company has working for them. Instead, the cost is calculated based on how many safety systems the company has and telematics." "Other countries have found ways to safely bring younger drivers into the industry, but the UK system still places much of the risk on employers hiring inexperienced drivers."

"The story is similar in other countries such as Australia and the United States, and the solution seems clear. Strict regulation and on-the-job training as drivers develop, strong safety systems and protocols, and shared policies across companies, not on individuals." The incoming industry retirement wave will exacerbate this issue

"Currently, over 55% of HGV drivers in the UK are between 50 and 65, with less than 2% under 24. [1]The industry is simultaneously losing more drivers to retirement, and failing to attract young talent in meaningful numbers. Within the next 5-10 years, the sector is not only going to need more drivers, it will specifically need younger, less experienced ones. These are the drivers that the current insurance model considers higher risk."

"The industry really needs new drivers, and companies like Driver Hire are working hard to bring them in and get them trained. But current insurance policies can create barriers for new drivers. Fleet-based insurance models, where the policy covers the company and all its drivers rather than penalising individuals for their age or experience, have worked effectively internationally.

The UK should take learnings from these models.

The logistics sector keeps the country running, and right now our system is putting up barriers for the next generation of drivers, instead of making it easy."

Transport & Logistics Magazine - Driving The Industry Forward