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Welch Group: Haulage Insurance Case Stud

Since 1934, Welch’s Transport has been a familiar sight on the nation’s roads. With a strong reputation for reliability, the Cambridge-based business has grown to a team of more than 150 while remaining a family firm at its heart. 

Having worked for the business for more than 40 years – 25 of which have been spent as Managing Director for the growing Welch Group – Jim Welch has seen the landscape change around the business, with more development yet to come. He explains some of the pivotal changes, and why having an insurance broker partner is essential.

What are the biggest changes you've seen in the haulage sector during the last 25 years?

They’re probably related to IT. If you go back 25 years, logistics was still a paper-based business. You didn't have things like ‘signature-on-glass’ for delivering items or tracking, so you didn't know where your vehicles were. We did have mobile phones by then, so you could talk to your drivers, but you couldn't see where they were. 

We didn’t have telematics either, so we couldn't tell how the vehicle was being driven. Now we can see exactly how a vehicle's driven. We also didn't have cameras, so when we had incidents, we relied on the driver telling us what really happened. Now we know what's happened because vehicles and roads have cameras. In fact, we can actually live-feed via our cameras so we can help drivers if they're lost. 

The vehicles are technically better than they were 25 years ago too, but they’re also about four times as expensive!

What are the biggest industry challenges you’ve seen in the past year?

In the last year, many challenges have actually dropped away. The two or three years prior to that were relatively exciting.

As we went through the pandemic years and then the war in Europe, we saw high levels of inflation and high interest rates. So in 2023, we were back to fighting hard to keep our customers and win new ones. In the previous three years, there were periods where there was a desperate lack of capacity because of a shortage of drivers. In many ways, things were easier, because you could almost dictate your rate and people would pay because they had no choice. 

Over recent months, the challenge is really to get back to normal trading and get back on with the things that we’ve let drift, such as proper prospecting and business development. We didn’t need them so much in the last few years because people were desperate for us to work for them.

What about the future of the haulage industry? What’s in store?

We are going through a third-generation transition at Welch Group. The Managing Director of Welch's Transport, which is our operating business, is now my son, Christopher. I’m still the Managing Director of the group and we arrange our insurances at group level, so I still do all of that. 

But the next 20 years in our sector will be very interesting as we are going to move away from diesel. The last time we had a change of fuel was back in the 1920s and 30s when my granddad started the business, which is when they moved from steam to petrol and then diesel. We've been a diesel-based sector for a hundred years but in the next 20 years we'll see that change. 

Electric vehicles have certainly been pushed by the government when it comes to cars, as well as light vans and light trucks. Whether it's something for heavy trucks or not, we don't know yet. But we're in tune with that change. And increasingly you need to be, because your customers are on their own roads to net zero. However, it does come at a premium due to the infrastructure required to make that transition.  

We've got one EV out there at the moment, which we've had since the beginning of last year. It’s a 19-tonne rigid vehicle for doing local collections. I've got a couple of maximum-weight units coming at the end of the year too. We’re doing this to get the depot infrastructure ready to run electric vehicles because it means a lot of investment. It's about learning more than anything. We're going to experience it and learn from it and understand it. 

My two sons expect to have another 30 or 40 years at this game, so they will see the transition all the way, whereas I'm just catching the beginning of it.  

Tell us about your approach to insurance.

When it comes to insurance, I tend to work in three-year cycles. I go to market regularly and test my incumbent broker. Every third year, I put a second broker in the mix alongside the incumbent. Ian [Limeburner] was in that situation seven years ago. Ian essentially did a better job than the incumbent, and he was also tested three years ago. Actually, he's going to be tested this time around. That's just how I do it.

I regard insurance brokers as one of our professional advisors, the same as I do lawyers and accountants. I like to have a good, solid, long-term relationship with them. But equally, unless you go to the market, you don't know what else is out there. I generally have a chat and sense-check what my broker’s been telling me. Then I will appoint one of them to go into the market alongside my current broker.  

What was it that won you over with One Broker? What were you looking for at that time?

I tend to look at the size of the business. We're an SME. We employ 150 people and turn over £15 to £20 million, depending on how good a year we're having. You need somebody that can relate to a company of that size. 

A small broker doesn't have the expertise to be honest. And with the larger brokers, you get lost in the numbers. You've got to pick the right size of broker, because you need that personal service. But equally, you've got to have somebody that's substantial enough to have the relationships with insurers, and the Lloyd’s market. Picking the right size of broker is normally the challenge. 

You're looking for that personal service, but from somebody who's got the scale to access insurance markets.  

How important was it that your broker has an in-house Claims team?  

For our sort of business, you've got a portfolio of insurances but it's the Fleet Insurance that's the important bit. That makes up over half of the premium income, and it's driven by claims. And, to be frank, when you're doing two or three million miles a year, you can't not have claims.

Typically we have between 30 and 40 knocks every year, and it's the efficiency of the claims process that makes a difference. 

We get on very well with Sophie who looks after our claims at One Broker. And because of that relationship, we're now involved in things that I resisted before, such as my drivers reporting claims from the roadside. I was never really comfortable with it, but Ian convinced me to do that and it’s been useful.  

The broker's claims function is essential but a lot of it depends on how good the insurer's claims operation is too. You lean heavily on the broker to make sure the insurer is doing what they should be doing and try to keep them in line. 

Would you recommend One Broker to other businesses looking for Haulage Insurance?

I would. I have no problem with recommending them.

Need to arrange your Haulage Insurance?

Find out more on our dedicated Haulage page, or contact Head of Transport & Logistics, Ian Limeburner, to arrange a quote. 

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