Lithuanian carriers are outraged by the amount of the OCP contribution payments which are even 4 times more expensive than before. Transport companies want to take the matter into their own hands and leave the Insurance Companies out in the cold. If they succeed neighbouring countries may follow suit.
New carrier’s liability insurance costs which recently became more expensive by up to 400% cause great confusion in the Lithuanian transport sector. According to experts of the Linava transport association the outrageous actions of the Insurance Companies interfere with the functioning of the transport companies and reduce their competitiveness in the international arena.
Antanas Milašauskas from UAB Milavita, a transport company with 50 sets „I have the impression that the insurance companies are just in cahoots. Previously we paird 250 euros for a vehicle. Now it’s 635 quarterly.”
Vidmantas Užpalis from UAB Transgesta adds:
According to my calculations our company is operating one month a year just to cover insurance expenses.”
Insurance companies give the „increase in the level of risk of Lithuanian companies” as the reason for the increase of prices.
L. Laugalis, head of the risk assessment department in Compensa Vienna Insurance Group: „Insurance price is rising because the truck repair costs are rising. Also the geopolitical conditions influence the prices. After Russia closed its borders, the Lithuanian companies started transporting loads to the west where the costs for the insurers can be even ten times bigger.”
Will carriers insure themselves?
In view of the situation, the carriers and Linava wonder whether setting up their own insurance company will allow them to avoid such a problem in the future.
According to the president of Linava, Erlandas Mikėnas there is no competition between insurers.
The insurance prices for carriers have gone up (…) but it has not made them more insured or cause less traffic accidents. The main reason for the actions of Insurance Companies is the loss of competition between them” says the president of the association E. Mikėnas.
It’s hard to say why the companies no longer compete. Representatives of an international transport group claim that, deducing from long negotiations, the insurers have stopped taking interest in small companies. Can this be a matter of price fixing?
The association of carriers is considering establishing its own insurance company which would enhance their competitiveness on the market. The company would be managed by the largest transport companies in Lithuania.
Photo: wikipedia.org