The transportation sector has experienced significant losses over the last several years, in part because of more-crowded roads, the proliferation of smart phones and distracted driving, and the hiring of inexperienced drivers to fill jobs lost after the recession – all leading to a spike in accidents. Combine this with high judgments and jury awards, and you get a tough commercial auto insurance market.
In fact, according to researchers at investment-management firm Conning Inc., the commercial auto insurance industry lost an estimated $716 million before taxes on policies in 2016, as costs totaled nearly $112 for every $100 of premium they collected. In addition, according to data collected from insurers by ratings firm A.M. Best, the business line’s underwriting results have been deteriorating since 2011, and are at their worst level since 2001.
In response to mounting losses, insurance carriers are increasing premiums across much of a business that generated $28 billion in premiums last year. Increases have ranged from low-single-digit percentages to 30% a year, according to companies and brokers speaking to the Wall Street Journal (WSJ). Some insurers have even exited certain types of coverage altogether, cites WSJ.
The road for truckers and the need for insurance coverage is made easier when a business adopts technology designed to monitor drivers. Indeed you’re seeing a wide range of commercial operators installing cameras in the cabs of their vehicles, and using cellphone applications to block use while a vehicle is in motion. This shows underwriters that the operators are focused on reducing claims and improving their risk profile.
For example, a president of a Pittsburgh-based trucking company cited in the WSJ article, looking to reduce the frequency of claims, purchased onboard video cameras for 45 trucks. “If there is a triggering event such as slammed brakes, these [cameras] create video of the seconds just before and after the event,” according to WSJ. The video can exonerate a driver if wrongly accused of causing a crash, and it can help the firm coach its drivers if necessary. The trucking company’s insurance bill was lowered due to the use of this type of smart technology.
In addition to on-board cameras, some companies have adopted technology that prevents drivers from texting, checking their email and using certain apps.
RPS specializes in insuring the transportation sector and can work with you to secure coverage for your clients and assist in improving safety records and reducing losses. We work with a network of the top-tier admitted and non-admitted carriers in this niche market.