Trends shaping the US transportation insurance market
“Rising gas and diesel prices, inflation, and decreased consumer spending are really impacting the transportation industry. Many insureds are having to remodel their business strategies to get more comfortable with the economic instability and uncertainty we’re facing today,” said Hancock, co-author of the RPS 2022 US Transportation Market Outlook, which is free to download here.
In challenging times, transportation companies might be tempted to sacrifice safety to accommodate profitability. Rather than jeopardizing their businesses through risky cost-containment measures, Hancock is encouraging transportation companies to work with insurance agents, brokers, and carriers who can help them to mitigate their insurance costs (which have increased due to soaring liability losses) and reduce the likelihood of expensive claims by running strong safety-oriented operations.
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“One of the biggest threats to the transportation industry is the litigious environment […] the nuclear jury verdicts and increased cost of claims due to personal injury attorneys getting involved,” said Hancock, who added that litigation funding is also a growing problem, with many law firms targeting accidents involving large trucks as a way to secure large payouts for their clients.
“The most immediate way we can help both insureds and insurance companies cut down on those costs is through the use of telematics and cameras (both inward and outward facing), which can determine who was at fault in an accident. A lot of transportation companies and drivers are now coming around to the fact that these tools are there to help them and to protect them in the event of a claim.”
More and more transportation insurance companies are promoting the use of telematics and accepting telematics data to assist with underwriting and pricing accounts. Hancock said many are giving preferential policy language and pricing to proactive companies with strong safety protocols and risk management practices, including the use of telematics and cameras.
The RPS 2022 U.S. Transportation Market Outlook covers a wide range of themes impacting the trucking and transportation marketplace from current macro-economic trends to the impact of social inflation on liability claims, the ongoing driver shortage, and the importance of loss control and data, among other things.
“This is an excellent resource for retail agents. It can help them have conversations with their insureds about what to expect from the transportation insurance marketplace right now,” said Hancock. “Often, companies feel insurance is an expense they have to pay, but they don’t really understand that the insurance industry is there to protect them and to provide peace of mind if something happens to them or their business.
“That’s sometimes lost when people look at how transportation insurance rates have increased because people think insurers are just trying to make money. But insurers are trying to stay profitable so that they can stay in the marketplace and provide long-term value and protection for transportation companies. We’re here to help our insureds stay in business and to help agents educate their insureds through resources like the 2022 U.S. Transportation Market Outlook. We’re all in this together.”
You can download the RPS 2022 Transportation Market Outlook for free at this link.