Trends shaping the US transportation insurance market
Trucking and transportation are the lifeblood of the US economy. The sector moved up a gear during the COVID-19 pandemic, delivering essential goods and
services to millions of Americans sheltering at home from the novel coronavirus. It kept businesses in operation, supporting the domestic supply chain when
international travel and trade was restricted.
The transportation industry was viewed as “one of the heroes of the pandemic”, according to Eden Hancock, area senior vice president, transportation, Risk
Placement Services. Unfortunately, the sector has not received a hero’s welcome in the post-pandemic “new normal”. Instead, it is driving into a barrage of headwinds
in the form of inflation, rising gas and diesel prices, lower freight rates, supply chain disruptions, and ongoing challenges in the highly litigious liability arena.
“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.
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
“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.