Nuclear verdicts are on the rise, and insurance rates are right there along with them.
Insurance is one of the top five most costly line items on a trucking company’s budget behind driver compensation, fuel and equipment, according to an analysis of the operational costs of trucking by the American Transportation Research Institute. With fuel prices up and demand for freight capacity lowering, trucking companies are looking for ways to trim insurance rates, and industry experts say investing in technology, combined with other factors, can help.
“There have been very sharp rate increases to clients because of what I'll call industry challenges and industry deterioration in profitability … If all of a sudden you have to come out with significant rate increases year-over-year-over-year, it becomes unsustainable,” Gary Flaherty, senior vice president of commercial auto E&S wholesale at Nationwide said in a TCA webinar about leveraging driver data for the best insurance rates. “It's really important to have good data. Your insurance agents can certainly work with you on that; experts in the field can tell really good stories related to the things that you've done as a motor carrier, and lots of motor carriers have done really good things. Whether that be investments they've made in technology, investments they've made in equipment and people, you want to be able to show your insurance company those things so that you're getting the best rate that you possibly can.”
Flaherty, along with Brandon Guiliani, principal and transportation practice leader at insurance brokerage Seubert & Associates, offered some tips on how carriers can get the best insurance rates during their next renewal.
While using technology can benefit carriers, it can also hurt, so transparency is key, they said.
The insurance industry as a whole reported a $4.1 billion loss last year. That means for every dollar in premium, the insurance provider is paying out $1.05, Guiliani said.
