Transportation Insurance Climate- April 2010- Lower Premiums/ Broadened Coverage

Are agents, MGA's and insurance companies paranoid about market conditions that operate in the trucking space? The answer is yes and you can see why based on the abridged article from Transport Topics below:


Increased competition is driving down insurance rates and forcing providers to offer broader coverage to transportation firms, according to interviews with industry specialists and new surveys.

Insurers also are seeking new ways to package their offerings to cover a growing list of transportation and logistics services.

Insurance rates have been declining for several years, but new surveys indicate that competition has intensified recently as more insurers have entered the market.
Three out of four insurance brokers and underwriters surveyed by NIP Group Inc., Woodbridge, N.J., said premiums charged for trucking policies continued to decline in the fourth quarter of 2009 and were “intensifying” after earlier
surveys had suggested a firming of insurance rates.

Overall commercial property and casualty premiums fell about 6% in the third and fourth quarters of 2009, according to a market index survey published by the Council of Insurance Agents & Brokers.

The soft insurance market is allowing fleets to negotiate better deals.
One insurer, for example, agreed to amend its liability policies to include the cost of a replacement vehicle with no increase in premium, The prospect of lower premiums gives motor carriers the option of securing more coverage for the same rate or
paring back coverage and pocketing even more savings.

A lot of companies trucking exposures have decreased because they are driving fewer miles, or they have a smaller payroll and fewer power units.

As carriers move further into freight management, they face new and different risks.
Carriers may be held liable for lost sales or extraordinary expenses, for instance, if a shipment does not arrive on time or is lost or damaged. A major issue of concern for insurers is how to cover the activity of brokers and third-party logistics companies.

Let's see if the insanity continues....