Congestion- Good for Trucking Insurance Companies?

I hope everybody is doing well. While CSA continues to be the pervasive topic along what to do with it, I was struck by an article in TT Express below:

"The cost of U.S. traffic congestion has jumped to $115 billion in 2009 from $24 billion in 1982, and trucks are shouldering a disproportionate share of the cost, according to a report released this week.

Congestion in the nation’s largest urban areas cost the trucking industry $33 billion in delay time and wasted fuel last year, said the annual Urban Mobility Report by the Texas Transportation Institute of Texas A&M University, released Thursday.

While trucks account for just 7% of the total vehicle miles traveled, the $33 billion represents 29% of the total congestion costs, the report said.

Unlike the cost of congestion for cars, the cost of truck congestion “was passed on to consumers in the form of higher prices” and the fallout from the congestion extends “far beyond the region where the congestion occurs,” the report said.

Because trucks carry goods to suppliers, markets, and manufacturers, delays in arrival can cause whole production lines to close down, it said.

“The report confirms that congestion has a significant impact on the cost of moving freight, which is ultimately borne by Americans in the form of higher shelf prices, lower incomes and lost jobs,” said Darrin Roth, director of highway operations for American Trucking Associations..."

Well, is that bad for trucking insurance companies? My answer would be no. Congestion works out to less miles traveled by each truck ( if the trucker is complying with hours of service and CSA is seeing to that). Less miles = less exposure. Less exposure= less losses.

That has certainly borne out in the lower frequency and severity statistics that have occurred year-after-year. So in spite of medical inflation that is out-of-control, look for better claims results.

That does not mean better loss ratios though as premiums continue to be in a free-fall. If the insurance companies can hold their pricing ( which they show no discipline for doing ever), then congestion would translate to better results.

Trucking's misery ( congestion) creates some unlikely beneficiaries ( trucking insurance companies). Food for thought....