COMMERCIAL TRUCKING
TRANSPORTATION
INDUSTRY FACES
RISING PREMIUMS
AND WORKFORCE WOES
I
f you’re in the commercial trucking or
commercial transportation business,
you may have noted your premiums
creeping—or in some cases jumping—
up in recent years. Most companies
looking to purchase transportation policies
are now feeling the effects of a “hardening
market,” in which insurance companies
are tightening underwriting standards,
raising premiums significantly and exiting
markets they deem too risky.
In Hawaii alone, we have seen the
number of local companies that insure
transportation risks dwindle from, perhaps,
five or six, down to just two or three.
There are myriad reasons for the changes,
but it fundamentally boils down to simple
economics: for many insurance carriers, it
has become too costly and too great a risk
to cover their exposures when it comes to
insuring commercial transportation.
A host of factors have contributed to rising
insurance costs, including:
•
Higher jury awards in instances
of death or injury resulting from
accidents.
• Greater vehicle wear and tear on
equipment due to deteriorating
infrastructure.
• More sophisticated on-board
equipment, such as GPS systems,
on-board cameras and enhanced
safety features, have dramatically
raised the cost of commercial
vehicle repair.
•
Higher reinsurance rates affect
14
primary insurers as they struggle to
cover their own costs and meet their
forecasted bottom line.
A decrease in the number of qualified
drivers has also contributed to hardships
in the transportation industry. Competent
CDL (qualified Commercial Driver
Licensed) truck and bus drivers are in high
demand by companies like Amazon, UPS
and FedEx, as retail customers increasingly
forsake shopping malls in favor of ordering
products online and getting deliveries
right to their door. Many drivers flock
to large, national employers rather than
local outfits, because they can often find
better salary and benefit packages and
more stable employment. Drivers are also
being lured away from trucking and bus
operators to other industries that offer
higher pay rates and other advantages;
in Hawaii, large construction projects
focused on infrastructure improvements
have exacerbated the low supply of
qualified CDL drivers.
When smaller, less-established companies
try to hire new drivers, they may be forced
to consider less experienced candidates,
who are more expensive to insure. Not
only do these employers need to assume
more risk with these drivers, they also
may need shoulder the costs of training
programs and hiring incentives.
One way companies can counter rising
premiums is to work on improving their
safety and driving records through
extensive training, realistic driver
schedules to limit exhaustion, and close
monitoring of their employees.
Your insurance agent can also help
you negotiate the best possible rates by
thoroughly understanding your company
and potential exposures to risk, as well as
representing you to underwriters in the
best possible light.
Atlas Insurance has a long track record of
working with transportation companies to
help combat runaway insurance rates and
providing a solid roadmap for success. Visit
us online at www.atlasinsurance.com or
call us for more information. +
BY: CURTIS NISHIYAMA,
SENIOR ACCOUNT EXECUTIVE,
ATLAS INSURANCE AGENCY
CONTINUE READING ON PAGE 28
Curtis Nishiyama is a senior account
executive with more than 20 years of
industry experience in the specialty
areas of transportation, construction,
municipalities, and food service. Prior
to joining Atlas, Curtis owned his own
insurance agency for more than a decade,
where he was responsible for his clients’
risk management programs and day-to-
day operations of the agency.