THE TRUCKING INDUSTRY
Trucking Industry Faces Insurance Challenges
Donny Cunha has built his career around the trucking industry , first as an underwriter for a large trucking insurance company , then as a partner and commercial account executive at Jones DesLauriers Insurance Management in Ontario . He describes both “ hard ” and “ soft ” markets in the trucking insurance industry , each of which has different impacts on his clients .
In a soft market , insurance companies are doing well , with low loss ratios ( premium income / claim payouts ) for each client . In this type of economic environment , insurance companies tend to price aggressively , lowering premiums wherever possible as they try to grow their portfolios . Of course , premiums still are largely determined by a company ’ s loss ratio .
Now we are in a hard market , in which insurance companies are paying out more in claims than they are collecting in premiums — largely the result of a strong American dollar . Although Canadian companies take in their premiums in Canadian dollars , their claims are largely paid in American dollars because the majority of their clients operate primarily in the United States . Fewer insurance companies choose to remain in the trucking insurance business under these circumstances , so the market tightens , premiums rise , and insurance providers become much stricter about safety and compliance .
In the trucking industry , every truck of every fleet is assigned a safety rating by either the CVOR ( Commercial Vehicle Operator Registration ) in Canada or the SMS ( Safety Measurement System ), the American equivalent . These ratings take into account a host of factors , including hours-of-service violations and maintenance issues , such as balding tires and brakes that need replacing . Trucks that are ticketed can expect a hefty rate increase on their next premium — especially with a poor loss ratio . Carriers that have a high frequency of violations can expect that this will be a factor to justify rate increases on their next renewal — especially when combined with a poor loss ratio .
Clients with poor claims histories and a history of safety and compliance violations can expect to be hit hard when renewals roll around . They are in the worse possible position to dispute an increase and usually have no choice but to pay up .
To avoid these rate hikes , companies should make sure their vehicles are maintained regularly , addressing problems before they can blow up into violations , injuries , or even fatalities . Safety training is imperative , and the company also should work hard to instil a culture of responsibility and awareness among its employees to try to minimise premium increases .
As an agent for Jones DesLauriers , I always stress to my trucking clients how much influence they can actually exert over their own premiums . If they are serious about safety and compliance , it will reflect on their attitudes and actions , usually lowering premiums in the long run . As the link between the insurance companies and my clients , I work with my clients to help them understand their policies and premiums , and I always fight hard to advocate on their behalf .+
BY : DONNY CUNHA , ACCOUNT EXECUTIVE JONES DESLAURIERS INSURANCE
Donny Cunha is an Account Executive at Jones DesLauriers Insurance specializing in Transportation & Logistics . Throughout his 17 years in the insurance industry , his niche specialization in fleet insurance , vast transportation experience and trucking telematics expertise has served as a valuable asset to his clients .
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