U.S. Transportation Market Outlook

Helping you come through for your clients

Over the past 10 years, the commercial auto industry has experienced its share of challenges that have impacted the transportation sector.

Nuclear verdicts, higher maintenance expenses, reduced freight demand and poor infrastructure, compounded by an aging workforce and driver shortage, have all led to the state of the insurance market today. Inadequate pricing and reserving has led to premiums that have not kept up with losses for several years. In fact, insurance carriers have had underperforming combined ratios that have steadily increased since 2014.1

To compensate, premium rates continue to climb, both year over year and on average, into double digits.

Operating on thin profit margins, transportation clients are continuing to look for ways to lessen losses and maintain profitability. And the beginning of 2020 was no different.

Then, COVID-19.

The jarring impact of COVID-19 has caused disruption across the transportation industry. Various segments have adapted and repurposed their business models, while others have been forced to halt operations.

There are still many unknowns regarding the long-term repercussions of COVID-19, as the economy, unemployment, stay-at-home orders and federal regulations will all play a role in the outlook ahead.

The transportation industry is always on the move, literally. As carriers and brokers try to forecast what will happen next, that continual movement may be the only predictable factor.

TRUCKING

While the commercial auto marketplace is impacted by a number of different classes of business, the trucking industry is contributing to the continual rise in premiums and influencing rates more than any other.

1 Best’s Market Segment Report, “U.S. Commercial Auto Results Continue to Deteriorate,” 2019

2

“Trucking is a difficult class of business for insurance carriers,” said Area President Mike Mitchell of the Transportation practice, Southeast region. “Truckers are on the road every day, so the exposure is always there.”

Even companies that haven’t experienced losses are getting hit with rate increases.

“Insurance companies are struggling to remain profitable, so they are charging more rate for more exposures,” Mitchell said.

Due to the volatility of trucking, there is limited capacity available from standard markets, especially for distressed fleets with poor loss experience and unacceptable safety scores that do not fit their optimal risk profile.

Agents working with transportation specialists have greater success in placing coverage but typically at higher rates than the standard market.

Insurance carriers have tightened up on terms and conditions, leading to higher premiums, which on average have gone up 10%–15% year over year since 2010.

Factors Influencing Insurance RatesThe following factors have influenced the profitability of trucking companies and the corresponding

insurance markets. Even recognizing that the pandemic could alter each factor slightly, these issues — which have plagued the industry for nearly a decade — are not expected to disappear.

Aging WorkforceThe median age of a long-haul truck driver is 46, but even higher for some fleets at 57.2 Various factors have influenced this trend over time, but a main contributor is the minimum age of 21 required for a CDL interstate license. And widening the gap further, many insurance carriers are unwilling to insure truck drivers under the age of 24.

The industry, therefore, misses the opportunity to recruit a younger segment of the population eager to start a career after high school. Congress has proposed legislation to lower the minimum driver age to 18, but it has yet to become law.

The aging workforce only exacerbates the driver shortage, especially when retirements are factored in. Replacing retiring truck drivers will account for more than half of new driver hires in the next decade.3

2,3 American Trucking Associations, Truck Driver Shortage Analysis 2019

© A.M. Best — used with permission.

Source: Best’s Market Segment Report: U.S. Commercial Auto Results Continue to Deteriorate

3

U.S. COMMERCIAL AUTO—NET UNDERWRITING PERFORMANCE

Driver ShortageNearly 11.5 billion tons of freight are transported by trucks, representing 71.4% of total domestic tonnage shipped, according to the American Trucking Associations (ATA).

Even so, the industry supply of drivers has not met the demand for goods for nearly 10 years.4 In 2018, the ATA reported the industry needed 60,800 more drivers to meet demand.

That statistic didn’t factor in the pandemic that has hit trucking jobs hard. In April 2020 alone, truck transportation jobs were down nearly 90,000.5

In this environment, there is even more pressure to fill seats instead of hiring quality drivers. Drivers with less experience and unsatisfactory safety scores increase the risk for accidents and thus increase losses.

Nuclear VerdictsThe rise in severity and frequency of nuclear verdicts, as well as the unpredictable nature of settlements and jury awards, have forced insurance carriers to reflect those risks in pricing.

Defined as a lawsuit verdict exceeding $10 million, nuclear verdicts in the transportation industry have been on the rise since at least 2012. Recent headline-grabbing verdicts have exceeded $200 million.

Additionally, it can take two to three years, and sometimes longer, to resolve bodily injury claims.

For example, what initially appears to be a $50,000 bodily injury claim on loss runs could easily turn into a $600,000 settlement, according to Andrey Miterin, area vice president, Transportation practice, Northeast/Mid-Atlantic region.

“Inadequate reserving is still prevalent in the truck insurance segment, and it can create skewed prior loss results and inaccurate data on which risk acceptance and pricing decisions are based,” Miterin said.

Freight DemandFrom 2017 to 2018, trucking briefly experienced relief when an improved economy and higher freight demand enabled truckers to increase freight rates and invest in new drivers and vehicles, while still absorbing rising insurance costs.

By mid-2019, due to trade conflicts and heightened political uncertainty, freight demand fell, resulting in lower freight rates and eroding profits. It became difficult, again, for truckers to pay high insurance expenses.

As a result, hundreds of motor carriers have had to close their operations, and many insurance carriers have exited the market altogether.

Maintenance Expenses Advanced technology, now standard in newer trucks, has influenced the rise in repair costs. In-cab cameras, collision avoidance systems, cargo monitors and other telematics are not only more costly to maintain, they also require highly skilled mechanics.

4 American Trucking Associations, Truck Driver Shortage Analysis 20195 Bureau of Labor and Statistics6 The American Transportation Research Institute, An Analysis of the Operational Costs of Trucking: 2019 Update

4

Defined as a lawsuit verdict exceeding $10 million, nuclear verdicts in the transportation industry have been on the rise since at least 2012.

Source: Truck Driver Shortage Analysis 2019

TOTAL DRIVERS NEEDED FROM 2019 THROUGH 2028 BY REASON

This has also shed light on a shortage of skilled labor, especially diesel fuel technicians, impacting costs.6 Not keeping up with maintenance will increase wear and tear on vehicles and the risk for losses, and thereby impact underwriting.

InfrastructureMore vehicles on the road leads to more congestion, which can wreak havoc on the nation’s highways and bridges already in need of repairs. These conditions create more wear and tear on trucks, waste fuel, and increase emissions, according to the American Trucking Research Institute.7

Additionally, congestion and poor road conditions force drivers to reroute into unfamiliar areas. This impacts truckers’ delivery times and productivity. A pattern of unpredictable routes and mileage is unfavorable to insurance carriers.

Distracted Driving A major contributing factor to accidents today is distracted drivers engaging in any activity from texting to eating that takes their eyes off the road. In 2018, distracted driving was the cause of more than 2,800 deaths.8

While distracted driving applies to truck drivers, it also affects other drivers on the road causing accidents with truckers. These exposures thereby factor into the continual increase in premiums.

Fleet Size Matters In general, fleets have higher limits but take on more risk with higher deductibles and self-insured retentions than non-fleet accounts.

Since they have a variable cost of insurance, the trucking fleets’ risk, is more predictable, since losses are based on miles driven, units and receipts.

The size of fleet makes a difference to the underwriter as well. Medium-size fleets, usually with 20–50 units, tend to perform better than smaller fleets with lower budgets allocated to safety and compliance.

At this size, trucking fleets should have a full-time safety manager and a dedicated mechanic, showing a higher level of commitment to monitoring and correcting driver behavior and vehicle maintenance.

7 The American Transportation Research Institute, Critical Issues in the Trucking Industry—20198 National Highway Traffic Safety Administration

5

Truckers that pick up loads at seaports or rail yards to deliver to warehouses, distribution centers or retail outlets, all in densely populated metro areas, increase their risk for exposures and losses.

“Larger fleets can potentially absorb year-to-year loss result fluctuation and remain a profitable account over the long term,” Miterin said. “They also tend to take corrective action much quicker than a small-size trucker, who might have a tough time recruiting new drivers to replace problem drivers or have less resources dedicated to safety and compliance.”

“Long-tenured fleet clients with good loss control and professionally managed operations will typically see less of an increase in premiums,” added Miterin.

Trucking Segments: Exposures and Policies Each trucking segment — from dry van to intermodal container — will face different risks based on how and where they transport goods. The size of the company will effect rates as well.

Region, type of vehicle, loss history, safety scores and driver quality also play a role in the balancing act of risk versus rate. Likewise, different segments of transportation and classes of business experience different trends.

Cargo policies are a differentiator across segments, as what is hauled will determine the exposure for theft, damage and spoilage, when applicable.

Dry vans, for example, are favorable among insurance carriers because they have cargo sustainability. Their commodities are stocked in a closed van that keeps goods temperate as they travel across different climates throughout the country.

The theft risk will depend upon the value and type of commodity, especially if it can be disposed of easily. For example, dry vans hauling items such as electronics and pharmaceuticals have higher limits of $250,000–$400,000 because of the higher theft and damage risks and, therefore, higher rates and premiums.

Flatbed haulers, on average, have higher limits than dry vans as they generally deliver expensive cargo, such as farm tractors in the Midwest, and oversized and overweight loads. As a result, in the event of a rollover accident or collision, the loss is typically a total loss.

“Rolling over a brand-new farm tractor is not easily salvageable like a box of cereal,” Mitchell said. “So this class does have a vulnerability that makes it tougher for carriers to insure, which can cause higher premiums on flatbeds.”

The Uniform Intermodal Interchange & Facilities Access Agreement for intermodal containers place extra requirements on truckers, increasing auto liability and general liability coverage to $1 million.

6

At the same time, the risk of stealing a tractor would be lower than other commodities. Aluminum, for example, can be easily stripped off the flatbed and exchanged for cash at a local dump site. The same cannot be said for a 1.5-ton combine.

Flatbed haulers also face their share of workplace injuries, with a limited market for workers’ compensation.

The unique commodities hauled by flatbed truckers make them more susceptible to injuries. For example, a livestock hauler has a higher rate of risk for injuries while loading and unloading stressed cattle. The open design of flatbeds also increases the likelihood of drivers climbing onto the trailer to tie down freight and consequently sustaining injuries from falling or dismounting incorrectly.

Cargo insurance for trucks with refrigerated haulers offers protection against mechanical breakdown and spoilage, but availability of markets differ.

More common and available among insurance carriers is mechanical breakdown, which recoups losses from damage resulting from equipment failure of the refrigerated unit. Most shippers require refrigerated haulers to have this insurance.

Spoilage, on the other hand, has a limited market due to its higher exposure. This endorsement protects against cargo spoilage while in transit but not caused by a mechanical breakdown. In many cases, it’s driver error.

“In the majority of cases, purchasing spoilage increases the cargo premium by 10% or more,” said Mark Gallagher, RPS Transportation practice leader.

To mitigate these extra but necessary insurance costs across dry van, flatbed and refrigerated haulers when higher limits are required, Gallagher advises clients to take advantage of higher deductible policies and combined deductibles.

Some carriers offer tighter combined deductible packages as a cost-cutting measure. But in other cases, truckers may find lower rates by purchasing coverage through more than one carrier.

Intermodal ContainersA tougher segment to underwrite than others are fleets hauling intermodal containers. Truckers that pick up loads at seaports or rail yards to deliver to warehouses,

7

8

distribution centers or retail outlets, all in densely populated metro areas, increase their risk for exposures and losses.

This, plus the use of non-owned trailer equipment, the potential for cargo to include hazardous materials and the variance in shipping/loading standards from one country to another, all creates additional exposures that are difficult to control.

With the exception of loading and unloading exposure, intermodal containers have a low risk for theft, especially since the container outside does not advertise the contents inside.

Additionally, the Uniform Intermodal Interchange & Facilities Access Agreement for intermodal containers places extra requirements on truckers, increasing auto liability and general liability coverage to $1 million, and cargo with specified limits depending on the equipment provider.

It also triggers other insurance requirements such as hired and non-owned coverage, as well as an intermodal interchange endorsement to provide additional insured status for intermodal equipment providers and shipping lines.

Truckers engaged in intermodal work also experience high driver turnover, mainly caused by the high concentration of trucking companies located around major port areas.

“Within a 10-mile radius around seaports in the Northeast, there are approximately 200 trucking companies, all competing for the same driver pool,” Miterin said. “Drivers will switch companies based on pay structure, sign-on bonuses and better benefits.”

Long Haul/Over the RoadThere is a limited market for long-haul truckers, due in large part to the specialized nature of underwriting for this class of business.

Traveling cross-country for consecutive days prompts higher levels of liability. Plus, insurance carriers in this market must provide the related client resources — claims adjusters, towing services, accident reconstruction experts and the like — in every state its clients travel through. Underwriters review data for where the risk is going instead of where it is located to ensure accurate loss costs, which will vary across the country.

PUBLIC AUTO

One of the fastest-growing classes of business in public auto in the U.S. today is nonemergency medical transportation, particularly used by senior citizens to travel to and from doctor’s appointments.

“As travel becomes more difficult for the aging and disabled populations, it is more common and necessary for this segment to be growing in a way we haven’t seen before,” Gallagher said.

Outfitted with wheelchair accessibility and other safety features, and due to the health risks of passengers onboard, nonemergency medical is more challenging to place, resulting in tightened terms and conditions.

Ride-sharing or transportation network company (TNC) businesses are more rapidly evolving with the use of smartphone apps than other classes, but also present new challenges in the market. Insurance carriers favor vehicles with predictable mileage and routes, which lessen exposures and losses. This is not the case for ride-share drivers.

Gallagher notes that carriers are resistant to provide TNC insurance. When they do, they prefer to cover businesses that typically offer ride-sharing services about 10% of the time, though he sees that changing in the near future.

“Insurance carriers are learning how to adapt to the trend and, as they become more comfortable with ride-sharing services, more markets will open up,” Gallagher said.

GAPS IN COVERAGE

Squeezed by thin margins, trucking companies allocate 5%–7% of operating costs to insurance and, of that, 70% goes toward auto liability.

Truckers are required by law to purchase a minimum $750,000 primary auto liability policy to cover third-party bodily injury and property damages in the event of an

One of the fastest-growing classes of business in public auto in the U.S. today is nonemergency medical transportation.

9

Not one facet of transportation has been untouched by the repercussions of COVID-19.

accident. Most trucking companies purchase more than the minimum, and limits are higher for truckers who haul intermodal containers or hazardous materials.

Add another 25% from the insurance budget for physical damage, plus cargo, general liability and special endorsements, and there’s little wiggle room to purchase extra insurance protection or even small increases.

Yet the additional risks outside the immediately identifiable exposures are creating a coverage need for transportation companies that can no longer be ignored.

Cyber Cyber insurance has been in a soft market with a lot of capacity, but the tide is turning for some industries, according to RPS National Cyber Practice Leader Steve Robinson. Over time, the coverage has expanded to account for exposures from the proliferation of technological advancements and interconnectivity — now more available than ever in the trucking industry.

From telematics in the cab to back-office financial software, trucking is a present and increasing target, especially for ransomware, social engineering and business email compromise.

In fact, transportation ranked third among the top industries targeted for a cyber attack, behind financial services and retail, according to the 2020 IBM Security X-Force Threat Intelligence Index.9

Gone is the misconception that cyber insurance only applies to data breach risk profiles, or companies that are rich in personally identifiable information, such as Social Security and credit card numbers.

Today, the biggest threat is ransomware — a more sophisticated attack where hackers debilitate and restrict access to networks and information until the ransom is paid.

Consequently, routes are held up in dispatch, drivers’ locations cannot be found, current orders aren’t being delivered, and future orders are on hold.

“For every hour trucking companies are offline, it will cost them greatly in business interruption costs,” Robinson said. “The broader the technological footprint, the wider the disruption of service.”

Whether it’s ransomware or another method of attack, the cost to the business doesn’t end with damage to the system.

Companies are responsible for expenses such as pinpointing vulnerabilities once a breach occurs and notifying the compromised employees or customers, third-party liability, business interruption, reputational damage, system damage, theft, and more.

9 IBM X-Force Incident Response and Intelligence Services, X-Force Threat Intelligence Index 2020

Transportation ranked third among the top industries targeted for a cyber attack, behind financial services and retail.

The average total cost of a data breach in the transportation sector is $3.7 million, according to the 2019 Cost of a Data Breach Report: Ponemon Institute and IBM.10

The use of ransomware has escalated greatly in both frequency and severity over the course of the past 18 months. In 2018, the average ransom payment was just under $29,000, but a year later this amount surged to more than $300,000.11

Underwriters are increasing their requirements and are looking at the issue holistically, accounting for IT security controls, employee training, proactive measures and backup protocols.

A small trucking company could pay less than $5,000 annually for $1 million of coverage. Larger fleets may see $10,000 annually per $1 million limit.

Transportation has been behind the curve in purchasing cyber coverage, but Robinson sees that changing in the months ahead as ransomware attacks continue to escalate in frequency and severity.

He advises agents to “change the narrative for cyber insurance away from data breaches and toward business continuity.”

Agents can help truckers understand their dependence on computer systems, telematics and third-party vendors, as well as how much revenue would be lost if they were down for more than two days.

“Cyber insurance fills the gap other liability policies don’t cover. Without cyber insurance, companies will pay out of pocket,” Robinson said.

He added: “The most valuable aspects of securing coverage is having the cyber incident response team lined up ahead of time, instead of trying to figure out who to call for what, when a situation is at its most stressful point.

Knowing all the factors, agents can help truckers determine if they can withstand the cost and stress of not having this essential coverage.”

ExcessNuclear verdicts have brought to the forefront the need for excess insurance — increased coverage for bodily injury and property damage above primary liability policy limits.

For example, if a claim ends up in court and the plaintiff ’s attorney sues for $2 million, a trucker with a minimum $1 million excess policy on top of a $1 million liability policy is protected. Without excess insurance coverage, lawyers will go after business assets.

“The frequency of large claim lawsuits resulting in significant jury awards are popping up more and more,” Miterin said.

Even knowing the risks, not all truckers are taking advantage of this extra protection.

Most small trucking companies only purchase excess liability coverage if required by a direct shipper of third-party logistics. And while larger fleets are more likely to carry excess, many do not, primarily due to cost, according to Miterin.

“The more risk, the more agents should encourage clients to purchase excess,” he added. “Larger fleets, especially, have significant assets on their books as well as

10

10 IBM Security, Cost of a Data Breach Report 201911 BakerHostetler, 2020 Data Security Incident Response Report 2020

physical assets such as owned equipment and buildings/warehouses. Some fleets are family-owned and operated; if the company experiences a large verdict/judgment, excess insurance can protect against lasting effects on their succession plan.”

Public auto fleets would also benefit from excess coverage. Gallagher said businesses in this segment with 15 or more passengers need $5 million in liability, but some carriers won’t provide more than $1.5 million, creating a gap excess could fill.

D&O and EPLIWhether a trucking fleet is public or private, the need for D&O and EPLI is present — filling in the gaps general liability policies do not cover. Protecting directors, officers and employers from wrongful allegations is advised for all trucking fleets.

Larger trucking fleets are more likely to purchase coverage, as opposed to small and midsize trucking companies that tend to carry minimum coverage requirements mandated by states and their shippers.

“With the rising cost of liability insurance, they tend to lower their spending on optional coverages or drop it altogether,” Miterin said.

This is not advised, however.

“Providing recent case law when it comes to industry-related employment practices lawsuits is still the best tool to convince clients that there is actual and real exposure,” he added. “Legal expense coverage provided under both EPLI and D&O lines can pay for itself very quickly if a trucker is stuck with a wrongful termination or independent contractor misclassification lawsuit.”

COVID-19 AND TRANSPORTATION

Not one facet of transportation has been untouched by the repercussions of COVID-19. Particular classes of trucking such as dry van and refrigerated haulers may have fared better at the onset of the pandemic, but now demand is leveling out.

Other segments have been devastated by a significant slowdown or complete halt to their business, due in part to nonessential businesses shutting down, stay-in-place orders and work-from-home restrictions instituted across the country. Those affected include but are not limited to:

• Flatbed haulers that were delivering construction materials to sites

• Fuel tankers that were replenishing gas stations

• Car carriers

• Public transit services

• Private vans and buses in hospitality

Fleets that relied heavily on spot market and load boards are working at lower rates than they did pre-pandemic, impacted by the limited availability of freight that has caused freight rates to drop significantly.

“The variable cost of insurance based on mileage, units or gross receipts encourage some trucking fleets to operate at a limited capacity, until spot freight rates firm up again,” Miterin said.

Contract carriers, fleets that exclusively haul for one or two shippers, are sitting idle and waiting for demand to resurge. Negotiating a new shipping contract is not an easy task and can take several months to a year to complete.

“Contract carriers are used to stable and typically higher paying freight with direct shippers, so temporarily supplementing their operations with brokered freight might not warrant the cost of insurance, driver pay and fuel costs,” Miterin added.

Motor carriers that work with multiple shippers, on the other hand, are in a better position during this pandemic.

Long-haul truckers also have taken advantage of lower fuel prices and federal regulations that temporarily loosened hours of service.

11

“With the rising cost of liability insurance, [fleets] tend to lower their spending on optional coverages or drop it altogether,” Miterin said.

12

Coupled with less congestion on the roads, long-haul truckers have been able to deliver goods quicker and at lower variable costs than under normal conditions.

“Some fleets are getting a boost from much-needed demand for capacity with certain essential products,” Miterin said.

A FOCUS ON SAFETY

Adjustments at the carrier level can alleviate exposures during the pandemic, but there are other steps agents can take to position transportation clients to remain profitable long term. As they look to cut costs, insurance will be top on their list.

Myriad factors influence pricing. Among the top three are loss history, driver quality and safety scores — all put under the microscope by underwriters. But safety scores are the gatekeeper, Mitchell said.

Any acute or critical violations — from unsafe driving to hours of service — within 12 months triggers an alert.12 These safety alerts can have a detrimental effect not only on the driver but the motor carrier company as well.

Poor safety scores give plaintiffs’ attorneys leverage in jury awards. And many insurance carriers won’t write policies for trucking companies with two or more alerts.

Therefore, it is pertinent for transportation companies to invest in and commit to safety, through various measures.

1. Telematics: Technology features in motor carriers today are becoming highly sophisticated at capturing driver behavior. Data from forward- and rear-facing cameras are one of the best ways to document the reason for a loss. Collision avoidance technology, automatic braking systems, cargo monitors and lane departure controls can all prevent accidents.

Integrating data collected from the federally mandated electronic logging devices with telematics can take data to another level as well.

“Telematics is an investment upfront, but will help save fleets in the long run, especially if an accident goes before the courts and the recordings prove the trucker wasn’t at fault,” Mitchell said.

Underwriters want to see a telematics investment, but the critical piece is using the data collected. Pinpointing risky driving behaviors before an accident occurs can make or break a business. This can be accomplished through safety training, ride-along coaching and education.

“It’s not enough to install telematics and hire a safety director; trucking companies need to show they are making improvements to driving behavior and scores,” Mitchell added.

2. Safety director: An employee dedicated to driver safety illustrates leadership’s commitment to safety. In this role, the safety director oversees driver safety training and education, analyzes data to make improvements, ensures rules and regulations are followed, and assists with accident investigations.

“When there are losses, insurance carriers want to see corrective measures in place. Is leadership investing time and money in long-term safety improvements or are they only implementing measures until the losses improve?” Miterin explained.

3. Quality drivers: Trucking companies that invest in and commit to hiring quality drivers with good safety scores, and that have a strategy to retain those drivers, will be better positioned to improve loss history and obtain lower increases.

4 KEY SAFETY MEASURES THAT CAN IMPACT SAFETY SCORES

1

2

3

4

Telematics

Safety director

Quality drivers

Proper documentation

12

12 Federal Motor Carrier Safety Administration, Safety Measurement System (SMS) Methodology, 2019

13

4. Proper documentation of all the above is essential to prove the client’s commitment to safety and training, and streamlines the process to obtain insurance quotes quicker.

OUTLOOK AHEAD

Insurance carriers are allowing adjustments to better position transportation clients so they can survive the current economic uncertainty and grow once the economy reopens and demand resurges across the industry.

Some of those adjustments include granting premium reductions; deleting units; and/or waiving monthly minimum reporting for mileage, receipts or units.

There are still many unknowns during this unprecedented time, even as COVID-19 restrictions begin to lift across the country. How quickly the economy improves, the rate of unemployment, and state and federal aid will play a role in helping the industry improve.

“I have always felt that the trucking industry is the canary in the coal mine for the economy,” said Mitchell. “Whatever is going on, trucking will feel it first. They are the first to be impacted and the first to come back, and the first to help our country heal and get back on our feet.”

With less congestion, fewer cars and fewer distracted drivers on the road, what remains to be seen is the impact on losses and ultimately rates, while states begin to reopen and consumers maintain their increased reliance on shipped goods.

Gallagher said the pandemic has given insurance carriers an opportunity to right themselves. “Insurance carriers have struggled for so long from a loss perspective, and the pandemic has allowed them to catch up a little,” he said “But it’s more of a reset than an ability to lower rates and bring a softer market.”

Mitchell added: “The big question mark is if loss results will get better and, if they do, insurance carriers will still need discipline not to over-adjust, take lower rates too far and lose sight of the challenges the industry faced pre-pandemic.”

The totality of the pandemic remains to be seen, but in the meantime, these unprecedented times have spurred hope in a couple of areas.

For one, in an industry where working from home is not possible, the pandemic has brought more attention to autonomous trucking and a future of more truckers driving virtually.

And second, the high unemployment rate presents trucking as a way to fill the driver shortage, with new drivers or former drivers reentering the industry.

“Our insurance carriers are looking to write new business,” Gallagher said. “It is instrumental for agents to provide us with enough narrative and background on the attributes of the truck line and improvements their clients are making, to help us place their business with our carrier partners.”

THE RPS DIFFERENCE

RPS has a dedicated Transportation division with full-time underwriters throughout the country and the markets to place accounts.

Due to transportation’s unique exposures and operating model, it’s best to work with the wholesale specialty broker that knows the transportation business.

“We are 100% dedicated to the transportation industry. With the breadth of our markets and capabilities, we find more success and more solutions tailored to our clients’ specific needs,” Gallagher said. “We find a home for everyone.”

Miterin added: “Now more than ever, in this continually firming market, it’s important to partner with an MGA/wholesaler who truly understands exposures within this specific niche.”

Being experts in the market extends to insurance carriers as well. “We have long-standing relationships with our carriers to help best represent our agents and their clients,” Mitchell said.

RPS’ commitment to the transportation market is unrivaled. The Transportation practice continues to invest in employees, education and technology. With over 80 offices nationwide, the practice is backed by the broader RPS organization, improving and innovating services to help agents place comprehensive coverage for their transportation clients.

“I have always felt that the trucking industry is the canary in the coal mine for the economy,” said Mitchell.

13

The information contained herein is offered as insurance Industry guidance and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client-specific risk management advice. Any description of insurance coverages is not meant to interpret specific coverages that your company may already have in place or that may be generally available. General insurance descrip-tions contained herein do not include complete Insurance policy definitions, terms, and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis.

Copyright © 2020 Risk Placement Services, Inc. RPS38502 0720

ABOUT RISK PLACEMENT SERVICES

Risk Placement Services (RPS) is one of the nation’s largest specialty insurance products distributors, offering valuable solutions in wholesale brokerage, binding authority, programs and standard lines, plus specialized auto through its Pronto Insurance brand. Headquartered in Rolling Meadows, Illinois, RPS has more than 80 offices nationwide.

For more information, visit RPSins.com.

14

CONTRIBUTORS

Mark Gallagher, Vice President, National Transportation Practice Leader

Mike Mitchell, Area President, Transportation, Southeast Region

Andrey Miterin, Area Vice President, Transportation, Northeast/Mid-Atlantic Region

Steve Robinson, Area President, National Cyber Practice Leader