Primary and Excess Auto Liability

The current state of the transportation market varies from one buyer to another due to the overall risk level of each client.

Motor carrier rates have increased within the last year and underwriting for both primary and excess liability is more constricted. Though the rapidly changing market of primary liability continues to shift as a result of poor commercial trucking markets, the opening half of the year 2018 shows a small balancing of top movements.

Underwriting for Primary and Excess Liability

Trucking companies have received large amounts of opposing jury verdicts in the transportation market. However, the excess marketplace, as a whole, is constant with ample production. This stable marketplace is present both domestically and internationally, in the city of London and the territory of Bermuda. Excess and primary liability underwriters prefer to focus on risks that are associated with safety, investments for the development of technology and future training while holding onto sound drivers. Rates are subject to experience an increase for those that have a poor damage past and negative BASIC scores.

Joe Hutelmyer says that for primary auto liability, there are limited markets looking to right the tougher pieces of business. Joe Hutelmyer is the chief underwriting officer of AmWINS Transportation Underwrites located in Burlington, NC. Among others, the states of Florida, Michigan, Louisiana, and Mississippi are difficult to place within the markets.

At the AmWINS Brokerage in Nashville, the executive president, Andrea Dickinson says, “While we can find a home for most auto accounts, the pricing can be a challenge. We have seen trucking operations close their doors because they simply can’t afford the insurance.”

An Increase in Commercial Auto Losses

Fitch Ratings listed 2016 as the year that fashioned the poorest underwriting production since 2001. As a result, many transportation insurers are suffering from their losses. In the year 2016, A.M. Best noted that there was a growth in commercial auto losses from $744.8M to $2.9B. The process of taking legal action has increased along with the production more expensive cars. This combination drives claims to a severe level as cars are gaining more miles and the economy continues to grow.

This causes a continued discipline of underwriting as classes move forward. Hutelmyer says, “There is heavy emphasis on examining every detail of an account: safety programs, investment in safety technology, driver selection and training, and more.”

Commercial Growth Opportunity

Fitch Ratings showed 2016 as producing the largest commercial segment in the market. This growth opportunity expanded by 5.6 percent. With more trucks on the road, this growth opportunity is present in today’s economy, however, retailers should proceed cautiously.

Andrea Dickinson says, “Because transportation is one of the few segments in the property and casualty space where premiums are on the rise, there has been an increase in dabblers. It is more important than ever to partner with specialists to ensure that the best terms are negotiated and that dedicated transportation markets are engaged to deliver quality services. You may not realize how important having a claims team that focuses on transportation is until you need them.”