The art of writing long-haul trucking

Long-haul trucking (LHT) insurance isn’t just for cargo and trailers — coverage must extend beyond the roadway.

When underwriters consider long-haul trucking risks, they should examine broader business criteria such as a fleet’s age and size, vehicle class, the distance drivers cover in a year, cargo types, level of driver experience, and adherence to vehicle maintenance and safety standards.

“No two LHT policies should be painted with the same brush,” says Josée Roy, Echelon’s national vice president of long-haul trucking and commercial auto. “The loss prevention process must be embedded across the customer lifecycle. That means on-site risk evaluations prior to binding to ensure the right risks are being underwritten.

“It also means providing long-term training and development support through in-house loss prevention experts. Additional loss control measures include partnerships with third-party providers such as CarriersEdge, which provides driver training education across North America.”

Site visits are key to evaluating the company management’s focus and capabilities. Through them, the insurer can examine a company’s safety controls and criteria for hiring drivers. “If a risk isn’t best-in-class in terms of loss prevention, but the management of the company is willing to work with a carrier, and is open to implementing the insurance company’s feedback, the insurer may still consider writing the risk,” as Roy explains.

Maintenance is also key. “Even if you have good drivers behind the wheel, the equipment has to be well-maintained to ensure major accidents and losses are avoided,” Roy says. “This includes premises security measures to avoid cargo theft.”

Telematics is another risk management tool and data source that drives pricing, in conjunction with consulting the expertise of specialized LHT brokers, some of whom have been in the business for decades.

Once a telematics program is implemented, dashboard reports can be requested by loss prevention teams during an inspection. These reports often include driver behaviour data to help identify additional training needs, and vehicle maintenance reporting, which can be used to enhance fleet safety.

“This can lead to an improved operator safety score, which can lead to lower premiums,” she says.

Discussing LHT market trends for 2023, Roy anticipates analytics advances will allow greater differentiation and assessment of risks. She also expects technology to play a larger role in servicing both brokers and customers.

“In Ontario, specifically, we’re seeing increased competition from captives,” Roy adds. “That model allows them to be more competitive in terms of rates, which presents a challenge for the traditional insurance model.

“Standard commercial insurers continue to step away from underwriting niche, harder-to-place risks like LHT. We continue to see major commercial markets focusing on class underwriting as opposed to risk underwriting.

“For specialized LHT insurers, the key is to do the opposite and evaluate each risk individually.”

 

Feature image courtesy of iStock.com/adamkaz