![]() ![]() In this kind of scenario, agents may want to consider teaming up with a wholesaler that deals with this type of account on a daily basis and has a significant volume of business placed with the writing insurance carrier. These types of insureds should be aware that these carriers will surcharge for any flaw while heavily scrutinizing drivers, inspections, vehicle reporting, additions to the policy and more. High-risk insurers may attempt to bring this type of insured back to operational basics in hopes of tightening up their operation and improving the risk. A first-dollar program may be their only option. Most of the insurance carriers that quote distressed risks offer no coverage enhancements or flexibility-and unless an insured has stellar financials, there are no risk-sharing options. With premiums that high, insureds must complete a cost analysis to determine whether they can even stay in business. Only a few carriers are willing to consider these truckers, with liability pricing coming in at 30-50% more per power unit than what an insured would be able to get from a preferred insurance program. Collateral requirements can also pose a financial burden.īut what about distressed truckers with fewer years in business, poor safer scores, heavy losses and fast growth? For them, a true hard insurance market is at hand. For example, risk-sharing options can seem very attractive on a per-unit cost basis in the short term, but in the long term, they can potentially cause problems for an insured that is not financially stable. Multiple standard market insurance carriers and alternative programs-such as captives or options offering large deductibles or self-insured retentions-are aggressively seeking this business.Ī well-educated agent must be able to explain all these different options to the insured. This type of operation could be classified in the soft market category. Truckers with low severity and frequency of losses and favorable safety scores who have been operating for more than five years will find a broader range of opportunities in the insurance marketplace. While trucking insurers as a whole have been consistently losing money over the past few years, some are fighting aggressively for preferred accounts. It’s much more complex, varying greatly based on type of risk. The current trucking insurance marketplace escapes simple “soft” or “hard” categorization. This can be caused by a number of factors, including falling investment returns for insurers, increases in frequency or severity of losses, and regulatory judgements against insurer interests. A hard market cycle is when premiums increase and capacity for the insurance carriers decreases. Typically, insurance premiums are referred to as either “soft” or “hard.”Ī soft market cycle is characterized by low rates, high limits, flexible contracts, higher compensation and broader availability of coverages. ![]()
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