Gallagher Insurance Brokers has launched a new national transportation practice this year, which will focus on offering specialized transportation insurance products in an ever-challenging market.
“When brokers are specialized, they have an in-depth understanding of the industry and its challenges, so they can bring better, more customized solutions for their clients,” says Joe Palmer, national practice leader for Gallagher’s Canadian national transportation practice.
Specialized transportation brokers also tend to put additional resources into value-added and risk management services to not only help with the placement of insurance, but also to help improve the overall quality of the risk, he added.
Palmer will be assisting clients in relation to longhaul crossborder trucking, fuel haulers, box trucks, tractor trailers and other niche market needs.
Gallagher has specialized in transportation since 1980 and been able to develop key relationships, unique processes and expertise to help clients. This is hard to compete with for a general commercial insurance broker, Palmer says.
Palmer says market conditions have been challenging for a couple of years, particularly in 2020. This correction in the market was needed due to rising claims costs, equipment values and liability settlements, particularly in the U.S. “Having said this, expect market conditions to remain about the same through 2021. When they start to soften, I expect it to be a slow and gradual process,” Palmer says.
Fleets need to continue to put more focus into risk management, safety ratings and the use of technology. Best-in-class fleets fared very well through the difficult market, because they have done a better job in these areas, Palmer says. Fleets that are not paying attention to their safety programs, carrier profiles and claims may continue to struggle to find affordable insurance and be able to compete.
Palmer says rising insurance costs are a result of rising claims costs. Due to sensors and electronics in vehicles today, a front-end collision can cost significantly more to repair than it did five or 10 years ago, he adds.
Liability settlements are rising in value, and nuclear settlements – over $1 million – have been increasing steadily. These are having a large impact on excess liability and reinsurance, Palmer says. Repairs and damages cost more in U.S. dollars, and the nuclear settlements are limiting the excess liability capacity available in Canada for our trucking clients, he adds.
Palmer says telematics, dash cameras, anti-roll, lane departure and adaptive cruise systems are being used by transportation companies to better manage their risk and claims costs.
Driver shortages continue to be a challenge, he says. Older, more experienced drivers continue to retire, putting more pressure on recruiting and training new and limited experience drivers. This puts even more importance on managing safety, Palmer says.