Vice President National Transportation
- West Des Moines, IA
The transportation industry has hit several bumps over the last couple of years.
"Freight rates are not where they should be, diesel prices and the cost of repairs are high, inflation is challenging, and higher interest rates have made borrowing for new trucks and trailers difficult. This environment has made it more challenging for trucking companies to grow and has created a barrier to entry for new entrants," says RPS Vice President Mark Gallagher, National Transportation.
What's Causing Issues for Fleet Transportation Companies?
Add a firm insurance market over the last several years to the mix, and fleet transportation companies, depending on their loss history and other factors, need help finding insurance homes.
"On the Casualty insurance side, you see nuclear jury verdicts in the tens of millions spearheaded by private equity funding. Additionally, skyrocketing values due to the cost of parts and vehicle scarcity have caused Physical Damage rates to rise," explains Jeffrey Marks, RPS Transportation Program manager. "You had a two-year period where, for example, it might cost $220,000 to replace a vehicle normally valued at $150,000. That cost is now down to $150,000, which is still high for a depreciating asset."
Cargo theft has also spiked nationwide and contributes to rising insurance rates.
These factors have made it challenging for insurers to keep rate adequacy, impacting many carriers' rates and appetite.
"Some insurers may only write fleets made up of newer vehicles with safety tech included, while others may not write Auto Physical Damage on those same fleets given their intractable values," says Marks.
Safety First With RPS's Fleet Trucking Coverage
Launched in early 2024, RPS Fleet Trucking is an exclusive program that provides coverage for long-haul fleets of 15 or more power units. It offers Auto Liability, Auto Physical Damage, Motor Truck Cargo and Truckers' General Liability insurance, and is currently available in 21 states.
The program is well positioned to insure more challenging, harder-to-place risks — those with tougher loss history or challenged safety scores that are ready to use RPS's risk control and data-sharing services.
"We are writing a segment that is underserved," explains Marks.
The RPS Fleet Trucking program also aims to improve the safety of challenging accounts.
What makes RPS Fleet Trucking unique is its eligibility requirement for all power units to install forward-facing cameras. "Through a vendor, we can also provide dual-facing cameras at a substantial discount," says Marks.
"Partnering with us helps a firm become a safer operation in the future and eventually transition to or graduate to another carrier where we may be able to broaden coverage and cut down on future insurance costs," explains Gallagher.
Data Drives RPS's Fleet Trucking Coverage
The fleets must also share their data from the tractors' electronic logging devices (ELDs). This data helps RPS validate its underwriting methodology and remain on track regarding loss ratios, profitability and the program's viability for its targeted niche market.
"We can compare an account's proprietary score against what we projected. If the score directionally matches the loss experience, we know we are on the right path with our underwriting and risk controls," explains Marks.
"The data can be used to better understand clients, improve rate adequacy and understand geographic diversity and its impact on safety and loss history," adds Gallagher. "Data is key in providing potentially less expensive insurance options in the form of discounts or subsidies today and providing more favorable premiums in the future."
