New ATRI research evaluates motor carrier responses to rising insurance costs

New ATRI research evaluates motor carrier responses to rising insurance costs

The American Transportation Research Institute (ATRI) released a new report analyzing trucking industry impacts from the rising costs of insurance. This analysis, a top priority of ATRI’s Research Advisory Committee, utilized detailed financial and insurance data from dozens of motor carriers and commercial insurers. The report assesses immediate and longer-term impacts that rising insurance costs have on carrier financial conditions, safety technology investments and crash outcomes as well as strategies used by carriers to manage escalating insurance costs.

The study found that carrier strategies included decreasing insurance coverage levels, raising deductibles and/or Self-Insurance Retention (SIR) levels, and decreasing investments in other cost centers. In spite of this increased liability exposure, out-of-pocket incident costs and carrier crash involvement remained stable or decreased among a majority of respondents.

Despite reductions in insurance coverage, rising deductibles and improved safety, almost all motor carriers experienced substantial increases in insurance costs from 2018 to 2020. Premiums increased across all fleet sizes and sectors, with small fleets paying more than three times as much as very large fleets on a per-mile basis. One-third of respondents reported cutting wages or bonuses due to rising insurance costs, and 22 percent cut investments in equipment and technology – potentially creating future safety and driver shortage concerns. However, in the short-term, crash data confirms that carriers that raised deductibles or reduced insurance coverage were generally incentivized to reduce crashes in the subsequent year.

Finally, the research describes a process for calculating the “Total Cost of Risk” in order to evaluate the full scale and impact of rising insurance costs on a carrier’s long-term safety and financial viability, including safety investments in drivers, programs and technologies.

A copy of the full report is available through ATRI’s website.

You May Also Like

Used Class 8 retail sales dropped 19% in November

Longer term, average price and miles were higher y/y, with age up 7% y/y.

Onfleet_6_generic

According to the latest release of the State of the Industry: U.S. Classes 3-8 Used Trucks, published by ACT Research, used Class 8 retail volumes (same dealer sales) were down 19% m/m. Average mileage was down 1%, with average price down 3% and age up 2%, m/m. Longer term, average price and miles were higher y/y, with age up 7% y/y.

Albert Gore named ZETA executive director

Joe Britton, ZETA’s previous executive director, will remain president of ZETA’s board of directors.

How trucking fleets will benefit from the Inflation Reduction Act

How much money can you squeeze out of the tax credit for EVs? Find out here.

Xos-EV-Tax-Credit-1400
Why this year will be the ‘Year of Fuel Efficiency’ regulations

Plus top takes on the CHIPS Bill, Repair Act and what this Congress can actually get done.

HDAD-EV-National-Regulations-1400
FTR reports: Shipper’s conditions stabilize

Aside from a large increase in diesel prices during the month, shippers’ market conditions were more positive m/m.

Other Posts

Live Blog: Heavy Duty Aftermarket Dialogue 2023 (Updated!)

It’s the first trucking event of the year! Here’s what happened, as it happened.

Heavy-Duty-Aftermarket-Dialogue-2023
Amid loose market balance, carriers start tapping the brakes on capacity

Volumes softened to the lowest levels seen since March and April of 2020.

ACT-Research-For-hire-trucking-600
EV truck manufacturers to give updates at Work Truck Week 2023 

NTEA has released more information about EV-related sessions.  

Trucking market 2023 prediction: Plan for uncertainty

The latest from FTR’s State of Freight online press conference.

transprotation-market-generic-1400