Accelerating through the challenges of transportation insurance

Transportation insurance is going through a transformative era, particularly in the trucking and commercial auto sectors. Speaking to IB, Drew Easton, executive vice president and branch leader at Amwins National Transportation Underwriters (ANTU), said that the expansion in niche sectors is offering opportunities.

“Just look at those gray trucks running around your neighbourhood delivering packages,” explained Easton. “We are also seeing a shortening of the radius for traditional long-haul carriers.”

Amwins leverages its specialization within various divisions – benefits, brokerage, programs, and underwriting – creating niche programs and capabilities even within broader categories. Easton himself administers an environmental transport program for haulers of hazardous and non-hazardous commodities, effectively a niche within the larger transportation specialty of ANTU.

ANTU, or as Easton jokingly calls it, “‘Ain’t U’. As in, ‘Why Ain’t you doing business with us?’” represents a strategic merger of Amwins’ capabilities and those of the former National Truck Underwriting Managers (NTUM). This amalgamation has only fortified its position with retail partners and the marketplace, consolidating their brand under the Amwins ANTU logo.

Focus on niche

The industry’s focus on specialization correlates with capacity, Easton told IB. As markets become more niche-oriented, the homogeneous exposure created is attractive to insurers, enhancing expertise recognition and facilitating unique capacity procurement.

“We’ve been really focused on finding proprietary relationships for products,” Easton added, aiming to offer partners something exclusive, a trend that competitors are increasingly emulating.

Technological advancements and data utilization are also reshaping transportation insurance. The industry, traditionally lagging in tech adoption, now embraces sophisticated data analysis.

“We have this massive amount of data. Yet, we were challenged to digest it,” Easton admitted. However, with modern tools and sophisticated data analysis, the industry is developing predictive patterns and shifting from retrospective loss assessment to forward-looking exposure identification and pricing models.

According to Easton, digital transformation in insurance is becoming ubiquitous. Motor carriers share operational data, such as location, speed, and hard braking, which underwriters use to assess risk quality. This data-sharing fosters better operational control and predictive insights.

“We’re securing a great deal of this (data) and recognize it can be very (highly) predictive,” Easton explained, underlining the industry’s shift towards real-time data utilization. The data can also assist in creating opportunities. For instance, a quick search in their agency management system might reveal hundreds of unplaced submissions, highlighting a need to build capacity for specific new niches.

Importance of mentorship

Reflecting on the challenges for underwriting, Easton told IB that concerns around rising rates, litigation and claims severity continue to plague practitioners – emphasizing the importance of mentorship and development for new entrants in the industry.

“We expect a lot more out of these new folks (claims, retail, and underwriting personnel) coming in,” he added. “Team leaders, such as myself, are charged with mentoring. But I think we may be missing out on opportunities.” 

In earlier days, carriers offered sophisticated educational opportunities, including claims and underwriting schools. The formal education offered a deep understanding of the risk transfer process and thorough knowledge of coverage and forms. Often, partnering with a subject matter expert or niche player offers a specialized experience that, absent the ‘old school’ training, may take a career to build.

There’s also an increased need for more thorough communication in broker-client relationships nowadays. As Easton pointed out, “answering the phone, responding to emails, and providing referrals are basic yet often overlooked aspects of good service.”

“I think we tend to take service for granted,” he told IB. “I can’t tell you how many times folks are surprised their call was answered by a person. That’s what we aim for. We’re definitely not a solution for all things, but we’re going to answer the phone and offer direction. We’re going to respond to that email and get you to where you need to be.”  At ANTU, they stand-ready to assist.

Challenges in transportation insurance

Litigation frequency and claim severity are also notable challenges. Easton pointed out that while the number of severe claims has increased, the actual severity has not necessarily changed. Instead, the financial demands associated with these claims have skyrocketed. Factors like litigation financing and inflated medical expenses are driving up costs. However, Easton remains optimistic, noting gradual changes in tort reform and legal regulations aimed at curbing these trends.

“We are seeing some changes occur,” he said. “We are seeing around the edges changes with tort reform and laws trying to put reasonable handles on liability and litigation. In some instances, folks must disclose there’s a third party providing litigation financing. I think that’s where I find my optimism – that we as an industry have to drive the trend towards a more reasonable tort situation here in North America. [That means we] can get back to what insurance is – the many pay for the losses of a few. And right now, unfortunately, we need a heck of a lot more ‘many’ to pay for these losses because they have become rather exaggerated in value.”