Cleaning the slate of Compliance, Safety, Accountability (CSA) alerts is critical for drivers to avoid the continued barrage of double-digit hikes in insurance premiums, Brenda Wiser, chief marketing officer for insurance company Reliance Partners, said in an interview Wednesday with Reliance CEO Andrew Ladebauche during the FreightWaves Carrier Summit.
“An underwriter doesn’t see anything other than CSA scores” when evaluating its safety record for determining premium levels, Wiser told Ladebauche. Underwriters “don’t want to see an elevated CSA score,” and they will act quickly and unfavorably in the carrier’s interest if they do, she said.
CSA alerts are anathema to truckers, and they must be quickly addressed and resolved in order to avoid either a declined renewal or a renewal that jumps by 10, 15 or 20% from the prior year, Wiser said. However, simply terminating a driver with infractions is not necessarily the way to go. She urged all truckers to first work with their safety professionals to improve the company’s safety culture and environment before they take the next step to fire a laggard driver.
Truckers also must understand that just owning the latest and greatest technology will no longer guarantee them a break on premiums, according to Wiser. Instead, underwriters want to know how effective the IT investment has been in preventing accidents or reducing their frequency, she said.
A decade ago, a carrier could buy advanced telematics or collision-avoidance equipment and expect to receive a premium discount, she said. In today’s world, those investments are table stakes. “What underwriters want to know is what you are doing” with the technology at a trucker’s disposal, she told Ladebauche. “Are you retraining your drivers? Are you upgrading your fleet?”
Fortunately, insurance companies are more willing, if not eager, to partner with truckers to better understand how carriers are leveraging IT to improve safety, Wiser said. This increased collaboration is a positive development, she said.
Not much positive is happening on the trucking insurance front these days. The rise of so-called nuclear verdicts — jury awards of $10 million or more — has rocked the insurance world. Reinsurance companies, firms that insure the insurers, pass on their hits to their customers, who, in turn, pass them down to the truckers. This will ultimately be felt all the way down the supply chain to the end customer, both executives said. (For her part, Wiser eschews the term “nuclear verdicts,” preferring to call them “unpredictable verdicts.”)
What’s more, there are relatively few reinsurers that specialize in the trucking and logistics space, making it more difficult for insurers like Reliance to shop around for partners.
Another headwind is a push in Congress to double the minimum federal liability coverage to $2 million from $1 million. The 90% of for-hire carriers with 20 trucks or less are already operating on thin margins, due in no small part to higher insurance rates. Doubling the minimum threshold would be a major financial hardship, according to the executives. In addition, insurers don’t really know yet how to set premiums with the higher liability limits in place, Wiser said.