Beat Back Rising Trucking Company Insurance Costs – Implement Best Practices & Next-Gen Technologies

ATRI 2024 Top Trucking Industry Issues Report cited insurance cost and availability as number four (4) in the list of top ten(10) trucking industry issues overall. Since 2021, ATRI research has documented continuing increases in truck insurance premiums paid by motor carriers. The increase in premiums is driven in part by the losses incurred by insurers resulting from excessive litigation and sever verdicts.

While excessive jury accident judgements are driving up insurance costs, the hard facts reported by Fleet-Connection commercial trucking accident data reveal that reportable accident frequency for the commercial truck population has trended up from 2019 (pre-Covid) to 2022 (post-Covid). Simply put “excessive jury settlements” would be a much smaller problem if there were  fewer accidents in the first place. This is not to say that accidents will not happen, they will, but the fewer accidents and severity for a fleet versus industry average, the better the chance to beat back continuous year over year rising insurance costs.

The Insurance Problem 

The trucking industry spends $14 billion annually in safety improvements, including investments in technology and training. Despite this heavy spend, insurance costs keep rising each year.

Why? While “nuclear” jury verdicts are a factor, the root cause is that existing risk management practices and solutions are disjointed in their application, with each fragmented solution presented as the “silver bullet.” They are not.  First it was telematics, collision avoidance and lane change technologies, then came dashcams in the cab and now AI applications. Each new solution aspires to contribute to the “risk” solution for the trucking industry.  

Common SenseFleet Accident and Claims Reduction Framework

The whole ballgame of reducing trucking company insurance costs is managing accident frequency and severity.  This can be measured by looking at premium / loss ratios in comparison with those from the same size fleets hauling the same cargo type. This effort entails, equally importantly, proactively communicating data driven facts to your insurance company.

Beyond the implementation of solutions like telematics and dashcams, trucking companies need to take a comprehensive approach that meets both insurance standards and operational efficiency goals. By focusing on comprehensive driver training, proactive maintenance, and data-driven risk management, carriers can position themselves favorably with insurers and optimize fleet performance.

Some risk situations that typically seem beyond a fleet’s control can and need to be managed.  For example, certain geographic locations in the U.S. create increased risk, and knowing where these are can help fleets avoid the exposure that comes with them. Using RouteScores helps fleets identify risk factors in the lanes they travel and uncovers opportunities to mitigate, helping them to keep their drivers, equipment, and cargo safer but also to keep costs down. 

Best operating practices, workflow automation and BI technologies exist today to deliver superior integrated solutions in areas like these: 

• A strong driver pool is critical to maintaining consistent insurance rates. It is one of the key factors used in assessing fleet risk. The strength of your pool begins with hiring the right type of drivers, training them properly, and retaining and managing them using data driven risk performance metrics.

• Proactive tractor and trailer maintenance and repair is crucial. Using both risk and economic data to make equipment replacement decisions is important.

• Understanding and applying best practices to handle and haul each type of cargo in a safe manner is necessary.

• Reducing risk by using route scores data to identify risk factors, and to uncover alternative route and time of day opportunities, will mitigate risk.

To effectively reduce accidents and claims, and to incur insurance costs better than competition, trucking companies need solutions that seamlessly integrate data and insights across all the above-mentioned functions in one easy to use platform. Such a platform must deliver customer configurable solutions, with data-driven fluid 2-way feedback loops and insights between driver hiring, driver behavior incidents, accidents, claims, and loss ratios.

Technology Solutions for Accident and Severity Reduction Work

It takes a combination of EKA Omni-TMS™,and several real-time integrated technology solutions provided by other key solution partners like Lockton, Fleet-Connection, tenstreet, telematics and camera system solutions providers like Samsara, Motive and Geotab and route scoring services to deliver the most automated, customer configurable and robust end-to-end risk reduction technology solutions in a single easy to use platform regardless of fleet size.

EKA ‘s People-First TMS platform fluidly melds automated driver hiring, most comprehensive behavior score carding, equipment maintenance, accident, claims and loss ratio reduction and route risk reduction scoring data and solutions with its superior load planning, execution, routing visibility, reporting and BI tools. This fusion enables fleets to lower levels of accident risk and severity, and fully comply with FMSCSA requirements.

Adopting the EKA risk management tools and insights described here will help you move beyond the understanding of insurance as just a burdensome expense and to take advantage of the data and operational insights which will make your business more sustainable and profitable.

EKA is fully committed to rapidly develop and implement solutions with its expanding list of Alliance and Integration partners to provide “forward-leaning” and“best-in-class” accident/severity reduction, lowest claims and loss ratio, and safety compliance solutions, all in one. That said the best technology solutions alone are not the “silver  bullet.” The quality of fleet results depends on how motivated and effective fleet management is in using risk reduction solutions like these.