How These Issues Impact Insurance for Fleets Going into 2023
ATRI released its Critical Issues in the Trucking Industry – 2022 report at the American Trucking Association’s Management Conference and Exhibition (MCE). Joining the “Big Reveal” session, ATRI President and CEO, Rebecca Brewster, was joined by three industry experts including Idelic’s Founder/CIO, Hayden Cardiff, who broke down the insurance impact and concerns fleets should consider going into 2023.
ATRI Top Motor Carrier Issues 2022:
- #1 Driver Shortage
- #2 Driver Retention
- #3 Fuel Prices
- #4 CSA
- #5 Economy
- #6 Lawsuit Abuse Reform
- #7 Insurance Cost / Availability
- #8 Diesel Technician Shortage
- #9 Detention / Delay at Customer Facilities
- #10 Truck Parking
While “Insurance Cost / Availability” ranked #7 by motor carrier executives, a large number of issues on the list likely raise concern in part for their impact on insurance costs for fleets in the coming year.
Driver Shortage. ATRI predicts the industry’s current shortage of over 80,000 truck drivers could continue to grow to over 160,000 by 2030 as a result of the retiring workforce, lifestyle challenges, regulatory pressures, and other underlying factors.
While this shortage can tempt driver hiring managers to adjust their hiring standards and practices to open their candidate pools to more drivers, this can cause serious liability consequences. Oftentimes, nuclear verdicts and claims of negligence stem from inconsistent hiring practices and handbook policies. So while being more lenient on incoming drivers’ history might prove beneficial in the short term and keep your trucks moving, it can make you more susceptible to problems down the road if those drivers experience an accident.
ATRI recommends the industry push to lower the legal driving age to 18, improve the driving lifestyle by expanding truck parking and reducing detention at customer facilities, and recruit more women to the profession as just a few ways we may be able to tackle the shortage without putting an individual fleet at higher risk.
Driver Retention. Despite average annual increases in starting bonuses up 26% over four years and retention bonuses up 57% over that same period, driver retention is still largely a concern for many fleets.
In an analysis performed by Idelic’s data scientists using 20+ years of historical driver data, the team discovered that the vast majority of accident risk comes from drivers in their first two years of employment with a fleet. This means that higher turnover, resulting in more new drivers can equate to higher risk in a fleet.
CSA. CSA has continually made ATRI’s list of top issues as carriers remain frustrated with how their safety performance is evaluated by CSA. One likely reason for this concern is that CSA scores play an important role in insurance renewals and availability and are often an insurer’s best approximation of a fleet’s safety.
The Fixing America’s Surface Transportation Act was signed into law in 2015 and required the National Academies’ review of CSA. Their following report, issues in 2017, included recommendations for improving CSA scoring to better reflect a carrier’s risk profile, but the FMCSA has yet to implement those recommendations. Without those recommendations in place, many fleets are concerned that their risk is being inaccurately portrayed, especially to their insurance carriers.
For a carrier to be seen beyond a CSA score, leveraging their other driver risk data on their own or through a third-party system and being transparent with their insurance carrier can go a long way in getting a fair rate, whether their CSA scores are above stellar or not.
Lawsuit Abuse Reform. Previously termed “Tort Reform,” Lawsuit Abuse Reform has made the list for the third year in a row. Insurance premiums have risen by over 47% over the last 10 years and ATRI attributes the developments in excess litigation as one of the primary factors in rising insurance costs.
While there is no surefire way to bulletproof your fleet from a nuclear verdict, there are ways to reduce risk and be better prepared if an accident occurs.
Preparing for Insurance Renewals in 2023
It is clear that insurance costs and availability are not only rising concerns for the industry alone but also impacting many areas in which drivers and fleet executives alike share concerns.
The Idelic Program provides insurers with proof of sustainable improvements in crash reduction and helps fleets negotiate better rates. Fleets on average see a 20% reduction in accidents within their first year on the Idelic Program alone. If you share some of the concerns listed above or believe you could be seeing better insurance rates, sign up now to speak with an Idelic expert about the Idelic Program and if you could see better insurance outcomes.