In our whitepaper, “6 Ways to Mitigate Risk, Reduce Insurance, & Avoid a Nuclear Verdict,” we discuss the impact new technology and Nuclear Verdicts have had on the commercial auto insurance industry.

While technology has been the key to some fleets unlocking affordable rates, the increased prevalence of Nuclear Verdicts has led many fleets to see their rates skyrocket in recent years. This has hit insurance carriers just as hard, which is reflected in the combined ratios of each carrier.

The Industry Has Been Unprofitable for Nine Years

First off, it’s important to understand what the term “combined ratio” means. In short, it is the sum of claim-related losses and general business costs divided by total revenue. As an example, if an insurance company’s combined ratio is 102% for a year, then for every $1.00 of revenue generated, they paid out $1.02 in losses

In 2019, the commercial auto insurance industry had a combined ratio of 109.4%, meaning the industry lost almost 10% more in claims than they gained in revenue. Importantly, this was the ninth year in a row the industry had a combined ratio over 100%.

What Does This Mean for Fleets?

It’s not uncommon for fleets to have a strained relationship with their insurance carriers, especially as premiums have skyrocketed in recent years due to the rise of Nuclear Verdicts. However, this attitude is often accompanied by the belief that insurance carriers are profitable companies unnecessarily raising rates, which simply isn’t true.

Instead, fleets need to see insurance carriers as an ally they can work with to obtain the coverage they need. Fleets should arm their insurance carriers—and themselves—with data that proves their safety program is effective, leverages that data to mitigate risks, and merits a reduced rate. 

How Fleets Can Work With Insurers to Prove Their Safety

While it may seem difficult to leverage your fleet’s data to unlock a fair rate, fortunately, there are tools that can help.

The Idelic Safety Suite® is the industry’s leading driver management platform, consolidating all of a fleet’s driver data into a single location where they can truly demonstrate their safety and improvement and gain trust from their carrier.

To learn more about how Safety Suite has helped fleets identify at-risk drivers with artificial intelligence, dramatically reduce the total claims cycle, reduce claims costs by 48%, watch a 2-minute demo or sign up for a deep dive here.