Navigating The Bumpy Commercial Auto Road (Excerpted)

The commercial auto market is similar to a time-worn highway. Each year, it seems to get bumpier, no matter how hard people work to repair the damage. Despite the rough roads ahead, savvy independent agents can find new ways to help their policyholders smooth the speedbumps, reduce the frequency and severity of their claims, and deliver exceptional service.

Traffic jam of negative forces - The current hard market has raised the cost of reinsurance. As a result, carriers have no choice but to pass those costs on to their policyholders. At the same time, insureds and their fleets face mounting risks. Supply chain shortages have led to higher parts prices and longer repair cycles. That means fleets are paying more to maintain their owned vehicles, and they’re paying more for rentals, too.

Continued labor shortages create yet another roadblock for fleet owners. As a result, companies within sectors where business is booming—such as manufacturing, lumber and building materials—are trying to do more with less. But when a company’s drivers are overworked and their fleets are understaffed, drivers tend to take shortcuts, which raises the risk for accidents exponentially.

Familiar landmarks - The three most common types of claims have remained steady over the past decade: Rear-end accidents continue to be the most common claim, followed by accidents caused by changing lanes or sideswiping, then right-of-way violations. But at the same time, the economic and social impacts of accidents keep growing.

The highest financial costs of commercial vehicle crashes often come after the accident itself. Indirect costs such as lost time for injured drivers, administration time to fill out workers compensation paperwork, and rental costs to replace damaged vehicles can add up quickly. Lost productivity, missed deliveries and poor customer service are other negative byproducts that result from accidents.

Getting back on track - Thankfully, independent agents have plenty of new tools to help their commercial clients rein in the cost and frequency of commercial auto claims. The continued sophistication of onboard technology and driver monitoring systems brings plenty of benefits to fleets. Some of the most effective solutions include:

• Continuous motor vehicle record (MVR) monitoring
• Telematics programs
• Distracted driving prevention tools
• Automatic emergency braking (AEB) systems

While technology plays a role in helping policyholders reduce commercial auto claims, it’s also important for fleets to follow a few best practices. Agents should recommend that their insureds:

• Implement a comprehensive fleet safety program
• Invest in driver retention
• Always follow up

Keep on trucking - In the same way that fleet managers must engage their drivers in regular safety training, agents should commit to ongoing communication with their insureds. Working with a carrier who understands the specialty niche of the policyholder can also be tremendously helpful.

Plan to meet with your policyholders several times a year so you can develop a relationship that goes far deeper than just reaching out to them at policy renewal time. The more face time agents spend with insureds, the bigger an impact they’ll have on mitigating the many negative effects of commercial auto claims.