Shifting gears: Driving trends in transportation insurance

Shifting gears: Driving trends in transportation insurance | Insurance Business America

Motor & Fleet

Shifting gears: Driving trends in transportation insurance

“Know the coverages, when they apply and where they’re required,” says EVP

Motor & Fleet

By
Chris Davis

Wes Bauer (pictured), EVP and casualty broker at Amwins Group, has an eye for transportation trends. Specializing in casualty insurance, he told IB that it’s an exciting time to be in the sector.

“My team focuses within the casualty space, and within that, we specialize in transportation,” Bauer explained. “Transportation is a broad subject because we see everything from contractor fleets to energy risks that involve transportation, from flatbed haulers to trucking and then to just pure for-hire trucking companies. This diversity exposes us to various segments, including energy, construction, and pure trucking for hire.”

One significant trend, Bauer noted, is the impact of social inflation and nuclear verdicts on the transportation sector.

“I’d make the comment to say that the most significant trend has been the effects of social inflation, specifically in transportation, those nuclear verdicts,” he told IB. “That’s directly impacted carriers’ appetites, leading to changes in terms, exclusions, sub-limiting coverages, and increasing premiums for insureds. As brokers, we need to know what steps can be taken to mitigate those concerns and manage expectations in a changing marketplace.”

‘Different state trends are happening’

Addressing state-specific trends, Bauer highlights the varying regulatory landscapes. New Jersey, for example, just raised their insurance limit requirement to $1.5 million for vehicles with a gross vehicle weight of 26,000lbs or over.

“Different state trends are happening, like Texas, which has a tough, litigious climate, particularly in certain areas. It’s not even all of Texas—it’s half of Texas,” he said. “Or Louisiana split in half regularly, and California, where the LA region is tough for underwriting, but Northern California is OK. Understanding these nuances is crucial for effective risk management.”

Bauer underscores that these challenges are primarily human-driven rather than environmental.

“It’s the temperature of the court system in that area, hiring practices, availability of personnel, unionized versus non-unionized states—all these human factors significantly influence the underwriting landscape,” he explained. “For instance, during the fracking boom that started about 15 years ago, the rapid pace led to mistakes, impacting insurers’ risk appetite.”

And, we’d be remiss to talk about trends without landing on the rise and rise of tech and AI in the sector – something Bauer believes is actually reshaping risk management at large.

“With the implementation of telematics and the vehicles, including cameras and electronic logging devices (ELDs), these systems create imperative checks and balances,” Bauer noted. “This positive change allows carriers to track real-time information, implement suggestions, and find comfort in areas they once withdrew from.”

‘It’s a win-win’

At Amwins, this approach also allows for more collaboration – which is the underlying key to its success. Combining insights from their underwriting authority with what they’re seeing in the brokerage space, it allows Bauer’s team to understand the market environment comprehensively.

“It allows us to collaborate on a very large scale,” he told IB. “To have underwriting authority for several of our key markets so that we’re immediately able to know and see the current temperature [there]. We combine that with what we’re seeing in the brokerage space, when we come together we have a very broad understanding of the current environment. And so we’re seeing it from all sides – how these changes are making, how these implementations and improvements are actually positively changing the marketplace. [It’s a] win-win.”

And if anyone should be able to predict what’s coming down the line, it’s Bauer. He’s been in this space for over 20 years, almost 17 of which were spent with Amwins – and he has some sage advice for those looking to follow in his footsteps.

“First, learn the details,” he told IB. “Know the coverages, when they apply and where they’re required. Secondly, build relationships with retailers, underwriters, co-workers, and competitors. Networking is imperative.

“Third, maintain integrity. Don’t chase deals at the expense of honesty. Stay informed about industry trends, read up on industry publications, and attend continuing education. Join your state and local chapters for surplus lines associations, and remain curious about the state of the industry.”