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Insurance trucking : it is difficult to ensure that a carrier from the United States

by

Justine Montminy

June 19, 2018 07:00

Photo : maxpixel.net

Several insurers have withdrawn from the market of trucking, particularly for carriers from south of the border. Find a cover is almost like an exploit, complain to the broker because the premiums are significantly higher.

Matthew Prefontaine, president of the brokerage firm of M2 Insurance, contacted the of the insurance Journal to share his or her concerns. “Insurers will get a market of trucking in the heavy presentation that makes the United States. Those who remain must significantly restrict their coverage. As brokers, we are no longer able to shop for insurance policies. “

Insurers are concerned the civil liability and bodily injuries in the United States that involve claims with high costs, unlike Quebec where there is the concept of no fault. However, for the carriers, the longer routes earn more profits. “They prioritize them so the trips americans. The risk of loss becomes, however, too important for insurers, who have withdrawn from the market.

A market of 3 insurers

Several sources have confirmed to the Journal of insurance thatAviva Canada was recently withdrawn from the market and that the claims submitted to the insurer were all denied. Aviva has not responded to our requests for interviews. The company also withdrew last year. There are no more than three insurers in Quebec, agreeing to cover its risks : Northbridge Insurance, Intact Insurance and Step.

“What we see now is the return of a tough market, confirms Luc Bouchard, senior director, transportation and logistics at Northbridge. The supply is dwindling. Insurers pull out of the segment. It tightens the criteria for underwriting and risk management. The premiums increase. “The insurer also mentions to have received double the submissions that the last year at the same date.

“A year ago, we had an opportunity to purchase an almost unlimited carriers from the United States, said Patricia Desjardins, director, transportation and personal lines wholesaler April Canada. We could easily cover the carriers with 90 % of their trips were in the United States. Now, it is difficult to get a cover for a carrier who goes there 5 % of his time. “

Ms. Desjardins adds that at the time of the renewal of the insurance coverage policies, if the customer spends more than half of his time in the United States, it is possible that April could no more ensure. “Even if we want to help brokers to help their clients, you can’t go up to our loss,” she said.

For Kathleen Ann Rake, vice-president, customer service and development of the firm Univesta Rake, the crisis began at the end of 2017. “It’s going to take at least a year before we get through all the renewals “, she adds.

Ms. Rake has been working in the transportation industry for 28 years. She claims to have seen the market cycles very hard, but never as bad as this.

“When carriers are in the United States are insurance, when they find one, the premium is staggering. We have noticed increases of 50 % to 60 %, sometimes even up to 100 %. We see that on the level of fleets of 10 trucks or more. This is stupid ! In addition, it is we, as a dealer who announces to the client, at the same time that one tries to sell him a blanket ! “She adds that it is the business of valet parking tow-who live the greatest distress.

In its financial results for the first quarter of 2018, Intact financial Corporation, which owns Intact Insurance, has also stated that there is a rise in insurance premiums trucking. The insurer pointed out, however, the Journal of insurance that this increase does not apply to the entire portfolio. She target segments of the least efficient. “Only a small percentage has experienced an increase of between 12% and 18 %,” said the insurer. In 2016, Intact had increased its rates in this segment.

Without insurer, without resource

As in automobile insurance, the brokers who are not able to find an insurance policy to their client must send the file to the Groupement des assureurs automobile (GAA) for the care of the orphaned folders. The GAA has confirmed to the Journal of insurance an increase in these folders.

“In 2017, our records by insurance companies (including trucking) accounted for 30 % of the cases. In 2018, it is expected that the number will rise to 50 % “, said the person in charge of technical affairs and the Centre for information on insurance in the GAA, Line Crevier.

In trucking, the GAA is dealing solely with liability insurance. The consequences can be serious for a company in trucking that is not better, says Kathleen Ann Rake.

“You can’t force an insurer to provide the cargo insurance. If a carrier does not find insurance for the cargo, even if he has liability insurance, it will not be able to practice. It ends there, it has no more resources. The companies to which it happens must close “, she explains.

The GAA also said to have noticed an increase in the cost of claims, even in Quebec. “The average cost of claims for the fleets of vehicle is increased from 7 900 in 2013 – $ 13 500 $ in 2017. The ratio of loss is increased from 57 % in 2013 to 80 % in 2017, ” says Ms. Crevier.

Claims more expensive

At the level of claims, there is not an increase in the number of claims, ” says Luc Bouchard, of Northbridge. The type of claim, however, has changed significantly in the past 24 to 36 months.

“We see more and more loss car. The value of the vehicles is increasing, in part because of the technologies found in the vehicles “, said Mr. Bouchard. He adds that the cost of claims is dependent on the canadian dollar, since parts of trucks are often in u.s. dollars.

A total loss of a truck, a trailer, and a loading amounted to about 400 000 $, without liability, writes Kathleen Ann Rake. In the event of an accident, the costs including the civil liability can reach 2 to 5 million dollars, reports Matthew Prefontaine, M2 Insurance.

Mr. Bouchard attributes the damage caused to a third party to the shortage of carriers. “There is a lack of driver so the firms are pressed to put the new drivers on the road. We turn a few corners. “He added that the congestion of the roads can also play on the severity of the injuries

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