New safety technologies–like collision mitigation systems, onboard cameras, and telematics, to name a few–are capturing the attention of the insurance industry as motor carrier companies work to handle increasing insurance premiums.
These technologies can help reduce or completely eliminate costly losses for fleets and keep all drivers on the road much safer, and have been used by trucking companies in Europe for years.
Both primary and excess liability underwriters are saying safety tech will play a huge role in reducing catastrophic losses, but Todd Reiser, vice president of the transportation practice at Lockton Cos., says underwriters are still “under a ton of pressure” to remain profitable.
So, does this play a part in why safety technologies haven’t yet been widely utilized across the U.S.?
Reiser says many large motor carriers who use collision mitigation systems can point to their own safety data in order to show “a significant drop” in rear-end collisions.
Additionally, with driver-facing cameras, driver behavior can easily be monitored.
“When drivers know a camera is in the cab, they know whatever they do could potentially be reviewed.” These cameras could also possibly excuse a fleet from liability, Reiser explains.
Craig Dancer, transportation industry practice leader at insurance broker Marsh USA Inc. says key issues are reducing costs while at the same time keeping drivers safe, and that this comes down to having a safer operation.
“If you don’t have claims, your insurance costs come down and you avoid driver injuries,” he says.
Practice leader at insurance broker TrueNorth Cos., Bill Zenk, says safety technologies are allowing motor carriers to collect data straight from their cabs, “to coach better driver behavior as well as point-of-contact data to mitigate the cost of an accident.”
Peggy Killeen, director at Napa River Insurance services, weighs in on the benefits as well. “We have seen a high correlation between implementing safety technology and reducing the number and severity of accidents,” she says. “Specifically, vehicles equipped with crash avoidance systems have shown to be a valuable resource as it relates to lane change and merging accidents.”
With all of these positive aspects, why would it be taking so long to get this tech regularly implemented in our fleets?
“’Nuclear’ verdicts, defined as jury awards in excess of $10 million, are becoming more prevalent, especially in the trucking world where higher liability limits are often purchased,” explains director of underwriting for transportation at Sentry Insurance, Randy Ramczyk. “Plaintiff attorneys are now engaging in litigation financing where an unrelated third party provides financing to the plaintiff in litigation in return for a portion of any financial recovery from the lawsuit.”
American Trucking Associations second vice chairman, Garner Brumbaugh, agreed with this explanation, claiming that trucking companies are beginning to go out of business “because of very aggressive trial lawyers.”
However, the reason trial lawyers are winning cases against companies in the trucking industry is because the industry’s safety standards are nowhere near where they should be, and juries are agreeing.
Because of this, it appears there should be zero hesitation in utilizing these new safety technologies to their full capacities in as many vehicles as necessary.
“Common sense would dictate that technology can and will help minimize the number of commercial trucking accidents,” says Sentry’s Ramczyk. “Rear-end collisions along with lane-change accidents are the most frequent and severe causes of loss in the trucking industry. This technology can help eliminate, reduce or alleviate these types of losses that can result in significant bodily injury or death.”
Luckily, Ramczyk says in-cab camera systems and advanced collision mitigation systems are becoming standard on many new trucks. However, many insurers are subsidizing the hardware to install in vehicles rather than providing discounts to those using a specific technology.
“The insurer is betting that their investment in safety technology will be paid back over time based on their insured’s improved loss experience,” explains Dancer of Marsh USA Inc.
Additionally, Ramczyk says, premiums are increasing across the industry “and will continue to do so until loss costs stabilize,” so it appears trucking companies will not begin to widely implement safety tech until insurance costs decrease, but costs won’t decrease until safety tech is much more common and largely effective.
For now, we’re at a slow-moving catch-22.