Site visits are key to evaluating the company management’s focus and capabilities. Through them, the insurer can examine a company’s safety controls and criteria for hiring drivers. “If a risk isn’t best-in-class in terms of loss prevention, but the management of the company is willing to work with a carrier, and is open to implementing the insurance company’s feedback, the insurer may still consider writing the risk,” as Roy explains.
Maintenance is also key. “Even if you have good drivers behind the wheel, the equipment has to be well-maintained to ensure major accidents and losses are avoided,” Roy says. “This includes premises security measures to avoid cargo theft.”
Telematics is another risk management tool and data source that drives pricing, in conjunction with consulting the expertise of specialized LHT brokers, some of whom have been in the business for decades.
Once a telematics program is implemented, dashboard reports can be requested by loss prevention teams during an inspection. These reports often include driver behaviour data to help identify additional training needs, and vehicle maintenance reporting, which can be used to enhance fleet safety.
“This can lead to an improved operator safety score, which can lead to lower premiums,” she says.
Discussing LHT market trends for 2023, Roy anticipates analytics advances will allow greater differentiation and assessment of risks. She also expects technology to play a larger role in servicing both brokers and customers.
“In Ontario, specifically, we’re seeing increased competition from captives,” Roy adds. “That model allows them to be more competitive in terms of rates, which presents a challenge for the traditional insurance model.
“Standard commercial insurers continue to step away from underwriting niche, harder-to-place risks like LHT. We continue to see major commercial markets focusing on class underwriting as opposed to risk underwriting.
“For specialized LHT insurers, the key is to do the opposite and evaluate each risk individually.”
