Carrier Insurance Costs Sky-Rocketing in New...
17 December 2001
Carrier Insurance Costs Sky-Rocketing in New Reality of Risk
The following is excerpted from the Ontario Trucking Association web site; the complete document can be found at: http://www.ontruck.org/news/news/2001/pnews_2001_12_17_115905_sa.php3.
Motor carriers across Canada are being hit hard by sky rocketing insurance costs according to the Canadian Trucking Alliance (CTA), and shippers should expect to hear from their carriers soon. Many carriers from across the country have begun to complain about massive increases in liability insurance premiums - even where the carrier believes it has maintained an excellent loss ratio. Increases of 40% to 50% are common and 100% to 200% increases are not unheard of.
The major reasons for the increases:
— Capacity Reductions...
— September 11 Impact on Reinsurance...
— Insurance Industry Profitability...
According to the CEO of the Alliance, David Bradley, "Like the escalating cost of fuel, there is no quick solution to this problem. Ultimately, carriers will have to deal with their insurance providers and their
customers. Our job is simply to make shippers and carriers aware of the situation."
He says that ultimately the increased cost should be reflected in freight rates. There is some talk of insurance surcharges being applied, although it is not clear how that would be calculated....