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industry & markets
Advocacy in Action | Trucking Insurance
With Rod Stiller—President, National Truck League
Trucking insurance must be blushing right now because she’s one of the most talked about sectors at the hard market party. With the increased strain on the supply chain during the pandemic and preexisting issues within the industry’s regulatory structure, premiums and deductibles have soared beyond what’s manageable for many.
The role of brokers and the IBAO provides a unique vantage point on the industry, so when concerns were raised about trucking deductibles spiking, we were asked to investigate the issue. IBAO CEO Colin Simpson assembled a team of brokers specializing in trucking, as well as leaders of other provinces’ Broker Associations to collect their expert insights. The team included Rod Stiller, President of National Truck League—a full-service, complete protection brokerage for the trucking industry.
“The trucking industry and trucking insurers lobbied the Facility Association (FA) for significant changes to underwriting for trucking entities,” said Rod. “There are many trucking companies that changed the location of their trucking operations, on paper only, to other provinces like Alberta and Nova Scotia, for less expensive insurance premiums. I’ve estimated cross-border premium for the same risk using the Facility Alberta model versus Ontario and found a $10,000 to $15,000 difference per truck.”
Industry lobbying efforts sought to prevent this work around of papering trucking operations in different provinces and have FA price the risk appropriately for where the trucks were predominantly operated. FA’s product adjustments resulted in a set of unintended consequences that included pricing smaller operators out of the market by implementing unrealistic deductibles. “There is no peace of mind with a $40,000 deductible,” said Rod.
IBAO assembled a national team that worked with FA to revise these changes. In April, FA published a bulletin acknowledging the work that had been done:
Facility Association (FA) would like to extend thanks to Broker Associations across Canada, Key Industry Associations, FA Committee Participants and Members who provided continued feedback and worked diligently with us as we conducted this review.
The role of brokers and the IBAO provides a unique vantage point on the industry, so when concerns were raised about trucking deductibles spiking, we were asked to investigate the issue.
Though this course correction was an unambiguous win for consumers, this was only the beginning of addressing the problems within the sector. The rising cost of coverage can be an indicator of an underlying issue that needs to be addressed.
“There’s a truck driver shortage in Canada. There are an estimated 20,000 unfilled truck driving jobs right now,” said Rod. “Small, long-haul trucking companies are required to hire drivers with three plus years of experience and this is very difficult given the driver shortage.”
Compounding the issue of it being difficult and expensive for new drivers to get started, there’s also a problem with the way experience is tracked within the industry, making it impossible for drivers to prove their experience and sometimes falsify their documentation, further muddying the water.
“There was once talk of a driving career being recognized for what it is—a skilled trade with apprenticeships and a career path. This isn’t an insurance initiative but an industry and government one,” said Rod. “There’s national collaboration to move driver experience records to a national database. IBC and IBAO are leading the conversation with trucking insurers and industry at the table. A driver database is the most important solution to a huge insurance issue—it’s really important.”
IBC and IBAO co-signed a submission to the Minister of Transportation outlining recommendations to bring down trucking premiums, including creating a driver database and developing robust driver training. With a few key brokers, IBAO continues to work with government and industry partners on finding a meaningful solution for all parties involved. This will take persistent effort, but as we saw in our work with FA, through sustained cooperation, viable long-term solutions are within reach.
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