March 15, 2013 by Canadian Underwriter
Rates in the United States transportation market remain high despite showing signs of levelling off, notes a new survey of transportation insurance brokers, wholesalers and underwriters south of the border.
The Transportation Insurance Pricing Survey (TIPS) – released Wednesday by NIP Group, Inc. – demonstrates the majority of respondents believe the transportation market remains consistent to last quarter, indicating a hard market.
“TIPS results indicate that we are starting to see a deceleration of rate increases in some parts of the country,” says Richard Augustyn, CEO of NIP Group, a specialized business insurance and risk management intermediary based in Woodbridge, N.J.
“Rate levels remain high, but are showing some signs of leveling off as both specialist and generalist insurers are increasing their participation in the market,” Augustyn adds in a company statement.
When asked about the overall direction of the transportation insurance market, no respondents reported it was softer, 2.17% said it was soft, 17.39% indicated it was flat, 76.09% said it was hardening, and 4.35% noted it was hard.
With regard to whether more or less insurers are underwriting the transportation class, 0% said many more; 14.89% noted more; 34.04% indicated the same; 42.55% reported less; and 4.26% said much less.
NIP Groups notes the key findings of the survey are as follows:
“Participants believe that as a result of significant rate increases in auto liability rates, more generalists are re-entering the space compared to last quarter,” notes a statement from NIP Group. “Over recent quarters, we have seen rate increases intensifying. However, they may be consolidating at higher levels, according to some respondents.”
Asked how premiums changed in the 2012 Q4 for auto liability coverage, 6.5% of respondents indicated there was no change; 71.7% noted premiums were up 1% to 10%; 8.7% said rates were up 10% to 20%; 4.4% indicated premiums were up 20% to 30%; and 2.2% said rates were up 30% to 50%.
The survey measures premium changes across 10 transportation sectors: trucking operations; intermodal carriers; messenger/courier services; ambulance/paratransit; school bus contractors; bulk transportation; airport ground transportation; charter/tour bus operators; specialized carriers and riggers; and limousine services. Results are used to benchmark changes in the availability and rates in the transportation insurance market.
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