In Partnership with
Navigating
a bumpy road
Transportation insurance experts reflect on the impacts of COVID-19, inflation, and new technology in the industry
Jack Falvey
Falvey Insurance Group
Industry experts
Justin Wenzelman
Cottingham and Butler Insurance
Mark Gallagher
Risk Placement Services
Jack has worked with Falvey since 2013 after graduating from the D’Amore-McKim School of Business at Northeastern University with a degree in international business. Jack started his career at Falvey as a business analyst before becoming VP, group operations. In that role, Jack oversaw facility structuring, analytics and reporting, and the system development of Falvey’s proprietary systems. In his current role, Jack oversees the operations of Falvey Insurance Group, which include marketing, claims, people operations, analytics and reporting, and compliance for all Falvey business units, in addition to market relationships and program building. Jack was named the 2022 C-Suite Rising Star by Providence Business News and was also named a 2019 Young Gun by Insurance Business America.
Falvey Insurance Group
Jack Falvey
Justin Wenzelman is the vice president of marketing for Cottingham & Butler’s transportation division. As VP, Justin is responsible for negotiating the broadest coverages at competitive terms for Cottingham & Butler’s transportation accounts. Justin also maintains market relationships at both an underwriting and management level for current and prospective partners, and communicates effectively with sales executives, marketing managers, and servicing staff regarding account placement strategies. Prior to starting his career at Cottingham & Butler, Justin completed both undergraduate and MBA degrees at Clarke College in Dubuque, IA.
Cottingham and Butler Insurance
Justin Wenzelman
Mark Gallagher, CPCU, joined RPS in early 2019 as regional transportation manager in the North Central division. In 2020, Mark began serving as vice president, national transportation, leading a growing and successful 18-branch national transportation division of dedicated industry professionals for one of the largest US wholesale brokers, managing general agents and program managers. Prior to joining RPS, he was the VP of underwriting at Truckers Insurance Associates, where he started his transportation insurance career in 1996.
Risk Placement Services
Mark Gallagher
“It’s almost counterintuitive to what we’ve always heard in the industry, which is that frequency breeds severity. We saw claim frequency go down, and severity continue to go up”
Justin Wenzelman,
Cottingham and Butler Insurance
THE TRANSPORTATION sector has been on a bumpy road in recent years. In the years leading up to the COVID-19 pandemic, the industry was plagued with challenges around distracted driving, a general increase in auto claim costs due to new technology, and a rise in catastrophic liability claims driven by social inflation and nuclear jury verdicts.
In this environment, transportation insurance loss ratios deteriorated dramatically, and as a result, insurers raised rates for both primary and excess/umbrella coverage, while also limiting capacity and applying strict risk selection and underwriting criteria.
While the panel of transportation insurance experts gathered for the latest edition of IBA’s Executive Roundtable Insights Series saw some respite for the transportation industry during the pandemic, when claim frequency declined with less congestion on the roads, there was unfortunately no reprieve in claim severity.
“We did see an increase in frequency of cargo claims during the pandemic, primarily driven by goods being left at ports, or the congestion or delays that came from that”
Jack Falvey, Falvey Insurance Group
“Values in many cases have gone up. What you paid for a truck a couple of years ago is almost certainly far lower than what that truck is valued at now”
Mark Gallagher,
Risk Placement Services
“What we’re seeing is the need for higher limit values on transit,” explains Jack Falvey, chief operating officer at Falvey Insurance Group. “We did see an increase in frequency of cargo claims during the pandemic, primarily driven by goods being left at ports, or the congestion or delays that came from that. We’re now seeing more focus from clients on making sure they’ve got expanded coverage for delays or spoilage in their cargo policies.”
Transportation equipment valuations have increased in recent years, primarily because of the modern technology and materials used in vehicles. This trend has been exacerbated of late due to the supply-chain disruptions and economic inflation triggered by the pandemic. In this context,
In a challenging risk landscape, loss control is key. Falvey says that brokers should partner with transportation clients and offer loss control as a value-added service, helping them to understand and enforce best practices.
“Nobody wants to have a loss in the first place – all parties would agree on that – but we want to make sure that we're not just doing reactive work, doing root cause analysis and talking to clients after the fact,” Falvey adds. “We need to be working ahead of it to try to make sure our clients are in the best possible position.”
This proactivity around loss control is very beneficial if a client does suffer a claim, according to Wenzelman. He explains, “If
The transportation sector is always changing, Gallagher adds, reflecting on his 27 years in the industry. There is an estimated $52 billion of commercial business in the industry, and there are a lot of growth opportunities for insurance carriers, program administrators, and brokers – especially for those who use data (like the insights mentioned above) to understand clients’ unique risk profiles and safety cultures.
“It’s almost counterintuitive to what we’ve always heard in the industry, which is that frequency breeds severity. We saw claim frequency go down, and severity continue to go up,” says Justin Wenzelman, vice president, transportation, Cottingham and Butler Insurance. “We’re waiting to see what happens over the next 12 to 24 months now that the roads are back open, everybody’s traveling again, and the [courts can clear their case backlog].”
As traffic returns to pre-pandemic norms, the underlying challenges in the transportation sector (distracted driving, speeding, driver shortages, claims inflation, etc.) have returned with a vengeance. Insurers are still looking for profitability and they’re raising rates for companies with poor claim histories and/or safety culture, according to Mark Gallagher, national transportation practice leader, Risk Placement Services (RPS).
“My biggest piece of advice is to take advantage of the loss-control services that brokers and carriers provide, while also making sure that safety and loss control are part of the company culture.”
“There are a lot of programs entering the space with private equity [backing], and that allows carriers and reinsurers to get into a segment of business that they normally wouldn’t jump into,” says Gallagher. “Ultimately, the feedback we give our clients is that the drivers and fleet managers who take care of their safety scores and driving records will end up with preferential insurance rates.”
The pandemic had an interesting impact on fleet operators and trucking companies hauling freight because a lot of companies chose to pivot their supply-chain acquisition strategies toward more local sources. Many also shifted their operations from just-in-time delivery to a just-in-case model, in which they increased order sizes to try to offset issues around supply-chain disruption.
“We recently heard of an $82,000 tractor that was valued woefully low and had a total loss,” reflects Gallagher. “That creates a lot of heartache at claim time, when an insured is looking to get back on the road and replace their vehicle. Values in many cases have gone up. What you paid for a truck a couple of years ago is almost certainly far lower than what that truck is valued at now.”
The RPS transportation practice leader also says now is a good time for clients to reassess their liability limits to ensure they’re sufficient to handle litigation in the social inflation era. While certain legal venues are more conducive to nuclear jury verdicts, the costs of liability claims are rising nationwide, and Gallagher says “that's very concerning” to everyone involved in the industry.
Read on
These days, technology plays a significant role in reducing risk for transportation companies. All three experts agree that telematic solutions and forward-facing cameras are now “industry standard,” to use Wenzelman’s phrase. One key benefit comes from the actionable insights that these technology tools are producing.
“A telematics provider can provide information for data analysis and quality assessment, [helping fleet operators and transportation underwriters] to understand driver behaviors such as speeding and hard braking, road congestion patterns, risks zones, road usage, traffic dynamics, congestion – they provide all sorts of opportunities to capture data,” says Gallagher. “This can, in some cases, be used for benchmarking against peers for safety and quality, as well as [for] feedback on fuel consumption and individual driver feedback.”
Falvey Insurance Group began as a single division, Falvey Cargo Underwriting, with the company’s founder, Mike Falvey, opening its first office in 1995 in Wakefield, RI. After more than 25 years, the company has evolved into Falvey Insurance Group, comprising four divisions: Falvey Cargo Underwriting, Falvey Shippers Insurance, Safe Harbor Pollution Insurance, and Falvey Insurance Services. "The specialized insurance experts" are known for flexibility, world-class customer service, claims processing excellence, and comprehensive knowledge and expertise that is unparalleled in the insurance industry. Falvey was also named Insurance Insider’s MGA of the Year in 2020.
Find out more
At Cottingham & Butler, we represent a unique spirit of partnership that is built on delivering value, vision, and excellence to our clients. It is our commitment to consistently deliver better advice, better service, and better ideas than our competitors. Every day. Recognized as the largest trucking insurance broker in the nation, we are proud to partner with a vast array of clients who trust us to deliver a better experience and a better set of solutions. As a leading insurance provider to the transportation industry, we offer a full range of traditional and non-traditional insurance solutions.
Find out more
Founded as a scratch operation in 1997 with just four employees, Risk Placement Services has grown to be one of the largest specialty insurance distributors in the US, offering solutions in wholesale brokerage, binding authority, program administration, and standard lines, plus specialized auto through its Pronto Insurance brand. The firm’s online services include a quote-bind-issue platform that makes it possible for independent agents and brokers to come through for their clients with coverage in a matter of minutes. Fueled by a culture of creativity, innovation and teamwork, RPS continues to add top-tier talent to its roster of insurance specialists and growth through new merger partners.
Find out more
“It’s almost counterintuitive to what we’ve always heard in the industry, which is that frequency breeds severity. We saw claim frequency go down, and severity continue to go up”
Justin Wenzelman,
Cottingham and Butler Insurance
“We did see an increase in frequency of cargo claims during the pandemic, primarily driven by goods being left at ports, or the congestion or delays that came from that”
Jack Falvey,
Falvey Insurance Group
“Values in many cases have gone up. What you paid for a truck a couple of years ago is almost certainly far lower than what that truck is valued at now”
Mark Gallagher,
Risk Placement Services
In Partnership with
Navigating
a bumpy road
Transportation insurance experts reflect on the impacts of COVID-19, inflation, and new technology in the industry
Read on
Phil Trem
MarshBerry
Timothy J. Hall
Relation Insurance
Gerard Vecchio
MarshBerry
Industry experts
Falvey Insurance Group began as a single division, Falvey Cargo Underwriting, with the company’s founder, Mike Falvey, opening its first office in 1995 in Wakefield, RI. After more than 25 years, the company has evolved into Falvey Insurance Group, comprising four divisions: Falvey Cargo Underwriting, Falvey Shippers Insurance, Safe Harbor Pollution Insurance, and Falvey Insurance Services. "The specialized insurance experts" are known for flexibility, world-class customer service, claims processing excellence, and comprehensive knowledge and expertise that is unparalleled in the insurance industry. Falvey was also named Insurance Insider’s MGA of the Year in 2020.
Find out more
At Cottingham & Butler, we represent a unique spirit of partnership that is built on delivering value, vision, and excellence to our clients. It is our commitment to consistently deliver better advice, better service, and better ideas than our competitors. Every day. Recognized as the largest trucking insurance broker in the nation, we are proud to partner with a vast array of clients who trust us to deliver a better experience and a better set of solutions. As a leading insurance provider to the transportation industry, we offer a full range of traditional and non-traditional insurance solutions.
Find out more
Founded as a scratch operation in 1997 with just four employees, Risk Placement Services has grown to be one of the largest specialty insurance distributors in the US, offering solutions in wholesale brokerage, binding authority, program administration, and standard lines, plus specialized auto through its Pronto Insurance brand. The firm’s online services include a quote-bind-issue platform that makes it possible for independent agents and brokers to come through for their clients with coverage in a matter of minutes. Fueled by a culture of creativity, innovation and teamwork, RPS continues to add top-tier talent to its roster of insurance specialists and growth through new merger partners.
Find out more
Jack has worked with Falvey since 2013 after graduating from the D’Amore-McKim School of Business at Northeastern University with a degree in international business. Jack started his career at Falvey as a business analyst before becoming VP, group operations. In that role, Jack oversaw facility structuring, analytics and reporting, and the system development of Falvey’s proprietary systems. In his current role, Jack oversees the operations of Falvey Insurance Group, which include marketing, claims, people operations, analytics and reporting, and compliance for all Falvey business units, in addition to market relationships and program building. Jack was named the 2022 C-Suite Rising Star by Providence Business News and was also named a 2019 Young Gun by Insurance Business America.
Falvey Insurance Group
Jack Falvey
Justin Wenzelman is the vice president of marketing for Cottingham & Butler’s transportation division. As VP, Justin is responsible for negotiating the broadest coverages at competitive terms for Cottingham & Butler’s transportation accounts. Justin also maintains market relationships at both an underwriting and management level for current and prospective partners, and communicates effectively with sales executives, marketing managers, and servicing staff regarding account placement strategies. Prior to starting his career at Cottingham & Butler, Justin completed both undergraduate and MBA degrees at Clarke College in Dubuque, IA.
Cottingham and Butler Insurance
Justin Wenzelman
Mark Gallagher, CPCU, joined RPS in early 2019 as regional transportation manager in the North Central division. In 2020, Mark began serving as vice president, national transportation, leading a growing and successful 18-branch national transportation division of dedicated industry professionals for one of the largest US wholesale brokers, managing general agents and program managers. Prior to joining RPS, he was the VP of underwriting at Truckers Insurance Associates, where he started his transportation insurance career in 1996.
Risk Placement Services
Mark Gallagher
“It’s almost counterintuitive to what we’ve always heard in the industry, which is that frequency breeds severity. We saw claim frequency go down, and severity continue to go up”
Justin Wenzelman,
Cottingham and Butler Insurance
“We did see an increase in frequency of cargo claims during the pandemic, primarily driven by goods being left at ports, or the congestion or delays that came from that”
Jack Falvey,
Falvey Insurance Group
“Values in many cases have gone up. What you paid for a truck a couple of years ago is almost certainly far lower than what that truck is valued at now”
Mark Gallagher,
Risk Placement Services
In Partnership with
Navigating
a bumpy road
Transportation insurance experts reflect on the impacts of COVID-19, inflation, and new technology in the industry
Read on
Mark Gallagher
Risk Placement Services
Justin Wenzelman
Cottingham and Butler Insurance
Jack Falvey
Falvey Insurance Group
Industry experts
Falvey Insurance Group began as a single division, Falvey Cargo Underwriting, with the company’s founder, Mike Falvey, opening its first office in 1995 in Wakefield, RI. After more than 25 years, the company has evolved into Falvey Insurance Group, comprising four divisions: Falvey Cargo Underwriting, Falvey Shippers Insurance, Safe Harbor Pollution Insurance, and Falvey Insurance Services. "The specialized insurance experts" are known for flexibility, world-class customer service, claims processing excellence, and comprehensive knowledge and expertise that is unparalleled in the insurance industry. Falvey was also named Insurance Insider’s MGA of the Year in 2020.
Find out more
At Cottingham & Butler, we represent a unique spirit of partnership that is built on delivering value, vision, and excellence to our clients. It is our commitment to consistently deliver better advice, better service, and better ideas than our competitors. Every day. Recognized as the largest trucking insurance broker in the nation, we are proud to partner with a vast array of clients who trust us to deliver a better experience and a better set of solutions. As a leading insurance provider to the transportation industry, we offer a full range of traditional and non-traditional insurance solutions.
Find out more
Relation Insurance Services, formerly Ascension Insurance, is a specialty insurance brokerage that offers superior risk-management and benefits-consulting services through our family of brands across the United States. More importantly, we’re a team of experienced professionals who genuinely care. Whether it’s for you, your family, or your business/organization, we want to be the relationship you trust for answers to your questions, solutions for your insurance needs, and peace of mind for your future.
Find out more
Mark Gallagher, CPCU, joined RPS in early 2019 as regional transportation manager in the North Central division. In 2020, Mark began serving as vice president, national transportation, leading a growing and successful 18-branch national transportation division of dedicated industry professionals for one of the largest US wholesale brokers, managing general agents and program managers. Prior to joining RPS, he was the VP of underwriting at Truckers Insurance Associates, where he started his transportation insurance career in 1996.
Risk Placement Services
Mark Gallagher
Justin Wenzelman is the vice president of marketing for Cottingham & Butler’s transportation division. As VP, Justin is responsible for negotiating the broadest coverages at competitive terms for Cottingham & Butler’s transportation accounts. Justin also maintains market relationships at both an underwriting and management level for current and prospective partners, and communicates effectively with sales executives, marketing managers, and servicing staff regarding account placement strategies. Prior to starting his career at Cottingham & Butler, Justin completed both undergraduate and MBA degrees at Clarke College in Dubuque, IA.
Cottingham and Butler Insurance
Justin Wenzelman
Jack has worked with Falvey since 2013 after graduating from the D’Amore-McKim School of Business at Northeastern University with a degree in international business. Jack started his career at Falvey as a business analyst before becoming VP, group operations. In that role, Jack oversaw facility structuring, analytics and reporting, and the system development of Falvey’s proprietary systems. In his current role, Jack oversees the operations of Falvey Insurance Group, which include marketing, claims, people operations, analytics and reporting, and compliance for all Falvey business units, in addition to market relationships and program building. Jack was named the 2022 C-Suite Rising Star by Providence Business News and was also named a 2019 Young Gun by Insurance Business America.
Falvey Insurance Group
Jack Falvey
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Both Falvey and Gallagher encourage brokers to be students of the transportation industry and experts in the trade. Falvey says it is also important for brokers to be experts on their clientele, taking the time to review their insurance applications and ensure their final submission is as thorough as possible.
“Not only does that help you get the best possible quote from the onset,” he points out, “but it also helps with your long-term career development and being known as the broker who really takes time to understand clients and can work with underwriters a lot more efficiently.”
Source: American Transportation Research Institute
driver retention
driver compensation
driver shortage
lawsuit abuse reform
shortage of diesel technicians
detention / delay at customer facilities
truck parking
Top concerns for truckers
all three experts are encouraging their transportation clients to reassess their equipment replacement cost values to ensure they have adequate coverage limits.
you've got loss control processes and procedures in place, if you've got published driver manuals and driver guidelines, if you have pre- and post-accident procedures, you've got to follow them in the event of a claim. All of that information is going to come to light and [attorneys] are going to look under every rock to try to figure out the one thing you didn’t do regarding those loss-control policies and procedures.
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Copyright © 2022 Key Media
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The Top 10 Commercial Auto Insurers in the U.S.
1. Progressive Group
8,370,046,527
7,287,295,076
66.98
15.59
15.59
2. Travelers Group
2,973,806,294
2,928,550,282
55.14
5.54
21.13
3. Old Republic Group
2,019,243,345
2,017,485,258
66.51
3.76
24.89
4. Liberty Mutual Group
1,708,073,041
1,718,421,643
62.85
3.18
28.07
5. Nationwide Corp. Group
1,683,254,678
1,682,779,784
63.77
3.13
31.20
6. Berkshire Hathaway Group
1,681,736,540
1,641,251,719
56.66
3.13
34.34
7. Zurich Insurance Group
1,612,363,006
1,561,273,081
70.36
3.00
37.34
8. Auto Owners Group
1,433,052,098
1,348,511,284
60.42
2.67
40.01
9. Allstate Ins. Group
1,146,521,762
1,118,918,728
82.90
2.14
42.14
10. WR Berkley Corp Group
1,098,848,920
978,063,712
50.82
2.05
44.19
DIRECT PREMIUMS WRITTEN ($)
RANK COMPANY NAME
DIRECT PREMIUMS EARNED ($)
DIRECT
LOSS
TO EP RATIO
MARKET
SHARE
(%)
CUMULATIVE MARKET
SHARE (%)
Source: National Association of Insurance Commissioners (NAIC), 2022
The Top 10 Commercial Auto Insurers in the U.S.
1. Progressive Group
8,370,046,527
7,287,295,076
66.98
15.59
15.59
2. Travelers Group
2,973,806,294
2,928,550,282
55.14
5.54
21.13
3. Old Republic Group
2,019,243,345
2,017,485,258
66.51
3.76
24.89
4. Liberty Mutual Group
1,708,073,041
1,718,421,643
62.85
3.18
28.07
5. Nationwide Corp. Group
1,683,254,678
1,682,779,784
63.77
3.13
31.20
6. Berkshire Hathaway Group
1,681,736,540
1,641,251,719
56.66
3.13
34.34
7. Zurich Insurance Group
1,612,363,006
1,561,273,081
70.36
3.00
37.34
8. Auto Owners Group
1,433,052,098
1,348,511,284
60.42
2.67
40.01
9. Allstate Ins. Group
1,146,521,762
1,118,918,728
82.90
2.14
42.14
10. WR Berkley Corp Group
1,098,848,920
978,063,712
50.82
2.05
44.19
DIRECT PREMIUMS WRITTEN ($)
RANK COMPANY NAME
DIRECT PREMIUMS EARNED ($)
DIRECT
LOSS
TO EP RATIO
MARKET
SHARE
(%)
CUMULATIVE MARKET
SHARE (%)
Source: National Association of Insurance Commissioners (NAIC), 2022