Pricing for transportation insurance continues to point to a steady decline, marking no material change from the last quarter, according to a brokerage firm survey.
Woodbridge, N.J.-based specialty brokerage NIP Group Inc. said its latest "Transportation Insurance Pricing Survey" indicates rates in the transportation insurance marketplace still show steady declines between 10 and 20 percent across all account sizes.
All market segments continue to experience excess capacity driven by continued soft market conditions which is increasing the availability of insurance.
The online survey was sent out to 14,000 insurance producers, customer service representatives, brokers and underwriters nationwide who underwrite or broker transportation placements. More than 60 responded to the survey which was conducted during October and early November.
In the past three months, standard insurers have persisted in their efforts to make entry into the transportation market in pursuit of premium volume, NIP said. Their strategy to underwrite significant risk in the transportation segment has included undercutting traditional specialty transportation insurers to gain market share.
For small accounts (those with premiums of $75,000 or less), 75 percent of brokers responded that premiums are down as much as 20 percent.
Results were similar for medium accounts (premiums of $75,000–$250,000) with 70 percent reporting rates down 20 percent.
The news was only slightly better for large size accounts (premiums greater than $250,000), where 57 percent of brokers who responded saw premium declines of 20 percent.
The largest decreases in rates were seen by brokers insuring general trucking operations. Intense competition among carriers in light of current market conditions is exerting significant downward pressure on rates, NIP continued.
Participants were also asked to comment on premiums by coverage type including Auto Liability, Auto Physical Damage, Motor Truck Cargo and Warehousemans' Legal, Workers' Compensation, Umbrella Liability and Owner/Operator programs.
Many respondents said they have seen declines in premiums of more than 10 percent, for most of these lines except Umbrella and Owner/Operator where a significant number of contributors reported increases in premium.
Richard Augustyn, chief executive officer of NIP Group said the firm plans to continue the survey and that it serves a dual purpose to track rate movements for the large transportation insurance market and offers a leading indicator of the direction of rates in the general commercial insurance marketplace.
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