To those who have recently investigated options in the cargo insurance market, it may be no surprise to find that rates have been going up. As reported by A.M. Best, a global credit rating firm focused on the insurance industry, many insurers have been losing money on commercial accounts over the past several years and are therefore continuing to raise prices. The report also noted several other market trends that have contributed to rising costs.
Many insurers have seen aggregate losses continue to climb and offset performance gains in other areas. Additionally, with attorneys becoming involved with more claims settlements, payouts per incident have trended upward as well.
Because of the rebounding economy, the report stated that the number of vehicles on the roads continues to increase, and those vehicles travel further distances per trip. While there have been more distracted driving incidents recently, the added public emphasis on eliminating cell phone usage and other distractions while driving is expected to start reversing this trend.
More Data Usage
Expect insurers to use publicly available data to create more sophisticated models that help identify risk and accurately price insurance premiums. Data can also be useful when personalizing policies for individual companies in niche markets.
As the cargo insurance market responds to changing trends, pricing and coverage options are expected to adapt. Unfortunately, trends suggest that prices may continue to rise before the benefits of recent changes start reducing actual pricing in the marketplace.