The COVID pandemic changed almost everything about the way the sector works, acting as a catalyst for both transformative change and disruptive challenges. Speaking to IB, Zach Bowling (pictured), EVP at Amwins Group, said that while the pandemic significantly impacted all insurance markets, for the transportation sector it was game changing.
“It’s been a turbulent marketplace over the past few years,” he said. “In 2020, we saw a dramatic impact specifically on the class of auto haulers. A lot of people didn’t read ‘recession and global pandemic’ and say, ‘Hey, I’m going to go out and buy a brand new vehicle’.”
The drop in demand for new vehicles during the pandemic led to a significant downturn for auto haulers, reflecting the tight interconnection between economic conditions and the transportation insurance market. Despite these challenges, Bowling concedes there’s been a remarkable recovery.
“Four years later, it has bounced way back in the other direction. Markets have come back in and really supported motor truck cargo and physical damage, seeing it as an opportunity to earn some profitability,” he said.
One of the critical aspects Bowling emphasizes here has been the account-specific nature of their pricing and coverage post-pandemic.
“Ours has remained relatively account-specific in terms of pricing and coverages being offered. It’s a frequency-driven class, so we don’t have nuclear verdicts like they have on the casualty side, but we do have high frequency,” he said. “We tend to look at it ‘what’s their five-year history look like? Have they grown? What technologies are they implementing to improve their behaviors?’”
When asked about evaluating and mitigating risks, Bowling also pinpoints the importance of being involved in their clients’ businesses.
“The insurers that have great risk prevention, safety, and training teams, and have checklists and protocols in place, tend to operate a lot better,” he said. “Those simple touches make a huge difference in the overall performance of the account. Having strong financials and contracts in place with clients is crucial. We can talk our way through a bad year or a bad loss if we have written procedures and protocols. If we don’t have any of that information to support it, and the insured is just focused on price, it becomes a lot more challenging.”
On the topic of technology and data analytics, Bowling is excited about ongoing advancements in the field.
“We see more submission flow from all across the country than any one of our individual carrier partners,” Bowling highlighted. By distilling submissions to extract necessary data for underwriters, insurers can make informed decisions more efficiently.
The shift towards utilizing dashboards and drilldowns for data interpretation marks a significant improvement compared to previous reliance on Word documents and PDFs. “We’re moving towards dashboards & drilldowns that enable us to view and interpret valuable data on a variety of characteristics and metrics,” Bowling stated. This innovation seeks to facilitate the identification of new product opportunities and effective strategic alignment with carrier partners.
As the transportation insurance sector continues to recover and transform, stakeholders are encouraged to embrace advancements in technology, fortify risk management practices, and prioritize the establishment of strong contractual agreements. In an ever-evolving marketplace, these strategies will be essential to ensuring resilience and seizing new opportunities for growth.
