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The Office of Insurance Regulation has received the 2018 Florida workers’ compensation rate filing by the National Council on Compensation Insurance (NCCI), which proposes a statewide average premium decrease of 9.6%. This includes a statewide average rate decrease of 9.3% and a reduction of the fixed expense cost applicable to every workers’ compensation policy in Florida from $200 to $160. The new rates would become effective January 1, 2018.

As always, the Office will review the filing to ensure the proposed changes are not excessive, inadequate, or unfairly discriminatory and evaluate its potential effects on the insurance marketplace and employers, who are required by law to carry this insurance on their employees. A public rate hearing will be conducted in October.

NCCI is a licensed rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida. For more information about the filing, read the NCCI press statement.

Gulfshore Insurance is pleased to bring you this eye-opening series that explores the rise in commercial auto insurance costs; factors impacting the rise in claims; and solutions you can implement to help combat the situation. If you have any questions or concerns, don’t hesitate to contact one of our trusted advisors. Click below to read previous articles in this series:

 

With commercial auto insurance rates continuing to rise and no end to this trend in the near future, it is important that companies understand the solutions and best practices available to help alleviate the bumpy road auto insurance has become. These four best practices can help you keep your commercial auto insurance expenses under control.

  1. Focus on Fleet Safety
    • The drivers and the fleet you put on the road are key considerations when an insurer assesses your commercial auto risk. Implementing a proactive Fleet Safety Program will create a strong foundation for controlling your risks and exposures from potential fleet auto accidents. A Fleet Safety Program will help establish standard safe driving procedures and expectations, thereby reducing your risk of liability, and will also communicate management’s commitment to the safety of your drivers and other motorists.

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Gulfshore Insurance is pleased to bring you this eye-opening series that explores the rise in commercial auto insurance costs; factors impacting the rise in claims; and solutions you can implement to help combat the situation. If you have any questions or concerns, don’t hesitate to contact one of our trusted advisors. Click below to read previous articles in this series:

 


 

After investigating the factors contributing to auto loss, it’s clear that more accidents, means more claims. Rising claims costs typically stem from either increased frequency or severity — but in the case of commercial auto, it’s both. Across the nation, the frequency of collision claims continues to rise, and in addition to increased frequency, a variety of other factors are driving up claim severity, resulting in higher payments for both bodily injury and property damage. Treating those injured in a commercial auto accident is more expensive than ever as medical costs rise at a faster rate than the overall Consumer Price Index.

This increasing trend in the industry is showing no signs of slowing or reversing. Here are three examples of recent claims that highlight how the “collision” of claims frequency and severity is impacting the auto insurance industry: Read more

Gulfshore Insurance is pleased to bring you this eye-opening series that explores the rise in commercial auto insurance costs; factors impacting the rise in claims; and solutions you can implement to help combat the situation. If you have any questions or concerns, don’t hesitate to contact one of our trusted advisors. Click below to read previous articles in this series:


Commercial auto insurance rates are on the rise, and you can expect this trend to continue. Why is this happening? Right now, there are industry-wide challenges with increasing loss costs in commercial auto insurance. In a recent Insurance Journal article, insurance carrier annual statement data revealed a loss ratio of 109 percent, meaning that for every $1 of premium charged, carriers were paying $1.09 in claims costs and underwriting expenses.

While the exact cause of this troubling spike is not clear, there are potential contributing factors to the increase in auto loss:

Density: We’ve entered uncharted territory in terms of the number of miles driven. Not only does exposure to accidents increase as people drive more, the exposure of more vehicles in proximity to one another also rises. Florida is the third most populated state in the U.S., with the most populated areas being Jacksonville, Miami, Tampa/St. Pete, and Orlando.

Driver Experience: A severe shortage of experienced commercial drivers —50,000 in 2015, according to the American Trucking Association — means a limited pool to choose from. Drivers completing unfamiliar routes or lacking practice behind the wheel translate into more accidents, but companies facing intense competition for experienced drivers with good driving records may be tempted to let risk management best practices slip, like proper driver screening and training.

Distracted Driving: Distracted driving has also contributed to the rise in auto losses, with mobile devices accounting for 64% of all the road accidents in the United States in 2016. One out of four car accidents in the U.S. are caused by texting while driving, and new data shows 71% of drivers are using text messaging or email in their vehicles.  In 2015 alone, there were more than 45,700 distracted driving crashes in Florida; they resulted in more than 39,000 injuries and 200-plus fatalities. As interactive technology pervades our society, the distraction it brings behind the wheel may be leading to increased frequency and severity for insurers, with a potentially greater toll for society.

Underinsured/Uninsured Motorists: Many people today are driving without enough insurance, or simply don’t have insurance altogether. When an uninsured motorist gets into an accident, the result is the insured driver ends up paying for damages even if they are not at-fault. Florida, in particular, is ranked second in the nation for uninsured motorists at nearly 25%. And although Florida requires drivers to carry a minimum of $10,000 for liability coverage, this is often not enough coverage to take care of commercial automobiles.

Increasing severity and frequency: Rising claims costs typically stem from either increased frequency or severity — but in the case of commercial auto, it’s both. Treating those injured in a commercial auto accident is more expensive than ever as medical costs rise at a faster rate than the overall Consumer Price Index. The average cost per paid bodily injury claim increased 32.1% from 2005 to 2013, and medical costs are on the rise. Vehicle damage-related losses are up nearly 17% since 2013, including vehicle repairs and medical claim costs. Concern over increased claim frequency and severity has recently prompted many insurance companies to raise prices in order to maintain margins and offset low returns on investments.

None of these trends show signs of slowing or reversing. Now is the time to reign in auto exposure, before the cost of claims balloons even further.

For companies with transportation exposure, costly auto losses can hinder continued growth. Organizations who partner closely with their insurance and risk management professionals to understand these risks – and the consultative support and tools available to manage them – will be better positioned to protect their employees, fleets, and businesses. Bottom line: your commercial vehicles are a growing liability to your business. At Gulfshore Insurance, we strive to share information with you to help you keep on top of important issues that may impact your business. As we continue our series on Commercial Auto, stay tuned for our next two articles where we highlight:

  • More Accidents, More Dollars – We will take a closer look at recent auto claims and the costs associated.
  • Just a Bump in the Road: Solutions & Best Practices Companies Can Use – We will discuss solutions available to you and risk management practices companies can put in place.

If you run a business that relies heavily on vehicles for your daily operations, you’ve likely been watching your commercial auto insurance premiums go up in recent years. For many, it’s getting harder to even find affordable coverage. What’s going on?

It comes as no surprise to many that driving is up, yet safety is down. The two trends go hand in hand: you can’t get in a crash if you’re not on the road to begin with. Here are a few recent statistics that speak to what we are seeing:

Recent Trends

  • The overall number of vehicle miles traveled increased to 3.2 trillion in 2016. More miles driven equal more cars on the road and a higher probability of accidents.
  • Motor vehicle deaths were up 6% in 2016. For the first time in nearly a decade, as many as 40,000 people died in motor vehicle crashes last year. That marks a 6% increase over 2015, and a 14% increase over 2014 – the most dramatic two-year escalation since 1964.
  • The preliminary estimate means 2016 may have been the deadliest year on the nation’s roads since 2007.
  • An estimated 4.6 million roadway users were injured seriously enough to require medical attention in 2016, and estimated cost to society was $432 billion, an increase of 7% from 2015.
  • Since the start of the upward trend, which occurred late in 2014, some states have been hit particularly hard. Motor vehicle deaths are up 43% in Florida.

 

Auto Traffic Deaths

 

How Do These Trends Impact Insurance?

With accident frequency at a ten-year high, auto insurers’ margins are slated to shrink in response. Auto insurance rates will likely continue to go up across the country.

A recent Insurance Information Institute (I.I.I.) white paper on personal auto insurance offered this warning: “There has been an alarming increase in crashes and claims reported. This, combined with the cost of the claims themselves, has led to a dramatic rise in the overall loss cost.”

In particular, one of the toughest lines of commercial insurance is that written on heavy, long haul tractors and trailers. Until a few years ago, insurance companies had a pretty good handle on commercial auto claims and costs arising from such heavy vehicle accidents. Claim frequency was pretty steady and predictable, and calculating damages and costs from bodily injuries was a fairly straightforward process. This made insurance for this type of exposure possible and profitable; insurers are not afraid of severe exposures as long as claim experience is predictable and allows for setting premium rates sufficient to pay claims and still make a profit.

The past few years, however, have seen a series of very large and unexpected judgements that have toppled old calculations, and are having a negative impact on the heavy commercial auto insurance market. Ten years ago, a $10 million claim would have been considered a large commercial auto claim. Today, it’s not uncommon to see settlements of $40 million to $50 million and even higher. And rising medical costs are a huge component of those increasingly astronomical settlements. General loss costs have also increased, by as much as 8 percent in 2015.

For companies with transportation exposure, costly auto losses can hinder continued growth. Organizations who partner closely with their insurance and risk management professionals to understand these risks – and the consultative support and tools available to manage them – will be better positioned to protect their employees, fleets, and businesses. Bottom line: your commercial vehicles are a growing liability to your business. At Gulfshore Insurance, we strive to share information with you to help you keep on top of important issues that may impact your business. As we continue our series on Commercial Auto, make sure to read our next three articles where we will highlight:

  • What’s Driving Auto Loss? We will explore the contributing factors specifically impacting the rise in claims.
  • More Accidents, More Dollars – We will take a closer look at recent auto claims and the costs associated.
  • Just a Bump in the Road: Solutions & Best Practices Companies Can Use – We will discuss solutions available to you and risk management practices companies can put in place.