Advisory Report: IMUA President & Deputy Chair Discuss State of Inland Marine Market Ahead of 92nd Annual Meeting

Apr 19, 2023 / by AAIS

For this Advisory Report, Stephanie Vasey, Product Manager of Commercial Lines & Inland Marine at AAIS sat down with Kevin O’Brien, President and CEO of IMUA, and Tony Falcone, Regional President of Intact Insurance Specialty Solutions and Deputy Chair of IMUA. They discussed the biggest underwriting issues arising due to the economy, the current outlook of the cargo industry’s effect on insurance coverage, what’s new at the IMUA, and more.

Underwriting Issues Due to the Economy

One issue that immediately comes to mind for Falcone is inflation. “Underwriting an account, [means] that claim costs could be 20 or 25% more expensive [today] than it was a year or two years ago and that certainly undermines profitability,” Falcone stated. The construction business has not been affected yet, but there is definitely a backlog, and that concerns Falcone. “We're not sure if projects on the docket for late ’23, early ‘24 are actually going to take off and start because of interest rates,” he admitted. Falcone believes the economy has really crunched that segment of logistics and trucking. “When you're that size, you're already working on razor-thin margins,” he said. “Maybe you cut your maintenance spend or you hire inexperienced drivers because they're cheaper. Or you go out of business since you can't make ends meet because of the economy...These are [the] things that inflation interest rates effect.”

Cargo Industry’s Effect on Insurance Coverage

The trucking industry is facing big challenges according to O’Brien. “There's tremendous demand for truckloads, both less than a full load and contract delivery,” noted O’Brien. “In the midst of all this increased demand, the trucking industry is facing a dramatic decrease in the need for drivers. The latest estimate was that the U.S. is 80,000 drivers short of the current needs.” It's going to take some work to fulfill the demand, but O’Brien states that one thing on the horizon that will help is driverless vehicles. “The hope is maybe [driverless vehicles] will offset some of that driver shortage,” he stated.

There has also been a big increase in the use of telematics in the trucking industry. “Telematics is collecting data on trucks. It's using various sensors to collect that data, GPS, and onboard diagnostics,” O’Brien explained. “That data says a lot about the safety of the fleet, and it'd be a tremendous tool for underwriters. Somebody that had good results and good data, would probably be able to get a premium reduction.”

Falcone agrees with O’Brien’s points but has a slightly different take on telematics. “The electronic logging device (ELD) syncs with the truck's engine, and it helps to combat fatigue driving, which was shown to be one of the leading causes of crashes [and] cargo damage,” he reported. “This technology was not positively received by the trucking industry, but now, after some years of data, the federal government can show you that we have less crashes every single month in this country [resulting in] less cargo losses.” Falcone believes this technology is ultimately proving itself to be very beneficial.

What’s New at the IMUA

IMUA is all about championing the interests of the marine industry and enhancing the development and education of industry professionals. They have 46 member insurance companies and about 3,500 of their industry professionals within their database. “In 2022, we launched all access learning. All access learning makes our upcoming virtual events, [like] webinars and classes that have been done remotely, available at no charge,” O’Brien shared. “Typically, we would have 50 people sign up for a webinar and it was a $59 fee. Today with no fee, our typical registration has gone up to about 250.” The all access library on IMUA’s website also includes about 60 archived webinars and a whole series of e-learning classes on business, construction, transportation, fine art, etc.

IMUA has also created a broker membership for brokers and any of their interested colleagues. This gives them access to all of the IMUA education curriculum for a reasonable fee on an annual basis. “Inland marine only represents about 2-3% of the overall PNC premiums,” said O’Brien. “Therefore, people that are providing education in these carriers are only getting 2% for inland marine. So, there is a dramatic need for training especially within the broker community.”

To view the full interview with Kevin O’Brien and Tony Falcone, click on the video above.

Registration is now open for the IMUA 92nd Annual Meeting on April 30-May 3 in Tucson, AZ. Click here to register online.

Tags: Inland Marine, Industry Associations, IMUA

AAIS

Written by AAIS

Unleashing Product Potential...Together

Lists by Topic

see all

Posts by Tag

See all