Safety tech can make commercial auto less attractive: Exec

SAN DIEGO — Implementing safety technology such as advanced driver assistance systems can make already tough risks like commercial trucking less attractive to insurers, says a senior excess and surplus lines executive.

More frequent and severe claims driven by nuclear verdicts and social inflation have pushed more commercial auto liability business into the E&S market and led to significant rate increases and tighter capacity.

Finding highly trained, qualified drivers is challenging, said Matt Dolan, president, North America specialty, at Ironshore and executive vice president in Ironshore parent Liberty Mutual Insurance’s global risk solutions business.

“There’s an employment crunch. Getting people on the road faster, maybe without the training, is creating more of a risk environment,” Mr. Dolan said in an interview Tuesday at the Wholesale & Specialty Insurance Association annual conference in San Diego.

Market conditions, in some ways, are being exacerbated by the safety measures implemented in the trucking industry, he said

Monitoring driver behavior sets a standard of care and “then the deviation from that standard is a little bit more overt. You can measure it,” he said.

“If you put these (systems) in you’d better make sure you adhere to them and if you don’t you’re de facto below the emerging standard of best practice in the industry,” Mr. Dolan said.

Driver technology creates a clear track record that “could augment a company’s defense ability or the per se evidence that the driver was being reckless,” he said.

These factors are conflating to create a “tricky risk environment,” he said.

“It’s a counterintuitive thing. We embrace all kinds of risk-mitigation efforts, but the adoption and then the implementation and the execution on that getting there, there’s a transitional period where it can change the risk dynamic,” Mr. Dolan said.