According to Jennifer Nuest, the leader of Amwins’ transportation practice, the U.S. trucking industry presents a division between highly competitive standard segments and areas with capacity shortages in more challenging states. Even as some companies step back, managing general agents (MGAs) and fronted programs are increasing in number.
In a recent interview with The Insurer during the WSIA Annual Marketplace in San Diego, Nuest discussed the dynamics of capacity fluctuations, program renewals, and shifting risk management within the commercial auto sector.
Driven by reinsurer loss experiences, many companies are adopting similar strategies. Nuest noted, “There are areas that are very competitive,” pointing out that reinsurers have shaped similar appetites among players in the market.
Concurrently, new programs are emerging in regions with lower severity risks, resulting in pressure on coastal hotspots. Many new entrants are focusing on standard trucking operations in the Midwest and plains, which, as Nuest indicated, doesn’t address the larger demands in states like Florida, New York, and California.
Despite ongoing challenges with profitability, there remains a steady influx of capital into the market. Nuest expressed surprise at the continued support for newcomers, particularly MGAs and insurtechs, describing a scenario of frequent new fronted programs surfacing.
She emphasized the necessity of compulsory coverage for companies, allowing rapid top-line growth for underpriced players and increasing price sensitivity due to thin margins. Insured parties often change carriers for minor premium differences, as trucking companies operate on extremely narrow profit margins.
As profit margins continue to tighten and claims rise, Nuest noted an increase in failures among insureds. She mentioned the case of Carroll Fulmer Logistics, which shut down after decades of operation due to mounting challenges. The stringent regulatory link between insurance and operating authority further compounds these pressures, making it increasingly difficult for uninsured operations to remain viable.
