Knight - Swift Transportation

• The insurance and claims related costs for Knight - Swift transportation were $215.36 million in 2018 or 4% of their total revenue which was $5.34 billion.
• These costs mainly consist of premiums for cargo, physical damage and liability.
• The insurance expenses grew from $34.44 million in 2016 to $95.2 million in 2017, while their revenues were $1.12 billion and $2.42 billion respectively.

US Xpress Enterprises Inc.

• US Xpress Enterprises Inc. spent $85.07 million on insurance premiums and claims in 2018 or 4.7% of their total operating revenue which was $1.80 billion.
• The insurance expenses increased from $69.72 million in 2016 to $77.43 million in 2017, or 4.8% and 5% of their revenue respectively.
• The company has various types of insurance including commercial automobile liability, cargo damage, workers' compensation, fiduciary liability policy and others.

Werner Enterprises Inc.

• The insurance and claims expenses were $98.13 million in 2018 or 4% of their revenue which was $2.46 billion.
• The companies' insurance policies are mainly for physical damage, workers' compensation and liability.

Landstar System Inc.

• Landstar System spent $75.68 million on insurance and claims in 2018, while their revenue was $4.61 billion.
• The insurance expenses increased from $57.28 million in 2016 to $62.54 million in 2017.

J.B. Hunt Transport Services Inc.

• J.B. Hunt Transport Services had revenue of $8.61 billion and their insurance and claims related costs were $129.41 million in 2018.
• The insurance expenses increased from $78.41 million in 2016 to $123.58 million in 2017.
• The company has different types of insurance such as workers’ compensation, accident costs, employee injuries and cargo damage.

Schneider National Inc.

• The insurance and claims related costs for Schneider National were $102.2 million in 2018, while their revenue was $4.98 billion.
• The company purchases insurance related to vehicular collisions, accidents, employee injuries and cargo damage.
• These expenses grew from $89.1 million in 2016 to $90.3 million in 2017.

Research Strategy

Number Of Trucks

• Commercial trucking companies who have a fleet of vehicles could decrease their insurance costs by consolidating all their auto contracts into one fleet insurance contract.
• The fleet insurance contract requires at least three vehicles to qualify, but many contracts require at least five vehicles to qualify. An advantage of this commercial truck insurance is the reduction-surcharge coefficient for drivers, where bad drivers don't affect the fleet bonus calculation, as the cost of insurance is arrived at by considering the number of vehicles and the loss ratio or overall premium.
• The price for the fleet insurance contract is generally cheaper than individual contracts and this significantly decreases insurance costs incurred by commercial trucking companies.
• According to FreightWaves, the cost per mile for truck insurance is 7.5 cents overall. However, the larger the fleet, the lower the cost, "with fleets operating over 1,000 power units paying just 4.4 cents per mile and fleets with between 5 and 25 power units paying 8.6 cents."

The Use of A Broker

• Using a commercial truck insurance broker can decrease insurance costs. This is because brokers have a lot of experience negotiating with insurers and their arguments commonly bear fruits leading to a significant decrease in insurance premiums.
• Decreased insurance premiums largely offset the broker’s fees and commercial trucking companies should use brokers, especially at the time they renew their insurance contract, to analyze and help in optimizing their commercial truck insurance.

Frequency of Claims

• The frequency of insurance claims affects how much commercial trucking companies pay in insurance costs. When a trucking company frequently files insurance claims, this increases the price of insurance policies.
• Commercial trucking companies can help to reduce the frequency of claims and reduce their insurance costs by assisting their employees to adopt responsible driving behavior through training.
• Using effective communication and training has been proven to prevent accident risks and reduce insurance claims by 40%, thus significantly reducing the price of policies and overall insurance costs.

Driver Experience and Driving Records

• Employing experienced commercial truck drivers with clean driving records decreases the insurance costs incurred by commercial trucking companies. This is because these drivers are more likely to drive without getting into accidents and this will decrease insurance premiums and costs.
• Companies should use the pre-employment screening program when hiring drivers to get a snapshot of a driver’s past performance, which could indicate the future performance to expect from the driver. A driver with a bad driving record is more likely to continue with the same trend.

CSA Scores

• A CSA Score is used by the Federal Motor Carrier Safety Administration, an agency that regulates the trucking industry, to identify high-risk motor carriers. A carrier’s score is calculated using the performance data of its drivers, including state-reported crashes and inspection violations.
• Most commercial trucking companies have public CSA safety scores. Insurance companies use these safety scores to identify the overall risk for truck companies. A higher score means that there is a higher risk and, therefore, higher premiums are charged.
• Commercial trucking companies need to strive to lower their CSA Scores as this will lower their overall risk profile and decrease their insurance premium rates and overall insurance costs.
• Commercial trucking companies with a low frequency of losses and severity and favorable safety scores have a broader range of opportunities in the insurance marketplace.

Use of Advanced Safety Technology

• Adding advanced safety technologies to trucks decreases insurance costs for commercial trucking companies. The advanced safety technologies include lane departure warning systems, collision mitigation systems, in-cab cameras, and cellphone applications to block use while a truck is in motion.
• These safety technology systems are created to help drivers avoid accidents, which reduces a truck company's risk profile.
• Fewer accidents by truck drivers lead to fewer claims being made by truck companies, which reduces the insurance premium rates and decreases the overall insurance costs.