NIP Group Inc released the results of the Transportation Insurance Pricing Survey (TIPS) for the first quarter of 2009. The survey is used to benchmark changes in the availability and rates in the transportation insurance market.
Survey results indicate that rate decreases continue to show signs of leveling off during the first quarter of 2009 and, in certain statistically separated components of the market (account size, segment and coverage break-outs), modest rate increases can be seen.
The number of new entrants in transportation market segments, which has a significant effect on rates, increased in the first quarter. According to one respondent, “traditionally conservative carriers are chasing premium as they find themselves competing against new players and purchasing groups.”
The trend toward rate increases was most noticeable in small accounts (those with premiums of $75,000 or less) and medium-size accounts (those with premiums between $75,000 and $250,000). This trend has even begun to manifest itself in large accounts (those with premiums of more than $250,000), which have not been similarly impacted in previous quarters.
The survey also measures premium changes across 10 different transportation segments. Respondents have indicated that the Trucking, Intermodal, Specialized Carriers and Riggers, Charter/Tour, and School Bus segments have continued recent trends of flattening rates in the first quarter. In fact, the number of participants reporting no change in rates or modest increases has gone up in all in these segments, in some cases dramatically.
Responses for two industry segments were greatly polarized. Some respondents stated that in the Bulk Transportation and Airport Ground segments, rates decreased in the first quarter compared with fourth quarter 2008. However, other participants noted marked rate increases in the same segments.