The following article has been provided by Ascend.
The trucking insurance industry has had a challenging year. According to the American Transportation Research Institute, carriers have exited the market because of increasing liabilities due to social inflation and nuclear verdicts. On top of that, trucking firms are facing tighter profit margins due to lower demand for goods, driver shortages, and the high price of diesel.
Because of these two factors, trucking companies and operators are looking hard for the lowest insurance premiums possible, squeezing margins for trucking agencies - more than in many other industries.
On top of these competitive challenges, the high touch nature of commercial auto policies with frequent endorsements and premium financing, have forced commercial trucking agencies to look at ways to simplify operations, forcing them to implement technology and processes that maximize productivity to handle this workload.
Some commercial trucking agencies have entire teams dedicated to managing endorsements, renewals, and billing due to the numerous changes that occur during the lifespan of a policy. With these changes, a commonality across these agencies is to simplify the repetitive billing, collections and accounting tasks in order to handle these requests efficiently and focus on revenue generating activities.
Some agencies have even gone to the length of building their own premium financing companies to ensure they have full control of the payments process, but all the top agencies share one aspect - they embrace automation to ensure repetitive tasks are handled not by their teams. Finding a platform that can automate AR (whether paid in full or financed) and the downstream AP (commissions and carrier payables), is essential to improve servicing and accounting team productivity.
Having a standard process for payment reminders is also very important to not only non-pay cancellation rates, but also to ensure agencies are protected during disputes. Documentation showing when clients receive and open invoices provides a paper trail in case clients ever challenge not missed payments. This eliminates the finger pointing and puts full accountability on the insured. In some states, it’s a legal requirement that all customers must be notified for upcoming payments in the same way as well.
What’s even better is when these reminders have been automated so that every customer receives the necessary emails to ensure they pay without needing human intervention. Especially for trucking insurance, where many policies are financed, these automations are crucial to ensure installments are collected and NOCs aren’t sent out.
Especially within trucking, where every team is managing many more policies per employee than other specialties, the best agencies have been able to move away from reactive cycles and focus on being proactive with their clients - tackling renewals way before they come up, making sure policies don’t go into cancelation, etc. Especially in this industry, where policies are constantly being shopped around, it’s vital that trucking agencies reduce the time spent on administrative work so they can allocate their time focused on retention and new business activities.
With all the challenges trucking agencies face today, they’ve found innovative ways to ensure they survive any market. The focus on productivity, proactiveness and automation are all initiatives that would benefit any agency today.
Image embedded: Kailyn Despotakis
