One man paints challenging outlook for brokers’ insurance
A new report quoting one insurance executive has startling observations about broker insurance. The post One man paints challenging outlook for brokers’ insurance appeared first on FreightWaves .
TD Cowen's latest report paints a grim picture for broker insurance in the aftermath of the Montgomery decision. The transportation team, led by managing director Jason Seidl, relayed an interview with a top 10 freight broker executive who reported a tripling of premiums following the ruling. According to the report, brokers can expect significant premium inflation, with large brokers currently experiencing mid-teens rate increases and mid-20s rate increases.
The report suggests that only around ten underwriters are involved in broker auto liability, with the number potentially dropping to eight in the future. This consolidation of underwriters, coupled with the volatility of insurance rates following high-profile cases like Montgomery and Lipe vs. Lupus Superior, has created uncertainty in the insurance market.
TD Cowen predicts that small brokers may face increased scrutiny from their shipper base and higher insurance headwinds, which could pressure their margins. In contrast, larger players like C.H. Robinson and RXO remain relatively more stable in their insurance dealings, with CEO David Bozeman of RXO expressing confidence in their ability to absorb the cost inflation.
The overall outlook is a challenging one for brokers, with consolidation and increased scrutiny likely to shape the future of the industry.
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