US trucking safety worries grow
In the US, the haulage and trucking industry is big business. With revenues reported to be in excess of $700 billion, approximately 5 million truck and bus drivers share the country’s roads alongside more than 250 million motorists. But as the trucking industry has grown so too has the number of crashes, leading to huge insurance claims and calls for the industry to make greater investment in technology and training to help improve road safety.
The trend is ominous, even when you take into account the growth in the number of miles driven.
Fatal accidents on the rise
There has been an upward trend in fatal crashes involving large trucks over the past ten years, data from the National Highway Traffic Safety Administration (NHTSA) shows. In 2008, fatalities were in excess of 3,000 but by 2017, deaths were approaching 5,000 for the year. “The trend is ominous, even when you take into account the growth in the number of miles driven,” says James Edwards, Pricing Actuary for Hiscox London Market.
It is not just the number of fatal accidents that is concerning but the overall severity of the accidents. Market analysis based on data from 20 policy years and a total exposure base of 230 billion miles driven, shows that claims inflation percentage in this industry, predominantly driven by courts awards, is around the high single digits, Edwards says. There have been some eye-watering settlements in the past ten years, including one for $178 million in 2011 when a tractor-trailer collided with a pick-up truck, and another for $157 million in that same year, when a tractor-trailer accident resulted in multiple fatalities. But what is causing this trend and what can be done to improve safety?
Causes of accidents are often due to one of three main categories: human error, adverse weather conditions or mechanical fault. Excessive speed is the most frequent driver related factor. In 2017, over 40% of fatal crashes involving trucks were caused by trucks travelling above 60mph. Distraction/inattention and impairment caused by fatigue, alcohol, illness, and the use of technology were other key causes of driver error. “We speak to a lot of contacts in the trucking industry about why there are more fatalities even though vehicles are theoretically safer, and the finger always tends to be pointed at distracted driving,” says Ed Wallis, General Liability Line Underwriter for Hiscox London Market, “Particularly distraction caused by the use of devices such as mobile phones – even legal use with hands free – or using central consoles.”
In 2017, over 40% of fatal crashes involving trucks were caused by trucks travelling above 60mph.
Reducing the risk through tech
What then can the trucking industry do to try and mitigate losses and improve its worsening safety record? Installing the latest technology, such as automatic breaking, cruise control, collision mitigation software, stability control and location specific real-time weather alerts, has been proven to reduce the risks of crashes. “A study on one fleet found that using collision mitigation systems reduced rear-end crashes by 70% and the severity of crashes that occurred by 70%. Another client noted that vehicles with collision avoidance technology have 82% fewer rear-end collisions,” Edwards says. Other technology, such as the use of onboard cameras, alerts fleet safety managers to near-misses but also helps change behaviour, as speed data can be sent in real-time, allowing them to both train and monitor their drivers.
Legislating for greater safety
New laws have been put in place in the US, such as the ‘Move Over Law’, in a bid to reduce the number of road traffic accidents. This law “requires drivers approaching stationary emergency vehicles displaying flashing lights, to vacate the lane closest if safe and possible to do so, or slow to a safe speed.” But could legislators do more?
“Some believe that the NHTSA has repeatedly ignored pleas from the National Transportation Safety Board to take action and make greater use of new technology to prevent trucks from rear-ending other vehicles. Crash avoidance and mitigation systems are in place with some of the larger haulage carriers, but the NHTSA has been reluctant to make these systems mandatory,” says Edwards.
Crash avoidance and mitigation systems are in place with some of the larger haulage carriers, but the NHTSA has been reluctant to make these systems mandatory.
Driver recruitment is another critical safety factor. “Monitoring the type of drivers that companies hire is an important measure of whether those companies have a poor safety record. So too is whether the management views safety as a key metric of their company’s success,” says Edwards.
Company culture also matters. The National Academy of Sciences has named four steps in building a strong safety culture for the Federal Motor Carrier Safety Administration, including analysing operations using hard data and promoting strong values in an organisation; a strong leadership approach to safety; and rewarding staff who drive and help improve safety. “In one insurance submission Hiscox has seen, the haulier offers a reward scheme for drivers who have completed one million miles without a preventable accident,” adds Edwards.
While these developments should offer some encouragement to insurers in this embattled class of business, they are not yet reducing the severity of claims. “Auto is one of the easiest classes to model and price. People will crash and with a higher frequency of crashes there is a higher likelihood that there will be severe shock losses to the industry. The increase in awards being made in liability cases involving trucks means the insurance market is not getting any easier,” says Wallis. Some insurers have already reduced capacity or exited the class altogether, he adds.
To reverse this trend, the trucking industry will need to change its approach to safety, concludes Edwards. “Investment into technology will be critical in bucking the trend in trucking fatalities, as will strong leadership from within the industry to change the culture towards greater road safety.”