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If driverless vehicles become the norm, accidents and theft claims should decrease. This will lead to better (loss) experience rating and a lower charge per unit for insurance.  Carriers that provide inland marine coverage for the transportation industry will see their rates go down.  Minimum exposure-based rates will probably still apply, but these will be chipped away at because of the better loss experience.

What does this mean to the inland marine underwriter?  Is it time to look for other coverages to sell, because motor truck cargo insurance will go the way of insurance for horse carriages and buggy whips?  Maybe… but don’t put your underwriting pen down yet.

Driverless vehicles will also solve the driver shortage. There will be more trucks on the road, gross receipts will be higher, and premium volume should increase.  So long as the average rate and loss ratio are acceptable, carriers will continue to provide the coverage.  That’s good news for the trucking industry and the inland marine underwriter.

Underwriting practices will change... so get ready.

Underwriting practices will change though, so get ready.  Sound financial condition and quality of management will be critical underwriting points, as always.  But the quality of drivers will no longer be the focal point.  Instead, it will be the quality of the technology installed, maintenance procedures, the software, anti-virus procedures to prevent being hacked, upgrades, etc. And telematics, real-time data of how an account is performing will become an important part of underwriting.

Accidents are not going to go away entirely.  Machines can and will fail.  And all technology will not be made to, or perform at, the same standard.  A good point of comparison is wind turbines. Due to defect claims in the “early days”, some insurance carriers would not provide insurance for certain turbine brands; or they would insure them with more restrictive conditions, higher rates, and bigger deductibles.

The driver might not disappear altogether - someone will be needed to get the goods in and out of the truck and deliver them to your front door.  That is, unless all goods are delivered by drone at some point, but that is the subject for another article….


About the author

Alexander McGinley is Vice President and Underwriting Manager for US Marine at XL Catlin. Contact Alexander at 860-709-3695 or


See Alexander’s The Impact of Driverless trucks on motor truck cargo insurance, Part One: Running Short where he summarizes how driverless trucks may help in the US’ anticipated driver shortage; Part 2,  which looks at the latest driver technology developments and the potential cost benefits to shippers and consumers and Part 3, where he looks at the potential effects of driverless trucks on motor truck cargo rates and the potential need for other insurance protection. 
  • About The Author
  • Vice President and Underwriting Manager,Inland Marine
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