According to the Fort Worth Star-Telegram, Fort Worth-based Gainsco announced earlier this week that rising losses have prompted it to exit the commercial trucking insurance business for the most part, severing what has long been a significant portion of the company's business.
After third-quarter losses announced last week, Gainsco said it now regards the trucking business as so unfavorable that even high premiums won’t help.
Insurance and trucking industry officials say that Gainsco is just one of many insurance companies that has given up on trucking. Premiums are rising, and trucking firms are raising deductibles to help limit premium increases.
Gainsco lost $7.6 million in the quarter that ended Sept. 30, including a $10 million charge to cover higher-than-anticipated claims and claims expenses related to trucking policies, the paper reported.
Trucking policies accounted for about 15 percent of the company's $128.6 million in total premiums so far this year.
Gainsco Chairman Glenn Anderson said the company will simply not renew policies as they expire, a process that should eliminate most of the coverage within a year.
The Insurance Information Institute, an association of property-and-casualty insurers, said all U.S. insurers in the commercial vehicle market lost money last year, the Star-Telegram said.
While Anderson cited rising claims costs in the business, higher accident rates don't appear to be part of the trend. Rather, the severity of each accident and the property and medical damages of each accident appear to account for the bulk of the increased costs.