Today, 80-90% of cargo moving across North America is under- or uninsured.
The reasons? Well, there are a myriad. An awareness gap is certainly at play here. Many shippers and freight brokers mistakenly believe their carrier’s liability coverage provides more protection than it does. Unaware of their full exposure, they don’t recognize the need to address this business-busting risk. However, the insurance industry has also played a role in the current global underinsurance crisis.
Like the freight industry, insurance is very much a relationship-driven business. As a result, it’s been reserved about adopting technologies such as artificial intelligence (AI) and automation. And, lacking tech-driven efficiencies, the costs of traditionally underwritten insurance have increased with rising risk. This creates a barrier to entry for far too many freight industry businesses.
DAT VP of Strategy Execution, Greg Hastings, and Loadsure CEO, Johnny McCord discuss AI and automation in freight.
The gains of technology investments
Here, transportation businesses have an edge. They’ve already realized the benefits of harnessing data across different sources. This provides a more complete picture of how freight is moving and how to move it more efficiently — with even greater visibility on the horizon.
These technological advances haven’t eliminated human tasks (or more importantly, jobs). They’ve freed freight industry professionals from the mundane so they can focus on what they do best. For instance, digital freight matching is putting data in front of decision-makers, so they can apply their judgment to each load and quickly make business-appropriate decisions.
The future of freight insurance
Insurance is only just beginning to follow suit — but those have been big first steps.
Just look at insurtechs like DAT Freight & Analytics’ partner, Loadsure. It’s tearing up the traditional rulebook and bringing AI and automation into the equation. What does that mean for the freight industry?
More responsive, affordable, scalable coverage.
As an example, Loadsure leverages AI to underwrite cargo insurance using vast amounts of historical and real-time data. The result: insurance coverage that is delivered in an instant and on a far more granular level than traditional processes.
Ultimately, that empowers brokers, shippers, and carriers to purchase coverage only when they need it — and without minimum premiums or upfront costs.
And as AI prices insurance to match the load’s actual risk profile, coverage becomes more cost-effective and more scalable — putting risk management in the hands of all businesses, and not just the enterprise. This is a critical consideration for small businesses, which often have fragile cash flow. This limits their insurance access to blanket policies that address cargo risk broadly instead of protections that are customized to their needs.
Insurance is a balance sheet stabilizer, and no business should be priced out of the coverage they need to protect their future growth — especially in this current climate. AI and automation provide the means to do just that.
Watch the video above to learn how trends in AI and automation — from autonomous vehicles to automated insurance — will influence the freight industry.