Eighty to ninety percent of goods going throughout North America is underinsured or uninsured today.
What are the reasons for this? There is a slew of them. There is undoubtedly a knowledge gap at work here. Many shippers and freight brokers are under the impression that their carrier’s liability coverage provides more protection than it actually does. They are unaware of their full vulnerability and hence are oblivious to the necessity to address this potentially crippling risk. The insurance sector, on the other hand, has contributed to the current worldwide underinsurance catastrophe.
What do you mean by that?
Insurance, like the freight industry, is a relationship-driven company. As a result, it has been hesitant to adopt artificial intelligence (AI) and automation technology. In addition, traditionally underwritten insurance premiums have risen in tandem with rising risk due to a lack of tech-driven efficiencies. For far too many enterprises in the freight industry, this presents a barrier to entry.
The benefits of investing in technology
Transportation companies have an advantage in this area. They’ve already understood the advantages of combining data from several sources. With even more visibility on the horizon, this provides a more complete view of how freight is moving and how to move it more efficiently.
These technological advancements have not rendered human tasks obsolete (or more importantly, jobs). They have liberated freight industry professionals from the banal, allowing them to concentrate on what they do best. Digital freight matching, for example, puts data in front of decision-makers so they can apply their judgment to each load and make business-appropriate decisions rapidly.
Freight insurance in the future
Insurance is only now starting to catch up, but those were significant initial steps.
Take, for example, Loadsure, a partner of DAT Freight & Analytics. It’s upending the status quo by incorporating AI and automation into the mix. What does this imply for the transportation industry?
Coverage that is more responsive, economical, and scalable.
Loadsure, for example, uses AI to underwrite cargo insurance based on massive volumes of historical and real-time data. As a result, insurance coverage is provided in real-time and at a much finer level than previous approaches.
Finally, brokers, shippers, and carriers will be able to get coverage just when they need it, with no minimum premiums or upfront fees.
Insurance coverage becomes more cost-effective and scalable as AI prices insurance to match the load’s actual risk profile, placing risk management in the hands of all enterprises, not just the enterprise. This is a crucial factor to consider for small enterprises, which frequently have a shaky cash flow. This limits their insurance options too broad plans that cover cargo risk rather than protections tailored to their specific needs.
Insurance is a balance sheet stabilizer, and no company should be priced out of the coverage they require to preserve their future growth, especially in this environment. That’s exactly what AI and automation can help with.
