The importance of the trucking industry to the U.S. economy cannot be overstated, with over 1.86 million trucking companies operating as of June 2023 and over 8.4 million people employed in trucking-related jobs in 2022, according to the American Trucking Association. Additionally, in 2022, the trucking industry generated $940.8 billion in gross freight revenues, moving 11.46 billion tons of freight.

As with almost every industry, changes are afoot in the commercial auto sector. The industry is looking to improve its safety record and profitability and is utilizing both automated driving and autonomous vehicles, which are methods that may help improve the sector's loss ratio.

The adoption of automated vehicles—which use technology to perform certain driving functions, such as braking, accelerating and parking without human intervention—is playing a significant role in improving industry safety.

“Commercial auto clients are leaning into proactive risk mitigation technologies like telematics and dash cams as part of their fleet safety program, which can reinforce safe driving behaviors and accurately capture the facts of an accident to ensure fault is properly assigned," says Kristina Talkowski, head of middle market commercial lines, Nationwide.

“Our research shows that most company drivers are supportive of these devices and believe they help to enhance safety," she says. “These tools can have a strong impact, but simply installing them isn't enough; they must be integrated as a part of a full fleet safety program to effectively manage driver behavior."

More recently, the journey toward autonomous trucking has begun to unfold in earnest with the announcement in May that car maker Volvo had collaborated with Aurora Innovation, a leading force in autonomous driving technology, in the development of the Volvo VNL Autonomous, an autonomous semi-truck. In the same month, Hyundai and its software partner, Plus, presented its Xcient Fuel Cell truck equipped with technology for Level 4 automated driving, which is now undergoing tests in the U.S.

The global market for autonomous trucks is estimated to increase from $3.3 billion in 2023 to $6.9 billion by 2028, according to a new study by BCC Research. Nevertheless, carriers operating within the commercial auto sector see both the pros and cons of autonomous vehicles.

“This [autonomous trucks] is just going to be a slow evolution. We've already been talking about it for years," says Jennifer Nuest, transportation practice leader, Amwins. “I think people are anticipating it to be a positive when you remove that driver element, so you don't have distracted driving or the possibility of human error."

“But I think you have to remember that the human brain is actually a pretty great, complex machine, and we have to teach a computer to make those decisions," she adds.

However, when it comes to providing coverage, the key consideration for the commercial auto insurance sector is “who drives the vehicle," says Mark Gallagher, national transportation practice leader at Risk Placement Services (RPS). “The commercial auto industry built their rates, rules and regulations around that fact, along with what you drive, where you go and what you transport."

“As you take the driver out of the equation, it removes one of the biggest factors and replaces it with several unknowns," he adds.

Autonomous vehicles are self-reliant, leveraging advanced artificial intelligence (AI) algorithms to make decisions, plan routes and adapt to varying traffic conditions. “If you're talking about driving through the middle of Los Angeles or the middle of New York City where there's a lot of chaos and activity that is not consistent, I don't know if the technology is there yet," says Chris Homewood, senior vice president and head of commercial auto, Hudson Insurance Group.

“But if you're in a controlled environment, like a port, where you're having container haulers offload from a ship, and then they're hauled to a staging area within the port, over that short, point-to-point distance, it could be very effective," Homewood says.

And while there have been consistent increases in losses from distracted driving, “autonomous vehicles remove human error as a factor in accidents," Talkowski adds. “A challenge, though, is how humans react to an autonomous vehicle on the roadway and the ability for an autonomous vehicle to be prepared to manage every and all potential scenarios."

Olivia Overman is IA content editor.