TD Cowen Warns of Insurance Hikes for Freight Brokers

Analyst
โดย FreightWaves·US·Read original
Summary · why it matters

TD Cowen has issued a sobering outlook for freight brokers' insurance costs following the Montgomery decision, citing a call with an unidentified trucking insurance agency executive that keeps the firm negative on RXO, C.H. Robinson, and Landstar. The report notes that a top-10 freight broker recently saw its liability insurance triple, and large brokers face mid-teens to mid-20s percentage rate increases, with only about ten underwriters in the market, a number expected to shrink. The executive described the market as volatile, with premiums surging after the Montgomery ruling and again after the Lipe vs. Lupus Superior nuclear verdict, indicating insurers are still assessing risk. TD Cowen also predicts industry consolidation among the roughly 22,000 brokers, as smaller players face unsustainable insurance headwinds, while C.H. Robinson and RXO executives downplay the impact, saying costs will be passed on to shippers and consumers.

Impact on stocks 3

Industrials▼ · 3 stocks
CH Robinson Worldwide Inc
CHRW
▼ NegativeRegulationrelevance

Insurance costs rising due to Montgomery decision and nuclear verdicts, with large brokers facing mid-teens to mid-20s rate increases.

Landstar System Inc
LSTR
▼ NegativeRegulationrelevance

Insurance costs rising due to Montgomery decision and nuclear verdicts, with large brokers facing mid-teens to mid-20s rate increases.

RXO Inc.
RXO
▼ NegativeRegulationrelevance

Insurance costs rising due to Montgomery decision and nuclear verdicts, with large brokers facing mid-teens to mid-20s rate increases.

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