Fleet insurance costs for Canadian carriers are likely to remain stable for at least another year as the current soft market in insurance is expected to continue beyond 1988. Canadian for-hire carriers therefore can anticipate no immediate increases in rates, according to industry sources.

Basically, we haven't had a rate increase in two years, says Keith Ingoe, president of Toronto-based Markell Insurance Co. of Canada, one of the largest underwriters of insurance for commercial fleets in the country. But claims for the trucking industry are increasing at a rate of 12 percent to 14 percent, while premiums are staying level or are being reduced. When the cost of claims starts exceeding the premiums, carriers will have to dig deeper into their pockets for insurance. Mr. Ingoe predicted the hard market will not begin for at least 12 to 18 months.The Canadian fleet insurance business is estimated to be worth about C$150 million a year. No one knows exactly what the market is worth because accurate statistics are not available.

What's abundantly clear, though, is that only a handful of primary insurers, or underwriters, specialize in insuring truck fleets. The three main underwriters are Markell Insurance, Royal Insurance and Transit Insurance, all based in Toronto.

A new player on the scene is Progressive Casualty Insurance Co. of Toronto, whose parent, NCI Transportation Services, based in Cleveland, underwrote US$170 million in fleet insurance in the United States last year. Progressive Casualty operates differently in that it doesn't employ brokers or agents, but works directly with the carriers. It began selling fleet insurance in Canada last year.

Certainly the trucking industry would like to see more primary insurers willing to cover commercial fleets. Lorne Alter, executive director of the Ontario Trucking Association of Toronto, for one, feels more competition in the insurance business would be healthy. There are simply not enough underwriters, said Mr. Alter. The major problem is a perceptual problem. Insurance people say that trucking is a risky proposition. But there are no numbers to say that's accurate.

Mr. Alter said that even a carrier with a safe driving record is penalized by having to pay unnecessarily high rates, based on an underwriter's misconception that trucking is an unsafe trade.

Ironically, it was the underwriting trade, itself, that was in a perilous position three years ago. Back then, a spate of high liability claims around the world adversely affected insurers. In Canada, United Canada Insurance Co. of Toronto, a major underwriter of fleet insurance, encountered financial difficulties. As a result, insurance rates skyrocketed for truckers and many carriers had problems finding coverage at any price.

The OTA is undertaking a comprehensive survey of its members' risk management practices. This statistical information will be available in case there is a renewed interest in self-insurance. If we see a crisis on the horizon, we will probably be up and running before the crisis hits, predicted Mr. Alter.

Carriers, of course, can do something about their cost of insurance. More trucking firms are opting for higher deductibles - that first part of the cost of damages that an insured person must pay. Laidlaw Carriers Inc. of Hamilton, Ontario, a large regional carrier, for example, has a deductible of $250,000. And it takes a pretty severe loss to exceed $250,000, said David Denault, Laidlaw's vice president of corporate risk and compliance.

In other words, the management at Laidlaw believes it's better risk management to absorb the first $250,000 in any insurance claim than to have a lower coverage threshold but a more expensive policy. Some large fleets in North America are basically self-insured, with deductibles in the range of $1 million. For small fleets, though, the average deductible is in the range of $5,000 to $25,000.

Whatever the deductible, insurance companies loathe to protect any carrier deemed to be unsafe. No carrier can afford to operate without a sound loss prevention program, stressed Mr. Denault, whose company runs close to 600 trucks in Canada and another 150 south of the border.

With the current overhaul of Canadian regulations, Mr. Denault hopes that safety controls remain tight, especially on trans-border movements. He pointed out that there are stringent requirements on Canadian carriers wishing to operate in the United States. We have to make sure we file Forms E & H as well as MCS-90 papers in every state to prove that Laidlaw has proper insurance. Are Canadian authorities going to be as concerned as American authorities have been with us? I am not sure at this time if all the mechanisms are in place in Canada and we have already begun to deregulate the industry, said Mr. Denault.

Frederick Transport of Dundas, Ontario, a truckload irregular-route carrier, also operates on both sides of the border. The carrier renegotiated its insurance in the United States in November and, two months later, renewed in Canada. We have better coverage and a little better rates in Canada, even though we have identical hiring standards and comparable accident ratios, said company President Tom Brooke. Frederick Transport's annual premiums exceed C$4 million and coverage is for 620 trucks.

The fact that Frederick pays less for insurance in Canada is not an anomaly. Canadian fleet insurance tends to be somewhat lower than U.S. charges

because Canadians are less litigious and jury verdicts are not as generous as south of the border.