Risk Management

Claim severity rising faster for rail systems than for bus operations: Survey

Judy Greenwald

December 06, 2018 Reprints

Aon Claims Management P/C Insurers Risk Management Cyber Risks Emerging Risks Technology More + Less -

Claim severity rising faster for rail systems than for bus operations: Survey

Claim severity is increasing faster for rail systems than for bus operations, according to a survey of public transit risk managers released Wednesday.

The “2018 Public Benchmark Report,” which was produced under a marketing agreement between Aon PLC and the Washington-based American Public Transportation Association, reflected a survey of 38 organizations representing 116 individual transit systems across 16 states, Washington, D.C., and Canada, and about 1.8 billion rider trips each year. The survey was sent by email in February, with an April 30 deadline.

Claim severity is increasing at a 2% rate for bus operations and a 5.5% annual rate for rail operations, according to the survey.

However, the survey found bus operations’ claim frequency is increasing at a 1.5% annual rate but decreasing at a 0.5% rate for rail operations.

The loss rate is increasing at a 3.5% annual rate for bus operations and a 5% annual rate for rail operations, according to the survey.

When asked to rank 30 risks, survey respondents rated third-party liability risks as the top risk, followed by damage to reputation/brand, injury to workers, workforce shortage, and failure to innovate/meet customer needs.

These were followed by economic slowdown/slow recovery, computer crime/hacking viruses/malicious codes, technology failure/system failure, failure to attract or retain top talent, and an aging workforce and related health issues.

Other questions asked included a number on cyber coverage. A total of 26 of the 38 respondents said they had cyber insurance, with the largest number (10) reporting $2 million to $5 million in limits.

Thirty-one of the respondents said they had not experienced a cyber incident and six said they had. One respondent did not report this information.