Commercial Auto & Truck Insurance Procurement Category Market Research Report Now Available from IBISWorld
Los Angeles, California (PRWEB) February 20, 2014 -- Commercial auto and truck insurance has a buyer power score of 3.5 out of 5.0. Scores closer to 5 indicate that buyers have more negotiating power than suppliers. “Buyer power is strengthened by low market concentration, product specialization and price volatility in the insurance market,” according to IBISWorld procurement analyst Donna Khuu. On the other hand, she adds, vendor and supply chain risks, switching costs, a lack of substitutes and rising demand for insurance weaken buyer power.
Low market share concentration and low product specialization have made the commercial vehicle insurance market highly competitive among suppliers. “Buyers benefit from a fragmented market because there are many suppliers to choose from,” says Khuu. In addition, commercial auto and truck insurance is very homogenous across suppliers. As a result, suppliers have to compete on the basis of price and service. Buyers are able to negotiate a lower price by pitting suppliers against each other. Moreover, price volatility during the three years to 2013 has been low and is forecast to be low from 2013 to 2016. Low price volatility is beneficial for buyers because buyers can consider shorter policy terms when there will not be drastic price increases.
Despite the gains in buyer power, buyer power is weakened by vendor and supply chain risks. Insurance suppliers face upward price pressure from their own suppliers, which is being passed on to buyers. With no insurance substitutes available, buyers must absorb the additional costs through higher prices. Furthermore, it is difficult for a buyer to switch to a new supplier. The acquisition costs and lost benefits are high because of the amount of time and labor required and the loss of a relationship and current discount rates. Additionally, demand is slowly increasing, which weakens buyer power because more buyers are competing for insurance and suppliers are less inclined to negotiate. Buyers that bundle other commercial insurance with their vehicle insurance and invest in lowering loss risk can better negotiate a favorable price. Major suppliers in this market include American International Group Inc., Nationwide, The Progressive Corporation and Travelers Companies Inc.
For more information, visit IBISWorld’s Commercial Auto & Truck Insurance procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of commercial auto and truck insurance. Buyers are businesses that use vehicles for commercial functions such as errands, sales calls, cargo transportation, construction and passenger transportation. Similar to consumer vehicle insurance, commercial vehicle insurance provides financial protection against physical damage, bodily injury and liabilities that could arise from traffic collisions, natural disasters and theft. This insurance includes coverage for cars, vans and trucks, which range from pickup trucks to semitrucks. Insurance providers are insurance carriers, and agents and brokers are intermediaries between carriers and buyers. This report does not include cargo insurance, commercial property insurance or general liability insurance.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Vendor Financial Benchmarks
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld Inc., +1 (310) 866-5042, [email protected]
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