How insurers and brokers fight cargo theft

Organized crime appears to be making the leap from personal auto insurance into commercial auto, partly due to law enforcement clampdowns on stolen vehicles.

With Canada’s economy now seeing high living costs, layoffs, and personally owned vehicles getting harder to steal, organized crime has moved into the cargo space by stealing goods in transit and reselling them, insurers report.

Industry carriers say cargo theft activity in North America increased by 27% in 2024 from the year prior, and one insurer reports cargo theft in Canada alone has cost the industry more than $5 billion.

“Generally, what we have seen is that auto theft and cargo theft are inversely proportional,” says Rupinder Hayer, assistant vice president at Echelon Insurance. “It’s historical. In the last five or six years, you’ll see that when auto theft has gone up, cargo [claims numbers] have gone down, and vice versa.”

Hayer says insurers have seen several signs of organized criminal activity in the commercial auto space.

“It’s more…sophisticated now,” he tells CU. “They’re using fake uniforms, and ghost companies that don’t actually exist, a variety of digital tools, and even fraudulent forged documents.

“We’re seeing a trend where criminals will stage an accident to block a one-lane highway or a road and divert [a truck] intentionally so they have the opportunity to steal that cargo.”

Related: Why cargo clients’ tariff responses can create new exposures

In most cases, cargo theft is designed around some kind of patterned behaviour of the insured driver or dispatch, Hayer observes. To help clients prevent such losses, Echelon sends dedicated risk control teams to discuss ways to prevent theft with them.

“We have a very dedicated team of risk inspectors who provide hands-on guidance on how to prevent not just cargo theft but overall risk,” Hayer says. “They go out and meet with the insured in person and make an effort to get to know the insured very well.

“We aim to understand things like driver hiring practices, historical claim patterns, the company’s overall financial strength, if they outsource anything as part of their operations, etc. Our goal is really understanding the management so we’re able to identify any gaps that may lead to loss, including cargo theft.

“We engage customers at the ground level to ensure our underwriting approach is rooted in not only the facts and data we can put on paper, but the strategy and attitude of the management of the company.”

Related: Fraudulent pickups the latest trend in organized cargo theft

Hayer says the best way to deal with organized crime’s inroads into cargo theft is to take a tripartite approach to underwriting the business.

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Dedicated risk teams are one pillar. A second is hiring seasoned underwriters who know this class of business thoroughly. And third, insurers writing in the volatile commercial auto space are advised to seek out experienced broker partners whose detailed knowledge matches the company’s underwriters.

“Not only are our underwriters skilled and specialized, we also strategically partner with brokers who know and specialize in what we’re writing,” Hayer says. “Our broker partner relationships are based on the expertise of the broker.

“It’s one of the reasons why we are able to write things like taxi, logging trucks, long-haul trucking with U.S. exposures, driving schools, and heavy truck driving schools,” he says. “We write multiple [challenging business classes] because the brokers with whom we partner know the business and collaborate closely with our underwriters.

“Our partnership strategy is not generic. It’s very specific, and we make sure to partner with strategically aligned brokers to ensure mutual success.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.