Insurance carriers are dealing with dramatically rising rates and historic losses.  The industry as a whole has been facing similar issues for the past few years. 2019 alone saw a staggering $4 billion recorded in underwriting losses.  Unsurprisingly, the transportation industry has been negatively affected by this, especially since increases in insurance premiums have not been enough to make up for these losses.

What’s driving these astronomical figures?  As is often the case, there are a variety of factors coming into play.  These range from the typical, such as distracted driving, driver shortages, and litigation financing, to the singular, like damaging nuclear verdicts.  One less recognized contributor to these high losses and unacceptable combined ratios is poor decision making due to a lack of segmentation.  Many insurance professionals rely on industry averages shown on SAFER System or other risk analysis tools.   These aggregated statistics are only marginally useful because they include every type of DOT registered motor carrier such as tractor trailers, local box trucks, dump trucks, tow trucks, motor coaches, school buses, vans, and limousines.

To make the best possible decision, you need to compare like-kind motor carriers.   For example, compare a refers with other refers, dump trucks with other dump trucks, etc.  The same can be said when writing any specific type of risk.   The best decisions can be made based on segmented market statistics for the same type and size motor carriers.

Failure to segment data leads to incorrect conclusions that can contribute to the sky-high losses that characterized 2019.

What can be done about this? The insurance industry, for the most part, attempts to address the segmenting issue by allowing underwriters to choose from a selection of programs with premiums that can be tweaked depending on the type of motor carrier and their insurance need.  However, this does not address the fundamental issue. Data that only considers motor carriers as an aggregated group is still displayed on the FMCSA SAFER system and widely used in typical underwriting reports.

Carrier Software has a better way: cohort-based analyses.

A cohort approach is based on comparing motor carriers that have the same size fleet hauling the same cargo.  By comparing like-kind motor carriers, assessing whether a motor carrier is safer than their peers, becomes clearer.

Our Carrier Underwriting Report is based on cohort analyses that segment risk data into similarly-sized and type truck companies.  Fleet size and cargo peer groups are just two examples of the type of segmenting you can use while conducting your underwriting analyses.  This way you can have the most accurate information results at your fingertips when it comes time to make those all-important underwriting decisions.

Want to experience the power and accuracy of segmenting data for yourself and see what it can do for your insureds? Call now to schedule a free webinar!

Failing to segment data can lead to incorrect conclusions that contribute to sky-high losses

If you are an insurance carrier, there is a good chance you’ve encountered challenges such as rising rates and historic losses.  You are not alone: the industry as a whole has been facing similar issues. 2019 alone saw a staggering $4 billion recorded in underwriting losses, a figure that even someone not familiar with the industry would agree is upsetting, to put things mildly. Unsurprisingly, the transportation industry has been negatively affected by this, especially since increases in insurance premiums have not been enough to make up for these losses.

What’s driving these astronomical figures?  As is often the case, there are a variety of factors coming into play.  These range from the typical, such as distracted driving, driver shortages, and litigation financing, to the singular, such as damaging nuclear verdicts.  There is another component to these high losses and unacceptable combined ratios, though: poor decision making due to a lack of segmentation when assessing motor carrier risk.

Data that only considers motor carriers as an aggregated group is still displayed on the FMCSA SAFER system and widely used in typical underwriting reports.

With segmenting, you can look at trucks that meet the specific criteria for each niche market, such as power unit ranges and cargo types.  Failing to segment data can lead to incorrect conclusions that contribute to the sort of sky-high losses that characterized 2019.

The insurance industry, for the most part, attempts to address this by allowing underwriters to choose from a selection of programs with premiums that can be tweaked depending on the type of motor carrier  and their insurance need.  However, this does not address the fundamental issue: data that only considers motor carriers as an aggregated group is stilldisplayed on the FMCSA SAFER system and widely used in typical underwriting reports.

Carrier Software has a better way: cohort-based analyses.  

A cohort approach is based on comparing motor carriers that have the same size fleet hauling the same cargo.  By comparing like-kind motor carriers, assessing whether a motor carrier is safer than their peers becomes easier and the data clearer.  

Our Carrier Underwriting Report is based on cohort analyses that segment risk data into similarly-sized and type truck companies.  Fleet size and cargo peer groups are just two examples of the type of segmenting you can use while conducting your underwriting analyses.  This way you can have the most accurate information results at your fingertips when it comes time to make those all-important underwriting decisions.

Did you know there are an estimated over half a million motor carriers in the United States today? Searching for prospective new clients can be an overwhelming task. That’s a lot of opportunity for writing policies, but also a lot of opportunity to waste time chasing leads that don’t fall within your markets’ guidelines.

We recommend 2 actions to take first before contacting your ideal truck insurance prospects.

First, dive into the community and learn the lingo and types of insurance. 

When you meet with truck company owners who have been in the business, you need to be able to “talk the talk”. Join groups like Motor Carrier Insurance Education Foundation (MCIEF), state and local truck associations, and surround yourself with experienced truck insurance specialists. Sign up for subscription lists for FMCSA updates, Commercial Carrier Journal, Transport Topics, and many others. Follow agents on LinkedIn who work for your company and other companies to find content that relates to your field so you can grow your breadth of knowledge.

Second, know your markets; the insurance carriers, Managing General Agents (MGAs), and underwriters.

To save time, know the specific underwriting criteria for those markets so that you can prequalify carriers for quote.  Ask underwriting what type of motor carriers you should submit to them, including specific questions about:

1. 1. Fleet size
   2. Commodities hauled
   3. BASIC Safety score parameters
   4. Radius of operation
   5. Many more…

Once you have the background knowledge in place and know your available markets, you will be ready to present yourself to sales leads. Running a simple search for insurers in your state or states of operation can yield hundreds or thousands of results, not all of which will be a good fit for your business.   How best to sort through them? Renewal date—of course! But that’s not enough.  So how can you combat this overabundance of prospects? The answer is surprisingly simple: filtering.

Using DOT Leads by Carrier Software, you can find pre-qualified truck leads by matching our filters to your geographical region and according to your markets’ underwriting criteria.  Most insurance carriers will expect you to scrub your submissions based on by OOS inspection counts, clean inspection ratio, commodities hauled, crash injuries and fatalities, and crash to power unit ratio. We provide all the filters you need, and many more that are market exclusives.

Then, run your search.

By crafting a search that specifies qualities you do or don’t want in a client, you will automatically you specified will automatically filter out those leads, presenting you with only the most relevant leads.  The opportunity cost of your time can be very valuable.  Eliminate those prospects that don’t match your insurance carrier’s appetite.  Focusing on the accounts “you can write” ultimately saves time and grows your book of business.

According to an article by the Tivoli Partners, “Customer loyalty, by definition, means commitment. A customer that is loyal to your brand continues to buy your product or service over and over again.” Insurance is an intangible product, so how do you build customer loyalty, rather than brand loyalty, to your business and why?

First, let’s tackle the why.

According to PWC, “32% of all customers would stop doing business with a brand they loved after one bad experience.” With that in mind, we know that we can’t rely simply on brand loyalty to keep generating renewals.  You must generate customer loyalty to you and your company.  In the truck insurance industry, retaining renewal business costs much less than finding new business. Cost factors for time, travel, and opportunity costs all need to be considered.  It takes a lot of money to find new business, persuade businesses to work with you, and figure out how to differentiate yourself against competition in that area.

Additionally, loyal customers will bring you referrals. If you can get a client that’s so loyal they’re willing to give you a referral, that’s the most effective way to get in the door at a new business.  You have someone on your side, in the same link of work as your perspective, that has the same goals in mind. Helping to create a positive impression through a shared contact is the easiest way to help generate new business. You can even get loyal customers to promote you on social media platforms. Get reviews and connections from your customers that are heavily active on social media.  Proudly boast to the digital world your loyal customers.

Now, let’s confront the how.

Loyalty is earned by going the extra mile to provide service that exceeds expectations. Never take your insureds for granted, and always make sure they feel appreciated, valued, and satisfied whenever possible. There are several ways to accomplish this.

As a retail agent, do not wait for a customer to call you with a problem. Reach out to them and touch base. Show your motor carrier clients that you know their employees by name. Ask them leading questions, such as:

“What can we do for you?”

“What can we improve on?”

“Do you have any suggestions?

“Is there anything we can do to make your job easier?”

“Are there any types of technology I can suggest to make your job easier?”

“Do you know what type of items you need to have prepared in case of audit by DOT?”

Intervene and help insureds with problems. Keep track of and notify them if anything goes wrong. Use Alert-VU to monitor your insureds in real-time.  Stay on top of all changes occurring with that customer in public transportation databases. Early knowledge can help quickly resolve problems for motor carriers that create liable situations. Here are some examples.

“I noticed you have a vehicle out here that’s not on your scheduled policy”

“Hey, I noticed that your MCS-150 is coming due shortly, do you want me to update it for you?”

“Your operating authority has been revoked. Is this correct? If not, we need to get this fixed immediately.”

“I see one of your BASICs in nearing Alert Status, should we brainstorm how we can avoid crossing the threshold?”

When you see the opportunity to help solve a client’s problem, do what you say you’re going to do. Trucking is a big industry, so building a positive reputation for your agency is critical.

Building customer loyalty is a key strategy for growing your business in today’s marketplace. Carrier Software has an entire suite of insurtech tools available to help assist you in growing your truck insurance business and expanding your customer offerings. Contact us today and we can help you find a unique solution to grow loyalty within your customer base.

According to the American Trucking Association, the truck driver shortage “will hit a historic high of just over 80,000 drivers.” For smaller fleets the turnover rate is about 77% and larger fleets averaged 89% (ATA).

NATMI-Certified Safety Specialist, Buddy Walls says “We have to make sure the right company culture practices are in place to retain experienced, safety-conscious drivers and decrease driver turnover.”

There are 3 main things you can do just within the first 90 days to greatly increase your odds of retaining drivers.

#1 Set expectations

Set expectations during recruiting calls and orientation. All drivers have their own priorities, whether it’s home time expectations, no slip seat, number of miles, if it’s force dispatch, etc. Upon recruitment, very few people ask the new hire driver what their priorities are. Let them know exactly how it is. Don’t just tell them what they want to hear, or you will lure them in with one expectation only to find out they will be unhappy with how the company actually operates. Care about what they think, start creating a rapport. You are outlining your expectations so there are no surprises. Allow them time to ask questions, and don’t give them an unrealistic expectation of their priorities.

#2 Use the golden rule

Most trucking companies need to improve and take more time with their driver orientation program and do a road test. Most rush through and push their drivers right out the door. Don’t just run them through like herding cattle. You must value your employees as people, and not treat them like a truck number. If you herd them like cattle, they will move on as naturally as herds do.

#3 Implement Bonus Programs and allow time off

Stairstep retention bonuses based on years of service and pay it quarterly and annually and increase it gradually. The average cost of losing a driver is around $8,200 including the truck sitting on fence not generating revenue, truck payment, insurance, etc. You can pay out a lot of bonuses before you hit the expense cap of a truck sitting empty. Do not be penny wise and pound foolish.
Give out safety bonuses. Not only do drivers appreciate the extra cash for clean inspections and no accidents, but it increases your bottom line by improving your safety scores. With Carrier Software’s CSA Safety Improvement Program, you get daily emails to notify you of new inspections in real-time. You can also get driver scorecards and points analysis to objectively view the driver’s overall affect quickly and easily on your company’s safety scores and which drivers have the most on-road safety problems.

Referral bonuses are a great way to address driver grievances through third party influence. If a driver is getting a referral bonus on a fellow employee, the stakes are higher for that employee to get them to stay. It also gives them a sense of fellowship with their employees. It gives drivers something to look forward to.

Time off and vacation time are key. Give them good vacation time and time for home emergencies, they deserve it. Make specific policies regarding what constitutes emergencies. Stairstep vacation time that coincides with their years of service. You are generating loyalty with that driver by showing that you care.

Implementing these policies will put you on the right path to earning loyalty within your fleet that will last for years to come. If you need help objectively looking at your fleet to determine who should get certain bonuses, but you don’t have time to develop a certain of safety parameters, Carrier Software can help you. Click here to learn more about how our CSA Safety Improvement Program can help service your company’s needs.

According to AVP of Carrier Software, Kyle Lack, there are around 390,000 long-haul, interstate trucking companies in the U.S. today. As an agent, where and HOW should you begin to sort through that many prospects and figure out where you can find the most success and save you the most time?

Advice from a Veteran Truck Insurance Specialist and NATMI-certified Safety Director Buddy “Roy” Walls “Nobody is born to be a truck insurance agent, you have to do your homework.”

Here are 6 things you can do today to get more ROI out of your prospecting. 

#1 Do your homework.

Before you ever pick up the phone, research the company you are working with, Pull a Snap VU Report, review the detailed information on their MCS 150, ISS Score, radius of operation, type of commodities hauled, type of trucks and cargo, understand their CSA Scores to better communicate with a prospect. Evaluate what this carrier looks like to see if they have a market that will be interested in that type of carrier. There is no sense in wasting their time if you don’t have market interested in insuring that type of carrier. Use that research to prospect companies that your available markets are aggressively wanting to underwrite. You want to go after opportunities that you think you have an 80% chance of closing with your underwriter.

#2 Start early.

A relationship doesn’t develop overnight. It takes time. At least 6 months prior to renewal, pull a SNAP-VU report and a detailed Insure-VU Underwriting Report, and actually understand the safety condition of a company. When you start the relationship early, it gives you an upper hand in positioning yourself against other brokers that are wanting to quote them as well. If there are issues with safety that need to be addressed prior to renewal, you will then have 6 months to help put them in a better position to get quoted with your market. Ultimately, this saves them money and builds trust with you.

#3 Bring solutions to the table.

According to Accenture, “The use of customer data to generate relevant, real-time usage- and behavior-based offers that help customers mitigate, manage, and recover from loss can help insurers build trust with customers. That’s the value advanced data analytics can deliver both to the insurance customer and to the insurer.”

Have SOMETHING in hand that you can provide for them that makes their life easier. Make sure that you understand the data you are reviewing so well that you can spot a violation that should be Data Q’d. Example, “I noticed that your MCS-150 filing is out of date.” “I noticed that you have 3 Basics in Alert Status, and here are your problem areas.” “I noticed you have a MUST Inspect ISS Score.” Provide information of value to the company, it gives you a lot of credibility. Have your Snap-VU report in hand; you may teach them something about their company they didn’t even know.

#4 Be realistic.

Let the potential client know up front what markets you are available to quote, and list them in order of preference. Don’t try to quote on a market that won’t be successful. If you have done your homework, you should know what markets will want your prospect. If possible, try to get the trucking company to send a letter to your underwriter assigning you as the broker of record for that specific market.

#5 Find a mentor

Have someone that you can ask a lot of questions, and someone that can lead by example. Learn from what the coach is teaching you. Success breeds success. Make sure your mentor is someone that is successful. Ask other producers “How much premium do you book?” “What size accounts do you target” “What type of accounts do you target that your insurance company underwriter has an appetite for?” Have your mentor introduce you to the underwriter. The underwriter obviously trusts the mentor, and that will go a long way in establishing a level of trust with your underwriter.

#6 Find a focus.

You can only feed so many sharks. Find a few, good aggressive markets. Use market analysis reports to determine who is writing business in certain geographic regions.

Most of our clients who implemented these procedures experienced higher return on investment and increase on premiums earned in just a few short months. Carrier Software offers a suite of prospecting, truck insurance marketing, and underwriting analysis tools. Visit our products page here.