As insurance costs skyrocket for hauliers in the age of nuclear verdicts and reptile litigation, Jean Gardner and Schuie Yankelewitz, CEO and COO of the Central Analysis Bureau (CAB), respectively, told participants of the CCJ Solutions Summit last week, the secret to keeping insurers by your side: tell your story before the driver data tells it for you.
A subsidiary of CCJ parent company Randall-Reilly, CAB has performed financial analysis in the insurance industry for motor carriers for 85 years. Together, Yankelewitz and Gardner have combined decades of experience to help carriers insure and reduce costs by leveraging driver data and getting the right message to insurers. During this time, Gardner said a lot has changed and the issue is now more important than ever.
âYears ago when there was a truck accident, it was a truck accident,â Gardner said. “Insurance companies could look at the information and details of the case and price them appropriately.”
But now, with the explosion of data streams generated by trucks, cars, mobile devices, record keeping and cameras, “every claim is paid at much higher potentials,” she said. .
Gardner cited a recent example of an accident involving a truck where the complainant recovered 10 years of driver violation records.
âYou’re sitting in front of a judge who doesn’t know what you know,â about the driver, his background or any listed offenses or accidents, Gardner said, âbut the judge said that was enough to keep this case going. against the driver for punitive damages which are not covered by the insurance.
The role of driver data has certainly enabled plaintiffs to demand massive payments, but according to Yankelewitz, if played correctly, driver data can also allow carriers to get coverage and get coverage for less. .
Essentially, the ACR’s strategy towards underwriters is to “answer the question before it gets an answer,” Yankelewitz said. âWhen the underwriter receives the request, if you’ve answered the questions there, you have a better chance. Subscription is an art. ”
The art of underwriting and avoiding negative spirals
According to the CAB team, insurers, like most of us, are in a hurry. The insurance industry has adopted a âslide right, slide leftâ model in which a few bad statistics can result in an insurer being quickly dismissed for coverage. Some insurers will continue to take a carrier with bad stats, but they charge more and can serve as a red flag for shippers.
The CAB shared with the CCJ audience an overview of the dashboards they create for customers that highlight each of the seven factors that go into a carrier’s CSA score and inspection selection score. Yankelewitz admitted that not everyone likes CSA scores, but at the end of the day “no one is going to come up with a scoring methodology that everyone agrees with.”
âIf you look at what the government has done, there are violations in six categories, and four are driver related. The rest are vehicle maintenance and hazardous materials,â he said. The four driver-related areas are Dangerous Driving, Driver Fitness, Hours of Service and Controlled Substances. The poorer a carrier score on these metrics, the poorer the ISS carrier score, which Yankelewitz says only causes more problems.
âThe ISS score is the score the government uses to prioritize your trucks and drivers at weigh stations with a higher volume of jumpers,â he said. “This means the likelihood of being inspected or arrested increases because the DOT officer scored high, so he’s going to be more critical and assume he’ll find something.”
Insurers know that poor CSA scores lead to poor ISS scores and that poor ISS scores lead to more inspections, resulting in more violations and lower CSA scores. Inspections result in more off-road time and more out-of-service time. According to Gardner, this is why ISS scores become a âsweep right, sweep leftâ situation for insurers, where poor ISS scores often disqualify a carrier within minutes.
Yankelewitz has given a solid strategy to combat this downward spiral. Basically, no carrier should ever be ringed for a seat belt violation.
Yankelewitz gave the example of two drivers, one speeding and the other neglecting to wear their seat belts. Even though the speeding driver increases their likelihood of an accident and the beltless driver does not, seat belt violations result in more costs for carriers.
âThe seat belt is the easiest thing to get. You just have to wear it,â Yankelewitz said. “If you don’t take the time to put on your seatbelt, that means other problems. It’s not a sign of a safety-conscious person. From a correlation point of view, it’s more likely. that there are other problems. Nobody calls their insurer to say ‘I’m going to drive recklessly’, “but showing seat belt violations communicates just as much, he said.
Gardner said eliminating seat belt violations can change insurance costs “dramatically” and gave the example of a fleet owner who told drivers that anyone would go six months without a seat belt violation. security would receive a $ 50 Amazon gift card. âIt was the best money he had ever spent,â Gardner said.
How to get better insurance rates
Once a carrier obtains a violation, it remains recorded for 24 months, even if a DataQ successfully disputes the violation. Because of this, fleets need to know what data they are showing to underwriters and anticipate any potential red flags.
âIf you go in preemptively and say ‘here’s what is and what action we’re taking,’ insurers see a road carrier that cares, and it’s not just with insurance companies directly, maybe even if you go to a broker in between, âYankelewitz said.
âDon’t wait for the question to react. Insurance companies will write companies with red scores, but they are less likely to do so if you say ‘oh, funny, you should ask about this’ when asking questions. arise. Take the initiative, that data is something that exists. Everyone will be watching. “
Driver retention also has an impact on rates, Gardner says.
âOne of the key factors that insurance companies are looking at right now is how long you have these drivers. Driver retention is essential, but even if you have a driver that has been with you for 15 years and is good, what’s the loss? The races have shown through worker complaints that more accidents happen in the first two years with you, no matter how long that driver has been driving. ,” she said.
So if your fleet has owner-operators who are just getting started, make sure insurers know they’re in the same truck they’ve been driving for years.
On removing problematic drivers from the fleet, the CAB said it had tools to visualize how much money they could save and encouraged fleets to get in touch to see how they could save money. money on insurance.