Webinar Replay Video #72: Preparing for Insurance Renewal

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Steve Kessler: Good afternoon. Welcome everyone to the Infinit-I Workforce solutions. Fast Forward Webinar Series.

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Steve Kessler: My name’s Steve Kessler, and I’ll be the host of the program today.

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Steve Kessler: 1st of all, I appreciate you all taking some time out of your day to join us on the program. We got a good topic today as something that is always of concern to people in this industry. And that’s about insurance.

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Steve Kessler: Our program today is entitled winning the insurance game. I love that title.

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Steve Kessler: how high performing trucking companies are fighting back against rising insurance costs.

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Steve Kessler: So, I think this will be a very helpful program, as you all are,

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Steve Kessler: you know, getting ready to renew insurance or trying to prepare to do the best job. Put your best foot forward. I think you’ll get some really, really good information here today.

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Steve Kessler: I also want to introduce Mark Ray. Those of you that have been on our programs or webinars over the over the years. Pretty much. All know Mark

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Steve Kessler: Mark’s an industry veteran. He’s been

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Steve Kessler: at the executive level in trucking for

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Steve Kessler: better than 35 years.

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Steve Kessler: So

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Steve Kessler: it’s

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Steve Kessler: good to have Mark on the program, mark. Have you got any words of wisdom before we get started. Here.

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Mark Rhea: Absolutely. I’m looking forward to Patrick telling us how to win the insurance game. There’s a there’s winners and losers in the insurance game, and I think

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Mark Rhea: he can bring us some very good insight on this whole concept of risk. I think we’ll all agree that

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Mark Rhea: every time a tire rolls down the road. We are taking a calculated risk.

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Mark Rhea: and I’m really looking forward to Patrick’s comments on how to

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Mark Rhea: how to assess that risk

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Mark Rhea: from an insurance point of view, and what a carrier can do to manage that risk. So really, looking forward to today, it’s a big part of our

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Mark Rhea: business these days the verdicts are, are

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Mark Rhea: Are out there, and you don’t want to be the risk. You don’t want to be on the receiving end of one of them or the giving end of one of those verdicts.

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Steve Kessler: Absolutely

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Steve Kessler: a couple of housekeeping things really quick, and then I’ll introduce our guest. Everybody that’s joined the webinar is muted so we can’t hear you.

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Steve Kessler: But you do have the option to use the chat box, which you’ll find there in the tray in the bottom. So, if you’d like to pose a question, you can use that. There’s also a. QA. Box where you can type in a question. So, matter of fact, if you all don’t mind, you might want to just jump on the chat. Tell us who you are, who you’re with and where you’re from, so we can kind of know who’s out there.

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Steve Kessler: So, while you’re doing that, let me introduce our guest today. Our guest is Mr. Patrick Thomas.

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Steve Kessler: Patrick is currently a managing partner with Southwest at Acrisure.

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Steve Kessler: actually, Patrick, before Acrisure served as president of RSI Insurance brokers which was a company that was acquired by Acrisure on top of his extensive knowledge of the industries well known for his leadership and energy that cultivate a group of people who are driven to grow and succeed.

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Steve Kessler: He’s a graduate of the University of San Francisco, as well as City University of London.

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Steve Kessler: Patrick currently lives in Orange County, California. So, Patrick, welcome, and we’re anxious to hear what you have got to say.

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Patrick Thomas: Yeah, well, thank you very much for having me. I feel like I’ve hit that age where I get a reference, my Alma Mater, and think, Oh, my gosh! This is now more than 20 years ago, like

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Patrick Thomas: this is wild. It’s crazy. But for quick reference I mean, trucking has been near and dear to my heart, my family’s heart. I’ve been in it since birth.

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Patrick Thomas: I got into the business because it was a family business we specialized in providing insurance solutions to the trucking community. So, without you all, I wouldn’t be here.

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Patrick Thomas: So, 1st let me just say thank you right like. I cannot thank the trucking community enough for everything you do without your efforts. We would have no economy of any kind. Right? It’s like I very sincerely mean that you are the backbone to what we do.

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Patrick Thomas: absolutely necessary sometimes, underappreciated or worse forgotten. We must bring you forward, and it’s my honor to be here today to help give tools, guidance, resource

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Patrick Thomas: you can hate me for being Californian. That’s okay. I get it. We have a goofy, weird state. We do some bizarre things, but I’m on your side, you know. I want to empower you, whether your clients or not

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Patrick Thomas: go control the things you can understand. How did we get here? And, more importantly, what are we going to do about it?

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Patrick Thomas: So, our philosophy at Acrisure

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Patrick Thomas: is to really just guide and educate our clients on what the insurance process is.

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Patrick Thomas: And if we were in person today, I would ask everybody to raise their hands. If they have had a fantastic insurance renewal.

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Patrick Thomas: I would say most people in the room aren’t even trying to move a muscle. They’re like, did you just say fantastic insurance renewal? And I’d say yes, and they’d say.

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Patrick Thomas: Not me.

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Patrick Thomas: and say, Okay, well, what about a good insurance renewal?

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Patrick Thomas: Probably about the same number of hands move.

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Patrick Thomas: It’s like, well, who’s been disappointed with their insurance renewal, and almost always like we get the majority of people in the audience to go up.

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Patrick Thomas: Well, here’s why

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Patrick Thomas: I get the benefit of selling a product.

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Patrick Thomas: Nobody likes buying that they hate using, and even when they do, it’s still a difficult outcome, right? Like inherently, insurance has been this bad thing.

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Patrick Thomas: That’s because insurance companies are paranoid and don’t have trust. And because of that, consumers us. We don’t trust insurance companies. We feel like it’s this poker game.

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Patrick Thomas: I’m here to disarm everybody. The reality is we have so much information on everything that exists

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Patrick Thomas: within an enterprise specifically trucking companies. There are no more secrets.

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Patrick Thomas: We don’t need to play poker.

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Patrick Thomas: and I think when we disarm ourselves about what our approach will be to winning. The insurance game of this is about clear, consistent communication

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Patrick Thomas: is about honesty. This is about transparency. When we start there, we just show our full deck of cards. Insurance companies don’t know how to respond other than thank you.

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Patrick Thomas: Now, it feels like a partnership. So

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Patrick Thomas: let’s start our journey. We have a couple of slides to get through. We have our bios. Thank you very much for Steve and Mark for sharing those on us

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Patrick Thomas: now it’s time to win our insurance game.

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Patrick Thomas: So

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Patrick Thomas: everybody in in the group again is thinking, no matter what I do, my insurance costs are going up right. And there’s some honesty to that.

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Patrick Thomas: And what we need to start to understand is

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Patrick Thomas: what’s the state of trucking insurance, right? We can control a lot of things. But there are certain things we can’t

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Patrick Thomas: step. One is the market.

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Patrick Thomas: We can’t necessarily control the market, right?

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Patrick Thomas: What the fed rate does, what politics. Do

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Patrick Thomas: you know, performance nuclear verdicts having impact on truck insurance markets? These are things that systematically within trucking, we must respond to.

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Patrick Thomas: And the unfortunate thing is, we’re not a good state.

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Patrick Thomas: Nobody should be in the expectation that commercial auto insurance, or, more specifically, trucking insurance, has been wildly profitable for the entire nation. It’s not

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Patrick Thomas: right. So, if anybody tells you, I’ll save you 50%,

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Patrick Thomas: one or 2 things are going to happen. They are professional liars.

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Patrick Thomas: and that’s not good.

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Patrick Thomas: or you’re going to get what you pay for, and that’s probably going to be worse than if you would have settled with the 1st thing.

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Steve Kessler: Yeah.

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Patrick Thomas: Right. We’re in a market cycle where it is difficult, believe it or not, for insurance companies to make

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Patrick Thomas: the profit that they have to maintain their shareholder interest if they’re publicly traded, or for their equity partners within the business.

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Patrick Thomas: And we know that for a lot of reasons

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Patrick Thomas: there are a lot of people engaged in a truck insurance claim.

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Patrick Thomas: TPAs, underwriters, attorneys, investigators, and those costs of those claims, no matter what they are. We all know, see, and feel that a claim is dramatically more expensive today

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Patrick Thomas: than it was yesterday.

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Patrick Thomas: Because of that.

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Patrick Thomas: Our insurance costs are rising right. We are following inflation plus, plus, plus all these other things leading to impact.

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Patrick Thomas: So, I think, having just a fair understanding of the insurance market and what’s impacting it.

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Patrick Thomas: lets us understand how we got here.

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Patrick Thomas: Right? Fatality accidents. There are more of them occurring throughout the country today than there have been historically nuclear verdicts.

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Patrick Thomas: It’s a term, I think the trucking industry kind of like helped not invent. But where the leading front of that we’re on this unfortunate journey, where plaintiff attorneys have learned how to exploit insurance companies through manipulating data. And the peer group that is, there’s now a jury to a trial.

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Patrick Thomas: We’re stuck with that. And these things, these massive 100-million-dollar claims, and we’ve all seen them like Wabash recently, or other manufacturers of equipment, you know, even tractors now getting brought into it that it’s not just the trucker. It’s not just a shipper or a freight broker. It’s everybody.

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Patrick Thomas: And these Mega claims

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Patrick Thomas: have huge impact on the insurance financial world where they have too over correct.

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Patrick Thomas: and that over correction means more rate on us, which is not fair, right? But that’s part of the market environment we cannot control.

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Patrick Thomas: But there are things afterwards with who we partner with and align, and we’ll get to that where it makes sense

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Patrick Thomas: cargo theft. It’s tough.

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Patrick Thomas: Right in California. You can just steal about anything, and there’s no consequence.

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Patrick Thomas: It stinks. But it’s the reality of the circumstance that the cargo theft is going up

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Patrick Thomas: 4 times what it had been.

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Patrick Thomas: Fraud is rampant, right? Freight broker. Fraud is rampant, and those claims are getting paid, and we must play catch up in there if we don’t have the controls and measures in place.

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Patrick Thomas: Right? We know the litigious environment in every State, you know. Mark and Steve and I were talking about man. It used to just be California, Florida, Texas, New Jersey, New York, Illinois.

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Patrick Thomas: But the reality is, it’s kind of everywhere.

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Patrick Thomas: It’s Louisiana. It’s Arkansas. It’s Alabama, Tennessee now, like

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Patrick Thomas: there is not a safe place to go have an accident. Feel confident that we’re going to win.

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Patrick Thomas: And that’s another driving factor to the cost.

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Patrick Thomas: Again, I think level setting where the insurance market is and understanding. That is a fair expectation on our part of

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Patrick Thomas: where do we want to go? And how do we want to get there?

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Patrick Thomas: And I like starting with that with our clients to talk about, you know, as we go through the insurance journey, right? Our renewal process.

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Patrick Thomas: What we need is insurance agents is fair feedback from you, as the trucking client. Tell me.

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Patrick Thomas: where do you want to go? How are we going to get there?

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Patrick Thomas: Because if I know your goals and you know mine, which is to perform for you we have alignment.

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Patrick Thomas: and the clearer that alignment is, the better your expectation is met. So that next year, when we have this meeting again, I ask, hey, how did everybody’s insurance renewal? Was it great? We get a couple more of these.

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Patrick Thomas: and that would be a good thing, right?

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Patrick Thomas: So, going into to truck crashes with injuries, we can see that the miles driven and the cost per claim is going up over 50%.

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Patrick Thomas: That’s not good for us. Again, another impact validating. Why increases and insurance rates are there

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Patrick Thomas: increases on fatalities. Again, we’re almost 30% more likely to have a fatality. Accident.

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Patrick Thomas: Trucks are big. Every truck could potentially be 80,000 pounds, and they have a million dollar check in the glove box. We want to arm you to make sure that that check is preserved

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Patrick Thomas: right? But we do know there is an increase there. Again, those increases in fatalities set the expectation that insurance companies need to play catch up. They must be solvent to continue to pay these claims

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Patrick Thomas: again, kind of the roadmap of where the accidents are occurring in the more litigious states.

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Patrick Thomas: I’m probably going to have to update this map. I think every State will probably be filled in before the end of the year. However.

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Patrick Thomas: these States here are the ones that have larger claims

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Patrick Thomas: than normal right. We know the claims occurring in California throughout Michigan, Illinois. Even some of the East Coast States, Virginia, Ohio, Pennsylvania. Claims occurring in these States are larger

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Patrick Thomas: where you drive matters.

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Patrick Thomas: but I do get the under the practicality of it. Right? If you’re delivering freight that consumers buy, you must go where consumers live.

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Patrick Thomas: That’s these populous states.

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Patrick Thomas: There’s no other way around it.

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Patrick Thomas: But we just again have to be armed with the understanding that if I’m driving more miles into South Dakota there is likely a lower insurance cost than if I drive 100% of them in California or Florida.

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Patrick Thomas: that these are factors we can control

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Patrick Thomas: right

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Patrick Thomas: again. Talking about the sky rocketing costs of insurance. Here’s some stats again, trailing over the past 10 years of where costs are going

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Patrick Thomas: again, probably don’t need to spend too much time in here. It’s just another anecdote of validated data. We’re spending twice as much to cover insurance costs.

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Patrick Thomas: It’s not fair. And we’re stuck with increase after increase after increase.

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Patrick Thomas: But it’s again it sets and validates the expectation.

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Patrick Thomas: Where is the insurance market like?

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Patrick Thomas: Do we think I will have a reduction by 50%? No, again. Here’s part of the why.

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Patrick Thomas: So, for fleets, you know where? Where we’re talking about size deductibles. What should we have? What shouldn’t we have?

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Patrick Thomas: These are good guidelines, right? Like how we’ve bought insurance historically

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Patrick Thomas: today. You know today versus where we were 10 years ago, 20 years ago, we should think about advancing.

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Patrick Thomas: and that ties into the story of Where do you want to go? How do you want to get there?

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Patrick Thomas: And I would say, Take time with your teams. Bring in your CFO.

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Patrick Thomas: your safety director, your chief operations officer. Let’s talk about the challenges in the business and what the impacts of changing deductibles or lowering limits have

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Patrick Thomas: that, you know. Again, having been in trucking my entire life. I get it. We’re in a cycle where there’s a little less freight than there had been, and in some cases a lot less freight available. The freight that we are moving. We’re probably moving for smaller dollars, meaning our margins compressed.

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Patrick Thomas: So, cash flow is a real issue right now.

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Patrick Thomas: and deductibles and limits are things that we are possible considerations for. How we affect that

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Patrick Thomas: right? We know when that’s the case. We’re going to take on larger deductibles to help lessen insurance costs.

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Patrick Thomas: But there’s a cash consequence. If a claim happens or claims frequency starts to pick up.

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Patrick Thomas: we might be caught off guard

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Patrick Thomas: if we reduce limits

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Patrick Thomas: that can be a difficult position for us to defend in the event of a catastrophic claim.

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Patrick Thomas: If our peer group has limits of 10 million 25 million, 50 million, maybe potentially 100-million-dollar limits and we have less.

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Patrick Thomas: we might be targeted

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Patrick Thomas: right again. These are factors that we just must be open and honest about talking about off. You know, as we maneuver the dials

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Patrick Thomas: that we can change and get through in our process of what the impact is to us as a business.

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Patrick Thomas: right?

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Patrick Thomas: So where are risks hiding today?

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Patrick Thomas: They’re everywhere.

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Patrick Thomas: Risks in a business are no longer just wheels on the road.

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Patrick Thomas: They are everywhere right. And

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Patrick Thomas: again, I think a very important process for us to go through as we’re talking about. Where do we want to get to? And how are we going to get there is, let’s be open and honest, right. We need a genuine assessment of our safety.

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Patrick Thomas: our operations, and our compliance. Right and safety isn’t just a culture, it is an absolute must

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Patrick Thomas: right. We must hold ourselves to the highest standard we possibly can. If we do anything to compromise safety, it’ll be discovered. It’ll be used against us.

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Patrick Thomas: and it makes every other future insurance renewal that much harder to play catch up because we’re in a defense position.

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Patrick Thomas: We need to play offense

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Patrick Thomas: when it comes to operations. We need to have KPIs that we generally manage. I’m a believer that if we can’t measure it, it’s hard to prove if we’re doing it well or not.

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Patrick Thomas: and we could spend a whole other hour session going into kPIs and metrics of what we should manage, whether it’s cost per foot cost per mile, and all these other parameters that impact your business. But again, measuring safety, our operations and compliance, which to me is difference than safety, right?

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Patrick Thomas: Safety, is the things that

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Patrick Thomas: are

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Patrick Thomas: not forced upon us per se. Right compliance is compliance is what the.is going to mandate.

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Patrick Thomas: They absolutely tie together, but safety must be at our core in order to get all these things done well.

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Mark Rhea: So, Patrick, I had a quick question on that when you mentioned safety, culture, and measuring everything, how would, from an insurance point of view. How do you measure

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Mark Rhea: safety, culture.

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Patrick Thomas: Well, I’m glad you asked in in our workshop, which this presentation is a part of, and I’m happy to share this with anybody that would like it. We go through an analysis right

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Patrick Thomas: on this page. We have general questions that are asking you and your teams to complete them. So, we collect data. We build a narrative around it to give your insight.

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Patrick Thomas: Right? So, like, we’re asking your safety team.

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Patrick Thomas: do we have safety mess or do safety messages have an emotional or personal connection. Right? Do we have driver training?

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Patrick Thomas: But all these things that you know, are we doing it. Some of the times never, always. And depending on the feedback we get; we begin to start building a documentation file of can we prove it

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Patrick Thomas: right, and that’s what we must do in the openness of our insurance renewals. Everything we say we do we have to prove we do. It’s no longer. Just let me take you for your word. Right? Because let’s assume every underwriter thinks we’re guilty until proven innocent, and they’re naturally skeptical.

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Patrick Thomas: Our job is to help guide and predict what the questions are going to be. The hard ones, right? How do you train? Why, do you know meetings once a month around the water. Cooling sounds great. Well, how are you? How do you prove that those meetings happen

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Patrick Thomas: unless you have a system to document it which our partners at Infinit-I have a brilliant one in.

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Patrick Thomas: It’s very difficult to prove

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Patrick Thomas: right. That’s a metric of how many people were in attendance. What was the content covered.

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Patrick Thomas: Do we have tests that we take after the fact? Right? So first, for safety again, we’ll start with in, you know, a higher-level observation to get?

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Patrick Thomas: What is the pulse of the people? Right? So, management through executives, what’s the pulse of the people? How are we doing it and provide that feedback to our clients

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Patrick Thomas: to help them with that journey. Sometimes we uncover things that people just don’t like talking about

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Patrick Thomas: right because it can be uncomfortable. So, I think it’s a great question. Hopefully I answered that for you, Mark.

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Mark Rhea: I I like I got. I got a follow up question. If you if you’re if you’re looking at safety culture and you’re looking at compliance.

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Mark Rhea: Do you weight one of those larger or less than the other? Or are they? Are they the same? What? What? How are you?

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Mark Rhea: What’s the balance? There.

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Patrick Thomas: Yeah.

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Patrick Thomas: I would say, they’re close.

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Patrick Thomas: and it’s fair for debate, right? But my personal belief.

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Patrick Thomas: the culture of safety plays a higher importance than compliance.

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Patrick Thomas: If we’re performing at safety, if we’re truly leading best in class there, our compliance would naturally follow suit.

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Patrick Thomas: So, compliance is what the Government’s going to regulate us to a minimum standard. Safety is everything above that.

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Steve Kessler: Just being compliant today is not good enough, is it.

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Patrick Thomas: It’s not.

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Patrick Thomas: it should. It’s not right, like, if we truly want to control our costs. If we’re adhering to the minimum standard

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Patrick Thomas: right? If the DOT or local authorities say, Here’s our benchmark for good or bad, if they’re saying, Here’s our minimum standard great we meet that we’re able to operate.

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Patrick Thomas: That’s what they would grant us.

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Steve Kessler: Yeah.

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Patrick Thomas: But from a cost standpoint of how do we control our insurance costs if we’re meeting the minimum standard? And again, I think that’s important to emphasize, and I don’t agree with all their standards. Right? So, I’m not saying the.is right in any way, shape or form. I think they’re wrong in many of them. But, however, if we’re adhering to the minimum standard great, we qualify.

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Patrick Thomas: But that doesn’t mean we get an exceptional outcome.

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Patrick Thomas: That just means we’ll have probably that below average expectation of

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Patrick Thomas: limited terms and conditions and a very expensive price.

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Patrick Thomas: So in in the discovery process again, I think it’s important to ask these questions like, can we validate? Do we have

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Patrick Thomas: a safety culture?

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Patrick Thomas: Are there safety goals that the business has

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Patrick Thomas: right and we can go through additional questions again, talking about data and metrics and understanding

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Patrick Thomas: what we’re trying to emphasize as a business right? And we can uncover areas that genuinely, genuinely need improvement, or that you’re doing exceptionally well

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Patrick Thomas: in the insurance renewal process. It is vital to hit on both

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Patrick Thomas: right. If all we’re doing is advertising the good and not addressing the reality. We’re not building a partnership with the insurance companies we necessarily want.

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Patrick Thomas: If all we’re doing is addressing the things that need to be fixed. We’re missing a key objective, too, which is sharing the positive work that’s allowed you to perform the excel, to let you be better and prove you’re better than your peers.

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Patrick Thomas: So, it’s a balance right? And when I talk about it’s no longer a poker game, this goes to our methodology of. We have to put all the cards on the table.

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Patrick Thomas: share what we’re doing for improvements. Let our partners know that we take them seriously. What are specific calls for action that we’re going to change as well as advertise. What makes your company exceptional.

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Patrick Thomas: then we have a basis of trust.

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Patrick Thomas: so that when we go through the what’s next of negotiating, looking at different solutions, there’s a lot of buy on.

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Patrick Thomas: And I think that’s important, right? I think it’s important with who everybody picks is their partner.

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Patrick Thomas: Right of.

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Patrick Thomas: you know, if all we’re doing is asking for basic information which competitors sometimes do, then you’re going to have a basic outcome. But if we’re going deeper, going further, going farther, trying to make a robust database of intelligence on your operation, you should have the confidence that you and your partners hopefully us collectively in the room. But if not, still have a better outcome.

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Patrick Thomas: and if we achieve that. I’m happy to participate and guide, right? Because it’s truly a journey. And if we all do well, then we all do well.

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Patrick Thomas: we pick up additional data points, too, about understanding. Like, you know, how well do we understand compliance in our business? So, like you? Asked Mark. It’s an important and material fact to help insurance companies make decisions. But what’s our score? Are we passing? Do we have an alert status? What are we doing about it?

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Patrick Thomas: And these are all indicators that everybody has access to, that. We should be monitoring and looking for performance

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Patrick Thomas: every day, every 30 month, or every 30 days. Right like, we must see improvement

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Patrick Thomas: unless we’re all at 0% green pass again. Even there, there’s something that we could probably do. And all these things impact on your operational expenses.

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Patrick Thomas: Obviously, insurance costs.

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Patrick Thomas: But if we’re not documenting it, and we’re not being open and honest about where our performance is at today no different than lost runs and claims. It’s 1 more thing working against us that we’re trying to hide, and if we’re that turtle you will not be winning your insurance game. We’re hiding, we’re playing defense.

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Patrick Thomas: We no longer must do that.

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Patrick Thomas: So

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Patrick Thomas: what’s our derisk strategy? Right?

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Patrick Thomas: We want to talk about safety and operations and compliance.

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Patrick Thomas: write down and commit to what our goals are. It’s an important process, because if all we do is say it.

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Patrick Thomas: it’s going to be hard to enforce.

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Steve Kessler: Right.

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Patrick Thomas: But if we document it no different than training, right? If we document training, we know it happens if we document our strategic initiatives related to safety operations and compliance. We have something we can pinpoint.

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Patrick Thomas: These 3 carriers always have the ability to change

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Patrick Thomas: right, nothing set in stone permanently, because if we accomplish them well, there should be something next that can fill its place.

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Patrick Thomas: So, in part 3 of our journey is kind of the risk financing aspect of it right? And I’ll I’ll start with before we worry about the risk financing. I would say you should worry about the partners that you’re engaged with

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Patrick Thomas: right that if you share your story, you own and know your data and have the insight to all aspects of your business.

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Patrick Thomas: who’s the right person for you to trust in that process.

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Patrick Thomas: If the person just asking, I’m going to make your life easy, give me your lost runs vehicle list, and maybe something else. I’ll have you a quote.

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Patrick Thomas: You might not win the insurance game.

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Patrick Thomas: but if the partner you put pick, if your key initiatives, business, philosophy aligns with theirs. You have a very open relationship

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Patrick Thomas: to where you can entrust them with data that you may not with somebody else, that, in fact, will likely be beneficial to your renewal.

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Patrick Thomas: So, once you select the right partner

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Patrick Thomas: committing to that, you can talk about building a new insurance program, right? So it goes back to your 1st question of

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Patrick Thomas: Where do I want to go? How do I want to get there?

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Patrick Thomas: So, let’s build an insurance product that is truly for high performers. Right

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Patrick Thomas: again, in our workbook, we’re going to talk about the things that impact high performers. I think we all agree that a safety culture, if you have a strong one is a plus, that’s a positive impact.

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Patrick Thomas: If we evaluate, you know, through our risk assessment that was in the prior slides. If it’s negative.

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Patrick Thomas: that goes against us.

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Patrick Thomas: Same with compliance, same with the financial statements of your business. Right? The health of your balance sheet will have positive impact in your insurance renewals, and might require

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Patrick Thomas: lower deductibles.

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Patrick Thomas: you know lower retentions, or give us affordability to have higher ones, but with less collateral

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Patrick Thomas: right. Like all these things, tie in together same with our CSA scores that if we have bad CSA scores in our financial position is a difficult one, right?

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Patrick Thomas: In that case we might not have the ability to get a deductible, that we want to help neutralize insurance costs or to have participation in control.

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Patrick Thomas: So, all these things absolutely factor into the journey that we’re going through.

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Patrick Thomas: So

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Patrick Thomas: with that again, it oh, sorry I went in the wrong direction. We have a couple of other items again, through our metrics, of talking about driver turnover

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Patrick Thomas: where we go. The jurisdiction, right? As we know, a claim occurs in Idaho versus California. Those settlement costs will be different. And we should anticipate that

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Patrick Thomas: technology and data sharing. That is a massive one. Right now, having insights to telematics and dash cameras and automated ways to report claims.

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Patrick Thomas: All these things absolutely matter, and they are accessible that are. They’re at our fingertips. You can have a very robust system that can be expensive.

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Patrick Thomas: There are other low-cost providers. Something I can guarantee you is better than nothing, doing nothing about. It will put you in a vulnerable spot.

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Patrick Thomas: The quality of our drivers, obviously, that impacts how trucks are being utilized, driven, and maintenance everything else that we do like, we know the impact drivers have. That’s obvious.

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Patrick Thomas: But again, taking the time to understand

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Patrick Thomas: the commitment, your executives, your leaders, even investors, and you excuse me. Your managers have

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Patrick Thomas: to supporting the efforts of the business, and again, us helping prove where they are committed or where we need to reassess or realign. That helps

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Patrick Thomas: that helps with our insurance story.

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Patrick Thomas: So, what.

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Steve Kessler: When you say that the commitment of

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Steve Kessler: executive leadership would be a key part of that safety culture that you talked about earlier, seems like it’s very difficult to have that kind of a culture without

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Steve Kessler: it being driven from the top down.

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Patrick Thomas: Yeah, it it really takes everybody’s buy on. You’re spot on with that, Steve, like we I’ve witnessed in companies, carriers, clients

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Patrick Thomas: where the team. The management team genuinely wants to do the right thing.

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Patrick Thomas: but they’re met by an executive could be a CFO. Even a CEO or owner. Where the answer is.

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Patrick Thomas: I don’t want to spend money on that

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Patrick Thomas: right, and if we’re not aligned, if we don’t have that capability, we either need to present the material to the executive to where they better understand the ask and the impact in the business, because that happens

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Patrick Thomas: or just understand the disconnect that we can’t win the insurance game if we’re not making the right investments, and we can’t win the insurance game if we’re not having, you know, data transparency reward or accountability for performance.

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Patrick Thomas: Right? It’s if we were to rewind 2 years ago, the need for drivers was different than it is today, and our tolerance for bad drivers was likely higher than it shouldn’t have been.

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Patrick Thomas: And those things impact the business of. I must have a driver, whether he has he or she has the experience or not, or a record that is deemed acceptable or not.

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Patrick Thomas: What we must do is improve that standard and have everybody buy on, support it and hold

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Patrick Thomas: everybody that needs to be accountable in that process. The moment we make an exception we break our own rules. And now we’re vulnerable, right? And that’s likely where the mistakes happen.

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Patrick Thomas: So in in designing the insurance, the ideal insurance program, right? One, I would say. For most people. It’s probably free, covered by the State. We don’t have to worry about it and move on right. We don’t live in that world, right? We live in a free-market world where we must be masters of our own destiny. And again, it’s our goal, our privilege to help provide insight to you all what impacts that.

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Patrick Thomas: And then also the levers that you have

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Patrick Thomas: not all insurance programs are created equal.

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Patrick Thomas: Right? I think that’s important to understand, no different than agents. You have some that you really like, some that are expertise, others where maybe it could be a price point, and there’s reasons to pick each, every and everyone. And I understand that.

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Patrick Thomas: But it’s important to understand its impact ultimately, of where you go.

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Patrick Thomas: So, we can talk about limits, right

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Patrick Thomas: limits impact what we spend.

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Patrick Thomas: We know insurance costs are increasing, but we know the cost of a claim is increasing as well.

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Patrick Thomas: So, helping guide you in that balance of what’s an appropriate limit for me.

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Patrick Thomas: We can help provide benchmarks to different companies, whether you operate 10 or 50 or 100 or 1,000 or 10,000 units of what’s the limit you should carry?

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Patrick Thomas: We pair that with data that supports what’s your expected loss?

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Patrick Thomas: You know. What are your expected losses within certain deductible or retention limits? What are your expected losses beyond that, so that we can understand and forecast, which I think is very important for everybody’s growth, plans or preservation plans, or even M. And a plan of what do we do? How do we do? And where do? Where do we take it?

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Patrick Thomas: So, I’ve run through a lot.

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Patrick Thomas: I’ll kind of recap with a few things that I think are absolutely important for the group, and I know I’ve done a lot of talking happy to go through any questions that anybody has.

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Patrick Thomas: But really, if I could hit home on a couple of things is

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Patrick Thomas: clearly define where you want to go as a business. Right? Simple mission statement.

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Patrick Thomas: I want to be the nation’s largest LTL hauler in these key markets

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Patrick Thomas: with, you know, XY. And Z is my most critical elements that I must hit on

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Patrick Thomas: right. I think if we define that we know the starting point where you are today.

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Patrick Thomas: where you want to go.

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Patrick Thomas: and it will start to fill in the gaps of how we get there.

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Patrick Thomas: First.st Step

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Patrick Thomas: complete transparency and bring in partners. You trust

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Patrick Thomas: it takes a lot to ask that it takes a lot of anybody to validate their knowledge in the business for you to really share the things the skeletons in our closets. And believe me, I’m coming from a family business. We had ours in the eighties and nineties and early 2 thousand. But we must get past that.

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Patrick Thomas: So, find that partnership

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Patrick Thomas: and build your story right. Understand? What’s your business’s story. How did you get here?

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Patrick Thomas: Where do you want to go?

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Patrick Thomas: How are you going to get there like? What is your system?

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Patrick Thomas: What is your process.

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Patrick Thomas: What are the key attributes of your business? What data are you managing? Does that data support the journey you’re going on? If not, there might be a gap, and there could be a way for us to help identify.

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Patrick Thomas: Assess that.

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Patrick Thomas: And the data is only good as the actions and the story that you’re going to tell, and the actions are only as good as the data supports.

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Patrick Thomas: Right? So that goes back to this is no longer a poker game. This is a chess game where we put everything down, and we must figure out how to maneuver the pieces.

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Patrick Thomas: So, with that, I hope you guys have, you know, liked a bit of what I’ve had to say. It may not have answered everything you were curious about. How do I win the insurance game. It may be simpler than what you anticipated right, or you might be still looking for that silver bullet.

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Patrick Thomas: You probably have the answer for the silver bullet.

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Patrick Thomas: A good agency. Good partnership will help you uncover that.

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Patrick Thomas: So, with that, Steve Mark, thank you guys very much for your time. Today I appreciate it.

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Steve Kessler: Yeah, Patrick, I do have a couple of questions here. Some of these are mine. Some were posted a little bit earlier. Do you have an opinion or comments, one way or another about

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Steve Kessler: about captive, a captive market captive insurance.

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Steve Kessler: any pros or cons there.

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Patrick Thomas: Sure with any insurance program, whether it’s a traditional guaranteed cost, retros, retentions, captives, self-insured groups, there are pros and cons to all of them. I think a captive is a great opportunity.

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Patrick Thomas: I think it’s a fantastic model to where you can control insurance costs differently, have influence over claims.

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Patrick Thomas: You need help managing the financial aspect of it. Of what’s the performance, whether it’s a single cell captive or you’re sharing it with members

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Patrick Thomas: who are those members? What’s the impact of it? What’s the performance? What are the controls that we’ve built around it? And again, not all captives are the same. Some have lower retentions with higher reinsurance, which could be okay. If you’ve never been in one to where you can begin to explore it.

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Patrick Thomas: you could have other ones where we have very large retentions and very little insurance, where we have the data management controls, insight the financial stability to go, pay larger claims or make larger contributions should they occur. All those things are great.

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Patrick Thomas: you know. I think the best thing to do as a business is explore good options, whether they’re captives or not.

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Patrick Thomas: and make educated decisions of, do does that vehicle right? Support your business’s goals? I think, in a lot of circumstances. The answer is, yes, especially in a world like today, where we have a very hard market and rising insurance costs.

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Patrick Thomas: captives can be a brilliant solution to help. You can control those costs.

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Patrick Thomas: But we need a certain size and scale and financial stability in order to support that over the long term.

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Patrick Thomas: You know, my typical anecdote is.

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Patrick Thomas: captives are great. If you’re worried about long term solutions and plannings. Right? If we’re worried about cash flow, retention is probably a more likely outcome.

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Patrick Thomas: Right? And that that’s okay. It’s just up to us to help

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Patrick Thomas: uncover what the reality of that situation is, so that you can make the best decision for your company, so I might sound like an attorney, because I gave you an answer without saying, Do I like captives or not? Yes, absolutely. We do captive business all day long. I’m very supportive of it, but it’s not for everyone.

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Steve Kessler: I understand totally.

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Steve Kessler: Here’s kind of a specific question, Patrick. I’ve heard from time to time

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Steve Kessler: how do out of service violations impact how you evaluate a person’s status for insurance? Do they have a big impact.

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Patrick Thomas: They do so, the out of service violations absolutely do, because it goes back to

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Patrick Thomas: the insight and control

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Patrick Thomas: right? The violations are a data point for an event that happened where an underwriter is going to look at it and ask

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Patrick Thomas: how and why?

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Patrick Thomas: Right? And the violation could be simple and mundane. But if we’re not controlling that, just think about what their perception would be for the stuff that is big.

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Steve Kessler: Right.

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Patrick Thomas: Right. So there absolutely is, is impact to it. It may not be the heaviest weighted assessment tool, but it plays back to the credibility of an operation.

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Steve Kessler: Great awesome

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Steve Kessler: a question to you.

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Steve Kessler: I’m guessing that you support the idea of proper training for what a driver needs to do at the scene of an accident.

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Steve Kessler: I understand that makes a great deal of difference sometimes in the outcome.

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Steve Kessler: based on what the driver did or didn’t do at the scene of an accident.

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Patrick Thomas: 100%.

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Patrick Thomas: I mean, obviously the partnership between Acrisure and Infinit-I. We are all about training, whether it’s pre accident or post-accident.

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Patrick Thomas: and there are a lot of circumstances post-accident where we wish we got information, statements, pictures, documentation that we didn’t. There could be instances where we driver says the wrong thing. And now it’s that reality that haunts us post-accident that we have to defend in court. So, training of is of most paramount importance

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Patrick Thomas: like we. We can’t do enough to train our drivers to document it. I know Infinit-I is taking great measures to help

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Patrick Thomas: post-accident. How do we control the situation?

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Patrick Thomas: What do we need to record? What shouldn’t we record?

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Patrick Thomas: Who do we engage.

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Steve Kessler: We say, yeah.

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Patrick Thomas: Yeah, like they. It’s

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Patrick Thomas: it’s an emotional process. It’s scary. I get it like, when you were in a truck accident.

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Patrick Thomas: Your nerves are rattled right so to have the tools at your fingertips at the driver level as well as at your dispatch and safety level working in tandem.

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Patrick Thomas: Right? This is, nobody did anything necessarily wrong. We must just address the situation for the reality of it, contain it, preserve it, but do it in a systematic way, so that we are again playing offense, not defense.

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Patrick Thomas: So, I’m all for training every driver as much as we can through controlled systems and process and consistency, so that that way nobody can say, well, in this one case you made an exception, and here’s why the outcome was bad.

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Patrick Thomas: And now we’ve got a limit, loss or worse punitive damages that get assessed to it.

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Steve Kessler: Good

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Steve Kessler: one last thing that just actually this popped into my head. A minute ago you were talking about the you know, the technologies we have.

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Steve Kessler: you know, collision avoidance

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Steve Kessler: technology and lane departure technology. One of the things I’ve heard several people say is because of that technology, the cost of repair has gone up dramatically because of the cost of those things. Any comments around that, or just agree with it?

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Patrick Thomas: Yeah, I mean, I would generally agree. I mean, all, all equipment’s more expensive than it used to be. I mean, whether you’re thinking about the personal car. You drive yourself with all the sensors that are in it.

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Steve Kessler: Right.

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Patrick Thomas: Fender. A bender is no longer 2,500 bucks to put a new fender on your truck right like, if I wreck my truck. I don’t even know what Ford puts in its sensors. Right? It’s going to be expensive. Your factors, right? Your heavy equipment, same things like it’s

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Patrick Thomas: it. It is a reality that as equipment is more expensive, it will be more expensive to ensure, and more expensive to repair.

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Steve Kessler: Yeah, but.

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Patrick Thomas: The tools that are in there should make you better safer operators, so that, you know our frequency is going down. Our severity is going down because of the, you know, Lane departure systems or the anti-collision avoidance systems like, if we’re enabled to make better choices because of technology.

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Patrick Thomas: even though that truck might cost 20% more or repair is 20% more. If we’re taking down the chatter of our insurance costs will be beneficiaries of it.

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Steve Kessler: Absolutely.

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Steve Kessler: Patrick, thank you. I don’t see any other questions coming in, Mark. Do you have any final thoughts or questions?

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Mark Rhea: No, no, I I certainly am ready to win the game now. So, the fact is, the risks that we take

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Mark Rhea: operating commercial vehicles can be managed there. There are things that can be done to manage that risk.

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Mark Rhea: I know they’re underwriters. They’ll just say I didn’t make a difference. Just you know, miles and Miles and things are going to happen out there. But you’ve certainly given us a few things. I I didn’t want to go back. You. You made a comment on cargo

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Mark Rhea: insurance? Are the cargo insurance rates going up

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Mark Rhea: at the same rate as the liability? And is that being that

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Mark Rhea: due to theft or wrecks.

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Patrick Thomas: So, theft has had impact in in the cargo market, but not to the same degree is liability. Our liability insurance across the nation has seen increases year over year over year that are significantly higher.

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Patrick Thomas: The inland marine market which supports motor truck cargo, you know, while in some pockets has trended upward. It’s not even close to the same degree.

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Patrick Thomas: right? So

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Patrick Thomas: we can win the insurance cargo game with fewer controls. However, if you’re hauling sensitive. You know, products, whether their temperature controlled, high value, target commodities. You know, those are all things that impact it. But again, you can control that, that if we haul TVs going into downtown Los Angeles or apple watches going into Chicago.

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Patrick Thomas: that’s a much different risk than if we’re hauling paper going into Boise

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Patrick Thomas: right, and those all become material factors for cost and consideration.

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Mark Rhea: Something someone should consider for, for routine training is security of your cargo, and

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Mark Rhea: how people are stealing it, where they’re stealing it, where to park, where not to park those type of things is

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Mark Rhea: are much more

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Mark Rhea: visible today than they have been in the past.

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Patrick Thomas: Right, like just giving it fair thought and consideration of you know, do we have the right security measures, both at the terminal and on the road, whether we’re stopped or not.

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Patrick Thomas: Right? Do we have GPS Units tracking it? Do we have the insight to how the equipment is being used right where it’s going? Do we have preassigned stops?

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Patrick Thomas: Or is it just random, right? Like those are all elements that with some planning we can control. That is, we present back to an insurance market is more secure and confident in their decision, ultimately giving you a better outcome, right? A predictable outcome of cost.

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Steve Kessler: Outstanding. Patrick. Thank you all very. Thank you very much. Some really good information. Just a little word to everybody out there

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Steve Kessler: we’ll be sending out an email with a link to the replay of this webinar that way. You can share it with some folks that couldn’t join today, because I think there’s

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Steve Kessler: a lot of valuable information in this presentation.

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Steve Kessler: So, Patrick, once again thank you for your time today and your expertise.

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Steve Kessler: Mark, thank you for joining us, and thanks to everybody out there that joined us today, and look forward to an invite to our next webinar, which I believe is next week on the 26.th

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Steve Kessler: We’re going to have a gentleman. Talk to us about

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Steve Kessler: accident reconstruction. We’ve gotten a lot of questions about that, and when should they be involved? And what do they do? Exactly. So, you all can look forward to that, Patrick. Thank you, sir, appreciate you.

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Patrick Thomas: Thank you for having me here. Let’s go win the insurance game.

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Mark Rhea: We have.

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Steve Kessler: Great thanks.

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Patrick Thomas: Take care!

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Steve Kessler: Alright! Bye, everyone.