Laidlaw drove nearly 50,000 buses for school districts around the US and Canada. Jeff Cassell excitedly told me about his experience with outsourcing risk analysis during his time as Vice President, Corporate Risk Management. Being self-insured for the commercial auto liability and the workers compensation meant that his daily fight was to prevent encumbering the corporate balance sheet by controllable claims costs. Involvement in training was only peripherally in his wheelhouse when he attended an impactful presentation called “Quantitative Analysis of Risk” at an insurance conference sponsored by RIMS. His details about “…the benefits were manifold. Data systems were reviewed. New methodologies were introduced. Optimal data flows were mapped. New protocols to continuously validate the data were implemented.”
Cassell shared on a phone call that I documented in the White Paper, “Laidlaw’s risk management department did a very good and efficient job compiling incident reports, processing claims and creating policies and procedures to support driver safety training;” nevertheless, Cassell felt he “had no control over, or understanding of, the loss costs.”
The risk management group generated data for their actuaries’ loss projections but had no basis to provide either meaningful insight nor display any convincing control over operational behavior. Cassell had huge concerns every time the actuary was due to re-calculate the loss forecasts, knowing that increases in the loss cost directly reduced the company’s earnings. Millions of dollars of reserves could be added to Laidlaw’s balance sheet when the actuaries’ trend and loss projections were delivered.
That changed when Laidlaw began a 17-year partnership for outsourced risk analysis using Cantor’s RiskMap®. “Through successive monthly analyses, the risk management professionals were able to document the impact of new training methods and protocols in dollars. This significantly facilitated and expedited the flow of Best Practices throughout the organization.” Cassell said, “Laidlaw now understood the dynamics that affected the loss costs.” He then convinced the actuaries that the reduced loss costs resulted from their carefully crafted and continuously refined driver-safety intervention programs…Laidlaw’s risk management department was able to document the cause-and-effect relationship between driver-safety programs and the dual objectives of greater control over risk and reduced loss cost.”
Because of the new and creative continuous risk analysis, Cassell was able to successfully negotiate a controlled multi-year release of millions of dollars in reserves.
Insurance reserves cushion the price of your insurance, to help the carriers’ balance sheet and profits at your expense.
Warren Buffett penned in his 2017 Letter to Shareholders, “At bottom, a sound insurance operation needs to adhere to four disciplines. It must:
1. understand all exposures that might cause a policy to incur losses;
2. conservatively assess the likelihood of any exposure actually causing a loss and the probable cost if it does;
3. set a premium that, on average, will deliver a profit after both prospective loss costs and operating expenses are covered; and
4. be willing to walk way if the appropriate premium can’t be obtained.”
What this means to you, InsuranceAI™ Services by Polestar Insurance will engage all necessary risk analyses and risk management services to help drive down the cost of your commercial auto liability coverage and workers compensation premiums and claims.
Other field underwriters may not have the powerful artificial intelligence to gain insight into your company.
Our tools help you by creating a unique profile. Then we will recommend a suggested offer to the insurance carriers. Our function is to make your risk appear reasonable and acceptable to the insurance company. One where the insurance company can profitably underwrite your coverage.
The steps we will discuss are to obtain competitive insurance offers. Polestar InsuranceAI™ Services will also help you with actionable data that may help bring improvements too.
Let me give you an example from our insurance agency with a prospect who is renamed Lelantus Transport for privacy.