Finally, an Easy Way to Get Started with Transportation Insurance

Joey Giangola: Jeffrey Marks, how are you doing today, sir?

Jeffrey Marks: Doing great. How are you doing, Joey?

Joey Giangola: Jeffrey, I'm doing all right. I'm doing all right. Before we really get into anything too serious, I need to know this first. Who is someone or maybe something that you have stopped giving the benefit of the doubt too?

Jeffrey Marks: The Pittsburgh Steelers.

Joey Giangola: Oh, I can-

Jeffrey Marks: They need to step it up.

Joey Giangola: As a Browns fan, I can fully support it. Although, I think you're giving up a little too soon, but that's just my professional opinion.

Jeffrey Marks: Well, when you're used to a couple, decade and a half or so of pretty great football, you see it trail off, you don't want to end up like other people in the AFC North. Right?

Joey Giangola: I may know all too well what you're talking about, Jeffrey. But for me, I have stopped giving the benefit of the doubt to somebody that has a dented vehicle. And I don't know about you, I feel like they've proven to me they've been wrong, and I don't know when they're going to be wrong again. That's just something-

Jeffrey Marks: Especially when they cut you off in traffic.

Joey Giangola: Exactly. And there's just something that I'm going to be a little cautious of. It's like, "Listen, we've seen how this has ended up before." Jeffrey, I wanted to take this over to the world of insurance and talk about ... I guess we'll keep it in the world of transportation. It's maybe a little more expensive transportation, and talking about covering the bigger things out on the road that hopefully is not dented or damaged, or going to damage you. But what do you think agents that are either in it or maybe looking to get in it don't fully understand or need to sort of understand about transportation coverage?

Jeffrey Marks: Absolutely. Transportation is complex. That's why so few companies are successful at it. It is a very complex market to play in. Right? So one of the big things to pay attention to is the quality of your submission, the liability of your data and the communication that you as a retailer have with your insured, so how quickly you can identify answers to questions that an underwriter might have. The more information and the better information you can pass along, the better rates they're going to get and the longer they're going to stay insured with the same company.

Joey Giangola: Yeah. I mean, talk about maybe just the different types of risks that are maybe out there in the transportation world because it is, like you say, complex. What would you consider maybe some low hanging fruit, a good place to get your feet wet and get started with it?

Jeffrey Marks: Yeah. I would look for carriers who are in your local area, somebody that you can call on within a 25 mile radius of where your office is, and develop a relationship with these folks. There are so many very good, honest truck drivers out there who are doing their best to run a company. Right? They have a specific set of skills when it comes to transportation, which brings a lot of headaches, so they're putting up with that. But on top of that, they're running a business as well, so anything you can do to help them run that business better, take something off of their mind. A lot of these companies are running maybe trucks themselves, they're driving and dispatching and running the books as well, so anything you can take off their plate is helpful.

And then just looking for somebody who is an expert in what they do, that's only going to make your life easier. They're going to understand better how to explain what they do. And again, that kind of goes back to having a good submission and getting good insurance rates because they are experts in their field.

Joey Giangola: Yeah. I know we focus a lot on sort of the number of trucks somebody might have parked in the lot. Is there a threshold of again, like you said, the guy that might be just the guy that runs the truck, owns the truck, does everything with the truck, versus where you're getting into the companies that have 10, 15, 20? That's probably a different situation. What's the big difference in understanding and identifying those and sort of if you've been thinking about going after your first transportation account for a while, how do you sort of go about making that distinction and sort of getting in the weeds of things with those different account sizes?

Jeffrey Marks: Yeah. I would definitely start small. And you're probably not going to see a lot of trucks in the lot if they're doing well. If they're doing good business, their trucks won't be anywhere near the lot because they'll be out doing long haul most likely, which is probably your best place to start, is with a long haul carrier versus somebody who's doing local or intermediate, coming home every night. These are the men and the women who are out seven to 21 days at a time driving across the country. They're making a lot of good money that way, consistent money, by hauling back.

But yeah, as an agent, if you're looking for someone again who knows what they're doing, who's an expert in what they're doing, you're going to want to hopefully call upon their staff that is in their office, where you don't see the trucks in the lot. Find out what it is exactly they're hauling. Find out what their needs are. And find out what their pain points are today. So you're going to find a lot of dry van out there, which is your typical 53-foot trailer that you see, everybody sees on the road, some reefer, which is that same trailer with a refrigerated unit on there, and then also, flatbeds. You'll see a lot of that, that's usually hauling, it's open cargo. It's just a big flat deck, maybe oversize, overweight, meaning that it's either longer, or wider, or taller than the typical trailer. So there's a lot to look in there and make sure that you yourself, if you're not already an expert on one of those things, that you kind of become an expert, and again, understand their pain points so you can be an expert to solve their problem.

Joey Giangola: Would you say dealing within just even those three, handful that you mentioned, if somebody were to really focus in on just those types of long haul trucking, that would be enough to sort of get them going and maybe really establish themselves within the transportation market?

Jeffrey Marks: You can build a career off of just those, absolutely, as a retailer. There's plenty there. Those are going to be your three biggest classes. You'll get into some more specifics with cargo types that have specific needs, whether it's high value, or breakable. Eggs are something that's a little bit different, hauling bees. There's lots of different funny little cargoes that you can haul. But if you're sticking to stuff, go back to dry van, it's going to be anything from electronics to rice and pasta. Right? It's just going to be kind of the basic stuff, but there's still a lot to dig into there and making sure that you're getting them the right coverage.

Joey Giangola: I guess something that I'm curious about, let's say you've got an agency that has been established in transportation for quite a while, and they've graduated to ... They're working with the bigger shops, the bigger fleet guys. Is there opportunities that they may be missing to sort of come back down to the smaller guys? Is there something that has been preventing them from maybe picking up a little extra business around that area?

Jeffrey Marks: Yeah. There's work involved. Right? Just like anything we do here, we are going to divide our time up into whatever makes us the most profit as retailers. That's certainly a good way to go about it. But you bring up an interesting point, where somebody might focus on maybe 100 plus units, or 50 plus unit fleets, that's great, they're going to have a lot of revenue from that. They're also going to have a lot of processing and a lot of E and O exposure. That does leave plenty of risks out there who are underserved because somebody's going after the bigger fish, so to speak. So 70 plus percent of fleets in the United States are under 10 power units, so the vast majority of the business out there is going to fall into that smaller space, which is a good thing is like our product that we offer on our transportation ecommerce product is one to 10 power units.

And it not only fits that large swath of the trucking business, but it also provides binding authority, meaning you can quote buying print coverage within minutes for your insured without really having to dig too deep or spend too much time on the policy. So where others may focus on those bigger accounts because there's more money, you can still be pretty efficient and effective in driving your revenue and just pick up more of those accounts through a platform like ours.

Joey Giangola: Yeah. I'm always fascinated because that's the big age-old, I guess business dilemma, if you will. Right? Bigger fish, smaller pond sort of thing. And the idea that you can be more efficient, I guess I'm going to ballpark this. Is there a sweet spot? I mean, in that one to 10, I'm assuming. Is it all pretty much the same? As you get from one unit to 10, is there a difference in terms of ... I mean, what's the premium? What can somebody look for if they were looking for five, six, does it really matter in terms of maximizing the premiums to that time?

Jeffrey Marks: Yes. I think kind of more what you're referring to would be rate, rate per vehicle, which is a lot of what we focus on is getting rate adequacy from an underwriting perspective, regardless of the size of the fleet. But you did bring up a good point, just like with anything, if you shop at Costco or Sam's Club, you're going to get a bit of a discount compared to if you went and shopped at your local Kroger or Albertsons. So think of it as buying in bulk, yes, the more vehicles you have, the more leverage you're going to have, the more appealing you're going to be. And also, as a risk, the more credible your loss data is, so going back to that, having a very good submission, having a credible submission.

If I have five vehicles or if I have 10 vehicles, well, if I have 10 vehicles, I have double the credibility, effectively, of a five unit account. It doesn't mean it's bad to be at five, or two, or any other number under 10, but it does mean you're going to be more credible. You're going to have more leverage. And as a retailer, you're going to be able to kind of move the needle on the rating better than you would on a smaller fleet.

Joey Giangola: So if they could play at the upper end of the one to 10, I guess across the board, the premium's going to be higher for them, they're going to make more money, they're going to have a little more flexibility to sort of negotiate the terms. And so I guess from an efficiency standpoint again, has that been something that has been holding up the market because maybe things have been a little more difficult than they need to be? And being able to speed up a little bit something that they maybe had been accustomed to, that ability to even have efficiency in this area is something that has been something that has escaped them, I guess, for probably their entire career.

Jeffrey Marks: Yeah. And it's interesting because a lot of that starts with the retailer, as far as being able to help improve the insured, how they look to the market, how they operate as a company. That's the retailer's job, is to kind of be their advisor on so many different things. I find that our retailers who have the most efficient processes in their office, who run their business as efficiently as possible, who have processes for everything, and do things the same way every time, those are people that we can rely on from the insurance side and we can kind of prioritize them, recognize again that we understand that they have good submission quality and that they have credibility in their data. That's going to get them seen and heard more than maybe somebody who is not or is inconsistent.

So it's kind of almost another pitch to your insureds out there. It's, "Hey, I have a good reputation with this insurance company." That goes a very, very long way in this industry still to this day. Another thing that we find is if you look at your phone and you look at your banking app, it's pretty good. You can pretty much do anything. You can buy stocks. You can move your 401(k). You can do all these different things just from your phone. Think of the insurance industry as 30 years behind that, typically. Right? And so we're working really, really hard to get caught up as fast as we can and with a really robust product, so that's why we brought up our transportation ecommerce platform that we actually just launched transportation on there fall of last year of 2022, and have already seen a huge amount of volume, not only from the quoting side, but actually binding that are benefiting from again, being able to go in, get quotes, have coverages explained to you.

You may not be an expert yet on all the different coverages that are offered on all the different lines. All you have to do is hover over something and we tell you exactly what that coverage is and how to explain it to your insured. And then you can bind it, print your proof of insurance right there, and email it out with your certificates.

Joey Giangola: You're talking about processes and sort of the agencies that have the most well-defined processes. I guess I'm going to give this a shot, Jeffrey, and let me know if you got something for me. But what's the best process that you maybe picked up from an agency that you've seen in terms of coming into your end that you're like, "Oh, wow, I didn't even know that you could really be this organized"? Is there something that stood out to you over the years?

Jeffrey Marks: Yeah, definitely. I've seen out of our best retailers, our most profitable, I would say best at growing their business consistently, is a really good insured management system, however they coordinate, who their insureds are, what their book of book of business looks like, of course, their contact information, their X dates, when they're coming up for renewal, what coverages they have, what coverages maybe they placed elsewhere with another retailer or by themselves directly, to know where you can kind of chip away and make that account more holistic and on your book, versus split across other books. The more coverages you can have for that insured, if they need seven coverages and you insure six of them, they're more what I like to call sticky. They're going to stay with you longer.

But if they need seven and you have two, there's a good chance you're the odd person out and they're going to take those two and move them over to somebody else. So I really want to make sure you round out that account, keep track of who you have on your books, what they need, and stay in touch with them. It's another thing, just whatever that system is, whether you use Excel, whether you use a third party vendor out there that has a web based platform, there's tons of them. It's a very good investment to help run your book, especially if you plan on doing it for 10, 20, 30 years.

Joey Giangola: You say that, and it might sound simple and easy to some, but you know and I know, and I'm sure other people listening to this know that's not the case as much as we might want it to be. Even stressing going the extra mile, even if they probably are a step ahead, I guess I think you mentioned there's probably five or six pieces of information that they're not even considering, even if they are keeping fairly detailed records. In terms of coverages, I guess how many would you expect an average account to have? Again, like you said, they call them for coverage X, but yet there's Y and Z and whatever else, I guess start the alphabet over at that point. How many do you think that they should be at least taking into account? Because they just might not be thinking to ask at some point, I guess. But you see it all the time, you see a bigger picture. How many should they be typically accounting for?

Jeffrey Marks: Yeah, even more than I deal with on a daily basis. There's so many different coverages out there. But definitely the most common ones for a motor carrier are going to be your AL, which is your auto liability, APD, auto physical damage, which is going to cover the vehicles that they own or lease, motor truck cargo, or MTC, and that's going to of course cover what they're hauling, and GL, general liability. And general liability, there's kind of almost two general liabilities that they might need. Right? So there's kind of your general slip and fall, general liability, and then depending on if they're running maybe some warehousing, or something where they're actually storing some of the goods, they might need a more comprehensive general liability coverage. It really just depends on what their exposure is.

Thinking about their terminal, or terminals, depending on how many they have, they're going to want to have property coverage there. They might want to have crime theft, employee theft coverage there as well. Business interruption insurance, so let's say a tornado came through or something like that, a natural event that put their business down for a period of time. There's cyber, which unfortunately is on the rise as far as a need. There's a lot of great cyber products out there, of course, that RPS offers as well through our platform. There's a lot of people out there who just want to get rich quick on the internet, so it's good to have that kind of coverage as well.

And then depending on how big your company is, you might need Directors' and Officers' coverage as well to protect the people who are the CEO, the C-suite, the owners of the company for their liability for any perceived errors and omissions. So there's definitely a lot of coverage out there that can be needed, and a lot of revenue for our retail agents to potentially get.

Joey Giangola: Yeah. I guess if you had to give them ... Let's just say that they were even willing to tackle three or four, is there ones that you maybe feel they could sort of complement well with a good transportation expertise and then sort of ... Is there a nice sort of package that you like to see people go in with? Because again, we often hear people say transportation is very expertise driven and not to sort of be a fly by night sort of guy, just offering transportation. What do you think would be a good focus for them to complement starting beyond just a transportation coverage?

Jeffrey Marks: Absolutely. Yeah. Start out with your AL, your APD, your MTC, and your GL, your trucker's GL. Those are your four. Those are the basis of any transportation risk that's going to be the majority of your premium. AL, APD are your two biggest. There's probably about 70%, 75% of your premium right there that you can get off of this account. That's where you're going to find your most, your quickest hit, your biggest amount of revenue for the least amount of coverages will be right there. But those four are the big four, and again, talking about stickiness, trying to keep your accounts with you.

Joey, you kind of bring up a good point. Don't just be fly by night. Be an expert. You may have somebody in your office or in a related office that knows more about property than you do. Right? You know transportation, but they know property, or they know cyber, or they know something else about professional liability lines. Lean on those people, split commission, however you want to handle it in your office. But make sure when you are being this advisor for your insured that you're relying on those sources.

Joey Giangola: All right, Jeffrey, I have three more questions for you, sir.

Jeffrey Marks: Okay.

Joey Giangola: And the first one is, what's one thing you hope you never forget?

Jeffrey Marks: My daughter's birthday, and I don't think I will.

Joey Giangola: That's a very good one, certainly would be very bad for you, sir.

Jeffrey Marks: Yeah.

Joey Giangola: On the other side of that, what's one thing you still have yet to learn?

Jeffrey Marks: I've been in the industry primarily on commercial auto, transportation, for 15 years. And it is humbling. I was in Boston last week at a conference. It is humbling to constantly realize you don't know as much as you think you do, or as much as you want to. So there is not one thing. I hope that I continue to just try to soak everything up like a sponge. I have yet to think that I'm the smartest person in the room. I hope I never am. But there's just so much to learn, and with our retailers, I just find that's the case. The most successful people I've worked with on the retail side throughout my career, and I started out as a retailer at the beginning, are the people who don't care that they don't know something. They're not embarrassed to ask a question. They just want to understand it. They want to advise their clients. They want to get their revenue and they want to repeat, and repeat, and repeat. So that's what I hope. I hope I never lose that.

Joey Giangola: All right, Jeffrey, last question to you, sir. If I were to hand you a magic wand of sorts to reshape, change, alter, speed up any part of insurance, what's that thing? Where is it going? And what's it doing?

Jeffrey Marks: I mean, that's the easiest thing I could answer because I complain about this all the time. If I could, I would make all loss runs have the exact same format across the world because there's about, gosh, 88 different version of loss runs that you can see, and they don't look the same. They don't even speak the same language for the most part. I would absolutely had a uniformed loss run for every insurance company.

Joey Giangola: Jeffrey, this has been fantastic, so I'm going to leave it right there.

Jeffrey Marks: All right, great. Thanks so much, Joey. Have a good one.