On the Road
The [motor] carriers are under extraordinary pressure now to deliver essential products. There is this huge strain on the industry, which adds the risk of exhaustion for drivers and the likelihood of more accidents. Because of trying to meet the supply and demand, there were also private fleets that were starting to operate, and that was adding additional risk.
A lot of industries today will utilize the spot freight market to be more strategic with their costs. Because the prices on the spot market vary so much, you can actually be quite cost effective. With the spot freight market, you’re not necessarily able to do full due diligence on the [motor] carrier’s liability all the time, and you do need to make sure you are fully covered. COVID-19 has changed people’s patterns of purchasing, whether it be food, supplies, but also insurance as well. People are starting to look at ways to be more cost effective.
Pay-as-you-go insurance enables people (freight brokers, forwarders, shippers and carriers), whilst they’re operating on a daily basis on electronic [freight] platforms, to purchase insurance when they want it. What we do is we underwrite the risk at hand in a dynamic real-time process. We have limited underwriting expenses because of the digital process and the algorithm that we use. We are able to provide a cost-effective, pay-as-you-go insurance within customer journeys on these electronic freight platforms that most shippers and cargo brokers operate through and provide the coverage instantly at an economical price.
There is a lot of expense in the market. …What we were able to do with the support of Argo was deliver a one-click solution and provide our product direct to the end customer in their customer journey.
There are vast amounts of data available through sensory technology both on the vehicles and within the trailers themselves. That technology, whether that be temperature variations or shock variations, adds into our algorithms and gives us far more granularity to the exposure. We’re able to pull that data and identify events that could have caused a loss in real time and to advise risk management whether a loss has actually occurred. In the event of a claim, you’re able to understand exactly where that loss occurred. That all has positive effects on the way that we can process the claim.
Hamilton: That’s one of the interesting parts. It’s useful for claims, but it’s also about how that information is fed back to clients, shippers and carriers. If you’re shipping a perishable product, then if there is a temperature deviation, those sensors will tell you exactly when that happened, what the temperature range was, and how long that was for. Those are warning signs that carriers can look for. Is it that you turn off the power for a period of time when you park up if it’s a long transit? Is it a different route? There is all sorts of information that doesn’t necessarily seem obvious from having that technology but that can then be used to add value back to the carrier and the shipper.
We were working on initiatives over a long period of time, and Johnny came up with this idea of looking for an insurance partner that was a bit more proactive in using digital in a way that could really bring some value and some benefits. It felt like that was a real opportunity to move the needle in the trucking industry. We sponsored Loadsure to be an agent of ours, which is essentially a Lloyd’s coverholder, which is quite a status for a new business. We’ve invested time in trying to help Loadsure with the insurance side of things and providing them the capacity to be able to market the technology and the product that they worked so hard to build.
Our point of view at Argo is very much constantly looking at new markets and new products where clients aren’t served as well by insurance as they could be. One of the real attractions of Loadsure is being able to provide that value to clients. You can see how technology like this can be used in other areas as well. This is the start of the Argo-Loadsure journey.