At the conference last week of the Specialized Carriers & Rigging Association I got a bit of a look inside a system that’s been in existence for years but that, according to some, insurance underwriters are increasingly turning to in efforts to predict future risk for carriers, part of the dramatic rise in premiums we’ve seen of late. A big part of that system, referred to as CAB by many in the business (that stands for “Central Analysis Bureau”), however, is nothing new.
It gives anyone subscribing to it access to those persnickety CSA scores that Congress so long ago now ordered pulled from public view in part in an effort to mitigate such use, given real concerns over the accuracy of any predictive use of such big data. “Earlier today we had the [FMCSA] administrator up here talking — a great presentation,” said Bill Hebron, program manager with specialty insurer NBIS, making reference to current acting FMCSA chief Jim Mullen’s speech earlier that day at the symposium, where Mullen talked about “the law of unintended consequences,” Hebron went on. “He said CSA scores were not designed for litigation, or for insurance. He said that, but guess what? They’re there, so everybody sees your CSA scores — they know where you are.”
That’s because the data underpinning those old public scores remains available to third parties, and with that data, and long-public scoring methodology, private entities like the Central Analysis Bureau can easily re-create the system in order to “predict the future,” or at least that’s how another insurance agent recently described it to me. That agent likened some underwriters’ near-total reliance on predictive algorithms to the dark situation in “Minority Report,” the dystopian film and Philip K. Dick sci-fi short story in which criminals are arrested before committing their crimes, based on supposed foreknowledge.
I’ll get back into that in more depth in future reporting, because today I’m happy to say that, at least for some insurers, the human element remains a central part of underwriting. Consider the case of Richard and Lisa Weddle and their for now one-truck Kool Ride, LLC owner-operator business.
Late in the afternoon of January 16, as freezing rain had begun over I-40 in New Mexico, near milemarker 222, the Weddles came up over a rise in time to see a minivan up ahead lose control and flip over onto its side in the median.
“We saw the van wreck right in front of us,” Lisa says, and later realized there was another vehicle that had lost control while pulling a small U-Haul trailer a little farther down the median. “We stopped on the shoulder to help the people in the van. It was a husband and wife, with three kids. Thankfully, nobody was hurt in that wreck.”
Rick exited the truck to assist, and Lisa got on the CB trying to warn those coming into the area. “We had gotten well off the road on the shoulder,” Lisa says — flashers, triangles, the whole bit, and Lisa dialed 911 whereupon she realized emergency personnel were already en route given the other wrecked vehicle pulling the U-Haul.
The minivan’s windows had been shattered in the accident, and it was freezing rain out, so the Weddles helped the kids into their truck to stay warm and dry. “I’m feeding them M&Ms and still trying to notify people there are wrecks up here” on the CB, Lisa says. And meanwhile, as approximately 10 minutes or so passed, Rick was talking to the driver of another car, who had stopped to help, “in front of our truck,” Lisa adds. They were discussing whether to go back across the road to get the husband and wife out of the median for safety’s sake, and Rick was “leaning on the front of our truck” when the worst happened.
Another truck’s driver lost control of his own rig and barreled into the back of the couple’s 2013 Great Dane stainless spread axle reefer.
With the forward motion of the combo, Rick was knocked into the road from his position in front of the truck, and the hood from the offending truck came to rest on top of him. He ultimately suffered three compression fractures in his back, one in his rib and a sizable gash on his head.
“I’m doing better but still hurting,” Rick said this morning. Sneezing is still a very painful affair, but he counts himself lucky. “Overall I’m good, I’m alive.”
The impact knocked the Weddles’ combo onto its side, and fortunately Lisa and the children inside came out shaken, for sure, but more or less unscathed.
The driver in the other truck? “I don’t know how he even survived,” Rick says. “We were grossing 76,000 lbs. and he absolutely demolished his truck.” And the Weddles’ trailer.
Lisa: “When I finally got out and saw his truck – my first thought was ‘he’s got to be dead.'” But he was out, walking around though not to Lisa’s recollection even having bothered to check on anyone else at the scene.
It’s heartening to see people like the Weddles in the trucking community, those who will stop to assist someone in the event of an accident, who I know would be quick to check on anyone they had the misfortune to be involved in an accident with, too. But it’s difficult to speculate on the motivations and/or mind state of someone involved in such a calamity.
In the aftermath of this event, “we both second-guess whether we were doing the right thing by stopping,” Lisa says, given the outcome, but ultimately “we know we were doing the right thing. A car wouldn’t have survived the hit that we took. If we’re the first upon any wreck, we always stop.”
Some time later, negotiating the claims process with their insurance company, Rick and Lisa were hesitant to utilize their own insurance coverage for repairs to their truck and trailer as the claims process unfolded, worried in part about rate increases on their already fairly sizable premium. They’d only reactivated their long dormant authority in the fall of 2018, then adding a second truck, and though their rates declined when they renewed last year, Lisa worried about any claim’s future effect upon renewal.
When an adjuster with their insurance carrier, Northland, saw that hesitancy in the claims notes on the loss, the adjuster took the time to actually understand the circumstances of the accident, and penned this note that came across the desk of C.M. Brown and Associates Vice President Gabe Hotop of Perry, Mo., the Weddles’ insurance agent:
These two are some good Samaritans and I want to make sure they get recognized. … I believe the couple has been hesitant to use Northland coverages. I’d like to note that I will certainly consider this a not-at-fault loss and we will NOT rate for it regardless of what coverages end up paying out. Can you please reach out to the agent and let them know that Northland underwriting is thinking about them and hope they both are feeling better. I’d like to reassure them that we will rate this loss non-chargeable so they don’t have to worry about utilizing our coverages — they are there to help them. They certainly deserve it with their good deed.
It’s the kind of story, Hotop notes, that doesn’t get heard often enough, and one that underscores the value of the human element in risk and insurance premium calculation. Relying predominantly on CSA scores through CAB reports for risk prediction, a crash like this might contribute to such algorithmic, data-driven premium rating.
And plenty often enough, Hotop says, “depending on how any state litigation” plays out after crash involvement, “our truck will get hit doing nothing wrong, and if the other party is underinsured or uninsured — our policy ends up paying” for a good bit of the damage done, depending on the severity.
It’s nice to know, at least, that in some instances, the human element prevails. Even in insurance.
“Yeah, she had to talk me off a cliff,” Lisa says of the claims adjuster and her own worries over negative impacts on the business. The adjuster told her that “if you wait for [the other driver’s] insurance company, you’re going to wait a while.”
She and Rick both appreciate the human element here.
And let’s hope it prevails in November, come time to renew again.