With more than 60% of freight under- or uninsured, the underinsurance crisis is a symptom of the fact that traditional insurance processes cannot adequately protect stakeholders in the demanding environment of the modern supply chain.
Traditional insurance policies are designed for enterprise accounts; inherently cumbersome, inaccurate and one dimensional, they are often unfit to serve small and mid-sized businesses (SMBs) and meet their unique needs.
Johnny McCord, CEO and founder of Loadsure, developed an end-to-end InsurTech solution that enables insurance brokers to better serve their freight community clients and tackle the underinsurance crisis.
“Solving the underinsurance crisis is our mission,” McCord said. “Traditional insurance processes have been very slow to evolve and address the needs of the supply chain. We know how important the SMBs are within the freight industry, and their needs are very different from large enterprises,” he said.
McCord observed a massive unmet need in the freight industry, and designed Loadsure’s model to fill that gap. “I worked in the 300-year-old institution of commercial insurance for a long time, and things needed to change,” McCord said. “Too many vital SMBs were underserved, and there was a lack of dynamic insurance solutions for the complex market of freight,” he said.
Currently, many SMBs are left with little choice other than to pay exorbitant premiums for policies that are unlikely to make them whole in the event of loss. To fix that issue, says McCord, companies and leaders across various sectors of the freight industry need to work collaboratively to advance best practices for risk management.
“We need to not only provide better protection at better prices, but also prevent risk proactively rather than reactively,” McCord said. “Addressing our exposures to risk and analyzing each individual SMB’s appetite for risk requires thorough data assessment. Of course we need to understand the suppliers and vet them thoroughly, but we also need to maximize our visibility within supply chain operations to continue to garner actionable insights,” he said.
Selecting the right tech and knowing where to leverage it is the first key in properly managing risk, according to McCord. “Loadsure is here to support the freight community, and that works best with an exchange of data,” he said.
“Speak with your insurance brokers and make sure you’re purchasing the right insurance to address your own unique exposure,” McCord said. “Every entity has different risk factors, and that’s why data-driven insurance needs to be customizable, particularly for SMBs.”
Rapidly increasing insurance prices are among the top difficulties for freight companies, and that’s what Loadsure’s holistic freight protection is meant to address. “We want to drive down the cost of insurance for the community so that small businesses can compete,” McCord said.
Loadsure’s innovative new model, holistic freight protection, is more dynamic, cost-effective risk management that’s customized to individual needs using data so that every policy sold is uniquely priced for each assured.
Crucially, says McCord, holistic freight protection enables the freight community to be proactive in how it manages exposure through actionable insight that helps SMBs avoid risk rather than simply protect against it.
“We’re not just bringing better-priced, dynamic insurance policies and world-class claim services, we’re also bringing predictive and preventative data so that freight providers can be more strategic about avoiding the worst risks,” McCord said. “Whether it’s assessing particular carriers, risks associated with particular routes or static locations, the best risk management avoids the losses that require claims in the first place,” he said.