InsurTech MGA, not SaaS: how we cut costs for the freight community

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  • Business
  • Pricing
  • Strategy

It’s no secret that the freight community, and particularly the market in North America, has had an extremely tough time lately. With continued inflation, overcapacity, rampant fraud and the unpredictability of supply and demand — it’s the perfect storm to put SMBs in the freight space out of business.

Whenever factors like this combine to put businesses at risk, there’s inevitably a surge in products and services that crop up in direct response. Yet for more than half a decade now, Loadsure has been on the frontlines of the underinsurance crisis, finding innovative ways to serve freight businesses and logistics service providers, and deliver the coverage they need more than ever, at the best possible value and bespoke dynamic solutions.

Creating solutions that do the freight community justice.

Before I founded Loadsure, I spent 20 years in the freight insurance industry, and saw the pain points of SMBs in that space firsthand. So many are forced into absorbing cost-prohibitive policies, or if their margin doesn’t allow for that, they have no choice but to run the risk of partial or complete exposure. This is a sub community that can be suspicious of the traditional insurance market, which has historically been unable to meet their needs in a sustainable way.

To survive in the industry, freight forwarders, carriers, shippers, brokers and 3PLs need access to products that can protect against loss without driving up costs. Unfortunately, there are companies out there looking to exploit that need. Too often, these businesses see an opportunity to manipulate their technology into a relevant shape, under the guise of providing a necessary service. Ultimately, they’re finding a way to push further costs onto a vulnerable market, which is looking high and low for a sustainable solution.

Despite the commonality of this approach, several leading insurance brokers are leading the way by actively listening to their communities and accommodating their feedback. For instance, last month, Marsh u-turned on their proposal to charge an additional digital brokerage of 0.5% on slips, due to the customer demand.

That’s why we built an InsurTech MGA, not a SaaS platform.

As I’ve said before, Loadsure wasn’t conceived as a clever solution without a problem to solve, instead, we were built from the inside out. Our business comprises technology wrapped around an insurance model, within which we found the space to create and deliver value to the freight and insurance communities. Crucially, Loadsure absorbs the cost of both running and developing that technology — a cost we don’t pass along to assureds.

So, how does this differ from other options on the cargo insurance market?

I founded Loadsure as an InsurTech MGA to bring “holistic freight protection” to market, and we fully commit to that MGA model through our dynamic distribution. We’re a digital-native company, but we offer end-to-end risk management, not a SaaS product, and don’t feel that using our technology should come at a cost to be borne on top of the premium.

For us, technology should be used to open new doors, enable efficiency and give us the chance to reach SMEs who have been underserved, not find new acquisition costs to build into the insurance. It’s thanks to our own digital and operational efficiency that we’re able to bear the cost of technology development ourselves.

Front-end experiences and APIs are rapidly becoming common commodities for digital-native businesses, so how can charging for something that’s so widely available be justified? To think of it how it translates into literal terms, insurers have never charged clients to visit their offices, yet this technology is the virtual equivalent of walking through that door. We cannot reasonably expect basic customer experiences like this to be worth a fee.

Of course, we’ll continue to offer added value options that do warrant an additional cost, like the option of expedited claims handling, but the insurance itself shouldn’t come with a service charge. This approach reflects our firm stance on upholding the original purpose and intention of insurance: to protect communities.

How we’re delivering holistic freight protection.

This mission extends beyond our approach to issuing cargo insurance. We’re already giving back to the freight community with active risk management enabled by collaborations like our work with WeatherOptics, which brings weather intelligence to risk calculations. In fact, we’re in the process of solidifying several partnerships that will grant us access to invaluable intelligence on the causation of loss, so we can offer proactive risk mitigation advice, and further drive down the cost of insurance.

As well as aiming to be best-in-class at pricing and claims handling, we’ll also continue to expand and diversify our product base, closely observing the evolving priorities of the industry and responding in kind wherever possible. For instance, the recent launch of our motor truck cargo and logistics services insurance, Columbia™, meets an immediate need for businesses operating in road freight.

It’s this commitment to assisting the freight community that makes Loadsure unique. We’re intent on offering truly holistic freight protection, while cutting costs to improve access to cargo insurance. Every policy we write goes a little way to mitigate the ongoing underinsurance crisis, and safeguard the global supply chain.

To find out more about how we go above and beyond to serve the freight community — both directly and through our insurance partners — take a look at our product catalogue or get in touch.