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SUPPLEMENT TO<br />
NOTES FROM<br />
NATIONAL INTERSTATE INSURANCE FOR ALTERNATIVE RISK MEMBERS
CONTENTS<br />
LETTER FROM THE DIRECTOR 3<br />
CAPTIVE HISTORY & MISSION 4<br />
A NEW WAY OF THINKING ABOUT INSURANCE 5<br />
MEMBERSHIP CRITERIA & PREMIUM DEVELOPMENT 6<br />
MEMBERS BY REGION MAP 8<br />
MEMBER SPOTLIGHT: BILL STRIMBU 10<br />
MEET YOUR NATIONAL INTERSTATE CAPTIVE TEAM 13<br />
AVAILABLE PRODUCTS & SERVICES 14<br />
BY THE NUMBERS 16<br />
RETURN OF EQUITY 17<br />
RECAP: PAST ADVISORY BOARD MEETINGS 18<br />
UPCOMING EVENTS SCHEDULE 19<br />
Subscriptions:<br />
The <strong>Captivate</strong> supplement is a free publication offered by National Interstate Insurance Company in support<br />
of its customers.<br />
Publisher:<br />
Established in 1989, National Interstate Insurance is one of the leading specialty property and casualty<br />
insurance companies in the country. Offering more than 30 different insurance products, including traditional<br />
insurance, innovative alternative risk transfer (ART) programs for commercial companies and insurance for<br />
specialty vehicle owners. Its customized solutions are made possible by its talented and dedicated team<br />
members. National Interstate employs over 700 employees in offices in Northeast Ohio, HI and MO.<br />
© 2017 National Interstate Insurance Company<br />
2<br />
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Editorial Contributors:<br />
Amanda Genther<br />
Chris Mikolay<br />
Josh Stoll
Letter from the Director<br />
JOSH STOLL<br />
I am excited about the launch of the first annual edition<br />
of <strong>Captivate</strong>, a supplement to our Extra Mile Magazine,<br />
featuring our flagship Truck Alternative Risk Programs.<br />
I hope you enjoy reading about the success of your<br />
programs and, whether you’re a longtime member or<br />
brand new to the “V” programs, learn something new<br />
within these pages.<br />
When I first started at National Interstate almost a decade<br />
ago, I was immediately drawn to the Venture, Voyager and<br />
Velocity programs. I could sense the tremendous amount<br />
of energy and excitement around them. That enthusiasm<br />
is shared by one of our long-term members, Bill Strimbu<br />
of Nick Strimbu, Inc. Bill and his company truly embody<br />
everything that these programs stand for – creating a<br />
culture of safety, sharing of ideas and best practices and a<br />
partnership with your insurance carrier. You can read more<br />
about Bill and his experience on page 10.<br />
On page 16 you’ll see the numbers that support our<br />
success. Potential returns are at an all-time high with<br />
nearly $20M in provisional net income accrued since<br />
2014/15, and since 2001, we have returned $46.3M to<br />
our membership!<br />
As the insurance market continues to change, I believe<br />
that more and more operators are going to seek<br />
alternative risk programs. The Venture, Voyager and<br />
Velocity programs of National Interstate will continue<br />
to be uniquely positioned to meet the needs of those<br />
best-in-class carriers.<br />
In closing, I would simply like to say thank you. Thank<br />
you to our agency partners who have been integral to<br />
the success of these programs, and thank you to our<br />
members for being the visionaries that have helped<br />
them thrive. For those considering joining, we hope this<br />
magazine demonstrates the high standards our members<br />
set for themselves. On behalf of National Interstate, we<br />
look forward to seeing the Venture, Voyager and Velocity<br />
programs flourish for years to come.<br />
Josh Stoll<br />
Director, Truck Alternative Risk Programs<br />
3
Like trucking itself, the market for trucking insurance<br />
moves in cycles. It is frustrating and pricing is often<br />
illogical, particularly for better run trucking companies.<br />
National Interstate recognized the opportunity to create a<br />
program for best-in-class trucking companies that would<br />
allow them to capitalize on their commitment to safety<br />
and outstanding loss performance, and after successfully<br />
launching a group captive program targeted to passenger<br />
transportation providers in the mid 1990’s and gaining<br />
considerable expertise in the alternative risk world, National<br />
Interstate, with its affiliated reinsurer, Hudson Indemnity,<br />
LTD., launched the Voyager group rental captive program<br />
in 2001. Voyager immediately afforded mid-market fleets<br />
the opportunity to partner with their insurance company,<br />
take on a reasonable layer of risk and see the benefit of<br />
controlling their cost of risk. Today, Voyager stands at 34<br />
active members and growing.<br />
As National Interstate grew the Voyager program through<br />
the early 2000’s there was interest in the concept from<br />
smaller trucking companies who had an understandably<br />
lower tolerance for risk. Recognizing this need, National<br />
Interstate launched the Venture captive program in 2003<br />
to fill a void in our alternative risk portfolio for insureds<br />
seeking to retain the first $50K of risk. Venture now proudly<br />
includes 48 active members.<br />
Continuously seeking to offer an insurance experience built<br />
around our customers, in 2006 the formation of Velocity<br />
rounded out our truck alternative risk portfolio. Feedback<br />
from select Voyager members indicated that they would be<br />
interested in taking on more risk with the opportunity for a<br />
potential higher reward. Velocity was created with a $250K<br />
retention and contains five best-in-class members. Though<br />
these are three distinct programs designed for fleets of<br />
various sizes, each offers its members a better way to<br />
control their insurance destiny.<br />
4
CAPTIVE SUMMARY<br />
AND<br />
PROGRAM BENEFITS<br />
A NEW WAY OF THINKING ABOUT INSURANCE.<br />
Move beyond the limitations of traditional insurance.<br />
With Alternative Risk Transfer insurance, your interests are aligned<br />
with the insurance carrier and other best-in-class companies.<br />
TAKE CONTROL With a significant portion of<br />
premium available for return, members can affect their<br />
total cost of risk through a commitment to safety.<br />
CONTINUOUSLY IMPROVE Enhance your<br />
operation with our superior risk management services,<br />
consultants and tools.<br />
COLLABORATE Work together with other like-minded,<br />
best-in-class members with the same safety-centered<br />
mindset that you have.<br />
PERSONALIZED SERVICE Get to know your<br />
program team and senior management at your insurance<br />
company, including the CEO.<br />
WE HAVE YOUR BACK With a dedicated<br />
claims handling team focused specifically on truck<br />
transportation operations, we strive to be your best<br />
partner on your worst day.<br />
STABILITY Exit the traditional insurance market and<br />
the headaches that come with it.<br />
5
MEMBERSHIP<br />
CR<br />
PREMIUM<br />
DO YOU HAVE WHAT IT TAKES?<br />
We seek members for Venture, Voyager and Velocity who:<br />
➼ Have a commitment to developing and maintaining<br />
an ongoing culture of safety at all levels.<br />
➼ Exhibit a history of best-in-class results evidenced by<br />
stable growth and sound financial statements.<br />
➼ Are willing to commit to a long-term mindset.<br />
Participants must understand that a primary reason<br />
for the program is to minimize wild price fluctuations.<br />
Short-term reductions of premium cannot be as<br />
important as long-term cost-of-risk stability.<br />
➼ Are willing to provide his or her time and expertise<br />
to continuously raise the bar through sharing of<br />
knowledge and best practices.<br />
➼ Stand out from the crowd by exhibiting risk<br />
management practices beyond industry compliance.<br />
6
ITERIA &<br />
DEVELOPMENT<br />
AND HERE’S WHY IT MATTERS<br />
Your experience has a significant impact on your premium<br />
determination. Our method of underwriting incorporates<br />
both quantitative data (mileage, payroll, revenue and<br />
loss history), as well as qualitative characteristics of your<br />
operation to determine your insurance costs. Qualitative<br />
characteristics include safety culture and programs, hiring<br />
practices and use of technology.<br />
EXPERIENCE RATING OBJECTIVES<br />
➼ Common, consistent across all participants<br />
➼ Premium based on your experience<br />
PRIOR 5 YEARS EXPERIENCE<br />
LOSS RUNS<br />
EXPOSURES<br />
DEVELOP LOSS FUND<br />
7
MEMBERS<br />
BY REGION<br />
One of the strengths of the program is its network of like-minded individuals. The map below illustrates where all of our<br />
current Venture, Voyager and Velocity customers are located across the country.<br />
8
“National Interstate has helped my<br />
operation become better, safer and<br />
more profitable year after year.”<br />
Jason Proctor, Jason Proctor Transportation Inc.<br />
“The most positive impact we’ve seen is<br />
safety. Our company has created a much<br />
safer environment<br />
since joining the Venture program in 2008.”<br />
Rhonda and Alan Branson, Stout Trucking, Inc.<br />
“I like being in charge of our insurance<br />
future. The stability of the program has<br />
allowed us to invest in our own program to<br />
meet our distinct needs<br />
.”<br />
Scott Romans, Romans Motor Freight<br />
“National Interstate is the best program<br />
to take<br />
next<br />
a quality<br />
level<br />
trucking company to<br />
the of safety<br />
performance, leading to better economic<br />
performance in order to compete in today’s<br />
tough trucking environment.”<br />
William Hill, HTSI<br />
9
Member Spotlight:<br />
Bill Strimbu, President of Nick Strimbu, Inc., joined<br />
the National Interstate family in 2002 as a traditional<br />
trucking insured. Read on to find out why he made the<br />
switch to an Alternative Risk program and why he’s kept<br />
his policy with National Interstate for the last 15 years.<br />
10
Why is it important to have an<br />
insurance partner and not just an<br />
insurance carrier?<br />
There are a lot of reasons. First, if you have a really bad<br />
accident, you want to make sure that your insurance<br />
partner has your back. You don’t want them to cut a<br />
check and run, leaving you hanging out to dry. The other<br />
thing is, you’re going to have a bad year every once in<br />
a while – there’s just some things that are out of your<br />
control. With an insurance partner, you don’t get a 40%<br />
•••••<br />
You want to make<br />
sure that your<br />
insurance partner<br />
has your back, so<br />
your relationship<br />
becomes a real<br />
partnership.<br />
•••••<br />
insurance increase that puts you back on the street, trying<br />
to find new coverage. A partner will likely take on added<br />
risk during a bad year, so your relationship becomes a real<br />
partnership. Third, we’ve played the numbers game before,<br />
where you go out on the open market, trying to buy the<br />
cheapest policy available. And these companies had such<br />
poor claims management that we were penalized because<br />
our losses went up due to the mismanagement. Now, I<br />
know all of the claim professionals that I’ve worked with<br />
at National Interstate by their first name and trust the work<br />
that they do for my organization.<br />
What are the benefits of being in a<br />
group captive, or Alternative Risk<br />
program?<br />
The biggest benefit that I can see is that you have critical<br />
mass. You have risk sharing with best-in-class companies<br />
and you share information on best practices with those<br />
companies. A lot of the times we may not even share<br />
information about insurance; it could be about a tire that<br />
another member is running, or an engine that’s horrible or<br />
a new truck model. That stuff is invaluable because you<br />
could make hundreds of thousands of dollars investment<br />
into something that others have tried that doesn’t work.<br />
As a small company, to be able to reach out to that many<br />
carriers for their input is priceless.<br />
Additionally, we started out with National Interstate in<br />
a traditional truck insurance program from 2002-2004.<br />
Currently, we receive the same type of professional claims<br />
management and responsiveness we had back then, but<br />
the add-on to us was that we were able to get premium<br />
dollars back, which rewarded us for having an overall safe<br />
trucking operation.<br />
Why do you stay?<br />
The people – I’ve known my product manager and<br />
underwriter at National Interstate for over six years and I<br />
made it a point to develop that relationship. I never want<br />
him to have to give me a rate that makes me leave the<br />
company nor does he want to. I share knowledge with him<br />
all the time and we have an open-door policy. Not only with<br />
him, but with my loss control team – this company doesn’t<br />
grow people and then they exit them out the door. In the<br />
Venture and Voyager programs, we’ve had a steady group<br />
of people managing the programs. Anything that changes<br />
doesn’t happen overnight and the members are asked for<br />
their input. I’ve never had another insurance company<br />
call me up to ask me what I think about something. And,<br />
because of that partnership, that’s why captive membership<br />
stays strong.<br />
•••••<br />
And, because of<br />
that partnership,<br />
that’s why captive<br />
membership stays<br />
strong.<br />
•••••<br />
11
Have you been able to leverage your<br />
relationships with other Voyager<br />
members to positively impact your<br />
business operations?<br />
Yes, I have numerous stories of how developing friendships<br />
and networking with captive members has benefited<br />
my company. I met Roger Bettis, owner of Green Lines<br />
Transportation, about 10 years ago. Roger had a customer<br />
with freight going to multiple geographic locations, some<br />
•••••<br />
I would tell<br />
anyone considering<br />
these programs to<br />
talk to current<br />
members.<br />
•••••<br />
of which Green Lines did not service. We provided capacity<br />
to those regions and have been growing our business<br />
with him ever since. We have also provided business<br />
to or received business from multiple other members.<br />
The relationships go beyond revenue-sharing. We also<br />
exchange best practices, help each other with breakdowns<br />
and support our philanthropic efforts. Basically, we develop<br />
interlocks with like-minded, conservative, philanthropic<br />
people – united by the industry we are in through the<br />
National Interstate captive model.<br />
What would your advice be for anyone<br />
considering joining the program?<br />
I would tell anyone considering these programs to talk<br />
to current members. Talk to some of the agents that<br />
National Interstate partners with – they know trucks and<br />
they specialize in an industry and product that requires<br />
specialization. Also, stop in and visit the Richfield offices<br />
and interview some of the loss folks and product managers.<br />
They always have their doors open for you to do that.<br />
12
MEET YOUR<br />
CAPTIVE TEAM<br />
GEORGE SKUGGEN<br />
Senior VP of Transportation<br />
george.skuggen@natl.com<br />
800-929-1500 x1142<br />
TRACY HICKS<br />
Senior Marketing Manager<br />
tracy.hicks@natl.com<br />
800-929-1500 x1383<br />
CHRIS MIKOLAY<br />
VP, National Accounts &<br />
Truck Alternative Risk Programs<br />
chris.mikolay@natl.com<br />
800-929-1500 x1407<br />
NICOLE RICKETT<br />
Business Development Manager<br />
nicole.rickett@natl.com<br />
800-929-1500 x5867<br />
JOSH STOLL<br />
Director, Truck Alternative Risk Programs<br />
josh.stoll@natl.com<br />
800-929-1500 x1316<br />
JODY JORDAN<br />
Business Development Manager<br />
jody.jordan@natl.com<br />
800-929-1500 x1556<br />
JEFFREY STEWART<br />
Assistant Product Manager<br />
jeffrey.stewart@natl.com<br />
800-929-1500 x5447<br />
13
Products<br />
and Services<br />
Risk Management<br />
Website<br />
As a member of Venture, Voyager or<br />
Velocity, you’ll have exclusive access<br />
to a variety of products and services<br />
that are committed to helping you<br />
maximize the profitability of your<br />
organization through safety. We have<br />
developed solutions and partnered<br />
with industry-leading professionals to<br />
provide you with the resources you<br />
need to support your safety efforts.<br />
14<br />
Our Risk Management website is a convenient one-stop<br />
shop for your safety and training needs. Access it for:<br />
➼ Pre-Packaged Safety Meetings – Everything you<br />
need to hold your own safety meeting from the<br />
presentation (PowerPoint) to the quiz – all in an<br />
editable format that you can personalize.<br />
➼ Streaming Online Safety Videos – Enjoy unlimited<br />
access to over 300 different safety and HR-related<br />
videos (many in both English and Spanish). Some<br />
include quizzes as well.<br />
➼ Safety Library – Our online library has over 10,000<br />
comprehensive and ready-to-use safety programs<br />
covering management, training and recordkeeping.<br />
The flagship of this library is the written safety<br />
program and training materials following specific<br />
OSHA standards.<br />
➼ Training Presentations – Access recorded webinars<br />
on various topics and voice-over presentations<br />
that can be used for trainings, reviews and driver<br />
meetings.<br />
➼ Accident Kits – Order complimentary accidents kits<br />
from our website.<br />
➼ Safety Brake Newsletters – Print off as many of our<br />
single-page newsletters as you need, and use them<br />
for payroll stuffers or handouts at safety meetings.<br />
We have over 100 topics that are just a click away.<br />
➼ Online Training – Access deeply discounted<br />
online training offerings through our partners,<br />
AdvanceOnline.<br />
➼ Driver File Guidance – Compiling the correct<br />
information for your Drive DQ File can be confusing.<br />
Our DQ File assistance feature makes it easy for you<br />
to know what is required.
clarity in the event of an accident, they are immensely<br />
useful in coaching and training the most valuable assets in<br />
your fleet, the drivers!<br />
Smith<br />
System<br />
Smith System is widely recognized as a leader in defensive<br />
driver training and we have partnered with them to offer<br />
their training for over 10 years. For members who have<br />
Smith System as part of their service package, we pay the<br />
tuition (up to two employees) to become certified (at the<br />
discounted per person rate). This is a train-the-trainer class,<br />
so the person you send will be equipped to come back<br />
as your organization’s certified Smith System trainer. The<br />
initial train-the-trainer class is a five-day long class where<br />
attendees will not only learn the Smith System Five Keys<br />
to Defensive Driving, but also how to proficiently teach the<br />
Smith System to a driver. The certification lasts for two<br />
years, after which time your trainer will need to recertify in<br />
a two-day class.<br />
The intuitive technology is designed to monitor driver<br />
and passenger behaviors, and identify potentially unsafe<br />
driving habits. AER technology can be utilized in your safe<br />
driver education to train your drivers and provide real-life<br />
examples of unsafe habits. Because AERs record both video<br />
and audio, they may also serve as your defense during<br />
litigation.<br />
National Interstate partners with the following AER vendors:<br />
➼ DriveCam/Lytx<br />
➼ Idrive<br />
Workwell<br />
Automated Event Recorder (Aer)<br />
Technology<br />
Physical Abilities Testing (PAT) can help you make sure you<br />
have the right employees in the right job. We partner with<br />
WorkWell systems, Inc. to create a customized program that<br />
enables our clients with workers’ compensation coverage<br />
to successfully implement a PAT program to determine<br />
if your employee or new hire can perform the physical<br />
functions of his or her job. Implementing a PAT program<br />
may also control your worker’s compensation costs and<br />
other expenses.<br />
AERs are advanced risk management tools that can help<br />
you to reduce risk, increase safety and as a result of safer<br />
operations, could potentially increase bottom line profits for<br />
your fleet operations. Systems may record continuously by<br />
triggered event or a combination of both, and many AERs<br />
offer both inside and outside views. Through its affiliate,<br />
Safety, Claims and Litigation Services, National Interstate is<br />
proud to fund a portion and support the use of Automated<br />
Event Recorders. These cameras not only help to provide<br />
15
BY THE NUMBERS*<br />
We believe our members are exceptional, and the numbers support that. We look forward to seeing our<br />
members continue to thrive.<br />
Ac<br />
tive<br />
Ri<br />
sk<br />
MEMBERMBER<br />
ERS 878<br />
Sharin<br />
ing*<br />
g* .31%<br />
To<br />
tal<br />
Premiumm iums<br />
$72M<br />
Invest<br />
stme<br />
ment<br />
Income<br />
$4.6m<br />
me<br />
REVENUE<br />
2014<br />
2015<br />
2015<br />
2016<br />
2016<br />
2017<br />
2017<br />
2018 Total<br />
Loss fund premiums written $ 35,612,222 $ 34,989,798 $ 34,803,180 $ 30,804,808 $ 136,210,008<br />
Loss fund unearned premium $ - $ - $ - $ 18,133,414 $ 18,133,414<br />
Loss fund premiums earned $ 35,612,222 $ 34,989,798 $ 34,803,180 $ 12,671,394 $ 118,076,594<br />
Loss fund assessments $ 3,702,182 $ 1,734,731 $ 1,969,276 $ 245,143 $ 7,651,332<br />
Net investment income $ 1,862,620 $ 1,478,381 $ 1,040,479 $ 209,244 $ 4,590,724<br />
Total revenues $ 41,177,024 $ 38,202,910 $ 37,812,935 $ 13,125,781 $ 130,318,650<br />
EXPENSES<br />
Loss and loss adjustment expenses $ 28,068,105 $ 22,298,788 $ 17,911,019 $ 2,127,082 $ 70,404,994<br />
Case reserves $ 1,892,918 $ 4,203,453 $ 7,648,528 $ 4,220,537 $ 17,965,436<br />
Incurred but not reported losses $ 3,058,803 $ 5,368,773 $ 9,215,938 $ 6,177,125 $ 23,820,639<br />
Total expenses $ 33,019,826 $ 31,871,014 $ 34,775,485 $ 12,524,744 $ 112,191,069<br />
Provisional net income (loss) $ 8,157,198 $ 6,331,896 $ 3,037,450 $ 601,037 $ 18,127,581<br />
*As of June 2017<br />
16
RETURN OF<br />
EQUITY<br />
Venture, Voyager and Velocity operate on a three-year<br />
accounting cycle, whereupon we return the unused loss<br />
fund dollars to members in positive equity positions. Over<br />
the last year, we’ve returned $7.1M and since the programs<br />
incepted, we’ve returned over $46.3M to Venture, Voyager<br />
and Velocity members.<br />
17
Recap<br />
OF<br />
PAST ADVISORY<br />
BOARD MEETINGS<br />
One of the cornerstones of a successful group captive<br />
program is the advisory board meetings. Meetings are<br />
required and held twice a year, and at each meeting the<br />
members discuss the state of their insurance program:<br />
financial performance, upcoming commutations,<br />
investment yields, prospective member evaluation, risk<br />
management updates and best practices reviews, among<br />
other things. Of course, each meeting makes time for some<br />
fun and camaraderie. Since each participant has a lot in<br />
common, time is spent collaborating (often over a cocktail),<br />
sharing industry updates and many friendships are formed.<br />
At our Aruba and Grand Cayman Advisory Board Meetings<br />
for Venture, Voyager and Velocity, we had the privilege<br />
of doing all of the above in addition to hearing from two<br />
exciting presenters. Dave Mitchell, author of The Power<br />
of Understanding People, taught the members how<br />
the various types of personal interactions we have on a<br />
daily basis can impact relationships and ultimately make<br />
one a better leader. Dave made the group both think and<br />
laugh, and a fair amount of time was spent analyzing<br />
individual interaction styles. Jim Olson, former CIA Chief<br />
of Counterintelligence, author and real-life inspiration for a<br />
Tom Clancy thriller, spoke on the challenges facing global<br />
intelligence agencies today. He also shared his undercover<br />
career including how he was recruited, the training he<br />
received and the risks he and his wife faced (she was also<br />
a CIA operative).<br />
As always, members had a day on their own to enjoy some<br />
fun and sun, exploring the islands.<br />
18
Schedule of Upcoming Events<br />
VENTURE:<br />
March 1-3, 2018: Spring Advisory Board Meeting | Cape Coral, Florida<br />
October 5-6 2018 Fall Advisory Board Meeting | Portland, Maine<br />
VOYAGER:<br />
February 8-10, 2018: Spring Advisory Board Meeting | Key Largo, Florida<br />
September 12-13 2018 Fall Advisory Board Meeting | Park City, Utah<br />
VELOCITY:<br />
February 8-10, 2018: Spring Advisory Board Meeting | Key Largo, Florida<br />
August 20-21, 2018: Fall Advisory Board Meeting | Cleveland, Ohio<br />
Spring Safety Workshop: April 23-24, 2018 | Cleveland, Ohio<br />
Fall Safety Workshop: October 15-16, 2018 | Las Vegas, Nevada<br />
“The environment that<br />
National Interstate creates<br />
to help you openly dialog<br />
with other similar-sized<br />
carriers about safety culture,<br />
best practices and current<br />
industry challenges is<br />
invaluable as a<br />
business owner.”<br />
Jake Conrad, Managing Partner<br />
LJ Beal and Son Trucking<br />
19
3250 Interstate Drive<br />
Richfield, Ohio 44286<br />
phone 330-659-8900<br />
800-929-1500<br />
fax 330-659-8901<br />
www.natl.com