Special Feature: ATA Comp Fund making national impact
Editor’s Note: The following feature appears in the 4th Quarter 2022 edition of Alabama Trucker magazine. You see the entire edition HERE.
Article By Dan Shell
Photo by Bob Fowler
Alabama’s trucking companies are making a national impact through the groundbreaking Alliance Interstate Risk (AIR) workers’ compensation insurance program. This program was established in 2021 by the ATA Comp Fund (the Fund), Alabama Trucking Association’s (ATA) sister-company self-insured workers’ compensation trust. With the launch of AIR, this insurance program can now issue trucking and allied industry companies workers’ compensation insurance policies in all 46 non-monopolistic states.
By working with other state trucking associations that partner with AIR as their workers’ compensation insurance program, AIR assists these associations both monetarily and with their efforts in concentrating more closely on the issues particular to their respective states—giving trucking companies and their respective trucking association a stronger voice in each state.
The ability to provide lower-cost and proactive workers’ compensation insurance coverage to trucking and transportation-related companies across the nation was developed over three decades as the ATA Comp Fund evolved and responded to member company’s needs and industry trends to build a successful in-state-focused business that now has a growing national footprint.
Kimble Coaker, ATA Comp Fund and AIR President and CEO, notes that 30 years ago it wasn’t uncommon to see Alabama standard market WC insurance rates of 10%-14% of driver payroll and assigned risk rates above 20% of driver payroll. Standard WC insurance markets weren’t aggressive in controlling claim costs and tended to simply pass them on in the higher cost of coverage, leading to sky-high rates.
In response, the ATA Board voted to form the ATA Workers’ Compensation Self-Insurance Fund (now the ATA Comp Fund) in 1992 to help ATA member companies find more affordable and effective workers’ compensation insurance coverage. Ever since ATA Comp Fund officials have ridden that concept and created a program developed “by trucking companies and for trucking companies” through strong growth and expansion based on a true behavior-based risk management model during the past three decades.
Coaker, who’s been with the ATA Comp Fund since 1995, says the fund has been strongly supported by ATA member companies and that’s made successful steady growth more possible. “A great core of trucking and allied transportation industry companies allowed the Fund to create and offer risk-sharing deductible programs with better terms and conditions to assist larger ATA member trucking companies.”
“We were always focused on expanding the program, with a strong safety and risk management mindset to encourage companies and get injured workers back to work,” he says.
Reacting to member company needs and industry trends, the ATA Comp Fund established its original Cross Border program in 2001 that served member companies with operations outside Alabama, as well as a nexus to Alabama. “We were seeing ATA member companies expanding into other states and regions of the country while working closely with shippers and operations in multiple states, and that helped us expand in a direction to offer a true nationally focused program,’ Coaker says.
He adds that the ATA Comp Fund had been looking to create an entity with a national focus for several years but wanted to make sure that the infrastructure was in place to be effective and cost-efficient before rolling out the AIR program.
With the transition and establishment of AIR in 2021, the ATA Comp Fund and AIR are now working with more than 600 trucking and trucking-related companies in over 40 states.
Alliance Interstate Risk is currently partnering with the Georgia Motor Trucking Assn., South Carolina Trucking Assn. and Virginia Trucking Assn. as their workers’ compensation insurance program and is also working closely with several other state trucking associations as potential new partners.
Currently, AIR officials are talking with multiple state trucking associations, starting in the Southeast, but also “any state with favorable workers’ compensation laws that makes sense,” Coaker says. “It’s exciting to work with new people who are just as committed to the same mindset that creates the opportunity to expand outside the Southeast.”
The ultimate goal is to continue to add trucking associations as partners across the nation. “But the key is we can only grow as fast as the infrastructure can be built out,” Coaker says, adding that they’d like to have a minimum of two or three loss control engineers per state.
It’s unfortunate that not all the trucking partner associations’ members qualify for the AIR program. “If they qualify, great. If not, we conduct risk management reviews of their operations, and advise them on areas of improvement to focus on in order to qualify in the future,” says Todd Hager, ATA Comp Fund and AIR Chief Operating Officer.
SAFETY PAYS
“We have a very hands-on safety and risk management program,” says Hager, noting that risk managers meet with company owners to get buy-in from the very top of the organization. It’s critical to have owner support to create a safer work environment when implementing new safety policies and procedures or re-emphasizing those in place.
Both the ATA Comp Fund and AIR pursue a true data-driven and behavior-based approach to safety and risk management. Risk managers make on-site visits and work with member companies to evaluate their safety programs and overall operations to identify and eliminate unsafe practices or situations.
One outreach program introduced in 2021 that feeds into the success of both the ATA Comp Fund and AIR is the “Safety Blitz,” a multi weeklong campaign to highlight situational awareness of safety issues in the trucking and transportation related industry. Last year’s blitz covered slips, trips and falls on the job with visits to member facilities, as well as monitoring drivers at shipper locations and truck stops to point out ways to reduce these common accidents.
This year’s Safety Blitz was expanded to a full month (October 2022) and covered the top five causes of motor vehicle accidents: distracted driving, speeding, fatigue, tailgating and weather. Program material includes videos, handouts, safety quizzes with prizes, and much more.
According to Abby Greer, in charge of marketing and media and internal communications for the ATA Comp Fund and AIR, expanding the Safety Blitz to an entire month allowed member company safety directors to better plan training sessions and cover each topic much more thoroughly and in greater detail.
She notes that Safety Blitz’s online participation more than doubled from last year, and they have awarded more than $2,500 in gift cards for the safety quiz prize drawings.
The ATA Comp Fund and AIR’s Certified Safety Program allow member companies and policyholders to earn discounts by adopting the ATA Comp Fund and AIR’s behavior-based risk management model. Risk managers make on-site visits to participating companies and monitor progress with hiring practices, claim reporting, training and inspections, and overall safety investment. Add in a qualifying loss ratio and meeting ongoing requirements, and a member company and/or policyholder can earn discounts up to 10% off annual coverage contributions and/or premium.
Offering up programs like the Safety Blitz and other support services helps feed into the overall effort to provide top-notch workers’ compensation insurance coverage at cost-effective prices.
Hager believes this only helps bolster the performance and reputation that the ATA Comp Fund and AIR offer through workers’ compensation insurance coverage and services specifically designed for the trucking and transportation industry.
For example, the entire business model is focused on trucking and transportation: Adjusters only handle trucking and transportation claims and have better insights into trucking industry dynamics than other insurance providers that handle many unrelated types of businesses, Hager believes. In addition, aggressive claims management means adjusters have lower case counts and can communicate more effectively with injured workers, medical providers, and policyholders to help keep costs down.
DIVIDEND PLAN
A key part of the ATA Comp Fund and AIR’s growth and success is their member company and policyholder dividend plans. Dividends for both entities are shared on a contractual basis. AIR is a wholly owned subsidiary of the ATA Comp Fund, but each entity stands on its own experience, Coaker says, noting that AIR is already building a sizable surplus of monies accrued for future dividends and is showing great national growth potential.
“We’ve never unnecessarily passed any surplus monies into equity—it’s all accrued as dividends as our underwriting performance speaks for itself. And we’ve been paying double-digit percentage dividends for the life of these programs,” Coaker says, noting that many other insurance companies and programs pay dividends only in the lower single percentage digits if any at all.
Overall, the ATA Comp Fund and AIR have returned an average annual historical dividend of 26% to participating companies, and more than $239 million has been accrued and distributed since the Fund began in 1993.
Coaker notes that in the past five years (counting the recent announcement of $22.5 million in dividend distributions for the upcoming 2023 year), the ATA Comp Fund and AIR has averaged more than $21 million in dividend distributions each year.
He adds that member companies and policyholders generally take three to five years to see the full benefits of the dividend plans, and that requires buying into the program concepts, investing in safety and risk management, improving loss ratios, and each doing their part to generate dividends.
BIGGER MISSION
As time goes on, Coaker says the ATA Comp Fund and AIR will continue to seek controlled, effective growth because the programs provide tangible benefits to ATA member companies and AIR policyholders and all our association partners.
“Across the nation, (AIR) has helped associations to better carry out the vision they have for their organizations and members,” Coaker says. He adds that they’ll continue to grow the AIR program as they find association partners that want to invest and become strong allies together.
Coaker emphasizes, “That’s the message: Strengthen the associations, strengthen the voice of the associations, give financial returns back to trucking companies, and in the long term make trucking and the voice of trucking as strong and powerful as it can be.”
