- Understand how new technology platforms are changing the way insurance brokers and agents manage insurance policies and exposures;
- Discover how usage-based insurance (UBI) is driving the new world of work in the gig economy;
- Learn how to simplify and streamline insurance administration through its entire lifecycle with digital and automated processes
Wendy Greenland: (
Hi, everyone.
Wendy Greenland: (
I'm thrilled to be able to introduce you to Open Force today, and, I arm wrestled Matt and talk him into joining me on stage, so we could talk a little bit about, what we've been doing. Some of the innovative products we've been working together on, in order to provide Innovative Solutions to independent contractors, using the technology that we have. So that's gonna be our presentation today. They're bringing it up for us. while they're doing that, wanna give us an opportunity to, do we have a clicker for this clicker? Oh, you got it right here. Okay. So you wanna go onto the next slide?
Wendy Greenland: (
I wanna start by introducing myself to you. Wendy Greenland. I'm the CEO of Open Force. Open Force is an independent contractor management system. So if you think about an HCM, a human capital management system, but only for independent contractors, we onboard, we provide insurance, we provide compliance and we provide payments to independent contractors using our technology. So what we do is we, we do all of that. And at the same time we mitigate the risk of misclassification because one of the big challenges of working with independent contractor workforces, for those of you who do that, you know, that misclassification is one of the greatest challenges we have in that particular space. So that's a little bit about Open Force. We're gonna talk a little bit more about that today. I wanna introduce Matt and I'm gonna let Matt take us on a journey through, what is the problem that we are together, trying to solve.
Matthew Bagley: (
Yeah, absolutely. Good morning, everyone. No better way to, kick off a conference and talking about insurance, certainly wake you up. Matthew Bagley, work at Crum and Forester. I'm the occupational accident business leader and what that means is first person workplace accident for independent contractors. It's an absolute pleasure to be on stage with you Wendy, representing a phenomenal company and partnership. So I know a lot of the prayer, speaker was discussing, disruption and catalyst for it and insurance and, you know, I think the connotation about insurance is always being a little more glacial pace, conservative in nature and not really taking a proactive stance, often taking a reactive stance and the gig economy, the emerging marketplace at based technology over the last we'll call it five years has really yielded quite a catalyst to develop innovation, not only disrupting economy, but also disrupting the way in which insurance carriers look at their products, right.
Matthew Bagley: (
Just taking a look at the numbers, they're absolutely staggering, right? Last year, 68 million people being self-employed and the rate of independent contractor growth over the last six years is just absolutely phenomenal. Thinking about in like 2014, 2015, 13% of the workforce was independent contractors. About four years ago, that number cresting 25% with the pandemic really bolstering that number up to in the last year about 51% of the workforce has been an independent contractor in some semblance or another, projections for 2027, that 90% plus individuals will have engaged in an app based technology or an independent contractor. those major disruptors, all that we're familiar with Uber Lyft, Grub Hub, Door Dash, all utilizing an independent contractor base, which creates a myriad of problems from not only the insurance carrier's perspective, but also the platform level and insurance being able to disrupt often, you know, connecting and being able to partner with those inure tech companies kind of acting as an aid and getting our minds a little bit more comfortable, especially from an underwriting perspective and being able to adapt to different marketplaces, ascertain different risks, and being able to really disrupt or take a proactive stance and, you know, the forward thinking nature.
Matthew Bagley: (
So one of the first problems that we identified from the insurance carrier, right? when you take an individual for occupational accident, again, independent contractor getting hurt on the job, someone steps out of the car, injures themselves. They may only work one, two days a week. They may work five days a week. They may work one day a month. Those traditional mechanisms of premium modes just they would not be applicable here at Crum Forester. We were one of the first carriers to evaluate that nuance and understand that charging an independent contractor, a monthly rate, isn't gonna work here. We need a more finite approach. That's gonna be tailored to what that individual is doing, whether it's food delivery, transportation network companies, staffing on demand nurses and being able to tie premium to that exposure base was quintessential to be able to scale and evolve at the pace of this marketplace.
Matthew Bagley: (
So, you know, in terms of, from the insurance carrier's perspective, what we need to do to get comfortable with a risk is really, you know, insurance and tech are two words that are often not used in the same sentence, right? Insurance is focused on the more traditional mechanisms being able to evaluate risk. But over the last few years, emerging companies, as well as more institutional companies, such as Open Force, being able to provide introspection into that exposure and gaining comfort across the entire stream of commerce for these platforms has really been, essential starting on from the onboarding where we know exactly what type of risk we're seeing, right from pre-qualifications to MVR screening, to really understanding that underlying exposure has yielded great benefit for us to approach these risks in a much different manner, right? Not only that, but just being able to track the exposure basis on that finite level and knowing that we're not gonna be charging, you know, a monthly rate per individual, as well as really the audit and making sure that all the settlements, the hours log the trips and the exposure basis is really being able to be quantified has been a fundamental part of our scale in this space.
Matthew Bagley: (
One of the, major aspects that not contemplated in the few prior slides is really the propensity for reclassification, something that all too familiar with in the transportation industry, right? Then applying that same knowledge base towards app-based technology, the gig economy, the moment that any of this, these independent contractors, you know, are petitioning for employee benefits. It undermines the entire model and being able to protect that model is absolutely of the utmost value and something that Open Force has done exceedingly well over the last 20 years. And a little bit more about that, Wendy.
Wendy Greenland: (
So Open Force began as you go back one, do you know how to go back? Okay. Open Force began as really a software and solutions company, that was designed to help mitigate the risk of misclassification because as we began to really try and understand and solve the insurance and compliance problem that that we have in independent contract workforces, the number one problem we had to learn how to solve well, a number of years ago was the misclassification problem. you can't just throw technology at an independent contractor workforce and think that you're going to be okay when it comes to misclassification. So we years ago had to learn because we really started in the courier space and for those of you who understand this space, you know, that couriers were really the first to begin to see the misclassification, activity that was going on now, every vertical, every part of the independent contract workforce, even referees I saw recently and massage therapist and physical therapist they're all getting misclassification activity.
Wendy Greenland: (
So if you're an insurer and you're trying to work with this kind of workforce, you need to partner with a technology and solutions company that understands this first and foremost, because what we've found is we've worked with customers that are coming onto our platform is that they've used technologies that have actually created evidence against themselves as they've been, they've been using new AI chat technology and they get all excited about the new slick technologies of their that are out there. Yet what they've done is they've created actual evidence against themselves in misclassification lawsuits, because what they don't realize oftentimes is they're looking at slick technology, is that by providing that to an admin, that's working directly with the independent contract workforces, that slick technology can also, like, like create evidence as they're having conversations. And then those conversations then are pulled into a deposition.
Wendy Greenland: (
Now they're trying to answer for all of the things that were said that now you have proof of through technology for misclassification claims audits and certainly lawsuits. So as they start looking at bigger judgements, you know, that on the insurance side, we're now seeking or we're seeing nuclear verdicts. There's a number of technologies that are coming in, but you need to make sure that the technologies you're working with or working with people who really understand misclassification and how to mitigate that risk. So at open force, what we have done is created a technology and solutions company to where the first thing we do is we start working with that, contracting company and we try to understand their model. As Matt and Crum Forester has really partnered with us, we wanna make sure that as we're ensuring these independent contractors, we are confident that we are all gonna get drug into some sort of lawsuit or claim.
Wendy Greenland: (
So what we do is we work with them initially a little bit on the model. We refer them out to the, best attorneys in the area, if they need that. Then as they come onto the platform, we're cleaning up their compliance. As they're onboarding, every step they take in our technology proves the relationship between a contracting company and an independent vendor. Many of the HRS platforms out there, if you're working with a contracting company, that's using one, what they do is they prove the relationship between an employee and an employer. So if they're using something like that's great technology, but it's not good for this particular population. So you need to have a technology that actually works to mitigate the risk of misclassification, coz you don't want them going after your work comp, your DNO, some of those kinds of things that get pulled in to these kinds of claims and issues as you work with this population, not only that every step in the life cycle of an independent contractor, and we've done this for so many years in courier, every step can be used against you in a court of law.
Wendy Greenland: (
So the way you recruit, the way you onboard, what you say through that process, through the technology, how things are set up, as you're collecting compliance, are you forcing things? So are the contracting companies saying, you have to do this, or you have to have this insurance. So now you get to the real insurance problem because when you add the complexities around insurance, for people who are out driving everyday, who are delivering goods, who are delivering heavy refrigerators, appliances, things like that. Now you're adding a layer of complexity that, becomes very, very difficult. That's where Open Force is at its best because we partner with the best in the industry when it comes to independent contractors and what we're doing is we're collecting all this data through the technology while we're proving independence, and then we're offering up simply offering up, policies that matter in policies that work, through the partnerships that we have.
Wendy Greenland: (
So I thought it would be easier. We really were excited about doing a case study because we thought it'd be easier to explain what we do through, our example with Ryder. Ryder last mile came to us and we started talking through some of the challenges that they have. You can see that they're delivering something there that's very delicate and probably fragile. So they drop it. They drop it in the home, maybe do some damage, obviously there's a lot of insurance implications. They get hurt, they get injured as they're doing that, they put their back out. There's all sorts of issues when it comes to last mile delivery. So in this particular case study Ryder came to us and said, we have a lot of people who would like to go be a part-time delivery driver, because maybe they're a teacher during the week, or they do something else and they wanna do this.
Wendy Greenland: (
But these flat rate, insurance policies just aren't working for us. So we were looking at, they were getting more and more complaints from the drivers. They were trying to get gig drivers into courier and last mile. What we found obviously is that AAC is the number one issue that we are trying to always begin to solve. Then we add cargo and GL and other insurances while under dispatch, commercial auto, you start to add all of these complexities and it gets really challenging. So we needed a very flexible occupational accident, in this case for Ryder for last mile, that could ebb and flow with, with full time, part-time, they're on, they're off dispatch usage base. We went to Crum and Forester and they came up with a really innovative product that Matt's gonna tell you about.
Matthew Bagley: (
Yeah. So, I'm gonna forget you know, mentioned lifting heavy refrigerators and pulling their back out. Gonna forget all about that from an underwriting perspective.
Wendy Greenland: (
Yeah. Sorry. I didn't mean to bring that up.
Matthew Bagley: (
Yeah. I'm gonna forget about that after this conversation.
Matthew Bagley: (
If you asked me 10 years ago, if I'd be interested in writing a courier class of business, I would've said no. If you asked me five years ago, Matt, are you interested in writing last mile delivery? I would've said no. Right. Notoriously very risky classes of business that just drive up lost costs, but partnering with Open Force with about four and a half years now and seeing their risk mitigation, how their platform works, the entire sales cycle, it completely changed my perspective on a class of business that has historically been redlined. Now to be honest, just, you know, getting involved and seeing what it is and the nuances of that platform just systemically. It is one of our more profitable lines of business just with the checks and balances throughout that entire process. Right. Part of that process is the settlement being able to be tied to a, revenue, to an IC in a fixing a rate mode to that.
Matthew Bagley: (
So the pay scales, but so does the insurance right? Where if you have a part-time driver that may only work one day out of the week and makes a nominal amount of money, they're not gonna want to pay a week's worth of premium on that. So being able to tie a one to one percentage of revenue, has made all the sense in the world in this space and it not only that, but also contemplates the underlying exposure where most of the instances here there'd be a master contract that may have independent contractors below them, obviously their settlement there's more hours worked. There's more people there's more label labor force below that, those premium scale with that revenue generation. So, this was the first time, and realistically, the only time that I had enough comfort from an underwriting perspective, knowing that they are instilled in that settlement process, where I know for a fact that the amount of dollars paid to the independent contractor, no audit implications, and really being able to ascertain the entire exposure base. It only works when you partner with a tech provider that can offer all products and less decentralized than other products out there. So a high degree of comfort and, you know, again, taking a restricted class of business for me and yielding a more preferable class in a matter of three years.
Wendy Greenland: (
So the way this solved it for Ryder. So this percentage based occupational accident, their drivers were making anywhere from three or $400 a week to five, six, $7,000 a week in settlement because they're full-time drivers that maybe had subcontractors that were working with them, you add the subcontractor and helper, complexity to insurance when it comes to transportation in particular, and now you've got some real serious complexity. So our technology allows for visibility into the master contractor, all the subs and the helpers. We can attach those subs and helpers to the master contractor. So the more they make and that, master that's their own business. They're a vendor, they have their own business, but the more they make the percentage of settlement grows with them. So they pay more AAC because there's more risk because you have subs and you have helpers and you have more risk going on.
Wendy Greenland: (
So that was the, beautiful part of this, but it also ebbs to those part-timers who are maybe only doing one delivery a week and so maybe their settlement is $300 that week, then their risk is much lower cuz they only had one delivery. Therefore the risk is lower. So the percentage of settlement AAC really ebbs and flows with the risk, with Ryder, they absolutely loved it. Just to talk a little bit about the results, they've seen a 98% increase in insureds in the last 18 months on this program, six and a half percent increase in premiums and they have proper insurance for the subs, the masters, the subs and the helpers all the way through the entire group. And they have confidence putting them on the road. And now they're also now, as you know, for those of you who are in transportation that there's a lot of competition for drivers.
Wendy Greenland: (
So everybody's out there trying to recruit and they can confidently recruit. Part-timers now knowing that they have the insurance products that will allow them to flex and grow with their organization. So they've really been able to expand, which is part of the reason for that 98% increase in insureds. So with this particular product, we are looking at a lot of others. We're doing, route base. this particular product works extremely well in the gig economy as well because gig drivers, maybe a hundred bucks they make in a week. Right. So how do you ensure somebody who's making that kind of, and they're on and off and they're on one week and then they're off for three weeks. This particular product is usage based. So if they're on, they pay, if they're not, they don't. So I wanna talk a little bit about how we do that.
Wendy Greenland: (
So we collect the onboard through onboarding all of their compliance items. So Matt, as he's looking at ensuring them, he knows all of their compliances up to date as they're going through that workflow, they're selecting insurances that that meet the requirements because they're vendors, they're not employees. They can bring their own to the table so they can just upload their own. If it meets the requirements, once they are contracted and they start working, then at the end of that cycle, they send the contracting company, sends us the dispatch data and we pay the drivers. So we have full soup to nuts from beginning to end, we have visibility to everything that driver's doing, which is what gives Matt. I think the confidence to be able to say, okay, I know if they're on or off dispatch because we have the dispatch data we're paying the driver.
Wendy Greenland: (
They only pay when they work. They don't have to pay when they don't and it's a percentage of settlements. So as the risk grows, so does the, premium. So that's part of, I think the success of this program, but we're also looking for others because it doesn't always work in every case and, there are certainly other populations that we are growing into if there's an IC workforce and that IC workforce has insurance complexities technology really is the way to begin to solve some of those problems. And that's what we're doing. So just to kind of summarize, a little bit of some of what we're talking about, the full lifecycle technology platform. Be cautious of all of these new providers. There's a lot of providers coming into the space as you're working with contracting companies or, and brokers trying to understand what's going on with some of these independent contractor workforces, be really cautious that the technology as wonderful as it is, is supporting the model it's supporting the independent contractor model.
Wendy Greenland: (
So you need to have transparency from beginning to end. However, they set it up through that technology to make sure that they're compliant, that they have the right insurances. They're not bringing insurances to the table and they're dropping it the next day. So continuous monitoring of insurances, continuous monitoring of their MVR. What if today their MVR is clean and tomorrow they get into an accident. Those are some of the continuous monitoring pieces that you need to have that technology can do for you as you're looking to cover this, this kind of workforce. So giving transparency to the full life cycle of the independent contractor is critical for an independent contractor group usage base. I think that's easier said than done. but using technology to be able to facilitate usage base on demand workforce operations, it allows you to see if they're on or off dispatch, but you do have to have access to the settlement in order to be able to see that it is the settlement. I think that gives you the, confidence in working with this group. Right?
Matthew Bagley: (
Exactly. It wouldn't even be an option if it didn't have that availability.
Wendy Greenland: (
Yeah. And then highly complex insurance policy management. When we start thinking about all of the different ways we have to cover, let's say an Instacart driver that just decides they're gonna start this weekend and now they're delivering, but they don't have the right commercial auto insurance, right. Riding over the top of their personal, they don't have occupational accident. You know it, becomes very complex, very fast. if there's an accident and or if they fall or they get hurt in the process, but when you add, you know, these heavy pieces of these appliances that people are delivering, certainly when you get into the trucking, when you get into owner operators, all of the licensure, they need to have, the training and certifications they need to have. How does a contracting company do all of that without risking misclassification?
Wendy Greenland: (
Because as you know, state by state, there are different requirements. If you're in California, you are going to be required to meet the ABC test and, Massachusetts, New Jersey, New York, some of these more complex states when it comes to misclassification, you've gotta provide these insurances, but also meet the requirements state by state, literally in order to have the coverage they need while mitigating the risk of misclassification. So through the technology, you can do that. It's probably the only way at this point moving forward. And, these are the kinds of things you should be looking at as you're looking to partner with technology groups that are working with independent contract workforces. So I put this up here. It's a very complex slide that tells you a little bit about Open Force.
Wendy Greenland: (
I brought a prop and all I wanna do is say, if you look at that simple is hard you know, it, is a lot of technology going on in onboarding compliance insurance, working with great partners that are providing great coverages. the integrations we have for background checks, drug screens, MDRs, retention, recruitment. We have benefits for the independent contractors because the contracting companies can't do that, technology that allows us to serve that population without risking the contracting company. There's a lot of technology that goes into it. And then of course the settlement, we have a full payroll platform. We don't call it payroll in the independent contractor rule. We call it settlement, but that's what it is. So all of this to say that simple is hard. All we want to do for that driver is to get all of that into a very simple workflow for them on their phone.
Wendy Greenland: (
When they go through and they go, oh, this contract requires occupational accident. What's that they can either call us, or they have the explanation right on their phone. They can select it right on their phone and it's a percentage based usage based occupational accident and it's right there. Or they can take a picture and upload their own nice and simple for the driver, right? Because for those drivers that are out doing this, we don't want it. They don't need to know this. They don't need to know all the technology behind. They just need to know that they have what they mean at their fingertips. And that's when technology is really at its best, we can make it super easy and then at the end of the week, they get their payment and it's on their phone and it says, oh, there's your premium for your occupational accident?
Wendy Greenland: (
It was a percentage of settlement. It's right there for them and it's detailed on their phone, remittance stub at the end of the week. So that's the simplicity for the drivers that we work with, for the home care providers, for the massage therapist, for the, who else we serve anybody that's in IC where if they have complexities in insurance, we're interested because that's really where we play best. So that's the simplicity of what we do. just to see if you, you have any questions we're gonna be at booth 207. Matt, do you have any final thoughts or comments?
Matthew Bagley: (
Yeah, I think, insurance should never be an impediment to scale, right? It should always facilitate it and I know that's, you know, sometimes hard to hear with the more glacial pace insurance carriers out there, but partner with people that understand your business model partner with people that understand the tech benefits and partner with people that take that entrepreneurial and agile stance to problem solving.
Wendy Greenland: (
We can open it up for, questions. We have just a couple minutes left. Oh, thank you, boy. That helps a lot. I can actually see it. You were all just like
Matthew Bagley: (
Who's sleeping out there. All right.
Wendy Greenland: (
No. Okay. Well, if you do have questions and you wanna come see us at our booth, we'd be happy to answer questions about the, programs, the policies or the technology. Thank you for your time.
Speaker 3: (
Thanks everyone.