Introducing Koffie

Trucking is an essential part of the economy across North America. Over two-thirds of all freight is transported by truck; the industry moves nearly 12 billion tons of goods worth $800b annually. Truck driving is the top job in over one half of US states.

Yet insurance for this industry is broken: premiums have consistently increased over the past decade (the average price of insuring a single truck in The Bronx is around $25,000 per year); trucking insurance remains one of the worst performing lines in all of property and casualty (insurers have lost an average of $0.11 for every $1.00 in premium written over the last decade); a sustained driver shortage is pressuring motor carriers to do more with less; outsized jury awards (“nuclear verdicts”) can put a trucking company out of business for a single crash and destroy an insurers book. There’s a reason this line of business is known as the Satan’s Pit of insurance.

Small fleets pay 3x more per mile traveled on insurance than large fleets

But it gets worse-- small and medium-sized trucking companies, representing 90% of all trucking carriers on the road, have been bearing the brunt. Small fleets pay on average three times more per mile traveled on insurance than large fleets. While a small percentage of large fleets can self-insure and absorb astronomically rising insurance costs, for smaller fleets insurance is the biggest expense after fuel and labor, and a top reason they go out of business. Profit margins in this segment are just 3-4% and continue to shrink as expenses keep rising. If the status quo continues, many more motor carriers will cease operations in the years to come.  

Trucking insurers have lost an average of $0.11 for every $1.00 in premium written over the last decade

What insurance at large suffers from is a lack of imagination-- everything from office productivity (fax machines, beige filing cabinets, typewriters) to underwriting (hand-written physical inspections) and the very nature of risk (18 speed manual transmissions) has undergone a quantum leap, but the industry remains firmly rooted in a prior generation.

The fundamental nature of trucking risk has been changing for 30 years, and few insurers have noticed. Starting with the advent of anti-lock braking systems, a multitude of advanced driver assistance systems (ADAS) have been broadly available in trucks for a generation. These technologies, from in-cab forward collision warning systems to automatic emergency braking, are proven to vastly reduce both frequency and severity of crashes. Yet, no insurance company offers discounts for the actual change in exposure these technologies represent.

Because large fleets absorb their own insurance costs, they can reap the rewards of using advanced safety tech. Small fleets and owner operators, however, remain at the mercy of insurance companies which provide no incentive to purchase more expensive equipment.

While insurers have historically been instrumental in pushing for higher safety standards in personal vehicles (eg, airbags and seatbelts), they have dropped the ball in recent years as change has become more technological, less mechanical, and faster paced (think over the air software updates). Enter Koffie.

Core to our philosophy is democratizing access to proven safety technology

Koffie is a modern day trucking insurtech providing efficient, affordable coverage paired with tools and technologies that help make fleets safer and improve their bottom line. We started from scratch in 2019 to fundamentally rebuild anachronistic processes, functions and incentives from soup to nuts. Core to our philosophy is democratizing access to proven safety technology. By crediting fleets for using technologies that make them less likely to cause a crash, we boost their bottom line, improve our own risk and advance road safety for all. It’s a win-win-win, and the social good that insurance should be. While insurance is a 400+ year old industry and purely disrupting it is short-sighted, the opportunities for innovation are massive. As a natively-digital insurer, here’s what Koffie brings to the table: 

• Instant We provide quotes in minutes, not weeks. Gone is the cumbersome, inaccurate and lengthy paper application process. 
• Transparent Insurance pricing is historically opaque. Koffie is transparent about the premium impact of changes in operations, such as adding new vehicles, drivers, routes or even technologies.
• Connected We monitor our fleets in real time via telematics and AI-enabled camera systems. This allows us to 1) make sure we’re underwriting accurate exposure; 2) provide real time recommendations to make our fleets safer and more efficient and; 3) submit claims instantly. As an insurer purpose-built for the next 100 years of mobility, we will be far more involved with our customers than an annual policy transaction.
• Data Driven Underwriters are at their best when leveraging precise tools that help them make better, faster decisions. Underwriting in trucking/transportation is rooted in heuristics and has remained unchanged for decades.
• Embedded We make it easy for fleets to transact with us in places where they already spend time. Koffie pre-fills over 75% of the application via a DOT number through our trucking ecosystem. 
• Responsible Diverse talent and diversity of thought are essential to achieving the lofty goals we have set for ourselves and our partners. Koffie strives to be a model for the insurance and transportation industries in fostering constant innovation. We are committed to building lasting relationships with customers

We’re excited to show the world just how dynamic and imaginative an insurance company can be. As the insurance, trucking and automotive industries converge, Koffie will ensure aligned incentives for all stakeholders. Safety should be affordable and afforded to everyone. Small fleets and their drivers have worked tirelessly for decades, long before they were navigating Covid-19. It’s time that we do the same for them.