Jim Gattoni: We accept liability in the event it’s our accident. Sometimes you end up tangled up in something that’s not your fault, but we feel we’re very fair in settling our accident claims. But we’ve been dealing with this 2019, May 1, as I said, May 1, 2019. And those premiums are actually after the 2019 renewal, I think the premiums went up almost 200%. We still see a little bit of creep in it. But I’m not sure I understand why there’s various carriers out there that are just talking about it today and why they’re getting hit with these big claims. The Landstar has been dealing with this nuclear verdicts for five or seven years. We dealt with the premium increase in 2019. So it’s kind of built into the model now. Clearly we could have a nuclear verdict hit us that would create more volatility in the line.
But the instability of that line that we’ve experienced over the last five years is, you know, I don’t want to say it’s going to stabilize. It’s still difficult getting insurance companies to carry trucking companies starting — we got a renewal coming up May 1. But from an inflate [ph] — I think we dealt with the majority of the inflationary pressure on the insurance line. Are we going to still have some? But I think most of it’s behind us. Might it still be 5% to 10% a year? Yeah, it could be. But the big hit was 1920 and 1921 is really where we saw it. You know, what we do here is, if we have an accident in a quarter, we put that accident up and we try and get it, you know, from an accounting standpoint, we try and get the quarters to the number that we think it should be.
And clearly we have unfavorable development in some cases and that carries over and you can see that in our financials. But I would say that we still struggle with getting renewals, but the pricing seems okay and there’s still some participating carriers out there. And we’re also a very safe organization. We probably lead the industry on accidents per million miles where we sit at like 2.1 where the average is like four. So we do get some favorable treatment when it relates to that. But I would say based on the long answer was, I think we’ll see more stability and that going forward and looking backwards.
Ravi Shankar: Got it. That’s super helpful. Maybe just follow up Jim, congratulations on an amazing career. I’d love to get maybe just broad reflections from you on how the industry has changed. What you’ve seen over the years, surprises, advice for the future, et cetera?
Jim Gattoni: Why the industry change significantly when I step away? I’m just saying the whole industry, the entire industry is going to change when I step away. No, I think insurance was one. That was a big change we saw coming along. I think one of the most interesting things was the digital players who were bragging about ubering the — I’m going to uber the agent base away. I’m going to get rid of all the broker carriers. We were prepared if that actually happened. We never said it was not a viable business. I still believe that there is some kind of play for technology only in the industry if you’re hauling marbles. But when you’re putting expensive freight on a truck, you want someone watching it, right? So we’ve said that all along.
The other thing we always talked about too is we have the technology everybody was selling. I mean, we have an app on the phones where the trucks can access. So that’s the one thing that it came and went in during my career here, back in the early 2010, 2011, we were going to be uberized and now you’ve seen what’s happened in that industry. So insurance was a big one, as I mentioned, but other than that, it’s been a very consistent business for 28 years. And we’ve always focused on the core and we watched the disruptors and we react appropriately to protect our agent base and our network. But other, you know, it’s been a great ride and going forward, I see this model has just continued to thrive. I mean, because I think they got it, there’s a great management team here, a lot of experience, the depth here is incredible.
Everybody’s got a 25 year plaque on the wall. So me departing this organization doesn’t change a thing, but –
Ravi Shankar: Thanks, Jim, we’ll miss you.
Operator: Thank you, we will move now to the next question coming from the line of Bascome Majors of Susquehanna. Your line is now open.
Bascome Majors: Thanks for taking my questions. I wanted to go back to Jack’s question on the splits, but from another angle, I think in 2020, you actually increased the incentives that you paid to the BCOs to really kind of keep them intact in a very difficult period for the transactional nature of their business. I mean, is there some incentive or talk or thought about you maybe doing that to stem the decline for a temporary period and keeping the network more intact than it has been? Just, you know, it’s — as we see the decline in BCO count accelerate, as we get deeper into the cycle, I think people would love to hear more about kind of some of the creative things you’re putting together to maybe stem that? Thank you.
