Blog Post: Why We Built LEEO

By Jeff Chen, CEO/Founder, LEEO Insurance

Commercial auto has lost money for fourteen years running. Not one bad year, not a rough patch but fourteen consecutive years of underwriting losses across the entire line.

I want to be clear about what that means, because the industry has gotten so used to dismissing it or explaining it away. A line of business does not lose money for fourteen years because the people in it are lazy or unlucky. It loses money for fourteen years because the model underneath it is broken. That is the diagnosis and everything else is a symptom.

I spent the first half of my career as a management consultant, paid to help businesses big and small optimize against problems to improve profit. I spent the second half inside the insurance technology that the largest carriers in the world run on and then helped build and sell two companies. While it’s been different seats along this insurance journey, it’s the same playbook: diagnose the problem, find and understand the underlying mechanism, then build what it should be. When I looked hard at the commercial auto industry, there was no comfortable story. So, we did what we have always done, we rolled up our sleeves and went to work utilizing our playbook. We built LEEO to fix the mechanism, not to repaint it with some marketing jargon, a faster quote, and a nicer UI.

Before I tell you what we do differently, let me be honest about the patterns that we have observed. I have watched a lot of very smart companies attempt to fix the problem. There have been a lot of shots on goal and a lot of misses. Seemingly, the same mistakes are repeated time and time, again.

The first problem is the cardinal sin - growth ahead of underwriting. Commercial auto is easy to grow and hard to grow well. You simply price below the people who actually know what they are doing. Premium pours in, the top line looks great, and the losses surface two years later, after the policies have already renewed twice. There is a difference between underwriting to win the account and underwriting to price the actual risk, and most of the market has quietly chosen the first without factoring in market dynamics. Underwriting to win is the lazy path: bind quickly, hit the growth number, and let next year’s loss ratio clean up the mess. In most lines you can get away with that for years, because the margins are forgiving enough to hide lazy underwriting. Commercial auto does not forgive. The loss ratios run too high and the severity too brutal, so when you price a risk wrong here, the book tells on you fast and it tells on you loud. A generation of MGAs, carriers, and investors learned this the expensive way, and the capacity that backed them learned it alongside. Capacity has a long memory. Burn it once and it does not come back at the same price, if at all.

The second is telematics as theater. Nearly everyone in this market now calls themselves telematics powered. But what does that even mean? Many collect data but far fewer know how to utilize that data. There is a real difference between putting a device in a vehicle so you can say it in a pitch deck and using how a fleet drives to underwrite the risk, set the rate, drive claims handling, and change outcomes. If the data does not move the price and does not change the behavior, it is decoration. This industry has been carrying a lot of decoration. Saying one thing then going right back to doing what you’ve been doing. No change. No innovation. No execution.

The third is building products that fight the people who sell them. Commercial auto is a broker business. It always has been. Brokers are vital in sourcing the business that matches carrier appetite. When you are trying to build and offer products that alienate brokers and make their lives harder, you only hurt yourself. Yet a striking number of new entrants designed workflows that treat the broker as friction to remove rather than the partner they depend on. Slow submissions, fuzzy appetite, quotes that take days, service that vanishes after the bind. Brokers notice every bit of it, and they place the next account somewhere else.

None of this is subtle. It is just easy to do when you are moving fast and the bill arrives late. We built LEEO around three commitments designed to make those mistakes structurally hard to repeat.

We underwrite first and grow second. Data, telematics, and AI lets us select risk more precisely than a traditional submission ever could, which means we can say yes faster to the fleets that earn a yes and price the rest honestly. Disciplined selection is not the brake on growth in this line. It is the engine. A book that performs keeps its capacity, and capacity is the scarcest thing an MGA owns.

And discipline only holds if it is engineered as a system, not left to willpower. So we built an AI underwriting platform that makes our underwriters faster and better at the same time. It pulls in every piece of information available, makes sure nothing gets missed, and presents it back in a consistent, repeatable format, so risks get underwritten the same careful way every time instead of differently depending on who picked up the file. Just as important is what the platform does not allow. Appetite is vetted automatically. No underwriter works in isolation, and no risk clears on one person’s judgment alone. There are multiple layers of scrutiny, from systematic checks to manager review, and they run on every account. A “No” in our world is usually better than a “Yes”, and trust me we say “No” a lot. The point is not speed for its own sake. It is to move fast, be thorough/accurate at the same time, which most of this industry still treats as a tradeoff. Not for LEEO.

We make the data do real work. The driving data helps set the price, sharpens the underwriting, and feeds back to the fleet as something they can act on and learn from. Drive more safely and you can earn money back. That is not a loyalty gimmick. It is the one mechanism that points everyone the same direction: the safer the fleet, the better the loss ratio, the more we can reward it, the longer it stays. The proof is in the data, and we make it do the heavy lifting.

The same data does work most MGAs do not talk about, on the claims side. Front-facing cameras are required across our book, and that footage does more than sit in a file. It signals our adjusters the moment something happens, and in many cases it triggers the claim itself, before the paperwork, before the phone call, before the story has time to drift. That speed matters more than it sounds. Cycle time is one of the largest hidden drivers of loss in commercial auto: the longer a claim stays open, the more it costs, and the more room there is for litigation to turn a fender bender into a nuclear verdict. Best-in-class claims handling is worth five to ten points of loss ratio on its own. That is the difference between a book that is profitable and one that is not. If a carrier is genuinely best-in-class on loss ratio, it is almost certainly best-in-class on claims, because you do not get one without the other.

We build for the whole chain, not one end of it. Insurance works when incentives line up, and in commercial auto they almost never do. So we designed LEEO so that the same outcome is good for everyone touching the policy. Brokers get clear appetite and a workflow built to win the account, with service that does not disappear after the bind. Fleets get treated as partners in lowering their own risk, and paid when they do. Carriers and the capacity behind them get a book that performs. When the safe fleet, the people who placed it, and the capital backing it all win from the same thing, the model holds. When they don’t, it doesn’t.

I am not going to oversell this. We have not solved commercial auto. Nobody has. The forces bearing down on this line are real, they are harsh, and they are not letting up: severity is climbing faster than inflation, verdicts keep getting bigger, repair and litigation costs keep compounding. What I believe we have built is a company whose incentives finally point the right way, where selecting good risk, rewarding safe driving, and serving everyone who touches the policy are not in tension. They are the same motion, and we are all driving in the same direction, to better results.

Here is the belief underneath all of it, and anyone who has worked with me has heard me say it. Nothing worthwhile is easy, and nothing easy is worthwhile. Commercial auto is the hardest line in insurance and that is precisely why it is worth it. The hard problems are always worth solving by the people who can and are willing to solve them.

So that is why we built LEEO. We focus on moving the big rock and the mechanism underneath it: select the right risk, reward the right behavior, and align everyone who touches the policy around the same result. The market took over fourteen years to get here. It will not turn in a quarter. But it turns via one disciplined book at a time, and that is the work we have signed up for. If you operate anywhere in commercial auto, as a broker, a fleet, a carrier, or the capital behind one, watch what we build. Better yet, come build it with us.