PETRO Trust
History
In 1994, Pennsylvania modified its Workers Compensation law to permit similar companies to band together to self-insure their Workers Compensation obligations. Ten Pennsylvania trucking companies, frustrated with the high rates and limited availability of Workers Compensation coverage, formed the Pennsylvania Elite Transportation Risk Organization (PETRO) Trust.
Their goal was to use the volume of their collective size to achieve the cost savings of a much larger organization. For those of you that don't remember, the Pennsylvania Work Comp rate for Truckmen was $23.67 per $100 of payroll in 1995, and it was still difficult to purchase.
The concept is simple and makes sense. Members "pool" their premiums to share in the gains and losses of the group as a whole.
The PETRO Trust is now in its 15th year, and has grown to more than 25 trucking companies. The group is able to file for its own rates, based on the group's experience, not that of the entire industry. Over time this has proven to be a substantial cost savings. In addition to producing stable and lower rates, the group has returned over $6.7 million in dividends to its members, with an additional $7-8 million in dividends earned, but not yet distributed.
Based on the success of the PETRO trust, the members formed a Fleet Liability group called the Elite Transportation Risk Retention Group in 2005. While a different legal structure, the concept is identical: pool the premiums of several good companies, create stability, and generate profit and investment income for the members. This program is currently available for transportation companies in all 48 contiguous states.
The PETRO Trust (Work Comp) and Elite Transportation (Fleet Liability) programs look for trucking companies with good safety practices and loss experience along with strong financials. The members have set a minimum annual Work Comp premium of $100,000, and Liability premium of $250,000. These programs are designed for the trucking company looking for long-term insurance solutions that work.