Josh Ehmke

Thanks for joining us again. For another, are we calling these episodes. I don’t know what we’re calling them. We’ll call it an episode. Again, Josh Ehmke here from One Claim Solution. I’ve got my business partner, Jeremy Traasdahl with you guys again. Wanted to discuss a few things this time around specific to the industry.

Josh Ehmke

I know that, a lot of you have read, the State of the Industry, that had come out. We’ve discussed a few of these things, and, and, wanted to kind of pick Jeremy’s brain on specific trends around cash flow. What we saw in 2024, and, maybe what can be done around those challenges.

Jeremy Traasdahl

So, yeah, so, interestingly, we at OCS have seen and this is one of those things that we fight against forever, right?

Jeremy Traasdahl

We’re trying to get days the first payment down. We’re trying to get days to close down. We’re trying to continue to get cash flow as fast as possible for these contractors. Right. We saw in 2024 a slowdown, even in our KPIs, to a point where we hadn’t seen that, from year to year basis as bad as we saw it this year.

Jeremy Traasdahl

So when that happens, obviously we first look internally and we say, like, what have we done? What have we broke? What broke, or what do we need to fix because we’re ever evolving, right. Or what do we need to change in order to get that down? We are continuing to do that. But I’m always eager to, see these R&R reports, CNR reports, these State of the Industry type reports.

Jeremy Traasdahl

Because I’m curious, we I mean, again, we’ve processed a half $1 billion in claims, right? So, I mean, we have a pretty good visibility into what normalized situations look like. But in terms of the grand scheme of things in the property and casualty insurance world as a whole, I always just want to see what these are being reported.

Jeremy Traasdahl

And if we’re feeling the same things that everyone’s feeling across the country. Right. And, the reports came out and it says, man, a bigger emphasis than ever before. Is, man, it feels more like my cash flow is slow. It feels like my days to payment continues to rise. We are taking forever to get paid. Which is why I think OCS frankly, had a lot of success in 2024 is because this idea around AR management has really been a strong emphasis because of what we’re all trying to fight against in 2024, which is it’s just taking a lot longer to get paid from these carriers than it typically has over the last, seven

Jeremy Traasdahl

years prior, I guess, would be the visibility that we have. And so that’s one of those things that everyone’s, I think, trying to trying to fix.

Josh Ehmke

Yeah. And thinking through that, you know, with, you know, what’s causing these delays. Right. What happened in the industry to cause, you know, these days to payment, you know, this, not even just days to payment, but overall final amount to collect.

Josh Ehmke

What happened? You know, and it’s tough to look back and pinpoint that and blame it on one specific thing. You know, it’s easier to kind of look back and say, well, overall as a whole, there’s, there’s been a lot more of like the catastrophic type of events with the hurricanes happening and, and these types of things that can absolutely affect the property and casualty world.

Josh Ehmke

And, and those types of things will ultimately have a trickle down effect, you know, into, into our specific space with the restoration and, you know, the day to day stuff, that falls outside of those catastrophe, type losses and events. But, you know, anything else that you’ve seen or.

Jeremy Traasdahl

Yeah. So I think I think my mind goes to where your mind goes is like, okay, what big event happened?

Jeremy Traasdahl

Was there a big fire? Right. The California fires, we’ve seen we’ve seen now multiple hurricanes, not only this year but in years prior. Right. We’ve been in business long enough that we’ve had multiple hurricanes. We’ve had the Texas Freeze remember that year. And so, like, we’ve seen these catastrophe, these catastrophic events happen. And they do slow payments down for a time.

Jeremy Traasdahl

If I were to say, man, we saw five this year, then I would easily write this year off and say, okay, we just had a really wild year in terms of, just environmental events, right. But having said that, I think we had a hurricane or two. I mean, I know of right, had a hurricane or two that affected us for a time.

Jeremy Traasdahl

Yeah. Some tornadoes, but like, it didn’t seem like a wild year, especially wild year. And so I think that this problem is goes far beyond that. I think that something systematically is changing at the carrier level, that that’s delaying payments being cut. And I don’t know what that, that is at the carrier level. But there is obviously something systematically that has changed this year that has delayed payments. And it’s not just catastrophic, catastrophic events.

Josh Ehmke
Right. The other thing that we’ve seen is a noticeable uptick in the amount of denied claims coming from the carriers, that has exponentially risen over the last year, year and a half. From what we saw the first six years, seven years of doing what we were doing. And so that’s an interesting change.

Josh Ehmke
Is, is this rise in flat out denied claims to. But I think that’s all connected. Right. Is to what’s happening from the carriers perspective. And it’s easy to speculate. It’s easy to look at, you know, cases that are going on around the country, you know, of, of companies or homeowners or whatever, fighting back against some of these carriers that are using unlawful or, you know, unethical practices and tactics to delay the payments, deny claims, do those types of things.

Josh Ehmke
But, it’s at the end of the day, this is the industry we’re in. You know, when we first got involved in the industry, Jeremy, it was, you know, I had I think I had a lot more hostility towards insurance companies than I do now. They were I think I kind of always viewed them as.

Josh Ehmke
As the enemy. Right. They’re the bad guys. We’re the good guys in all of this. But, as I’ve grown, as I’ve learned, about the industry more and more as I’ve, you know, read through different cases and understand things, you know, insurance companies are, they exist for a reason. They want to they want to generate profits, too, just like the rest of us.

Josh Ehmke
You know that we’re in business not because we enjoy it, but because we need to provide a living for our families. And I’ve come to have more respect and appreciation for the role that insurance companies do play in, in especially the American economy. You know, none of what we have. We could have without insurance. I can’t have my house, I can’t have my car.

Josh Ehmke
It makes zero financial sense to own those things without insurance. If you’re in an accident, if the house burns down, you lose it. It’s gone. But with insurance, it’s literally the great equalizer of this for really the American middle class. And the reason I’m going down this road is, is because you know, that change in mentality and the way that I view insurance companies and the role they are doing it, you know, it’s easier to kind of maybe give them a little bit more leniency.

Josh Ehmke
I don’t even want to say leniency, but I understand why they do what they do. I’m not justifying not saying it’s right, but that’s where OCS can come into play. More on that type of a thing is we’ve often, touted our ability to remove the emotion from the equation. You know, we’re not the ones that answered the phone.

Josh Ehmke
Call it 2 a.m. to go out and respond to that flood. And so we’re not the ones sitting there going, I need to be paid on every single one of these line items, especially this one. At the end of the day, our goal is to reach certain benchmarks and KPIs for our clients, our customers. And so we’re able to really remove that emotion from the equation.

Josh Ehmke
And we’re able to recognize those trends that we’ve discussed on insurance companies, you know, slowing down their payments or refusing to pay for certain line items. And, and we’re able to help overcome those. But even in 2024, we talked about that downturn. Right. Where it took us a little bit extra longer, to collect the money or, you know, not just us, but the industry as a whole as stated by the State of the Industry address.

Josh Ehmke
You know, those are the types of things that that we’re able to recognize those trends very quickly and we’re able to address those and adapt and shift, you know, but being able to keep that emotion out of it helps to see a little more clearly, I think. But, any other thoughts on that type of stuff?

Jeremy Traasdahl
No, I think I think also just internally at some of these carrier levels, like they’re trying to implement new processes as well. They’re trying to implement AI, they’re trying to implement, changes. And I think with every change there’s a hiccup in terms of production. And so I imagine, we’re going to continue to fight this fight, you know, to try to make sure that we get our clients paid as fast as possible.

Jeremy Traasdahl
And we’ll continue to, to do that. But I think we’ll continue to have an uphill battle. I don’t foresee that this is going to just have a turnaround in 2025.

Josh Ehmke
Yeah it’s just that constant chess game, right? They move, we move, they move, we move. Always has been that way. But, yeah, it’s interesting to see, hard to predict why carrier doing it other than, you know, motivation for profits and, you know, for their own financial health, which, you know, I again bring up the value that I see that insurance companies have.

Josh Ehmke
And so it is important that, you know, as we work with contractors, make sure that their documentation is correct, that it’s accurate. All of that helps facilitate and streamline that whole AR process for them. The days to collect, the amount to collect. So there definitely are things that can be done from the contractor’s level to counteract these trends that we’re seeing.

Josh Ehmke
But, It was an interesting year for that, no doubt. You know, Jeremy, we were we kind of touched briefly on those trends of, you know, that were identified in the State of the Industry and the cash flow issues. Talking more specifically about OCS and how OCS can help contractors overcome those trends. How do you see that role, that OCS kind of steps in to help overcome some of these more recent trends that we’re seeing?

Jeremy Traasdahl
Yeah, I think that there’s really two buckets that you can really take on to affect change to your cash flow. From a contractor perspective or our perspective, you have to gain efficiencies. We’ve talked about that before. Gain efficiencies in AI, gain efficiencies in the predicted outcome of a claim. When you gain efficiencies, that allows you to touch more claims in a shorter period of time.

Jeremy Traasdahl
Truly the most effective way to improve your cash flow timing is to be on top of. I guess I would add a third bucket would be on top of your claim. And make sure when your claim was submitted that it’s submitted with all of the pertinent documentation. So there’s no back and forth needed from an adjuster to a contractor to say, hey, you didn’t give me photos, or you didn’t give me your moisture logs, or you didn’t give me XYZ, because every back and forth is just a delay in payment.

Jeremy Traasdahl
Right? And so I would say make sure that upon submission, you have your stuff in order. Make sure that you are continuously calling the adjuster, following up with the adjuster to get payment on your claim. And then third would be the AI efficiency gains or just any efficiency gains. That just allows your team or our team to touch more claims in a shorter period of time, because I think that that’s really the key to cash flow.

Josh Ehmke
Yeah. One of the things that I don’t think we’ve ever really talked about. Right. But is a question that we get a lot or maybe it’s even, you know, questions that contractors have and maybe might keep them from calling us. But, when a contractor reaches out to OCS, what does that typically look like?

Jeremy Traasdahl
Yeah. So I mean, I think it’s a it’s a multi-tiered process. But obviously we want to make sure we’re a good fit. There’s a fit for the contractor. There’s a fit for us to make sure we’re all on the same page on expectations, KPIs, what we’re both trying to get out of the relationship.

Jeremy Traasdahl
There are contractors that see our value in terms of speed of cash flow. There are some that see our value in terms of, “I don’t want to deal with it.” You know, “I don’t want to deal with the adjuster. I don’t want to take the call.” Some of them see our value in documentation management and expertise.

Jeremy Traasdahl
And then some of them see our value in our data analytics, in our portal and what they get to see in terms of their AR and what they get to see in terms of their jobs, because our software gives them visibility into things that no other software gives them visibility into.

Josh Ehmke
That’s what you mean by referring to the portal?

Jeremy Traasdahl
That’s correct. That’s what I mean when I say portal. So, those are all different value-add services that we provide, and each contractor comes in with a different need, right? So if they reach out, we’re going to make sure that we’re a good fit and they’re a good fit. We’ll take a look at their historical KPI performance, where we see some of their deficits, and then what their team looks like currently and what our team would be doing.

Jeremy Traasdahl
And really, it’s an outsourced model right off their back office. It says, “Hey, let us just be your back office and handle this for you.”

Josh Ehmke
Yeah.

Jeremy Traasdahl
Josh, I appreciate you touching on that. I just know that’s a question that I get a lot: “What does that look like if I ever reach out to you guys? Is there some huge, strenuous process?”

Josh Ehmke
It’s always scary for a contractor to consider turning over that control of their accounts receivable. That’s the lifeblood of their company. And so for them to turn that over to a third party, that’s a scary concept a lot of times. So, what does OCS do to help alleviate that fear with contractors of turning over the lifeblood of their company to a third party?

Jeremy Traasdahl
Yeah, I would say, first and foremost, visibility into that lifeblood of their business is how you’re going to overcome that, 100%. It says, “Hey, you sent us X. Here it is. You can see it. You can see what stages it’s in. You can see where it’s gone. You can see when you’re getting it in terms of a claim.”

Josh Ehmke
And so the more visibility we can give contractors, the better, because that alleviates some of that pain of, “I’m not just sending it into a dark hole and hoping that the money comes back.”

Josh Ehmke
Yep. Absolutely. And I’m glad you touched on the visibility. I think that’s been one of the biggest eye-opening things that I have seen and encountered since being in this industry—the lack of visibility or transparency that contractors oftentimes have into their own AR.

Josh Ehmke
The feedback that we often get from them after they’re with us for even just a few months is, “Oh man, I’ve never had this type of visibility and clarification into my AR. I know where everything’s at.”

Josh Ehmke
And I think that’s one of the benefits that I’m not sure we really anticipated when we set out to start OCS. But it’s definitely been something that has risen to the top as far as one of the key benefits that we’re able to offer contractors—that visibility into their AR.

Josh Ehmke
And we talked about a little bit of AI and the predictability of that, contractors being able to predict their revenue—when it’s coming in, how much is potentially coming in—that helps drive all of their business decisions.

Josh Ehmke
So having visibility and that type of access and clarity is one of the big benefits of OCS, outside of just the obvious—that we collect very well and we collect very fast.

Josh Ehmke
So, interesting, interesting. So in kind of jumping, piggybacking on what we were talking about with what contractors can expect if they reach out to us and how scary it is for them to consider that and often make that leap of turning over their lifeblood to a third party…

Josh Ehmke
The other thing to consider there is, OCS is not a new startup company. We’ve been here for eight years now and have seen very consistent growth over those eight years. We’ve gained a very different type of view into the insurance billing process that really nobody else quite has—based on dealing directly with the carriers, as well as the legal aspects of it and diving into those areas.

Josh Ehmke
So I would just throw that out there. But any other thoughts you have, Jeremy, on how OCS can help a contractor with their AR and these problems identified in the State of the Industry?

Jeremy Traasdahl
Yeah. Ultimately, I think that in terms of performance and cost associated with that performance, OCS is best positioned in the cash flow management process than anybody in the industry.

Jeremy Traasdahl
We’ve done it for eight years at this point. We have our systems pretty dialed. We are continuously evolving, but in comparison to back-office staff, collectors, or billers—or whatever they call their team—we are going to be more efficient. We are going to be faster.

Jeremy Traasdahl
We’ve just been able to develop that because that’s our core business. Our core business is not doing restoration work and having billers. This is our core business. This is all we do. This is what we spend our time developing and ensuring—that we are the best in the industry at attacking the cash flow problem.

Jeremy Traasdahl
Ultimately, we believe we’re not only better and faster, but we’re also going to be an improvement to your bottom line, even, because we have the systems in place to be able to do it more efficiently than anyone else.

Josh Ehmke
Yeah, absolutely. So I guess I would wrap up by saying, hey, look, if you’re a contractor that’s heard of OCS and you’ve heard about us for a while, reach out. See what we have to offer. See if it’s a good fit for your company.

Josh Ehmke
Like Jeremy alluded to before, OCS isn’t a perfect fit for everybody, and we’re pretty good at identifying which contractors we fit well with and which ones we don’t.

Josh Ehmke
But reach out. Let’s explore that together. Hope to hear from you guys. Thanks for tuning in again. If you want to reach out, visit www.oneclaimsolution.com. Appreciate you tuning in.