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Shepherd Savings: Preferred Insurance for the Best Builders

Justin Levine

Justin Levine

Co-Founder & CEO

May 15, 2024


Today we’re thrilled to be unveiling the next iteration of the Shepherd Savings program for our construction clients. In a series of posts defining this program, we’ll explore:

  • Defining the Shepherd Savings program - upfront savings for tech adoption on coverage proposals

  • The insurance ROI of broadly adopted software products, starting with Procore

  • How technology facilitates risk controls that lead to fewer and more predictable claims patterns

Over the last several months, we’ve been studying the quantifiable impact of the most popular construction technologies on claims outcomes, leveraging insights from over 1,500 casualty insurance submissions and a broad dataset of jobsite behaviors. To say the results exceeded our expectations would be a gross understatement, and we’ve already incorporated our findings directly into our underwriting. From today forward we will begin offering two types of Shepherd policy proposals: standard (what we do today) and Savings. A Shepherd Savings proposal integrates construction tech data into underwriting in order to provide clients with upfront significant premium savings, improved coverage terms, and ongoing risk control feedback throughout their policy term.

Shepherd’s Big Thesis

At the heart of Shepherd's mission is the belief that contractors who embrace technology present a lower risk profile than their peers. This principle defines Shepherd’s core approach despite being a challenge to substantiate. The reluctance of insurers to align with technological advancements spans various industries, with the commercial construction industry being no exception. The reason behind this is often a lack of credible data and an inability to quantify the impact of products against loss outcomes. Since launching Shepherd two years ago, we’ve been laser focused on data management: everything from the way we collect information to the architecture of our internal underwriting platform. We’ve leveraged this approach in order to maximize our ability to investigate the construction tech hypothesis. Now, with thousands of submissions at our disposal, our efforts have yielded many new insights, making this a significant milestone for our business.


Methodology and Approach

The foundation of any actuarial review is rooted in the analysis of claim frequency, which examines the regularity of claims occurrences among clients, and claim severity, addressing the average monetary impact of these claims.

Our initial data study for project management:

  • Incorporated on a broad array of broad array of inputs and behaviors from the Procore platform

  • Encompassed more than 1,000 contractors

  • Spanned annual revenue sizes ranging from $25M to $2B in annual CV (Construction Volume)

  • Included exposure from all 51 U.S. jurisdictions

We concentrated on uncovering correlations between technology adoption, usage, and overall engagement with both claims frequency and severity. Furthermore, we delved into causation, assessing technology's influence on losses before and after its implementation. Our findings surpassed our expectations in numerous aspects.

Claim Frequency

Project management software like Procore helps contractors manage project-oriented workflows, including everything from daily progress logging to incident and observation tracking. Over 16,000+ contractors, trades, and owners use Procore. Put simply, Procore helps contractors organize job sites and coordinate across multiple parties.

We found significant correlations between General Liability claims frequency and specific behaviors of customers who utilize Procore. Based on our analysis,we concluded that the best Procore adopters are superior in eliminating smaller claims first: the types of claims that may not grow to significant size but do add up in aggregate over time. These can be especially challenging for contractors with loss sensitive (i.e. deductible) programs. Examining claim severity supports this supposition.

Claim Severity

We found that contractors who use Procore tended to have larger average claim sizes than non-users. At first this seems counterintuitive — if Procore customers are truly improving their risk controls, it might be reasonable to expect lower average claim sizes. But if we are to believe that Procore users tend to eliminate smaller claims first, the initial review begins to make much more sense. With fewer claims overall, Procore customers have higher average claim sizes: these are the claims that are likely harder to prevent given that they occur with less predictability and frequency.

Beyond the raw averages, what catches our attention is the trend for each cohort. Procore customers have seen a decreasing severity trend over the last 10 years, surmounting to a significant decrease in average claim size over this time period. On the other hand, non-users have experienced an increasing trend at roughly the same pace, which is consistent with what the construction industry has experienced at-large. Based on our analysis we expect to see Procore outperform non-users across claim severity beginning in 2023 and beyond.

Causation: Which Comes First?

Procore was founded in 2002 but famously hit hypergrowth in the late 2010’s and has continued to scale past their IPO (2021) into present day ($950M revenue in 2023). The goal of our initial frequency and severity analysis was to identify correlations between current Procore customers and claims trends, not taking into account when the contractor implemented the platform. For a better analysis that focuses on causation, we incorporated Procore adoption date.

We found that contractors tended to experience more volatility in the years prior to Procore adoption. Once these customers adopted Procore, we observed more predictability in claims frequency, including a slight decrease over time. This tells us that the Procore platform may be influential in creating more consistency year-over-year. Predictability and consistency of loss results are both critical factors in the underwriting process.


We’re Proud to Partner with Procore as Part of Shepherd Savings

Shepherd Savings is a partnership program designed to benefit technology-enabled contractors. The current Shepherd Savings partners are Procore, Autodesk, OpenSpace, and Samsara. Any active user of these tools is eligible to receive upfront savings. We evaluate activity and usage data in the underwriting process to provide up to 25% premium savings in our proposals, upfront.


Despite the construction industry's progress in adopting cutting-edge technologies, insurance providers have largely overlooked the profound effects these innovations can have on enhancing job site safety and overall project quality. Shepherd was founded to bridge this gap, showcasing the tangible benefits of integrating technology into risk assessment models and pioneering a path forward for the industry.

We’re thrilled to be supporting clients in a unique way through Shepherd Savings, putting dollars back in their pockets in order to encourage the continued investment into technologies that improve risk.

Finally, we understand that not all contractors are using the same tools in the field or even across projects in their portfolio. In the next post of this series we’ll examine the impact of additional tools and technologies on claims outcomes.

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