Revolutionizing the Organization

Claims to cover wage losses for disciplined union transportation workers were ramping up, and LECMPA’s reserves were dwindling — from $10 million to about $5.5 million.

Susan Tukel, president, Locomotive Engineers and Conductors Mutual Protective Association

“The trend was so dire, I was concerned we would run out of money,” said Susan Tukel, president of the nonprofit Locomotive Engineers and Conductors Mutual Protective Association (LECMPA).

Adding to the troubles, Union Pacific, employer of the majority of LECMPA members, had increased its discipline for safety violations from about five days’ suspension to a minimum of 180 days.

A more thorough risk management approach was needed, and Tukel’s approach revolutionized her industry.

“She brought an awful lot of foresight to bear to position a 100-year-old organization for the long-term,” said Rod Bloedow, a trustee of the organization. “Susan is clearly a terrific leader.”

LECMPA not only had to increase prices, but Tukel decided it had to begin differentiating its coverage based on frequency and severity of claims as well as by job function. At the time, LECMPA had no writing groups and all members paid the same premium.

The riskiest workers — conductors, engineers, dispatchers and crew callers — would be offered newly created Group A coverage. It was more costly and provided expansive coverage for disciplinary days. Group A workers also had the option to purchase a lower cost policy that would provide fewer benefits.

Newly created Group B policies would be offered to railroad workers with less risk of discipline, those in communications and signals, and maintenance.

About 75 percent of the members fell into Group A, and the decision wasn’t popular. It also wasn’t popular with the nonprofit’s salespeople, who feared decreased commissions.

“It was very controversial,” Tukel said. “We lost about 5,000 members. It was very scary. I probably didn’t sleep the entire year. Everybody was angry with me.

“But the next year, we operated at a profit. We had fewer members but we operated more profitability. Bigger isn’t always better. I learned that that year.”

“It was very scary. I probably didn’t sleep the entire year. Everybody was angry with me.” — Susan Tukel, president, Locomotive Engineers and Conductors Mutual Protective Association

And later that year, some of those 5,000 members who left for a competitor asked to return when the competitor raised its prices.

They were surprised when LECMPA turned them down, Tukel said.

“We decided to use this as an opportunity to do some housecleaning,” she said. “We had paid some big claims, $70,000, $80,000 claims, and then they left. And then they wanted to come back.”

Since then, she has reached out to transportation and logistics union workers to expand membership, introduced a loyalty program for retiring members, and enhanced both Group A and Group B benefits at either the same or lower price due to improved underwriting.

“She’s done an excellent job for her clients,” said David Duthie, chair, Vistage Michigan, a peer-to-peer business organization that honored Tukel with a “Soaring Eagle” award in 2015.

“She’s taken that nonprofit organization from not being as well financed as it should be to being comfortably financed as far as reserves and a growing client base and coming up with a variety of new products,” he said.

At its high point, LECMPA had 32,500 members. After seeing the huge loss of members, it now has 30,200. And its reserves are about $53 million. &

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