--:-- Ryan Hanley: Thank you. Hello everyone and welcome back to the show. Today we have a tremendous guest. His name is Brian Falchuk. These are some of my favorite episodes because Brian is a guy that I have followed on LinkedIn for a while. Our paths digitally have crisscrossed many times, though we've never actually spoken. Then finally, I can't remember if I reached out to Brian or he reached out to me, but we had a phone call last week, just a get-to-know-you, "Hey, we're both in this space, what are we doing?" kind of thing. Within three minutes, I was like, "Dude, you got to come on the podcast." This is a great episode.
--:-- Ryan Hanley: Brian has a tremendous book coming out and we're going to tell you how to get that book. You definitely need to put this on your radar. Brian is also one of the partners at Insurance Evolution Partners. He's a former InsurTech executive. He has been in, outside, and around the insurance world in many different capacities, bringing a tremendous amount of experience and expertise. He's a TEDx speaker and just an all-around tremendous resource for our industry. I am incredibly proud to share him with you today.
--:-- Ryan Hanley: Before we get there, I want to give a quick shout out to my people at Tarmica. If you don't know about Tarmica, go to T-A-R-M-I-K-A.com today. They are absolutely positively changing the game, specifically on commercial lines rating. A little birdie told me they might be adding personal lines down the road, but right now the things they're doing in commercial lines comparative rating are absolutely game changing. This isn't screen scraping. This isn't "we have a couple carriers, that's cool." This is API integrations pulling in real rates. This is how commercial lines rating for small business is going to be done moving forward. They have BOPs, they have comp. Commercial auto is very close to being launched, then you're going to get into specialty lines. This is going to be a one-stop shop for your small business rating needs. Re-rating books, moving books. This is going to be the tool. Go to T-A-R-M-I-K-A.com. Get a demo. Even if you don't purchase Tarmica today for your agency, know what's going on. Go get a demo and know what's going on with this tool. You will not be sorry that you did.
--:-- Ryan Hanley: With that, we're going to get on to Brian talking about all things carrier and InsurTech. Not disruption, but how carriers specifically are solving problems in our industry today. I love you for listening to this show. Let's get on to Brian.
--:-- Ryan Hanley: Dude, it is great having you on the show. We had an awesome talk a week or two ago, and then I blew you off yesterday for our recording. That's totally fine. That's life right now. You're like, "Oh God, am I a father or am I a professional?"
--:-- Bryan Falchuk: No, totally fine. What happened was my dad normally comes and picks the kids up on Tuesday, Wednesday, Thursday. So whenever I need real quiet time, that's the time I schedule stuff. Yesterday he was like, "I can take them, but I need you to drive them out because something was going on in his life." And then you're emailing me and I'm like, "Oh, what a dick."
--:-- Ryan Hanley: No, it's okay. I've done that twice and that's not me. I'm super punctual. So I ended up feeling it for weeks. I'm like, "I can't believe I was 15 minutes late."
--:-- Bryan Falchuk: Yeah. I think we all need to give ourselves a little bit of space on that right now.
--:-- Ryan Hanley: So dude, I don't know how we hadn't talked before we did, because what you're doing... I've obviously seen your work and heard your name a bunch of times. TEDx speaker, this is your third book, correct?
--:-- Bryan Falchuk: Yeah.
--:-- Ryan Hanley: You've been very well received as a self-help author. You're in the insurance space, you've worked in InsurTech. You have a really dynamic story. It's always funny to me when I find someone in the insurance industry who is as dynamic as you are that I haven't had a chance to talk to yet. I feel like we know each other.
--:-- Bryan Falchuk: Yeah, our worlds kind of overlap a lot. I've been following your stuff. When we got on that first call, we just jumped in as if we were continuing a conversation we were just having.
--:-- Ryan Hanley: We were doing a lot of research for that first call. That's all, we were prepping for it. But it's kind of funny that it took us this long. We're here now.
--:-- Bryan Falchuk: We're here. And I'm glad we are. I want as many people as I can. I've been introducing you to some of my podcast buddies too, because I think what you're talking about, the way you're highlighting companies and the way you're talking about technology in our industry, is the healthiest way possible. It's exactly the type of conversations that we need to continue having.
--:-- Ryan Hanley: I loved that you highlighted everything from Ohio Mutual to State Workers Comp Fund to USAA. You brought in the full spectrum. It wasn't just "let's laser in on these tech-only startup InsurTechs and say they're the future." It was "look what Ohio Mutual is doing." This is the kind of company that independent agents, this is their bread and butter.
--:-- Bryan Falchuk: Yeah, there's some big names in there. Getting some of those carriers to jump on board, like USAA is in there. Everyone's like, "Oh no, they'll never do it, so don't even try." I look at it as, if I don't have them now, what do I have to lose by asking other than my dignity? They say no. Ask her to the dance. If she says no, you're not dancing with her right now anyway.
--:-- Bryan Falchuk: I've got the USAAs of the world and CNA and AXA. But I've also got Ohio Mutual, who I love. They're incredible. On the InsurTech side, that was one of my accounts. I got to serve them. I got really close with their team, so I got to see them inside and out. They're awesome. You've got Employers, who is a public company, but not so long ago they were a state-owned or state-run monopolist. Not just market of last resort. If you had employees in Nevada, you had to insure with them. I hope this doesn't offend anyone, I think they would agree, they were a mess financially and technologically. Their CEO Joe says he started in '93, so he's been with the company 25 years and worked his way up. He said, "I had to bring my own computer because we only had these green screen terminals in the 90s."
--:-- Bryan Falchuk: You've got the State Comp Fund of California. Again, a big carrier, but a state entity. Unlike Employers, they are still part of the state of California. They were a market of last resort. They have been through serious ups and downs. They have unionized employees. The point is, all these different carriers in different functional spaces, different corporate structures, different ownership, different constraints. We all face a lot of them: regulation, the jokes about the industry being slow. But they're dealing with unions. They're dealing with ultimately reporting to the governor. You've got companies that have to deal with the stock market and answering to analysts. There's companies that are mutual, companies that are private and reciprocal.
--:-- Bryan Falchuk: Every one of us in the insurance industry—agents, brokers, carriers, providers, partners—we all have different constraints. What I didn't want to do was write this book about innovations or companies that have done stuff and have anyone be like, "I can't do that because they're a startup and don't have any of that," or "they've got 20 billion dollars in the bank so I can't do that." Ohio Mutual doesn't have that, but they've got money for their size because they got themselves there. Anyone should be able to look at these cases and drop the excuses of why it's okay to just sit back and struggle.
--:-- Bryan Falchuk: Every carrier I saw when I was on the InsurTech side started with the same: "We're too far behind. We're stuck. We can't catch up. These new guys are coming in here and making us look bad. Our customers want all these things and we can't do it for them yet." They're doing stuff. It's a message of hope, as silly as that sounds.
--:-- Ryan Hanley: That was my biggest takeaway from what I've read so far. You were breaking down the excuses that an organization may have for not innovating. There are companies that I work with who are incredibly innovative in certain sections of their business, and I still have to log into Internet Explorer—not even Edge, Internet Explorer—to reach certain parts of their technology. At first I was very frustrated with that. I've been an agency owner for like four months now. I was like, "I have to go buy a new $700 computer as a Mac user, figure out how to get Internet Explorer onto this PC because Microsoft doesn't even support it anymore."
--:-- Ryan Hanley: But then there are other aspects of this same carrier that are so innovative. The way they approach risk, the way they're using data on the back end, even though you have to use an abacus to access it, the way they're actually using that data is thoughtful and creative. I thought two things. One, in general, we need to stop giving carriers such a hard time as long as they're pushing forward. And two, there are no excuses. You can be any size. You can be a small little super regional or domestic mutual, all the way up to a publicly traded company, and there are possibilities here.
--:-- Bryan Falchuk: Yeah, I think that's spot on. We use the word "excuses" and I don't want anyone to take offense because they're real things. We're not dismissing any of it. It's not like, "Oh, you're regulated? Well, get over it." It's, "Okay, you're regulated. That doesn't mean no. That means you need to find something you can do that meets regulations."
--:-- Bryan Falchuk: The Ohio Mutual example is about their use of texting in claims. I joined this InsurTech because I was one of their first customers, so I fell in love with it just from using it. Ohio Mutual learned from several failed attempts. They were really honest and shared all of that with me. It's all in the case. They said, "Look, we didn't get it right the first time. We screwed up a lot and we learned from that." This was like a 10-year journey for them to be able to text with customers.
--:-- Bryan Falchuk: They had some of the same concerns. If you're texting, some carriers will just give their people a phone. I know agents, IAs, it's really common. You got to talk to them, it's the way people do it now. They can't take your phone call, so you shoot them a text from your cell phone. But now that insured, that prospect, or that claimant has your phone number. They're going to bother you on the weekend. They're going to call you at weird hours. They're going to expect a response. None of that is going in the file.
--:-- Bryan Falchuk: If you're negotiating a new policy and the underwriter makes some indication of coverage in a claim discussion, but it doesn't make it into the underwriting file, what happens when there's a claim that hits on that discussion? "We don't have record of it, so we're not going to cover it." The broker says, "I have all the texts." Now you're getting into an argument. You have to have all the conversations in the underwriting file, the claim file. You can't just start texting off someone's cell phone.
--:-- Bryan Falchuk: Some carriers say, "We'll take screenshots and upload them into the files." Do you know how painful that is? Do you know how quickly people won't be doing that? I know carriers who gave a series of adjusters phones and they blocked out Friday afternoon each week to upload the screenshots. One of two things happened: the adjusters either just didn't upload the screenshots because it's miserable, or they stopped texting because they're like, "I'm not doing the screenshots."
--:-- Bryan Falchuk: Little things like that. You're regulated. There's coverage litigation, there's discoverability, there's DOI audits. You need to have those conversations. So you need a texting solution that flows into the claim file or the underwriting record. It's simple, but it doesn't mean you don't text. It means you need to be mindful of that. All these things are excuses, but they're considerations. They're not hard constraints. It's like walking up to a wall and saying, "I can't go forward." Did you look to your left? There's a door. You just need to look around a little bit and see how you can get through that barrier. That's really what the message is about.
--:-- Ryan Hanley: I think when I think "excuses," the same thing can be an obstacle or an excuse. An obstacle is something we understand is an issue, like this texting problem you're describing, because that's 100% real. An excuse is that same issue except you're not trying to solve it. You're just staying put because you're using it as a reason not to move forward.
--:-- Ryan Hanley: The texting thing is so real. I have a cell phone and I have two-way text through my main number that automatically delivers that text message as a file record into my account. As long as I have the cell phone that I'm texting attached to a client file in my agency management system, every text goes to that system. The problem is sometimes I pick up the cell phone because it's easier and I'm just texting through here instead of through my computer. But see, that's an excuse. When I pick this up, this is an excuse. Figuring a way to two-way text is just overcoming an obstacle.
--:-- Ryan Hanley: These stories, and I use the word "hope," are of companies of different sizes and different makes and different stakeholders that are overcoming obstacles in their business. It shows that it's possible if you can systematically start working towards a solution. You can get there regardless of size or constituency.
--:-- Bryan Falchuk: Absolutely. What it isn't is a blueprint for exactly how to solve the seven specific things that these carriers talked about. To keep on Ohio Mutual, this isn't as much as I love Hi Marley having worked there and I believe in it. It's not to say if you want to text with your customer, or more broadly, if you're having communication problems in claims or anywhere else, the answer is not necessarily "do exactly what Ohio Mutual did and just go sign up with Hi Marley and you're done." There are reasons why they were successful. Look into that journey. They went on taught them a lot about how to be successful with it.
--:-- Bryan Falchuk: It's not about the technology. It's not even about the specific problem. CNA and Shift Technology working together on fraud. It's not to say if you need to solve for fraud, you have to work with Shift. I advocate for Shift, I think they're awesome. What I learned through the case taught me that. But there are lots of ways to solve for fraud. Maybe it's not really about fraud. It's about something else you're facing, but the way that CNA story played out gives you some insight into how you're going to solve this problem you face over here. None of the cases are about that exact issue and that exact solution. They're about a story in our context with constraints and excuses or obstacles that someone had to navigate through to get to a solution. That might resonate with you.
--:-- Ryan Hanley: What do you think it is about the leadership of the companies that you highlighted and their ability to overcome obstacles that's different from companies that have not yet taken those steps?
--:-- Bryan Falchuk: I think this is really critical. There are a few things. There are three overarching themes that came out of the book. One of the key pieces comes straight from leadership. But it can't be leadership alone. It has to go in both directions. You need the people and you need the leaders. You can't have one or the other. You might have some success, but you're kind of getting lucky and there'll be a limitation to it.
--:-- Bryan Falchuk: What you see consistently is like Vern Steiner at SCIF, the State Comp Fund of California. Old state entity, lots of complications. He's one of the most dynamic people I've ever met. I've gotten to interact with him on two different things: the book and another startup a few years ago. Really cool guy. He's excited and he cares so deeply about his people. A leader could look at the fact that they have civil servants and union employees and be like, "It's us against them, management versus the union." There are considerations. There are things they can and can't do because they're unionized. Their adjusters, their attorneys are in unions. I don't think anyone ever thinks of those kinds of roles being unionized in California. And they're state employees.
--:-- Bryan Falchuk: He said in the quote I have in the book, "We would have done these things anyway." They're super inclusive. They did a design-build workshop training program for the entire company. When I say the entire company, I don't just mean the underwriters and the claims adjusters or the people in innovation because they have an innovation team now. I mean everybody. The administrative assistants, the first notice of loss people, the claims process. Everybody did it. He realized if you don't have the entire organization on board and excited and contributing, it's going to fall flat somewhere. It's going to feel like "they're making us do this."
--:-- Bryan Falchuk: It's not about leadership. Leadership proposes some of the things they've done, but they have these workshops. They came up with 30-something ideas. 18 of them are either in development or being deployed right now. Over half of the stuff that the employees came up with are going live. That doesn't happen if you don't involve your people.
--:-- Bryan Falchuk: Doug Dirks at Employers. Not to stay on workers comp state fund kind of backings, but same kind of thing. It's all about the people. He's very focused on telling the people where you're going, listening to their reaction to it, and taking that in.
--:-- Bryan Falchuk: I worked at another carrier where the CEO had these all-hands meetings around our new core system. He's a fairly good leader. He could set the tone and the vision and people took to that. I think he was a good step up from the past. But you know how he started the meeting? He opens the phone call, we did it by a group dial-in. He goes, "I'm going to tell you about an update on the new core system. It's being delayed. I've muted every participant. I don't want to hear a single thing from anyone about this problem." That's how you're opening the discussion? Instead of, "Listen, I know everyone was excited for this. We're still excited for it. We're still super aggressive on the timeline. We're still going to deliver it way earlier than anyone ever said. But we've made a decision to push back three months for these reasons that we think are really critical because you guys told us it wasn't ready. You told us you needed this feature."
--:-- Bryan Falchuk: It was an opportunity to have the people bought in instead of being like, "Great, now we're stuck and we're not allowed to speak because how dare we." Same thing. All-hands meetings. They got the whole company together for an annual kickoff meeting. He said the same thing. "We're going to go over the system, which was being delayed again. We're going to have Q&A, and I'm going to tell you right now, I don't want a single question about the system." Dude, that's the first thing you tell your entire company to start off this discussion. Do you think people are going to feel open? Do you think they're going to feel safe sharing the ideas they have? Absolutely not. You can't have it both ways. That was universal across every single case in the book.
--:-- Ryan Hanley: I'm going to try not to use any of the cliches. As we're recording this, we have both Corona and protesting. We have another layer with the rioting going on, and all the undercurrent culturally, not to mention businesses trying to reopen. People from basically the entire spectrum are trying to restart or recalibrate their life to whatever it's going to look like.
--:-- Ryan Hanley: I had someone message me the other day. It was a DM on some platform, LinkedIn or Facebook. They just said, "Everything has changed and it all starts with leadership. Everything has changed and it all starts with leadership. Leadership can never be the way it was in the 50s, 60s, 70s, 80s, 90s. That draconian version of leadership will not work. It won't be tolerated, let alone you're not going to be able to keep the people."
--:-- Ryan Hanley: That's a really interesting problem. The companies you highlighted, Employers in particular, watching some of the things they do. Ohio Mutual, I know a lot of people in Ohio Mutual from my old life. You can see the difference. I find, don't watch the actual leader. Watch the way the people underneath him or her operate, and you will know what kind of leader that person is. That to me is the biggest game today. That is the most important thing. How do we get our companies back to business in a way that makes everyone feel safe and heard and pointing in the same direction, unlike it's ever been done before?
--:-- Bryan Falchuk: I completely agree. As you're talking about that, there's a trait in leadership that I think, and we talked about this when we were catching up last week. I think people like Mark Russell, the CEO at Ohio Mutual, Vern Steiner, Doug Dirks, it's humility versus hubris. There's so much unknown right now. For you to stand up there and dictate what it is and that everything's fine... Coronavirus, every week there's a different answer as to how it works or what the issues are. I don't want to spark a debate with anybody publicly about this, but that's just true. There's a lot we still don't know. It's not to put down any of what we do know or progress. To stand there and say definitively, "It's this or it's that," who are you serving?
--:-- Bryan Falchuk: The same goes for your leadership. To tell your company, let's say you had a spike in claims on a liability line, so it's not a short tail kind of thing. To just say, "It was this and we're over it." What happens next quarter when the next few lawsuits come through or those judgments didn't go the way you thought they would? Or you've got a class action.
--:-- Bryan Falchuk: I had this happen when I was running claims. We had a class action suit. The floor had been set on those suits by the prior case. There was another one going on concurrently. We didn't think it would settle before ours did. It did. Each suit in the same space kind of sets the floor for the next settlement, so it keeps going up. They settled for 10 times what the last one did. All of our reserving was shot. It was big dollars, a really, really multimillion-dollar change in reserves. That was a huge shock.
--:-- Bryan Falchuk: I thought back to the last quarterly reserving meeting where I presented that claim. I remember the CFO nodding as he's hearing me give a view on it. "We're holding this for it right now. Here's our reasoning for it. Yes, there's uncertainty, but we feel pretty good about that." Six weeks later, I come back about nine times higher. How certain was I when I made that statement? How much was I trying to tell him, "There's no issue here, move along"? Versus just being like, "Look, this is what we think it is. The reality is there's risk and I don't know. I think this is what it is. We're making our best efforts. Here's all the data behind that. But anything can still happen because it's a heated situation."
--:-- Bryan Falchuk: I think that's really critical. The people who are willing to admit that and take the feedback and take the guidance and listen to your people. That's the first two of the three pieces of advice. One is your employees have the answers. Two, your customers have the answers. You have to listen to your customers and you have to listen to your people. If you tune them out or you tell them what they think or you tell them what the final answer is when it's still really early on and there's room for things to move around, you're going to fail. I think that's a universal truth in leadership.
--:-- Ryan Hanley: We need problem solvers, not people with the answers. Because the answers aren't the same anymore. It's a new test. A whole new test. Look 10 years ago, look five years ago. The test was the same test. Maybe a couple of the questions changed, but the same test. It's a completely different test today. The Scantron looks different. There is no Scantron. We're not even using number two pencils anymore. This is a completely different thing.
--:-- Ryan Hanley: At all times, eyes wide open, ears open, listening, learning, reacting. What leadership is, is less about having the answers and more about being willing to take responsibility. That's what it is. I'm hoping that our agency owners who are listening to this, our producers who are writing accounts and on the front lines talking to businesses and leaders of businesses who are addressing these exact concerns, carriers working with agents, understanding, trying to develop.
--:-- Ryan Hanley: I look at the role insurance is going to play in the next five to 10 years in our society. I don't know that there are very many industries as important to our future as insurance. I think both our carrier professionals, our vendors, and our agency force need to take that responsibility seriously because this is our time. Comp is going to be a disaster. A disaster. BI, what happens when the riots are over and they finally have a chance to come back to the BI discussions and they start trying to help these companies with their BI?
--:-- Ryan Hanley: It could change everything. Right. And like BI may not have been triggered by coronavirus, and I have a view on that, but it would be by rioting. 100%. By looting. 100%. Yeah. So that's a no-brainer. But what I'm talking about is they're going to come back to these discussions they were having pre-rioting about whether or not BI is covered in COVID and whether or not carriers will just be a mechanism for distributing these dollars and all these different discussions they've had.
--:-- Ryan Hanley: So I don't know. I'm very interested in your opinion on that because I have my own as well. But there are going to be crazy decisions made that are passed down to insurance organizations of all sizes, agents, carriers, and their vendors. And we have to be flexible and we need to step up because people's lives will be changed by the work that we do over the next five to 10 years.
--:-- Bryan Falchuk: Yeah, I think that is absolutely right. There's no question about that. And this is a major shift point for us. The book goes into a lot of technology and CX kind of stuff, customer experience stuff. And that's no question been pressured to change. But we're talking about some more fundamental, economic demand-side, paradigm-shifting type stuff, to use lots of cliches, but that's the reality.
--:-- Bryan Falchuk: I can't remember if we had talked about this offline, but one of the other big things I've been talking about with people is autonomous vehicles. The move to autonomous vehicles, shared vehicles. Is personal car ownership going to go away? Or if you still have a car but it's autonomous, it shifts from personal auto to product liability coverage. So for the personal auto insurers, that's a big question mark. A lot of them have been playing around and thinking about what they do long term. CSAA, the Triple A carrier out in California, they're in the book and they talk about that as one of the things that they think about.
--:-- Bryan Falchuk: Well, I don't care what any predictions are that say, "Oh, in two years, every car's gonna be autonomous." The reality is that's still a ways off. Until there are enough cars off the road that are personally owned or that are autonomous... Instead of personal auto, that's a ways off. A decade plus easily, I would say decades, but who knows. It's a while. The average car on the road is 12 years old. So you at least need to turn over the fleet once to have a meaningful change here.
--:-- Bryan Falchuk: But now you have something that suddenly is threatening personal car ownership for a different reason in the here and now that's not dependent on tech. Everyone suddenly is at home. Tons of coverage of that. Miles driven down, frequencies down, all that. There's lots of givebacks. That's pretty widely known. Well, the question is what happens as people start to go back to work? Simultaneously, you have companies that were never for remote work that had to be okay with it, had to put all the tools in place and saw what happened as a result. And you do have a lot of companies that are like, "Actually, we are gonna be flexible on where people work. Oh, we can give up all these leases?"
--:-- Bryan Falchuk: Nationwide, they're keeping four campuses. They're walking out of all their other leases. State Auto has two campuses in Columbus alone. They've got their main building and then they had additional space. They're already out of the additional space. They're redoing parts of their headquarters and consolidating in. A lot of carriers are looking at giving up their leases. And then that stretches to other industries. Twitter and Facebook have already said that. I know people in the creative world.
--:-- Bryan Falchuk: A really interesting interview with Ralph Gilles, who's the head of design for Fiat Chrysler globally. He said, "We started to see designs coming out of our designers. Everyone has a style, so you kind of expect when they're on this project, their sketch is going to look like X. But they're coming up with totally new design languages for their style because they're working from home." So a lot of companies are thinking about that.
--:-- Bryan Falchuk: Now, what happens if you were a two-income or one-income earning family with two cars, because those cars were going in different directions at the same time, you had to have two cars? What if you're working from home now? The average number of cars per person in the US is 0.83. What if that drops to 0.8? Not a big shift. Or 0.75? Numerically, that doesn't sound like a lot. That's billions of dollars in personal auto premium. So you start to think about that. It's not AVs. It's not 20, 30 years out. That's right now. The average lease is three years.
--:-- Bryan Falchuk: My wife and I are both working from home. My son goes to school in town. So do we need to have two cars? Mine's paid off. So when her lease is up, I don't know. Maybe we downsize to one car. I ride my bike or run a lot of places too. So do we need cars? There are interesting new discussion points that are going to come up that I think the industry's in for some interesting shifts.
--:-- Ryan Hanley: Yeah. And the other interesting part is as cars go, there's so many things here. Just think about as cars go electric. I've insured two Teslas in the last two weeks. Right now, the way Teslas get rated are as highly expensive. And yeah, they're expensive to fix. I think they're being overrated personally. But as rating history starts to extend and we start to see what the crash history is on these things and more auto mechanics are able to repair Teslas for less. Today they get one in every thousand cars that comes into an auto shop is a Tesla, so they don't know what they're dealing with. But as these cars become more frequent, the parts are on hand, the technicians understand what they're dealing with more. The cost of repair will go down.
--:-- Ryan Hanley: I think what we're going to see is a dramatic decrease in the amount of claims that we have. Because anyone who's ever driven or sat in a Tesla, it's almost hard to crash. I just look at the technology in my wife's Ford Explorer. If I get too close to the car in front of me, it literally brakes for me. I'm like, "What the heck is going on?" So this kind of stuff is changing the dynamic of these companies and how we serve our clients.
--:-- Ryan Hanley: Where do agents spend their time? Since agents are probably the primary listeners to this show, where do they spend their time? If you're hawking home and autos right now, you need to have a real value proposition besides price because that market... Just think of what you're able to pull from LexisNexis these days. If the carrier has a LexisNexis, not if they have all the other databases built in. It's going to be pretty soon: if you have the VIN, you need nothing else. That's it. Why do you even need the driver? If the car drives itself, if it's a Tesla, why do you need to know who the driver is?
--:-- Bryan Falchuk: Yeah. I mean, look, I just got a competitive quote. I didn't provide them any information. I used to be insured by that carrier like a decade ago and they even knew what my coverages were. Now for people in the industry, maybe that's old hat, but I was blown away. I was like, "Okay, I downloaded my dec page because I gotta make sure." And it's like, "Oh, how do they know what my coverage is?" Well, because it's all out there. It's all through the DMV. That's registered information. It's available.
--:-- Bryan Falchuk: So how are you going to continue to access the information that's there, but also thinking about how the exposures change? What we were just talking about is a frequency versus severity question. And it becomes more of a med pay issue. The cost of repairing any car with advanced technology, advanced safety equipment, is expensive. But the real issue is going to be on the med pay side. Medical bills are expensive. There's no question about that. And even more complicated today. So what's your understanding of bodily injury? What if people stop getting hurt in car accidents?
--:-- Ryan Hanley: Well, so there's that question too. So there's no question there's a huge shift potentially coming in what auto accidents end up looking like in the actuarial experience for them. And I agree with you on Tesla. The sensors come down and they're highly aluminum intensive, and that's very expensive to repair. But Ford did that with the F-150 and they're going through process with that. Other car companies will continue to do that same thing with carbon fiber. So maybe five or ten years out, the general body shop space can't deal with those cars yet, but they will be able to.
--:-- Ryan Hanley: As a technology and the ability to work with it comes out, it's like a Kia Stinger. I saw a repair on a front end collision with the five mile per hour bumpers activated, so not a major accident. It's $39,000. That car barely costs more than that. So it's not just Teslas.
--:-- Bryan Falchuk: I a hundred percent agree with that. I like to use Tesla because everyone gets fired up.
--:-- Ryan Hanley: No, but it's perfect. But the Stinger's not getting rated like a Tesla. And what I don't understand is, you look at state minimums. Some states still have 15/10 state minimum. New York is 25 state minimum. You can repair a fender bender on... Like you said, you bump into a Kia, and now your at-fault liability is maxed out. This guy I insured the other day, he had a rear-end accident. He rear-ended a Mercedes. $27,000. He was going 20 miles an hour, slammed on his brakes. It was in a city environment. $27,000 because of all the sensors to get the bumper back on. If he had state minimums, he's coming out of pocket for that.
--:-- Bryan Falchuk: And that's just the Mercedes. That's not even his car.
--:-- Ryan Hanley: Yeah, that's not the damage to his car. That's just the damage to the car that he hit. So you think about that. If frequency goes way down, but severity is way up, how does that impact things? I'm not an actuary, so I don't understand all the dynamics of it, but I do know that things are a-changing.
--:-- Ryan Hanley: To bring this back to your book, I think what you're talking about in here is that all these obstacles are solvable. And that mindset that you outline is important. Too often, when someone like you would come on a show like this, what people are really dialed in for is "Give me the three-step process. What's the three-step process that gets me to that solution?" It's like, no. Let's talk about the mindset. Let's talk about how they're doing it. And then you can apply those learnings and methodologies to your own business. But you're not getting a checklist to the answer.
--:-- Bryan Falchuk: Yeah. And so this is when I get into the discussion about, "Wait, your first two books are self-help and then this one's business." It's like, okay, well, I've been in insurance for 20 years. So this is more in my home space. And the self-help stuff, there's a reason why I wrote those. But I kind of see them as the same. The first two books, self-help for an individual. This is self-help, but the individual is an insurer or an industry, if you will. But the approach to me is the same.
--:-- Bryan Falchuk: There are self-help books that are out there that are like workbooks. "Answer these three questions and add the sentences together and then you have your life mission statement." Might not work that way. They're introspective. I think this is the same story. And that's why I'm not like, "Question is fraud, answer is shift, done exactly like CNA did." It's like, no, you're not CNA. So it can't be exactly the way CNA did it. Even just the people are different. So it is like, "Well, what are you facing? Okay, here are some things you need to think about. Guide you. How do you engage with your customers to learn more instead of presuming what they want?"
--:-- Bryan Falchuk: Sheffy from Coverage said in their weekly roundup the other day, she's like, "This is an industry within different customers. If you're working on things that customers don't care about, stop it." Obviously there's some things you have to work on that customers don't care about. So it's not as black and white as that. But if it's a CX thing, if it's a customer facing thing, stop it because they don't care. So why are you doing it? Because you said they care? Well, did they say that? And we've all been guilty of that. I worked on something with like the fourth thing customers wanted was what we were working on. And of course it got spun in the presentations. "One of the top five things." It's like, no, it's like 20% wanted that, 80% wanted the first thing. And you're not even paying attention to that because that felt too hard.
--:-- Ryan Hanley: I have to give a shout out to Sheffy. I adore her work. I also disagree with her a lot of times, but she is one of the best provocateurs in our entire industry. And I know it was a provocative statement. She's the best at those.
--:-- Bryan Falchuk: Yeah.
--:-- Ryan Hanley: Her and I really like... I once had... I mean, I've called me one time and we were just... Not out of the blue, but we were just talking and we probably talked for like two and a half hours, just rapping. I never talked to him before. He's another one of those guys. And Jeff is the same way. But to her point, that's been one of the biggest lessons that I've learned owning my own agency. When I started building this thing, I was like, "This is what customers want and this and this." And at the end of the day, you know what customers want? To not have to think about this. That's it. They don't care if you do it in paper. They don't care about e-sign. They don't care about any of that crap. They use whatever you tell them to use. If I sent them an application in the mail and said, "Hey, sign it and stick it in the mail and send it back," they'd be like, "Okay, no problem. I'm good."
--:-- Ryan Hanley: They want to know that it's taken care of. And that to me has been this mind shift. I was working on all this stuff and funnels and automation. And I'm looking at the analytics and I'm going, "No one gives a shit. They're not even looking at the freaking video proposal things that I'm doing. They're not even watching them." And I know people, and I'm sure they're not lying. This is just a one case study to your point. Someone said, "Video proposals are the future of personal lines insurance." And I know that that person believes it and I love that person to death and I do not doubt that their experience has been that. My experience thus far could not be farther from the truth. I've sold every personal policy I've sold so far by emailing a PDF and jumping on the phone with them. Not Zoom, not video proposals. I even sold one belly to belly across the kitchen table. So from my perspective, I completely agree with you and Sheffy for that matter. We need to stop working on the shit that we're being told we should work on and work on the stuff that our clients actually want us to work on.
--:-- Bryan Falchuk: Right. And I think they want choice in that. And that came out in the USA case. If someone wants to talk to us, we need to do that. And if they don't, we need to do that too. And if they want one and switch to the other. Or a CSA, like the case there is about offering Lyft vouchers instead of a rental car. Because not everyone wants to rent. I lived in the city in Boston. I couldn't get a rental car because I couldn't park it anywhere. And the insurer probably wouldn't have paid for me to put it in a lot for like 40 bucks at night. So I don't want a rental car. But Lyft didn't exist back then. I would have loved to get Lyft credits.
--:-- Bryan Falchuk: I love that. But you know what? Sometimes you need both. And they initially were like, "It's one or the other." And then the body shop called them last minute after they returned the rental car to be like, "Oh, you know what? We just found a problem with the paint. We need to touch it up and let it cure for another day." They're like, "Well, now I don't have a rental car and the place just closed. I need a ride." Well, how about we get flexible? Because they chose one path. We're not going to lock them into that because our intention is to get them from point A to point B in their life. That's what the coverage should be about.
--:-- Bryan Falchuk: On the video stuff, man, I hope it doesn't go that way. My bank just sent me an escrow analysis as a video. I'm like, "I don't have 12 minutes. I just need to know what the number is." Do your video, but can you just send me the information? I don't want to sit through this. It's like flowers and the sun is shining. I'm like, "You're taking more money from me. I don't need the little animation. Can you just tell me what it costs?"
--:-- Ryan Hanley: Yeah. And there are people who want that. And I think, just to kind of wrap this conversation up, which has been tremendous, we could talk for another hour. I think that you said it: this is not a time for humor or hubris. It's a time for humility. And a willingness to be flexible to what your customers want, knowing that if you have 10 customers, that could be 10 different customer experiences, 10 different paths. You go 10 for 10, all different. And being able to receive all of them, that takes humility. Because oftentimes we want to shove them down a path because our hubris tells us that's the way it should be. And I think that's the failing.
--:-- Ryan Hanley: I say all this, yet the most recent proposal, which I'm hoping the guy signs today or tomorrow, was a video proposal. That's what he wanted. He said, "I don't want to get on the phone. I'd rather email or text." So I did a video proposal for him. But the first 20 that I signed, not a single one of them wanted it, nor did they care. So it is about having the humility to be flexible. I think you're completely right on that. I just couldn't agree with that point more.
--:-- Bryan Falchuk: Yeah, no, that's awesome. We could totally talk for hours. And then we can bring Avi in and go for like six hours. That'd be fun.
--:-- Ryan Hanley: So people have listened to the show. They're obviously bought into what you're doing. They want to get the book. They want to learn more about you. Where do they do that?
--:-- Bryan Falchuk: The book's available everywhere. Pre-order right now, coming out June 24th. Kindle, Audible, all that. The Audible is coming. Or you just go to future-dash-of-dash-insurance.com. You've got to use the dashes. And you learn more about the book. You can see the carriers that are in it. You can get a link to the pre-orders. I'm adding them as each one of those channels comes online. So it's future-of-insurance.com.
--:-- Ryan Hanley: Sweet. So we'll have the links up in the show notes if you can't remember that, although you should be able to remember that. Or just go to Amazon and pre-order the book and push the rankings up. You want to have a bestseller here on the show. We always like to give everyone a bestseller. And I don't think you can go wrong, guys. Even if you're an agent and you don't nerd out on the carrier stuff, you're going to learn how to solve problems. Or I shouldn't say learn how to solve problems, but you're going to learn how these companies are solving problems. I'm telling you, it's going to open your eyes to what I think, and obviously what Bryan does as well, is how we are going to get past these obstacles moving forward.
--:-- Bryan Falchuk: Yeah. And maybe some of those listeners will be in round two of the book. Because I do believe we as an industry have the capacity and the intelligence to keep moving this forward. And there's cool insights going on every day. And I want to keep hearing them. So I want people to get the book, but I want them to do something with it. And then I want to hear from them. I want to know how you're innovating, how you're evolving and changing, despite all that we face.
--:-- Ryan Hanley: Yeah. So guys, follow on LinkedIn. Get on the newsletter. Go check everything out. I'll have all the links up in the show notes. But absolutely grab this book. You're not going to be disappointed. And connect with Bryan on LinkedIn because he's always sharing good stuff. That's where I originally just came across your work and been a fan ever since, man. So thanks for spending some time with us.
--:-- Bryan Falchuk: Yeah, thanks a lot, Ryan. And ditto, man. Thank you.
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