--:-- Ryan Hanley: In a crude laboratory in the basement of his home. Hello everyone and welcome back to the show. Today we have a tremendous guest, Aaron Steffey, the managing partner of Propeller Bonds.
--:-- Ryan Hanley: Propeller Bonds is the kind of company that I think represents a major part of the future of the independent insurance agency channel because bonds are tough. One, there's not a lot of people that are bond experts. Surety is a very specific kind of niche expertise. It is something that people can make a career out of, but you really have to dedicate yourself to it.
--:-- Ryan Hanley: This is a personal opinion. It's not the most interesting topic that exists, but there are some companies that write bonds. Bonds tend to take a really long time. And I have stamps and stickers and all kinds of stuff in my drawer over here. What Propeller Bonds has done is created a platform that allows you to get rid of all that. Basically, you send your clients to the platform, they fill out the forms, they can pay for the bond, they can get it digitally issued, which is now, as Aaron will describe, available in all 50 states.
--:-- Ryan Hanley: We're talking everything from $100 notary bonds all the way up to $3 million plus performance bonds. This is the kind of platform that just changes the game for agents because now you can add an additional service to your tool belt, be even more of a value-added resource to your clients without having to bog them down with the hassle that surety bonds tend to be.
--:-- Ryan Hanley: I want to save some of the juice for the actual conversation. Aaron's a tremendous dude. We use Propeller Bonds here at Rogue, and it's a great tool. But before we get to our conversation with Aaron, I want to give a big shout out to one of the companies that makes this podcast possible, and that is Donna by Arius Analytics.
--:-- Ryan Hanley: Donna is taking over the game when it comes to breaking down the data and information in your agency and helping you put it to use by pulling out opportunities to cross-sell, pulling out clients who may be in distress or may be flight risks by using their proprietary sentiment score. This is in addition to net promoter score. You can use net promoter score. There's nothing wrong with it. Rocket Referrals does a great job with net promoter score. You should be looking at things like your Google reviews or Yelp reviews or Facebook reviews, wherever you're collecting reviews.
--:-- Ryan Hanley: What the sentiment score is doing is taking the policies you have, the touch points that your people are having with your clients, both in text, email, and phone real time, and breaking those down and coming up with a sentiment score. How do they feel about your agency right now based on their most current communications? It allows you to get out ahead of problems, especially as a leader. With an easy to use interface, they're integrating with more and more tools. I just think Donna is a big part of the future considering it is a plug and play with many different systems and at a price point that you absolutely can integrate into your agency.
--:-- Ryan Hanley: Google Donna for agents, go to Donnaforagents.com. Check Donna out. I said this before, I was out ahead of Tarmica. I told you guys about Tarmica, Tarmica blew up and now it's the best commercial rating platform. I think Donna is the same type of tool for agents. Get on it today.
--:-- Ryan Hanley: Let's get to Aaron and learn about bonds.
--:-- [Transition to interview]
--:-- Aaron Steffey: These are podcaster problems. Not, not. Yeah. This is only my... I did the Vertifor podcast with Rick Fox, but other than that, I've never done one. So bear with me if I'm not as compelling as you'd like.
--:-- Ryan Hanley: Rick Fox, the bastard got you first, huh?
--:-- Aaron Steffey: He's awesome. He's so good to us. We talked to him back in like August, September, something like that. And we're integrating with Vertifor and whatnot.
--:-- Ryan Hanley: That's great. Rick's a great guy. I've been friends with Rick for a long time. I've been on his podcast a bunch. I think he does a tremendous job. So I'm a big fan.
--:-- Ryan Hanley: I'm pumped that you're coming on the show for a bunch of reasons. I'm excited because bonding and surety in general is a topic that most agents disregard. We kind of talked about this when we were looking at your platform, which I have started using. If I'm being completely honest with you, I haven't completely baked it into my process yet, though I have looked all the way through it. I've done some practice stuff. I really, really like it.
--:-- Ryan Hanley: I think a lot of agents just disregard bonding and surety because it's complicated or it's too much work. Other people say there's no money in it. I've run your platform by a couple agents and I said, "Hey, have you heard about Propeller?" Some said they had heard of you, some said they hadn't. We're going to fix the "they haven't heard of you" part today.
--:-- Aaron Steffey: Yeah.
--:-- Ryan Hanley: The beauty of what we're talking about here is you don't need to have a rubber stamp and stickers and all this crap in your dresser drawer or in your drawer next to your desk because you just send people through and they do it themselves. In the world of Tarmicas and all these platforms that are starting to streamline processes that have been a pain in the butt, I feel like what you're doing at Propeller is right in line with that.
--:-- Aaron Steffey: We're good friends with Ragov and Chris at Tarmica. I'm hoping in the future we'll do more together. As everyone tackles streamlining the process of small commercial, they're forgetting the bond process. We can be that bolt-on bond solution to anyone. It's pretty interesting.
--:-- Ryan Hanley: What I plan on doing, and we'll get to the platform in a second, is building it into my post-sale. I lead with comp. Sometimes I'll get the whole package with the comp, sometimes I'll just write the comp for people. It's my lead-in, and then I work into the rest of the account. Using my CRM, I can then drip out after the sale all kinds of messages. One of them is going to be, "Hey, if you have a bond need, you don't need to go someplace else. We can handle all this for you. If it's something small that you can do on your own, here's a link. If it's more, email me." I'll probably just end up sending them the link again anyway.
--:-- Ryan Hanley: That idea is mindless from the standpoint of you don't have to be a surety expert. You can get this in front of them and provide extra value. Aaron's not paying me for this. I just was so excited because this is something I love — products that get someone to buy another thing from you. In the personal insurance space, it's like, "Oh, I have 30% retention on an auto. If I get home and auto, it's 60% retention. But if I get that umbrella that I make $17 on, all of a sudden the retention goes to 91%." I feel like this is one of those things for commercial insurance.
--:-- Aaron Steffey: No, it is. I think I said this to you, and not to recycle something I mentioned to Rick, but there's a pretty big ecosystem of direct .com bond riders. It's because agents let this stuff flow out the back door. You'll see that there's a ton of online .com, and those people are starting to get smart and just use the bond as the lead. They lead with the bond for work comp because they're solving a real difficult problem for the customer. Then they're like, "Okay, well, we'll just write your GL since your agent won't help you on the bonds."
--:-- Aaron Steffey: Customers inherently do want to go to one place. They don't want to piecemeal everything all over. I always liken it to a personal lines agency. It's almost like not saying that you don't do umbrellas. When the customer goes out and finds their umbrella somewhere, you think those people aren't going to try to sell them home and auto insurance? It's a tag-along policy. It's not even truly an insurance policy, but it's a three-party agreement that should be bolted on to any contractor's account. It seems to slide out the back door all the time.
--:-- Ryan Hanley: We've definitely not buried the lead here, but let's do the loop back and talk a little bit about how you got into bonds and surety. What brought you to this space? Then I want to talk about the platform itself because I immediately got the sense that this made sense. I want to take our listeners through this journey. There's a lot of commercial agents that listen to this show. I want them to understand why we got here, why it's important, and what we should be thinking about when making decisions about using a platform like Propeller. Let's start at the beginning and work our way through.
--:-- Aaron Steffey: I cut my teeth being a retail insurance agent at a mom and pop retail agency. We grew through organic sales and marketing efforts, as well as a little bit of M&A activity I got involved in. Several years ago, we decided we were looking to potentially sell the agency. It's so funny looking back on it. At that point in time, everyone thought it had hit its peak as far as valuations go, and it just seems to keep climbing.
--:-- Aaron Steffey: I'm in Philadelphia. I started doing an MBA program at Villanova. I think I was just a little insecure about what the next step in my journey was going to be. My resume basically said I just worked at a mom and pop insurance agency. I went and did that advanced degree, maybe just to bolster my credentials. During that time, I got to do a lot of soul searching and dealing with different people from different industries in the program. I decided at some point that I wanted to be involved in insurtech.
--:-- Aaron Steffey: I kind of looked around the landscape. At that time, I felt like there wasn't a lot of insurance people leading the charge in insurtech. It was a lot of tech people that decided there was an opportunity here. I started looking at the different problems within insurance. Surety bonds was one of many, private flood another. I had a reverse flow business where I would network with city officials of the city of Philadelphia. When international companies were coming to the area to set up a North American office, Philly's a popular spot because they can get between New York and DC on the Amtrak line, but it's not near as costly.
--:-- Aaron Steffey: In doing that, I was referred to a company called Axe Group out of Australia. They built software systems for Hanover Re, MetLife Australia, the Bank of New Zealand runs on some of their software. My job was just to court them, show them the city, sell them insurance ultimately. Over about a year's time, we became fast friends. I could no longer care less about selling those guys insurance. I just loved when they would come into town and spitball ideas with them. They showed me their tech capabilities.
--:-- Aaron Steffey: Finally, we decided instead of us just trying to land a client over here in the US, why don't we do a joint venture? I pulled in eventually Chris Colger once we decided on surety. Chris is now our head of operations. He was a VP of surety at Chubb, formerly in the Philadelphia office. He would always complain to me on the carrier side of things how tough commercial surety specifically is. I kind of knew it from the agency perspective. Then they brought the tech.
--:-- Aaron Steffey: We've always said, if we ever go to raise money or anything, our pitch is going to be like, "What better team than us?" We've looked at it from every different lens. We launched the company. We sold our first bond, I guess, in July. Now we're working with somewhere between 70 and 100 agencies. We have about almost 4,000 bonds on the platform. We're adding about 500 bonds every two weeks. We're gaining some momentum. It's been pretty exciting.
--:-- Ryan Hanley: I just reiterate, I have no interest in the platform and Aaron and Propeller are not a sponsor of the show. How did we get hooked up? LinkedIn? Did you reach out?
--:-- Aaron Steffey: I've always noticed your content on LinkedIn. In insurance for a while, there wasn't a lot of young people in insurance, at least from my perspective on the agency side. Seeing your content was a nice fresh approach. I've always seen your content from afar. Then I thought it'd be a good idea to reach out to you from a bonding perspective because you had launched your own agency. You seem like someone who's pretty forward thinking about utilizing technology and processes. I figured you'd be a perfect person to show this to.
--:-- Ryan Hanley: All you guys out there that say LinkedIn is just junk mail, this is another example of that not being the case. We hooked up, we did a Zoom and walked through the platform and did a demo. A couple of things that I like in a third party platform like this: one, there's some branding. It's like rogue risk dot propeller dot whatever. There's some branding to the agency. It's not just like I'm sending them someplace. It feels like an extension. There's my logo. It's super easy to search and get to the type of bond.
--:-- Ryan Hanley: I want you to cut me off and straighten me out where I'm off here. I did some practice searches. Everything from tiny little municipal $150 bonds up to contract bonds that a contractor would come in who's bidding on a job. To me, I immediately was like, "This is amazing." Granted, if I have some big huge surety need from someone, I'm probably going to call Cincinnati. But anything in the day to day, this is a no brainer. I went in and I just punched in a couple of things and I was like, "Oh my God."
--:-- Ryan Hanley: Where my mind goes is all the content that I can create around this platform to drive people to it. If they buy a bond and I get their contact information, "Hey, saw you bought a bond. Just wanted to introduce myself. What else do you have going on? How can I help? If now's not the time, when?" That's an easy conversation for a sales and marketing person to have after someone's already purchased something from you. From a marketing perspective, I see it being so powerful.
--:-- Ryan Hanley: Dipping back into your story, you've made these tremendous connections. You have the Chubb guy. You have a lot of industry experience from all three points of the triangle. Now you're starting to think about what the platform is going to look like. Talk to me about the thought process behind why not just go direct and say screw agent partners? Why not just load up the PPC, go get a shit ton of seed money and start blasting people into the thing?
--:-- Aaron Steffey: We considered that. Part of our business philosophy is to watch what everyone else is doing and go the other way. That's where a lot of things are going right now. For agents, you'd be surprised now that we've been able to see behind the veil a little more, how many carriers actually wholly own agencies and are going direct to consumer. They're the agent's best friend on one day, but on another day they actually own a .com that's selling direct.
--:-- Aaron Steffey: Coming from an agent perspective, I always understood the value of the agent. I actually think that carriers and anyone else drastically underestimates the agency relationship with the customer. I think it's more powerful than people give it credit for a lot of times. That was our path to entry. In doing so, we didn't want to create another login for an agent, another "come to our website instead of their website." There's no login. An agent can transact a bond on our system faster than they can probably even log into a carrier system. You click it as a bookmark on your web browser. It can also be customer facing. It's very adaptable.
--:-- Aaron Steffey: We put the agency's brand forward. When a customer buys a bond, the email comes from "Rogue Risk powered by Propeller." We always tell our agents, we try to be "powered by Propeller," not "overpowered by Propeller." We love to play second fiddle. I would liken it a bit to the Shopify model. We build the highway. We just collect the toll on the way through. Our product is free. That's another thing we had to decide early on: do you want to be a software as a service, or do this freemium model where we give it away for free and we just click the ticket on the way through?
--:-- Aaron Steffey: By cutting us in on five bucks a bond, and often cases not even that, we're paying 30% on commercial, which is pretty standard. You would never expect that from a wholesaler.
--:-- Ryan Hanley: That was actually a question I asked you. When you were explaining your model to me, and then you explained the commission structure, I was like, "So where's the catch? Am I signing a piece of my agency over to you? How do you make this work from an economics perspective?" Basically what you're saying is the technology piece, the streamlined nature of the technology, allows you to run on margins that actually create opportunity for agents. We're not pushing through 5% or 10% commissions on bonds. We're actually getting legit 30%, which is market rate. You may do a little better than that if you have a direct surety appointment with somebody, but not much. And again, you're hand stamping it and stickering it. If they need it directly, there's FedExing overnight sometimes, which we built in.
--:-- Aaron Steffey: One part of this was a bit of a stroke of luck. When we were going to launch, we were only going to launch in 20 states. They were all accepting electronic signature, electronic seals, everything. Then COVID hit and overnight all 50 states now accept it. We're the first to market with it. The carriers are going to take quite a long time to be able to build all that in. We're really out in front of things as far as that goes. You got to be a little lucky along the way. It's crazy to think about COVID providing anyone any sort of favorable outcome, besides the platform we're talking on now with Zoom. It really helped exacerbate our business model. When people were sent home without their seals and their printers and their stamps, these large surety departments had no idea what to do. They couldn't get bonds out the door.
--:-- [Break for sponsor message]
--:-- Ryan Hanley: Sorry to take you away from the episode, but as you know, we do not run ads on this show. In exchange for that, I need your help. If you're loving this episode, whether you're watching on YouTube or listening on your favorite podcast platform, I would love for you to subscribe, share, comment if you're on YouTube, leave a rating review if you're on Spotify or Apple iTunes. This helps the show grow. It helps me bring more guests in.
--:-- Ryan Hanley: We have a tremendous lineup of people coming in — men and women who've done incredible things, sharing their stories around peak performance, leadership, growth, sales. The things that are going to help you grow as a person and grow your business. They all check out comments, ratings, reviews. They check out all this information before they come on. As I reach out to more and more people and want to bring them in and share their stories with you, I need your help. Share the show. Subscribe if you're not subscribed. Leave a comment about the show because I read all the comments. If you're on Apple or Spotify, leave a rating review. I love you for listening to this show. I hope you enjoy listening as much as I enjoy creating the show for you. All right, I'm out of here. Peace.
--:-- [Return to interview]
--:-- Ryan Hanley: Let's get back to the episode. It's so interesting to me, your comment about COVID. It really feels like you were either a big winner or a big loser. I don't mean that to be harsh to anyone who felt negative ramifications from COVID. It's simply an observation that there was no middle ground. People either gained ground by luck or by tactical decision making, or they lost ground. It's very easy to sit back and make excuses. "The way we've always done bonds..." We're talking about bonds, but I think this applies to a lot of stuff. "The way we've always done bonds is this, and geez, I don't really know about this new thing."
--:-- Ryan Hanley: I'm looking at it going, "Oh my gosh, I'm going to create so many YouTube videos about bonds and link directly to my platform that in six months, when those videos start to get traction in Google search engine, it's going to be a cash machine." Dave and Crothers calls it "mailbox money." With the systems in the backend using CRM, you can go to town.
--:-- Ryan Hanley: I'm doing a little pontificating here, partially because my kids are home and I'm going a little crazy, but partially because I really think we have to change the way we do things. I wanted to have Aaron on and talk about Propeller and what they're doing because this is one of those veins that we have to start to build into our business. It's maybe cyber through a ProWriters or someone like that. There are platforms that are starting to develop that allow us to take coverages and, I don't want to say remove us from the process, but certainly make it more streamlined and easy. When someone has a bond problem, they have a bond problem. They're not like, "Oh hey, my bond renews in six months. It's time for me to shop that." Many standard companies think of their bonds as, "Holy crap, we need a bond. Let's go get one." They need that problem solved immediately.
--:-- Aaron Steffey: To echo your point about taking agents out of the process, what our product does and what a lot of newer products are going to do is make it adaptable. You can take yourself out of the whole process if you want, or you can not market the link to anyone and keep it in-house and just have it help your staff process bonds faster. It can be whatever you want it to be. That adaptability and flexibility is really what's needed.
--:-- Aaron Steffey: On the idea of getting a big bond request, we work with Marsh and Epic and Risk Strategies. To them, this automates their commercial surety. Anything above a certain threshold they want to take on themselves. To another agency, like one we're working with in Birmingham that's a decent sized agency but doesn't have a bonding department, doesn't have markets for it, doesn't have the expertise, we're now their complete outsourced bonding department. We have underwriters and carriers and expertise. We fulfilled a $3 million bond for someone recently, a hundred something thousand premium. I guess to double down on the idea of adaptability, we can be as forward facing or not. We can be utilized in any different manner. A lot of new tech products are going to be able to offer that where an agent can hands-on use it, or they can just capitalize on their existing network and their existing customer base and market it. You can be a paid marketer or an actual agent with it.
--:-- Ryan Hanley: If I'm sitting here and I'm a skeptical agent and I'm saying, "This sounds cool, but Hanley hypes up a lot of stuff. Obviously only stuff that I believe in, but this must be written on some bullshit paper with companies that don't know what they're doing. This is a startup, so you can't have any good carrier relationships." Who are you working with? If someone writes a bond, where's it coming from?
--:-- Aaron Steffey: It's going to be on one of five papers. We have appointments with Crum and Forrester, Travelers, Arch, Markel, and UCS. The bulk of our bonds are going to be on Travelers or Arch for the time being. We're not a comparative rater. It's not really needed on bonds. You'll see that the pricing on this stuff is so narrow. A $100 minimum premium is a $100 minimum premium. It's going to be that way. We're not trying to be Priceline.com for bonds. We're trying to be speed of use. That's the biggest thing. Carriers have tried to throw money at this. They had 25%, 30%, 35% commission. It doesn't matter. You're still losing money on it if you're spending two hours doing it. We need it done in one minute, five minutes.
--:-- Aaron Steffey: So whoever our carriers are, we usually assign one per class code. If a carrier wants to get on our platform and say they want to take over another carrier on contractor license bonds, then they've got to come with a larger capacity, a larger instant issue threshold, a lower credit criteria to make it streamlined and easier for agents. In a lot of ways, by aggregating premium from agents, we can really negotiate with the carriers on behalf of all of them.
--:-- Ryan Hanley: I love that idea. So you're essentially, instead of making them compete customer-facing, you're making them compete for the platform, for the access. So they have to almost bid, both in scale and volume of opportunities and volume of bonds and geographic and then price. Wow. I love that. That is really smart.
--:-- See, because I'm with you on the comparative rating stuff. There are two issues with comparative rating. One, no one has ever been able to make it profitable. Ever. Compare.com never profitable. The Zebra had to turn into an agency to make it profitable. No one has been able to make that work. And there are psychological reasons for that. Once you present more than three options, the chance that someone will click a button drops by like 70%. And if you just present one option, no carrier likes that because they feel like they're not getting shown. But by making them compete on the backend, you're actually leveraging way more power. Man, that's a really interesting concept.
--:-- Aaron Steffey: Yeah. And what's cool is there's not a laundry list of coverages and bonds. It's a three-party agreement, kind of like a one-payroll thing. It would be counterintuitive to offer a customer a $110 bond from Travelers and a $100 bond from Arch. They're going to ask, "What's the difference?" Well, there is none. They're both top 20 sureties. They're awesome companies. They're A-rated. It doesn't matter at all. It's just who's going to get it out the door quickest.
--:-- We look at things from that perspective, and our carriers have been awesome in understanding our mode. We really portfolio underwrite this stuff. We underwrite by class code, not by account, which is how traditionally sureties do it. They underwrite based on the business. We underwrite based on the class of the bonds. For contractor license bonds, where a lot of times you would have to ask special permission to write them, 95% of those on our platform are an instant issue. No credit check, no anything. We'll just write them all day long.
--:-- It took a little bit of convincing. We had to produce a use case and they have to monitor our results. But the carriers have been really incredible. Going into this, I was a former agent, and there's always this carrier-agent tension. You submit things and there's this force field between you. I was a little apprehensive about that. But honestly, the carriers we're working with have been awesome. They've helped us develop the product, given us insights and information where we didn't have it. We don't have all the answers, and they have all this data to go off of. It's really opened my eyes to how many awesome people work on the carrier side.
--:-- Ryan Hanley: Yeah, we only do a lot of carrier bashing on this show when they deserve it, mostly around their terrible technology. But in general, it's funny. I tweeted something out the other day. My wife gets sick of me talking to her about insurance. She's in insurance too, but at 4:30 she wants to turn her insurance brain off. So sometimes I'll just tweet stuff to get it out of my brain. I tweeted the other day that I'm starting to realize which carriers are partners and which are not. I got all these crazy responses. People were saying, "Oh, you're just learning that?" And it's true.
--:-- I have found just in this first year — it'll be one year of Rogue Risk on March 9th — that the carriers that are your partners, that are interested, man, they will do a lot for you. I have a great relationship with a few of my carriers and I'm trying to build better relationships with a couple others. They'll actually do a lot. I don't like to trash them. I do wish most of them would get better at technology, but they're humans trying to do their thing.
--:-- It's cool to see so many carriers get involved with a young platform like yours so quickly. What do you attribute that to? And are you looking for more? Do you have any you can talk about who may be coming in?
--:-- Aaron Steffey: As far as what you can attribute it to, I think it's the really difficult part of surety: how archaic and paper intensive the distribution was. You're talking about small dollar items a lot of times. This is a volume game. I think the fact that we offer distribution and technology is a really attractive thing for them. We're able to go out and appoint hundreds of agencies essentially for them. They look at this as we're basically commission-only salespeople. They would have to hire field offices of people to go get agents interested in putting it on their paper. And once you're in an agency, you have to say, "Log into my platform instead of Travelers or CNA." And I'll bring you more donuts. We've helped circumvent that.
--:-- We've actually had a lot of interest from the majority of the major surety carriers who have approached us about getting on the platform. But they'd have to really do something to supplant what we have currently. We have a really good relationship with the carriers I mentioned before. We are looking to backfill some things because there are some oddball lines of surety that some carriers just knock out of the park. Like crime bonds or resident trust bonds. The relationship with Crum and Forster was spawned out of cannabis bonds. In states where cannabis is legal, they require bonds for head shops or growers. A lot of carriers don't do that, but Crum and Forster does. We're looking to backfill the hard-to-place stuff. But it's tough because no carrier only wants to be on the tough stuff. They want a portion of the low loss ratio stuff as well. So we're trying to navigate those waters.
--:-- We've had conversations with most carriers. Most of them go well. Some are rough. I've felt several times where it's like, "Well, we can invent this tomorrow if we wanted to." On those calls, I try to bail as quickly as possible. But most people we've talked to have been great.
--:-- Ryan Hanley: I had a really interesting experience with one of my carriers. I was onboarding with them and part of the process was talking to the surety team. I had the mid and small surety guy, and then there was a woman who handled the larger surety cases. My brain always goes to marketing. That's just the way I'm wired. So I immediately start thinking, "How can I position content? What ads can I run? Who can I reach out to as lead sources?" I'm talking about workflow, and sometimes I forget that people's jobs are based on the fact that it's paper and it takes time and they can take the stamp and pound it into the ink and slam it on that paper. That's where their value comes from.
--:-- So I'm talking about it and she goes, "Whoa, I got to stop you. No one goes online and looks for surety." I said, "No one? Okay." I started typing. "Well, Google says that in New York, 2,500 people just Googled the term 'surety bond' last month. So how many of those did you get?" She starts barking at me about how I don't understand and it's complex and this and that. Finally I just said, "Okay. Yeah. Okay. All right." I was just the asshole trying to sell it.
--:-- All I was asking was, "What are some of the terms that drive sales? What are some of the things that people ask about?" Because I've sold some bonds in a previous life, but I'm not a bonding guy. That's when she went to, "No one. Nobody." So productive. I said, "Well, you win then."
--:-- Aaron Steffey: Yeah. Some people you could spend years trying to change their mind. It's best to cut bait. If you're not willing to open your brain to new ideas... That's where we got super lucky with the people that are our linchpins. Scott at Arch and Ken and Keith at Travelers. They've been able to really open their mind and get things. That's been cool. But yeah, we've run into a couple where it's like, "Well, we basically already invented this." And it's like, "Then why are you talking to us?"
--:-- Ryan Hanley: I love this time in our industry. I feel like 10 years from now, we'll look back. 2016, 2017 was the "insurtech revolution." I think a lot of really positive things came out of that time. The idea of disintermediation was dashed against the rocks, and what came out was way more productive. It's the concepts you're talking about: taking technology, streamlining CX and UX, and bashing it into the human side of our business that still makes us go.
--:-- When I see things like what you're doing with Propeller, I think this is exactly the type of platform that moves us forward. There's so much blue ocean. There are 70 agents on your platform. If you have a decent marketing mind and you stop what you're doing when you hear this podcast and you go to Propeller and sign up, you have so much blue ocean to start pushing this platform out into the space. You can get it to your clients and use it as a value add for contractors.
--:-- I already started building the marketing material. I'm probably giving away my secret sauce here, but I have this program called Rogue Risk 365. I'm trying to give everyone a use case for this. The first iteration was working through comp issues. The second part is certificate management. The third part that I'm now plugging in is Propeller for the bonding. Now you can go to a contractor and say, "What does every other agent do? 'Hey, let me quote your stuff.'" You get another quote from the same carriers you get all the time. Platforms like Propeller allow agents to come in and say, "I'm going to help you with marketing and placement, but then you get this. One-click bonding. So if you need a bond on a Saturday because you forgot that on Monday you have to be in Latham Town, you log into roguerisk.propeller.com and buy your Latham municipal bond and you're walking into the job."
--:-- Aaron Steffey: The URLs are a little wordy, but typically no one even types in URLs anymore. It's just a click. We always tell you to make it a link to a button on your site or your email signature. I would also piggyback on what you were saying. Another good use case is turning your clients into salespeople. Law firms are a great use case. Every estate planning attorney's customers need probate bonds. When someone passes away and they inherit the estate, they need a probate bond that says they're not going to steal the money. Lawyers can be your referral sources. Every time their customers need a probate bond, they just say, "Hey, fill out this link." At Propeller, we'll even white label it for them. If they want to use it internally, you could be the agent of record behind it. Or your GCs, if they need their subs bonded on a job, they just tell them to fill this application out real quick. Your GCs become your salespeople. We do all the work. And on the contract, you're going to pay 20% for not even touching it. There are a bunch of good use cases for affinity programs and association work.
--:-- Ryan Hanley: Everyone who uses the platform is now your customer. You can reach back out to them. You can send them a nice note. This is how you really become a value provider. Solve the immediate problem and back into the meat and potatoes.
--:-- This is why I used to pitch short-term disability in New York state. It's a crappy little policy. $44 in premium per female, $19 per male. You have to have a lot of employees for there to be any real meat. But no one knows what it is. No one knows where to get it. Half the people that should have it don't have it. You can backdoor into these things. From there you cross-sell into the whole account, and they use you over and over again.
--:-- I'm so in line with the decisions you've made about this platform and the way you're building it. I'm really glad we were able to take some time today to talk through it. Is there anything else going on that you really think people need to know about?
--:-- Aaron Steffey: No. I think the fact that we're scaling and adding bonds so much is the most impressive part. Our bond library in and of itself could be a business that we lease out to people. Having all the bonds mapped is really big. The other big pain point in surety that we didn't touch on is billing. We do credit card direct bill. We auto renew by credit card. You wouldn't believe how many agencies have their bonds on agency bill and have to be the bounty hunter for a $100 bill every year. It's another loss leader.
--:-- Right now we're scaling up the business. 70 agencies is not the goal. That said, we're working with a lot of very large agencies. That was not by design. We were surprised by that. I think the larger agencies do enough of this stuff that they know how much of a pain in the ass it is. It's death by a million paper cuts. They want to streamline this and focus on the bigger ticket items. The big next step is making agent adoption quicker, faster, easier.
--:-- Ryan Hanley: Perfect segue. If someone is listening to this show right now and they're like, "I need to get this into my agency right now," where do they go? What do they do?
--:-- Aaron Steffey: Right now, you would simply email me, Aaron, A-R-O-N at propellerbonds.com. You can schedule a demo if you'd like. We also have video demos we could just send out depending on how deep into the Q&A you want to go. Then it's like a carrier appointment. A producer agreement, W-9, direct deposit form, copy of your license, copy of your E&O. We can make your URL within five minutes of receiving your paperwork.
--:-- Ryan Hanley: Which is true. You did that for me. It took five minutes.
--:-- Aaron Steffey: You can be up and running really quick. We pull the logo from your website. We set you up with whoever you want the accounting information to go to because you'll get a direct deposit and a commission statement each month. You can pick someone to be CC'd on all the bond purchases. Then it's really easy to reply all and say, "Thank you for your bond," and keep that conversation going.
--:-- Right now we're doing it that way, but our dev team is working on self-onboarding where you go online, put in your information, and onboard yourself at your speed.
--:-- Ryan Hanley: So A-A-R-O-N at propellerbonds.com. If they want to learn more in general, propellerbonds.com. Can they reach out from the website?
--:-- Aaron Steffey: Yeah, reach out from the website. My number's on there, everything. Social media wise, we're strictly all in with LinkedIn. That's what we think is going to be best for us. We're very active on LinkedIn. Our page is very active. We also have an email blast that goes out each month talking about different bond types being added and new developments. We recently added a chat feature and Google Analytics. Our dev team is working around the clock. Agency management system integrations are not too far out. We're doing some cool things there.
--:-- Ryan Hanley: I'd like to talk to you about the agency management stuff and some CRM stuff. I think there could be some real opportunity there. We can talk about that offline.
--:-- Guys, I want to reiterate this. Aaron is not an advertiser. I know this has been just about the bonding thing, but I think what he's doing is a tool that you absolutely put in your tool belt. Even just putting it in the favorites of all your staff. If you listen to Billy Williams and you have your coverage declination sheet, if one of your commercial client declination sheets has surety on it, now you're getting in front of them. You're telling every one of your clients, "Hey, do you have surety needs? Once a year, just email us. We have a simple way to get it done for you now. With direct bill, you don't have to send us a check anymore. It's super easy."
--:-- I hope that if you guys do have a bonding need or a surety need, that you will give Propeller a shot. I think it's a game changer in terms of ease of use for both agencies and for customers.
--:-- Aaron Steffey: I appreciate it, man. It was great spending more time with you. Thanks for inviting me.
--:-- Ryan Hanley: Appreciate you, man. Hey, be good. All the best.
--:-- Aaron Steffey: All right. Be well.
--:-- [Outro music begins]
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