--:-- Host (Ryan Hanley): Hello everyone and welcome back to the show. Today we have an absolutely tremendous episode for you. We're talking to Raymond Lynch from Coterie, the VP of Growth at Coterie Insurance, a company that I've talked about a lot here on the show. A company that I think is absolutely pushing the envelope in what is possible from both the ease of doing business as well as widespread underwriting, growth, connection to agents, providing resources and tools for agents to do business in a more modern way.
--:-- Host (Ryan Hanley): I see Coterie as part of the future, and I really like the team there. I'm also going to be interviewing one of their co-founders who I've known for a long time. They're not going to tell you who or his name because I want you to be in some suspense because we're going to nerd out heavy on Coterie itself.
--:-- Host (Ryan Hanley): In this conversation, we're going to really dig into why he made the move from Liberty to a company like Coterie, what he saw in the future, what problems—and I don't want problems—what were the aspects of Coterie that he saw that really presented such a dynamic opportunity that he would move from a place where he was well-established, well-respected like Liberty, and move from that more established player to a brand new player in the marketplace. What that decision was like and where Coterie is going and what are some of the major concepts in small business insurance—concepts isn't the right word—the trends in small business insurance that he sees coming down the pipe that we really need to be aware of.
--:-- Host (Ryan Hanley): So this is an awesome conversation. You're going to love this one. But before we get there, today's episode is sponsored by Propeller Bonds. Guys, I've been talking about Propeller Bonds for a while on some of the socials, not so much on the podcast here. I did have Aaron Steffi there, one of their co-founders on the show, talking about Propeller. Go back and listen to that episode. It's an absolutely tremendous episode, but I just couldn't be happier to have Propeller as a sponsor of the show because we use them every day, like literally every day.
--:-- Host (Ryan Hanley): I have messages going out in our automations to our customers, introducing them to the fact that we have this on-demand bonding service and just kind of keeping them. And then later on in automations, we're letting them know, hey, just a reminder, you're going to have bonding needs at some point, big or small. All you need to do is use this resource. You can get your bond today. And then we get all kinds of inbound activity as well. People looking for bonds and most of the time, unless it's something complex, we're just sending them to Propeller Bonds and saying, here, use this link, buy the bond you need, find the bond, buy it. You're going to get your certificate in a matter of minutes.
--:-- Host (Ryan Hanley): It's just an absolutely tremendous resource and it's one of the game-changing tools that I see in the marketplace and just couldn't be happier to have Propeller as a sponsor and be sharing with you. I think they're an absolute no-brainer product. Just like Tarmica and Donna and so many of these other companies that have been part of the show. Yes, they're sponsors. Yes, they help pay to make this show happen. But guys, I take these companies on as sponsors because we use them. I think they're part of the future. So I hope you guys can appreciate that and check out Propeller Bonds. Go to propellerbonds.com. Just Google Propeller Bonds. And if you're looking to do something crazy, let me know, reach out to me. I'll connect you with Aaron and see what you can do from like taking it to the next level kind of thing. But absolutely check out Propeller Bonds. I'm telling you, we use this tool every single day.
--:-- Host (Ryan Hanley): All right. With that, let's get on to Raymond Lynch, VP of Growth at Coterie. Dude. What's up, man?
--:-- Raymond Lynch: What's up? Just another busy day here at Rogue Risk.
--:-- Host (Ryan Hanley): It's all right. I exchanged some emails back and forth with the producers yesterday.
--:-- Raymond Lynch: Oh, yeah, yeah. We used the wrong link for the thing.
--:-- Host (Ryan Hanley): Yeah, I mean, if you want to drive traffic directly to Coterie and not get any credit for it, sure. That's fine.
--:-- Raymond Lynch: Well, what he did was I created a Bitly link, which is Rogue SMB. So bit.ly slash Rogue SMB. So that when someone comes in who we think is the right account as a disposition, we'll just send that to them and say, hey, you can go right through here and at least get a quote if not bind yourself. If you like what you see, that's the whole process.
--:-- Raymond Lynch: What he did was he put that in and then he copied it because basically it goes to the Rogue specific one and then it drops that tag off. And he took the link without the tag and then sent that instead of the Bitly link. And I was like, whatever, all good. First time this has happened. We'll get it fixed. No worries. So all good.
--:-- Host (Ryan Hanley): And I have another one too that I'm working on. It's funny, this is one of the things that is exciting to me about what you guys are doing. I actually said this in a promo for one of the episodes that I did for you guys that'll come out sometime before this one. I said, someone—and this is true—someone tweeted at me or texted at me, one of the two, "Who are the five most tech focused carriers right now?" And you guys were one of them. A perfect example of that.
--:-- Host (Ryan Hanley): I coupled your promo with Harm because I think they fit so nicely. I was like, I had someone—I was sitting here doing something on a Saturday, right? I was just working down here. The kids were off doing something. So I was having a beer and finishing up some work. A lead came in and they just needed GL. It was a pretty standard thing. They needed GL for whatever they were doing to get into their office. And I just right there banged out the quote, put it through, did my little video proposal, off it went. That took me probably seven minutes total.
--:-- Host (Ryan Hanley): So I'm still working with my other hand on the computer over here and got that done. And I'm like, I think a lot of agencies would just delete that. That account wouldn't even—they would just see that lead come in and they'd be like, nah, no thanks. And I just look at it and I'm like, okay, that took seven minutes, whatever, all good. Maybe it's a $500 GL account, but that could be the kid of the business of one of the largest business owners in his town. Or his best friend could have a startup that's huge. Or it could be nothing. But you don't know unless you write the account. And that $500 account in two or three years could be a $10,000 account based on their own growth.
--:-- Raymond Lynch: Right. I mean, we all start. All these businesses and all these middle market accounts started out as that $500 GL.
--:-- Host (Ryan Hanley): Yeah. And that's one of the things that I think so many agencies are missing. It's why I've enjoyed—as much as we're just starting to get rolling with you guys, and a lot of that is just our internal process—I kind of picked up right away when you and I first talked. I picked up on what you guys were doing. And I was like, this is absolutely—I look at you guys, I look at Propeller Bonds, I look at ProWriters. And I'm like, here are companies and tools that are providing agents with both customer facing front ends and agent facing back ends that allow you to be incredibly versatile, that allow you to work on your client's own time.
--:-- Host (Ryan Hanley): And I think that's the key today, man. Being both digitally friendly while still being an agent. I think a lot of agents are still missing the point.
--:-- Raymond Lynch: Yeah. They'll bitch for an hour about Travelers, yes. And I think they're missing the ROI calculations on some of the stuff as well, right? Because there is some fuzziness to it, but it's a matter of the ROI has probably come two or three years from now. But you can't wait.
--:-- Host (Ryan Hanley): No. Well, also, when a lot of agencies look at ROI, if they even take the time to do so, they do not take their own time into account. I remember—I'm going to forget the exact conversation. It may have been Chris Burran. I don't know if you know him from Burran Associates. One of the smartest guys. I don't always agree with every one of his takes, but there is no denying that he is one of the smartest guys in our space. He brought this up. He's like, we're not taking our own time. We're not putting a time value against—is the agency owner's time worth $500 an hour? Right? Probably no less than that.
--:-- Host (Ryan Hanley): And that agency owner will spend three hours on quoting or doing nonsensical things and not realizing that they're just burning money. But then they'll go, well, Coterie's new. Let's see where they're at in five years. I'm like, where they are in five years? If you read the policy forms, it's not like there's anything missing there. What are we talking about? So I don't know. That's just my take. I hear all this crap, not just about you guys, but everybody. Because I write a lot of workers comp with Pie and I like what they're doing. I was super excited they just bought Western Insurance Services or Assurance or something, which means they're going to be moving to their own paper, which is super cool.
--:-- Host (Ryan Hanley): And they're like, yeah, they're so new. And I'm like, dude, what did you think? Like they just never read another policy form ever and started handwriting shit down from scratch? Where do you think they came from? We have to go through the state filing process the same way every other carrier does.
--:-- Raymond Lynch: Right. It's the same process. It's the same regulation. It's the same form.
--:-- Host (Ryan Hanley): Yeah. Right. I mean, the innovation isn't in the forms.
--:-- Raymond Lynch: I agree. Because the regulators don't allow it.
--:-- Host (Ryan Hanley): Yes.
--:-- Raymond Lynch: Innovation is in all the other stuff.
--:-- Host (Ryan Hanley): Yeah, 100%. So one of the questions that I wanted to ask you, and you can talk about this as much or as little as you want, but coming from a company like Liberty, right, and moving to Coterie. I'm interested in—and I'm not looking for you to knock Liberty in any regard. That's not the point of the question. But that's a big move, right? That's 55,000 employees to a startup. Liberty has a personal arm, a direct arm, an agent arm, used to kind of have a captive. This very broad, huge organization to a very focused small business. Talk to me about the decision to make that transition. What caught your eye? What really got you charged up to do it? I'd like to just start there.
--:-- Raymond Lynch: Liberty was a fantastic foundation to come into the insurance industry. I came in through what they call their Corporate Development Program out of an MBA. I don't have any insurance background. They really put you through a two-year rotational thing where you get to expose yourself to a ton of different parts of the company. You get to basically act as a consultant on these projects on a six-month basis. It helped me understand where in insurance I wanted to get invested in. Commercial insurance resonated with me right away.
--:-- Raymond Lynch: Coming from the background I have within the military and stuff, I've always been looking for that kind of leadership role. I knew pretty quick that the large corporate type positions, being in the tower in Boston, wasn't necessarily going to get me jazzed up to go to work every day. I wanted to be more close to where the work's getting done. That's why I took that underwriting role in New City and built out a small commercial underwriting team.
--:-- Raymond Lynch: The reason I've gotten into this tech focus thing is because I had the opportunity to meet Anaki and Rashmi and the team at CoverWallet when they were five people. We were lucky enough to be one of the national carriers that gave them a shot when a lot of others wouldn't. So I got to watch and see the progress and the hiccups and the different ways that they went about it in their journey until the acquisition by Aon. Seeing them build and knowing the challenges and the frustrations—it's not easy—but that really resonated with me and put that idea in the back of my head. I was like, I want to actually build something.
--:-- Raymond Lynch: It is great to come into an organization that has all kinds of systems and things in place. It is very hard to impact and actually feel like you're changing things. You can do it around the edges, but you're not necessarily going to get that true roll up your sleeves, get dirty level of building something from scratch. I've been patient. I've been very fortunate to be well connected within the startup community just by the nature of the job that I had before I left Liberty. I networked around and knew small commercial still had a long way to go and there was going to be a lot of opportunities to do some really neat things there.
--:-- Raymond Lynch: I heard about Coterie like I heard about a lot of other startups. The guys at Coverager posted something about them raising their seed round or getting some of their funding. I saw that they had posted a job that they were looking to get into the agency space. I networked and connected with David, and three weeks later, I joined the company in October, in the middle of COVID and everything else. It was the position that I wanted and the opportunity to actually build something. I felt that I could add a lot of value to their team.
--:-- Raymond Lynch: I came in purely focused on digital at the start. I haven't even been there a year yet and I've already had basically three different roles. I got involved in so many different things trying to build. There's a lot of stuff in insurance that I don't think I even appreciated, like compliance. I had no idea. There was a whole other group at Liberty that you would just send producer stuff off to and it would get done. We didn't have that. We had to build that from scratch. I was like, hey, we need to build this. When you come up with an idea in a small company of 30 people, you have to actually go build it. I was one of the people helping our ops team come up with a process just to onboard agencies and producers. I wouldn't have gotten that experience at Liberty.
--:-- Raymond Lynch: I have a team of seven people now when I didn't have anybody reporting to me. We've more than doubled in size since I've joined here. It's not all sunshine and roses. It's hard. I have so much more respect now. I think it's easy for experienced industry people to throw shade and be like, oh, they don't know what they're doing. It's true. We might not know what we're doing all the time. But we're pouring a lot of effort with a lot of smart people to improve and try to get better and to try to do things just a little bit differently. Sometimes we swing too far in doing things differently and we get pulled back in by the inertia of the industry. But we're always moving forward on the edges.
--:-- Raymond Lynch: If we can continue to stay focused and make sure the value we're adding is resonating, that's where we'll see the success. The challenge is you have to do it on VC timelines, which is a little bit different. How do you impact and show some of the growth that the investors want to see when you're working in a channel that moves a little bit slower? It's a lot harder to do. I've learned more in these nine months, to be honest, than I did probably my last five years, just because I got to wear so many different hats. I'm back doing what I love most, which is leading people and getting them to succeed.
--:-- Host (Ryan Hanley): There's a lot in there. Coming into Rogue, one of the biggest mistakes that I made was having a bit of hubris. Feeling like, man, I'd been in this industry for 14 years at that time. I had been all over the place, had been an agent, had spent a lot of time with a lot of people in a lot of different places. As much as you can have some understanding, until you've lived it, had to make the decisions and deal with the ramifications of decisions, there's literally nothing that can be experienced. It's very cliche, but it's true.
--:-- Host (Ryan Hanley): One of the things that's really opened my eye from this experience and sharing the startup experience with you is now I have even more respect. I like to believe that I had some respect for them, but I have even more respect for the people who share ideas that have been through it. Now I listen with a keener ear and try to pick up on some of the things because I'm like, yeah, they actually went through it. So what they're saying, I should probably take a deeper listen to.
--:-- Raymond Lynch: No, it's true. [Connection cuts out briefly] Sorry, I lost you there for a second.
--:-- Host (Ryan Hanley): You got me now?
--:-- Raymond Lynch: Yeah, sorry about that. That was weird.
--:-- Host (Ryan Hanley): No, it's okay.
--:-- Raymond Lynch: Even the small stuff, even the day-to-day decisions that don't work, you learn all those lessons. You learn a hell of a lot faster. The speed is a whole different thing. It's a huge opportunity for growth. Honestly, I have a different respect for agents now than I think I did living in carrier land. It was very easy to discount agents and be like, oh, they're not adopting whatever we think is the next best thing because they just don't understand. That couldn't be further from the truth. I don't think I had full respect for what they are actually trying to do and what it takes to actually run a business. Those that are really successful at it and have been doing it for a long time have found a way to stay focused and get through that. It gave me a whole new appreciation for the independent agent channel than I had as an underwriting manager complaining about the agent that kept calling me because he didn't like his renewal. I get it a lot differently now.
--:-- Host (Ryan Hanley): I was talking to a kid, he's 22, 23 years old, doing his work in the risk management program. Super good kid. His name was Darren. He was interviewing me. He asked a question around what would be my recommendation for how someone starts. I just said, do all the things. Go work for a carrier for a couple years, go work for an agent for a couple of years, try to find a tech company for a couple of years. No matter what you choose, after you have a couple of different experiences, you're going to be so much further ahead of everyone else.
--:-- Host (Ryan Hanley): The problem is you get into the carrier system and you think agents and technologies are the worst. You get into the agent system and carriers and technology systems and vendors are the worst. You talk to technologists and these stupid agents, carriers are so slow. You don't have this respect for really how hard all the pieces of this industry are for a whole myriad of reasons. Nothing we do in this industry is straightforward. We're not selling t-shirts or widgets. This is a complex thing that has real ramifications on people's lives.
--:-- Host (Ryan Hanley): That's why I think the only people in this industry that I've ever had a real problem with are the ones like the guy from Lemonade who just acted like these are users and we're all idiots. His stock price is tanking, although I'm sure he got paid. I don't take any pleasure in that outside of the pleasure that I do take. I just think to myself, if you can just have a healthy respect for what's happening here, man, there's so much that can be done. That's why I get so excited about you guys. I would be lying if, when I found out that you were part of Coterie, it didn't give me some peace of mind. I was like, ah, they got somebody who spent some time on the other side in there. They're going to have that perspective. That perspective is going to be in the building, which is a really positive thing.
--:-- Raymond Lynch: The one challenge is we have to adopt faster. We're going to have to get better at change management on all parts of the value chain over these next couple of years, or consumers are going to push away. I think that's the hardest part at a tech company or at a startup, really trying to push the envelope. How do you find that balance between the way we've always done it and really being like, but is that the best way to do it? I think we have to have a much more open mind. I don't have all the answers. I certainly know that I don't have all the answers. I learned that quick here. You pull levers and you're like, oh, well that used to work. Well, yeah, it used to work because you had this massive machine behind you. It doesn't work when you're still trying to build on the fly.
--:-- Raymond Lynch: If we can't adapt and move some of these processes forward—thinking about the micro space, right? I've listened to some calls of some partners that we have and I've seen people that have taken a different approach to the micro space. A lot of it has been like it's just transactional. It's purely transactional. It's like I don't want to think about it. I'm going to offload it to somebody else, whether that's some sales center or something like that. But when you actually take the time—and it's not a lot of time, right? If you have the right tools, it can actually be pretty quick. You just take the time to listen to them and treat them with an ounce of respect because they've been bounced around three or four times. Your conversion is going to skyrocket.
--:-- Host (Ryan Hanley): Amen.
--:-- Raymond Lynch: We're seeing that. I have a story of a partner that we're working with. It's one producer. She's a new commercial producer. They're doing a good job. It's a high volume type opportunity. For two months in a row, she's closed a hundred accounts. Now everyone will poo poo it. It's like, oh, but it's $400, $500, $600 accounts. I don't care. Show me anybody being that productive and having that type of close rate. Just think about it. If you put better workflows, you put efficiency in place, and you give them the freedom to treat every account the same. I think there's some magic there.
--:-- Host (Ryan Hanley): There absolutely is magic. You just literally defined what we're trying to do at Rogue. What's been very interesting to me is we are reevaluating relationships that we have with "gold standard" carriers—I'm doing air quotes, no one can see—because of how absolutely terrible dealing with them is. That is not me bitching from on high. That is day to day, boots on the ground, trying to get things done. It can't be this hard. I'm emailing the underwriting overlord to get whoever our person is to respond within a week. And then the person's yelling at us because a week should be—I'm busy, don't you understand? I'm busy. And I'm like, you're our underwriter and we can't move without you telling us this is okay.
--:-- Host (Ryan Hanley): Simple things like that. You get to the point where you're like, I don't care what the name on your business card is. You're starting to not help us close business. That aside, I don't want it to be the bitch. I think the point that you made about taking care of every customer—one of the things that we're doing, one of our values—the number one thing that I wrote down that we live by every day is no customer left behind. That means if it's a right down Broadway, Main Street office business, that's great. We can write that. That's awesome. If it's a crypto miner, we can help that crypto miner. If it's someone with a seven car fleet, we can help that car fleet. If it's a $200 GL policy for a mom who's starting a side business and needs to get into a building to do whatever she's got to do, we're going to write that policy too, because that's the right thing to do.
--:-- Host (Ryan Hanley): Now, granted, do you have to have automations? Do you have to have efficiencies? Do you have the right partners to be able to make some money doing that? Absolutely you do. But there is going to come a day if the agency force doesn't get our head wrapped around this, where the business is not even going to hit the independent agent. It's not even going to get down to that layer. It's going to hit starting their bank account—gone. It's going to hit signing up for a Shopify account—gone. They're not going to walk into your agency. They're not going to ask their friend for a referral because there's 10 things they do before they look for insurance. One of those 10 things is going to provide them with the insurance and the business is going to be out. They're already going to have done business with somebody. And if that company can take care of them in the human way that you just described, they're never going to leave.
--:-- Host (Ryan Hanley): So what you just said to me, I agree with it. The timetable is obviously we just can't handicap that because it's very tough. But the day of business just not even making it to the main street agents level, like it just never comes down that far—that's absolutely coming.
--:-- Raymond Lynch: What's up, guys?
--:-- Host (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, if you enjoy this podcast, 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. 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. But they all check out comments, ratings, reviews. They check out all this information before they come on. So 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, and I'd love for you to leave a comment about the show because I read all the comments. Or if you're on Apple or Spotify, leave a rating review of this show. I love you for listening to this show and I hope you enjoy listening as much as I enjoy creating the show for you. All right, I'm out of here. Peace. So let's get back to the episode.
--:-- Raymond Lynch: Yeah. But it doesn't mean that if you're well-networked and actually within your community, you can't insert yourself into a similar touchpoint on a local level. That's what we're trying to do—bring tools that allow you to provide that digital shopping experience or embed that experience into a lower-level affinity play or whatever buzzword you want to use.
--:-- The biggest thing I noticed with all this API technology that everyone's talking about—it's going to be the savior of all of our efficiency. And it's like, yeah, but that's just getting data back and forth. That doesn't take into account that you actually have to have an application that makes freaking sense. You could have the best APIs in the world, but if you're asking 70 different questions, no thanks. And if you're not responding quick enough or you're not giving them—if everything is call, call, call—just being able to put a price and knowing that they can buy that, I think is valuable. Even if they don't buy it, just because you have a qualified customer that is informed and educated, and your discussion is less about "this is what it's going to cost" and more about "this is what you get"—that's what API technology can do.
--:-- Host (Ryan Hanley): Right. I think that gets lost sometimes. I think it's just like, "Oh, it's an efficiency play." It is an efficiency play, but what it really is is changing the way the funnel works.
--:-- Raymond Lynch: To truly leverage it, you've got to get used to funnels that look a lot different. I remember that was always the challenge I had at a large carrier. They want their funnel to not change. It's like, "I know I've got a 30% hit ratio, and I know everything kind of stays consistent, and as long as we're meeting those marks, we're going to hit our financial plan." Then you introduce this frictionless data transfer, and all of a sudden your submissions shoot to the moon, your hit ratios tank because it's no longer a hit ratio—it's a yield. Everything in between changes. You have to have a different perspective on your financial plans, on what success looks like, how to make iterations. Because when your funnel is that primed at the top, a one or two percent change in a close rate or whatever ratio you want to look at is much more meaningful than when you're just kind of eking by and staying flat.
--:-- That's something I learned over the last couple of years. It's going to be about price. Price is price. Transparency has to come to insurance in commercial insurance in general. It can't be this mystery of "I'm an electrician, what the hell am I going to pay for insurance?" What it has to do is—well, you're an electrician, you've got a lot of needs. Service is the biggest need, especially if you're working for different GCs and trying to get different contracts. You know better than I do about servicing, cert requirements, endorsements, and all these different things that we like to forget about and just focus on making a sexy new business flow. That's where agents win—because you can provide that service, that education, and you're advocating for them with whatever carrier they're working with. That's the value. That's why I would choose an agent for my own business—because I need somebody that can do that stuff for me, advocate, and go to bat for me, whether it's a claim situation or a servicing thing. It's less about "give me a quote," because I can go to 10 different websites now and get a quote.
--:-- Host (Ryan Hanley): Yeah. I would love for you to go back to one point you made—yield versus hit ratio. This is one of the concepts that I know from firsthand knowledge—there are carriers that get it, and there are carriers that carry partners. I don't think any agent—and this is not a knock on agents, this is a high-level, marketing-related, sophisticated idea—so I don't want to knock anyone who doesn't understand. But I think this concept is a defining concept in the actions that people are taking. Can you break down the difference between hit ratio and its legacy versus this new idea of yield, and why you may want to pivot your mentality?
--:-- Raymond Lynch: To go back to the standard funnel that we've always thought about—I'll give a carrier lens because that's what I know best. You have your portal. You know how many agents have started a submission—that's your submission count. You know how many have gotten through to the point where it's an approved quote—that's your quote. And then you know how many policies you sold. Traditionally, a hit ratio is that approved quote or finished quote to how many policies—policies divided by quotes. Yield is when you talk policies versus submissions.
--:-- It's still pretty standard because your quote ratios are going to be in the 80% or whatever it may be. But when you get into true marketing efforts and true volume plays, that submission number is very important. The approved quote becomes less important—that's a matter of how well you're able to get people through the funnel. Yield is when you look at policy sold at the end of the day based off of that activity that you draw. It's big in any type of marketing effort. If you're going to cast a broad net, or even a narrow net, and you're going to run different campaigns to bring attention to your agency and bring customers to you, yield is much more important than how often you quote them. Once you quote them, you should be closing at that same level—that doesn't necessarily change. But understanding that you have a thousand submissions and you're only writing 10—if you go from a one percent yield ratio to two percent, the math is just different. You still have that thousand submissions, but you're closing at two percent. Now you grow the bottom line much faster. It can be more impactful from a premium standpoint or a revenue standpoint.
--:-- That's why I'm much more concerned with yield. I want to get a swing at every single account that's out there. That's why Coterie is integrating into just about every platform you can find. I want to be where the agents are transacting, not making them come to us to transact with us. I want to swing at every single time. That means I want as many submissions as I can possibly get. Then I'm going to see how many we actually can close based off of that. Then I'm going to work on how to close more based on this huge volume of submissions. Making those small tweaks—whether it's making ourselves more prominent on Tarmika or making something easier in the way they get from Tarmika to us to sold policy—that's where we can impact much differently than just saying, "We've got to drive this many quotes to our platform, our portal, our dashboard."
--:-- I saw my hit ratios when I was working with the big insurtechs over the last couple of years. My quote ratio was like a hundred percent because it's getting filtered out. I'm quoting 90-plus percent, but every time I'm getting a bat, I'm only closing 10%. You have to get comfortable with that. You have to be like, "Okay, this is a lot more data, a lot more power in understanding what's going on from that first API hit to a sold policy." Making changes on that can yield a heck of a lot more lift than just saying, "I want to move my hit ratio from 34% to 35%."
--:-- Host (Ryan Hanley): Yeah, I think that's a really important concept. The volume plays are where everyone is going too. The one-off stuff is nice, and everyone's still going to need to do that occasionally. But to get attention from the carrier space and from agents, you have to be able to push weight. You just have to be able to do it. I think everyone's kind of always known that. The FinTech platforms, the B2B platforms, the B2C platforms from the personal perspective too—whatever these platforms present, there are so many opportunities. You can also get this from your local attorney firm who does LLCs. You can get this from your accounting firm. I don't just want to talk about technology. There are tons of opportunities. In our space, everyone gets hung up on home mortgage broker referrals. Every conference ever has the person doing the most home broker referrals with some new shtick. I'm not knocking that, but the next play is the small business. Obviously that's where we're going. These partners are everywhere. We just need to open our eyes. The accounting firm, the law firm, real estate managers—they're all there. The ability to be that partner and set up flows drastically increases the number of bats you get. Now you have to deal with a potentially lower hit ratio or a more spread out book. I think that's a key to it.
--:-- One of the things we found is you need to have a couple of different players. No carrier is going to have the appetite that solves the singular problem. But you pick a few that are willing to mentally play this game with you, and you can do damage. You can do real damage. You get the few that get you the 80%, and you get hyper efficient on the 20%.
--:-- Raymond Lynch: Yep. Think about it from the point of view of the referral partner. In the traditional model, it's like, "Hey, call this guy" or "Go to this guy's office." I think it's a better experience when it's right there—they get a couple quotes right away. I think your referral partners will like it because it makes them look good. They're providing a value service to their customers too. Anytime it's a mutually beneficial partnership, that's how these things work.
--:-- Host (Ryan Hanley): Right. That's how I frame it with all these platforms out there. I want these platforms to succeed because I know if they succeed and I'm part of that, we're both going to rise up together.
--:-- Let's change the topic a little bit to data and the disposition. I don't want you to give away any secret sauce, but I think a lot of agents haven't necessarily wrapped their head around how carriers like Coterie are using third-party data and pulling it into the system to reduce friction. I know Tarmika does this. I know you guys do this. It's happening more and more. I'd love for you to help everyone better understand—one, where is this data coming from? Two, can we trust it? And three, how are you actually using it? How is it improving the process? There's a lot to unpack there.
--:-- Raymond Lynch: Where the data is—it's just like anything else. There is no one source of data. Anybody that knows and has seen your online persona knows it's very mineable. I don't even know all the stuff that they do to get it and fill in the gaps. But there are a couple of different things. The easiest one for people to wrap their heads around is property, because it's tangible. It's physical. There are a lot of records and sources out there—whether it's imagery or all kinds of different things—that can tell you about a building. You can go to different towns. There's data out there, and there are really aggregators. Hazard Hub is a great one on the property side. They've built different models and different ways of collecting information. With one call to their API, I can pull back a whole ton of information on that property—information that as an agent, you would have had to either fill in yourself or go back to your client and be like, "Hey, can you look outside and see what your roof's made of?"
--:-- Host (Ryan Hanley): This is my number one educating point. Why are we still asking roof types? Why are we still asking construction types, BG codes, and all this other stuff? It's all there in one sense or another.
--:-- Raymond Lynch: When was your roof updated? Who has ever said, "It was 37 years ago"? What agent doesn't know that every agent says "2015"?
--:-- Host (Ryan Hanley): I look at that question and I'm like, who—everyone who answers this question knows that if you put it more than even 10 years, in some cases they're going to penalize you. No one actually knows when the roof was done except for the property records. So it's "seven years ago" or "five years." It's ridiculous.
--:-- Raymond Lynch: Put your underwriting hat on. I don't care if the roof was updated five years ago if the guy did a crap job. Is that any better than it was done 20 years ago and done right and it doesn't leak? Because that's all we care about—is there going to be a water leak, and are there issues there that we're going to have a loss over? So why ask? If everyone knows we're pencil-whipping it, what's the point of asking? Is it truly that relational to your loss ratio or to what makes a risk good or not? That's what we're trying to eliminate—or at least get a better, different source of information for. It's not a trust thing. I don't want people to think, "Oh, they don't trust the agents to give them the right answer." It's not that at all. It's just, why waste hours of your time trying to figure out how to answer these questions when we can make an API call to five, six, seven different vendors and pull in a lot of information about that?
--:-- I think what'll be interesting to see is classification. Can we build some models around understanding what somebody does that gets us close enough to a proper classification so that we know we're getting an appropriate rate for that risk without making it a painful experience for an agent to figure out how to classify them? Everyone can classify a bakery. A brand new person into the industry can say, "Yep, that's a bakery." Except for maybe some of those people that like to have "baking" without actually doing baking on premise. But that's another story.
--:-- There's a lot of information out there on all these businesses—whether it's in their social media feeds, in their services, in their menus, whatever it might be. There's a ton of information you can glean based off of an address, based off of a named insured. We're just using different sources, and we're constantly changing them and looking for better ones. We have some really smart data people in the background trying to build some scoring and some models around it because it's not perfect. It's not going to be accurate 100% of the time, but we don't need it to be accurate 100% of the time, to be honest with you. What we're looking at is how do we present it in a way that an agent can verify it? Give that agent still that say to be like, "Yeah, no, I know your sources are saying this, but it's really that." It's not a "we're only going to use data." We're going to use data and let you verify it at times when we think it needs to be verified.
--:-- Host (Ryan Hanley): Yeah. I look at what Branch is doing on the personal lines side—first name, last name, and email address, sometimes, and you can get full home, auto, and umbrella quotes. What's been interesting to me, and I think this is the idea we can break down a little bit here for agents, is that just because we're using third-party data doesn't mean we're doing less underwriting. I think that's one of those common misconceptions that over time we'll get past. There's this feeling that because we're using third-party data, somehow we're doing less underwriting. That's not the case. We still have to have models. The companies still have to make money. They're still based on actuarial tables. Maybe some of the thought processes are a little more progressive in the underwriting methodology, but there's still underwriting happening. It's just where the data comes from. It's really that simple. Instead of you telling me this house was built in 1955, Hazard Hub is telling me it was built in 1955. Instead of you checking a box that says "Is this in a flood zone?", Hazard Hub is telling me it's not in a flood zone. You're good.
--:-- The amount of what that does—to put it in perspective for agents—instead of having to ask those questions, you now can be more of a problem solver on the phone. That to me is where we need to get to as agents—get back to our roots of solving problems for people instead of being data collectors. That's one of the reasons why I'm so bullish on you guys. I think you have the right mix of people, and I think how you're infusing this information, the experience, and the fact that you are still heavily relying on agents—to me, it's a winning strategy. I know you probably have a long way to go and it doesn't always feel that way, but from the outside, it looks like you have all the pieces in place.
--:-- Raymond Lynch: We have some of the pieces in place. I think what we have to do is prove that our ideas and our processes work. Black box underwriting is sexy until it blows up and you lose your paper, and then Coterie doesn't exist. So yes, it's more about—we're in the micro space, so it's about how do we put better guardrails in using data to keep that hyper-efficient experience that everyone needs? Saving time saves money. It transitions your conversation to something much different. You can actually give that smaller account a good five-minute explanation on what their policy actually covers, as opposed to just not wanting to deal with them.
--:-- I think it's evolving. It's changed probably just in the last three or four years, and it'll be even more in the next four or five years. I'd love to say that we're the only ones doing this, but I'm sure we're not. We're not that arrogant to think that we are. What we're trying to do is iterate towards that goal and find a way to be transparent in how we're doing it. The biggest lesson we've learned—at least I think Coterie has learned—is you have to be very transparent to give agents that confidence. One, we know what we're doing. Two, they know what they're selling. Anytime we've had a gap in that transparency or that understanding, that's where we've gotten a lot of pushback—which is healthy. Work with us, because guess what? We listen. We are hyper-focused on that feedback.
--:-- Host (Ryan Hanley): My favorite story from what I was involved with goes back to something very simple—a cool proposal. We're like, "Hey, we're a tech company. We're going to do some tech stuff. We're going to create this cool microsite that you can email to your client. It'll look awesome on a cell phone. It'll look awesome on a computer. It'll give them the basic information they need to move forward." No one used it. They were like, "Where's my PDF?" We're like, "But we've got this awesome website. This is so much cooler. Your customers are going to think you're amazing because you can provide them this." And they're like, "No, I don't want that. I want a PDF." So we pulled our head out of our ass and got a PDF out in the market. Which I've used. It's great.
--:-- Raymond Lynch: It's part of the fun. That's why I love being at Coterie. I get the chance to learn these lessons and have the freedom to fail. A lot of times people get wrapped up in fear of failure. At the end of the day, we're all trying to make a difference in some small way. I just feel a lot more comfortable screwing up right now, as long as I don't bring the whole company down. It's a different culture. I think that's another thing that kind of freed me from some of the previous things I've done.
--:-- Host (Ryan Hanley): It's awesome, man. I'm a big fan of what you guys are doing. I've been on it since I talked to David like three years ago. He was telling me, "Oh, I got this thing," and he pitched me the idea. From afar watching it kind of take shape, and then when I started Rogue, I reached out to you guys. Now we're starting to integrate more and work together closer. I'm excited because when a company like Coterie comes into the market and starts doing the things you're doing at the pace that you're doing them, it pushes the rest of the market to get better. I like to hammer on Lemonade because I really didn't appreciate the way they approached our market space. But you can't knock it—Lemonade changed a lot of the way that a lot of people do business and the mentality and the mindset. They have had a major impact on the culture of our industry in a positive way. I think the innovation is good for the space. I think the way you guys treat and onboard agents, especially new agents, is good for the business. It doesn't feel good when you're an entrepreneur trying to start a business and some carrier comes in and speaks to you like you're a peon because you're only going to give them $100,000 in premium in the first year. They could care less. That's the way a lot of carriers make you feel. It's nice to talk to somebody, have a 20-minute conversation, have them say, "Hey, let's go," and then the paperwork is about five minutes. Now you can write business, and you feel like there's a sense of empowerment. I think that's a small but important piece of the puzzle as well.
--:-- Raymond Lynch: We want to grow together. I love working with new agents. They're fired up. They're trying to bring new ideas. They're experimental in themselves, just trying to get a footing. I'd be happy to work with anyone that's just trying to figure it out. We're bringing tools. We're not only delivering things for our top-tier agents. We're bringing these tools to everyone, and we're going to continue to do that.
--:-- Host (Ryan Hanley): It's awesome. And you guys just partnered with my favorite network in the world, Indium. That announcement came out today as we're recording. I always love to see it—it's like watching friends get married.
--:-- Raymond Lynch: It's fun because it's a small network. We've all kind of met each other at different conferences. We've all kind of talked to each other. It's a blast to get to work together. Chad and Eddie are the man. Other than being a Clemson fan, that's the only negative I can think of. But he's solid, and that's a great network. We couldn't be more excited to partner with them.
--:-- Host (Ryan Hanley): Awesome. So if agents listen to this and they're like, "Heard of Coterie, I'm convinced, I want to reach out and see if they're a good fit for me," what's the best way to do that?
--:-- Host (Ryan Hanley): Easiest way, Coterieinsurance.com. From there, you can go look at our producer resources. All of our forms are out there, different endorsements. It's very transparent. We have a digital appetite guide powered by our buds at Ask Kodiak, so you can kind of get a sense of where we're writing.
--:-- Raymond Lynch: We're admitted in 48 states. We're filed in New York. I know people want us there. We want to be there more than ever. We're working through the 60-plus things we have to respond to in the filing to get a standard ISO BOP filed and ready to go in New York. But yeah, you can even sign up to be a producer. You put a couple of pieces of information in, and we'll get in touch with you in a matter of hours. You'll have somebody on our team getting your contract, giving you a quick overview, letting you know you can join one of our demos. Feel free to hit me up on LinkedIn—Raymond Lynch—or Raymond at CoterieInsurance.com.
--:-- I was heavily in the digital space for a while, and it's fun and kind of interesting to circle back and see all the changes, even in those three or four years from when I was an underwriting manager to now. I see how far agents are pushing the needle—those that are engaged and really wanting to.
--:-- Host (Ryan Hanley): Well, hey, man, I appreciate you spending the time. Obviously enjoy our partnership, looking forward to more. And just as an observer of the industry, I'm looking forward to seeing what kind of trouble you guys get into as you continue to push into the space. I think it's trouble in a good sense.
--:-- Raymond Lynch: Give them comfort. We do have some insurance people.
--:-- Host (Ryan Hanley): Yeah, no, they do. We're not just a bunch of tech.
--:-- Raymond Lynch: We've got a great underwriting team behind the scenes. It may not be the traditional underwriting relationship that you're used to, but know that we have some really strong underwriting minds keeping the guardrails in place and making sure that we're writing the right business and that we are underwriting.
--:-- Host (Ryan Hanley): Yeah, definitely want to give that. And I'll say this too—I told everyone this when we had Dax Craig on from PI—I think of you guys in the same exact bucket. You are new carriers doing things a different way from a data and ease of business perspective. But I think both of you guys have the insurance expertise and experience on the back end that any agent can lay their hat on what's happening.
--:-- Raymond Lynch: Yeah, no, I 100% agree with you. There are other InsurTech players in the space that I don't use for that same reason. But I just think you guys are doing a lot of good stuff.
--:-- Host (Ryan Hanley): So I appreciate it, man. As always, enjoy your talks. And we'll get out of here.
--:-- Raymond Lynch: All right, man. Let's go write some business together.
--:-- [End of interview. Promotional segment begins.]
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