RHS 132 - The Power Brokers on the Future of Insurtech

Ryan Hanley: Hello everyone and welcome back to the show. Today we have an absolutely tremendous episode for you and it's a multi-guest show. I don't do a lot of these because sometimes when you don't have a good flow, they can be a little distracting, but today's episode is just wonderful. Two former guests, Steve Anderson, CEO of Catalyit, and Peter McDonald, co-founder and CEO of Wunderite, as well as a first-timer, someone who we are going to have on for his own solo episode at some point, but this is the first time he's on the show, Andrew Wynn, co-founder of Ascend.

You've heard me talk a little bit on the show about Ascend Payments and how they've been a big part of our success here in the second half of 2021, moving into 2022. These guys reached out to me and said, "Hey, we really want to have this conversation. We'd love to do it on your show and we want to talk about the future of InsurTech." That was just music to my ears. I'm excited that they would think about this show, my audience, you guys as a group of people that they would want to speak to and have this conversation in front of. Such an honor. It's a wonderful conversation. You're going to learn a ton, get a bunch of really cool ideas, and hopefully get your brain spinning here as we continue to run into 2022 on our collective and individual paths to world domination.

Alright, before we get there, I want to give a quick shout out to the sponsors of this show, the people that make this show possible and pay the bills. That is Podium. If you want to see Podium in action, go to roguest.com and check out the web chat. We use a couple different features of Podium, but the one we use the most is the web chat. The reason for that is we get like a 95-plus percent response rate to people who use that web chat. They fill out the web chat on their phone or online, and when we respond, it hits their text message. Text response is way higher than anything else. This allows us to get in front of people. What we're able to do is vet people quickly on the fly through a few questions in the Podium chat before we move them into our pipeline. We're able to either refer them out to where they need to go or put them into our process and start working them through Rogue. So love Podium. Big fans. Very happy that they've chosen to be a part of our show here.

I also want to give a quick shout out to Coterie. Coterie is a company making things happen in small business insurance. Guys, if you're struggling to get appointments with some of the big traditional carriers because they want to give you a bunch of garbage about an appointment costing money and time and blah, blah, blah, and all this crap, that's not the case with Coterie. Coterie is appointing agents. They're looking for people who want to break into small business or are already doing small business. They have a wide breadth of appetite. Their platform is so easy to use. It's good coverage. Guys, I can't recommend Coterie enough. Go to C-O-T-E-R-I-E, Coterieinsurance.com. Check them out, get appointed, and start writing more small commercial today.

Alright, with that, let's get on to this absolutely tremendous episode, "The Power Brokers on the Future of InsurTech."

[Discussion begins]

Ryan Hanley: I'm so sick of COVID.

Peter McDonald: I know, dude. I'm so done with it at this point. Even if I were ever actually scared of it, which I wasn't, I just can't take it anymore. I couldn't take anything this long.

Ryan Hanley: I was definitely a little scared in the beginning there in March. I was thinking of that Matt Damon movie. I was like, "Oh my god, we're all gonna die."

Peter McDonald: I think you get to like the end of June if you were scared. Real scared. I think that's legit. But at this point, it's been a year and a half ago. Now it's just a business model. There's going to be MBA classes on, "Hey, want to set up an annuity? Here's a really cool business model."

Ryan Hanley: What I'm scared about now is just mutations. We don't have vaccines going out and whatever. It's just going to keep mutating. It's weird. I don't know. I won't get into all that.

Peter McDonald: I know. I follow you on Twitter, so between your football commentary and weight lifting and everything, I just can't help it.

Ryan Hanley: I think I said to my wife the other day, I tried so hard for so long to not have an open opinion on this, and I just can't handle it anymore. I can't take it. I'm going to explode if I don't have one channel that I can voice my feelings on this particular topic. My wife is badass. She's like, "Fuck it, let's do it. Who cares? What do you care?" I'm like, "Alright, alright."

[Addressing Steve]

Ryan Hanley: Sorry, Steve. You walked into me pontificating about the vid. So what's up? What are we talking about here today? This is like a powerhouse show that we got going on here.

[Pause]

Ryan Hanley: I can't hear you, Steve, by the way. Are you talking?

Peter McDonald: Yeah, Steve, your mic's not working.

Ryan Hanley: I love when I get emails. Who sent me the original email? Was it you, Andrew? That was like, "Hey, we want to do this show. I got all these guys together. Can we go on your podcast?" I'm just like, "This is my favorite. Yes." Why would I say no to that? That would be crazy. So what are we talking about here, fellas?

Peter McDonald: Yeah, and wanting to wait to see it, we can hear Steve.

Ryan Hanley: Oh, Steve, are you not?

Peter McDonald: Steve, this does not look good for Catalyit.

Ryan Hanley: This does not play well. First tool of Catalyit is going to be an IP phone system about now.

Steve Anderson: [Audio comes through] Yeah, now there we go. There we go. There you go. It's amazing when you actually turn the microphone on what happens. I have to leave it, you know? I figure I just got people snowed about Catalyit, so no big deal.

Ryan Hanley: Oh, yeah.

Steve Anderson: You know, that's actually the advantage of being around so long. It is what it is.

Ryan Hanley: Yeah, I got this thing. Well, I've been snowing people about my understanding of insurance for about 16 years now, so I'm right with you.

Steve Anderson: I feel like I'm on that one.

Ryan Hanley: So, guys, what are we talking about today? You got three complete power brokers on the show, and I have literally no idea what we're talking about, which makes me very happy.

Peter McDonald: I think Andrew had approached... we were chatting about something. We had connected about a year ago and we were chatting recently with Steve and with each other. We were like, "It'd be great to do a podcast to discuss the future of InsurTech." I think there's been a lot of thinking by agents in the beginning about, "Where's my place in all this? There's all this sexy stuff happening. All these companies like Lemonades of the World are happening. What's happening with us?" We wanted to kind of set the record straight that people are already on board, obviously. But the future of InsurTech is really about empowering independent agents. There's a future there. Where Steve's unique background and experience of knowing all the different tools out there comes into play, he can talk to that. It's an interesting conversation point for Catalyit, which is having a big year this year, talking about how to help agencies simplify and understand.

Steve Anderson: Yeah, we are having a big year. Actually, literally today we signed another state on board.

Ryan Hanley: Congrats. They're dropping like flies. That's awesome. So let's do this for those listening at home. Let's do quick soundbites on whatever your thing is. We'll start with Steve, then Andrew, and finish with Peter. Just quick. What is Catalyit? Where can people get more? Hit them with the elevator pitch so we can level set everybody.

Steve Anderson: Sure. I'm Steve Anderson, co-founder and CEO of Catalyit. We're a new for-profit entity formed by seven Big I state associations, along with a growing number of other states that have partnered with us to provide technology resources and information to their members. The way I describe it is we help agents discover, evaluate, select, and implement the technology they need to continue to thrive.

Ryan Hanley: I love that. It's like a trusted source for all their tech concerns, questions, problems. Who's out there? Who should I pick? How do I do it? How do I not make a mistake?

Steve Anderson: Yeah. What cost you? What cost you? Ryan, what cost you? $500,000? $2,000? Multiple thousands of dollars if you make the wrong choice? And the time and the brain cycles.

Ryan Hanley: The time is the biggest. The cost is the easiest thing to feel frustrated about, but it's the time and the brain cycles. How much energy do I have to give to this thing? When you change a big system, it takes a lot of focus and a lot of attention. If you end up making a mistake or get something you're not happy with, that is a killer. That's when I popped the bottle of Buffalo Trace behind me.

Steve Anderson: The message we'll have this year is we are a fractional CIO for the normal independent agency. Large brokers have one or multiple positions whose full-time job is to do that. The traditional normal agent doesn't have the resources to do that. We become that for them at a very reasonable monthly fee.

Ryan Hanley: That's great. I love that. Okay, cool. Andrew, on to you.

Andrew Wynn: Thank you.

Ryan Hanley: Is this your first time on the show, by the way?

Andrew Wynn: I don't think it is.

Ryan Hanley: Oh, that's kind of funny because these guys have both been on. Steve's been on a ton of times. I've talked to him too much. So we got to do an individual show too, but okay. We'll do that later.

Andrew Wynn: Well, thanks for having me for the first time. Looking forward to the others. I'm Andrew Wynn, one of the co-founders of Ascend. Ascend is the first modern insurance payments platform. We're an all-in-one payments platform for independent agents. We allow you to do premium finance, digital payments, automating payables, things like that. To Steve's point earlier, it's really about saving you time and helping you do what matters to you, which is sell insurance and help people find the right coverages, and not worry about all this other paperwork and stuff traditionally associated with selling insurance.

Ryan Hanley: Guys at home, you've heard me talk about Ascend a little bit. Rogue is an Ascend client. I processed a payment with them today. To me, there is no easier system on the market for capturing payments. The fact that you can do standard payments or premium finance, and the ease of it, just send out a link and you guys kind of take care of the whole thing. I don't even have to send the email anymore. There's a button where once it's all set up, I just click go, and you guys take care of the email and the reminders. It's been a game changer for us. I appreciate it. And you obviously pay the brunt of that in terms of all the Slack messages that I send with different insights that I have. We'll call them.

Andrew Wynn: No, we appreciate it. But yeah, we really want to take that muscle memory away of deciding, "Hey, should I offer premium finance? If so, let me get a quote. Let me go to the systems." We push that to the customer so they can decide on the fly. "Hey, do I want to finance this or not?" If so, they choose, and you as the agent don't need to be in the loop of that. We handle the rest. So really saving you a ton of time.

Ryan Hanley: Very cool. Okay, Peter, you're up.

Peter McDonald: Yeah, my name is Peter McDonald. I'm one of the co-founders of Wunderite. We built what I think is the best experience to fill out applications with your customers. Quick background, I was an agent for seven years. I wish Steve and Catalyit existed five years ago. We were literally looking for a fractional CIO. And I love the concept of Ascend and knew I had a use for that in my own life as an agent, as I did for an easier way of filling out applications. I used to fill them out with pen and paper. It was literally the fastest way to do it. It drove me crazy to think that I would work so hard to win deals and then fill out apps with paper or Adobe Acrobat or whatever. So Wunderite is the best, easiest, fastest way to fill it out collaboratively. Invite your customers, click a button to send them an email, et cetera.

Ryan Hanley: I will also give another disclosure that we are a paying client of Wunderite. Neither one of these guys or any of these guys are sponsors of the show. This is a real story. We hired a new account manager for our team, we call them Client Success Associates. She came from a standard agency and she needed to do something in the Accord form. She said, "Can I get a login to Adobe Acrobat to manipulate this form?" I said, "No, you don't need to do that." She said, "What do you mean?" So we Zoom and I do a screen share. I go, "We use this tool called Wunderite to do that." We get about two minutes into the thing and she literally goes, "Ah," and she has a physical and audible reaction. She goes, "Holy shit, this is so easy." I said, "Well, use the tool." It's crazy how quickly people take to that process. We use it every day pretty much. So I just want to put that out there. None of these guys are sponsored. I use their tools.

Ryan Hanley: So, love it. Now that we've gotten all that nonsense out of the way, let's talk about the future of InsurTech. I want to start with Steve because Steve's the oldest, has the most experience, and only by a couple of years.

Steve Anderson: Yeah, well.

Ryan Hanley: Steve's also probably the smartest out of all of us.

Steve Anderson: That's for sure.

Ryan Hanley: So Steve, you uniquely have this breadth of experience in our space, really starting from when tech first started to infiltrate into the industry to now, where you've lived through multiple iterations of "everyone's going to go away and there's not going to be agents anymore." We cycle through that phase and then come back. It does feel like we're in a fairly unique period where technology is starting to be built with agents in mind from the very start, not trying to disintermediate them but strictly trying to take them to the next level outside of the standard technology players that we all had to use for so long. It's a really interesting, innovative time. I'm interested in your take. How would you kick this conversation off? What's going through your coconut?

Steve Anderson: I think the phrase hitting me right now is the democratization of technology. When I started literally in the 80s, there were few options, they were expensive, and they were not at all customizable. In presentations I would do in the early 2000s, I was telling agents, "You need to get a website. This is what's coming." There were a lot of people talking about not needing an agent anymore. I think perhaps one of the most interesting aspects of today is that every direct-to-consumer player has suddenly recognized that agents are there. I've been trying to figure out for a while what the change was, why that mindset is changing. Platforms, processes, procedures, tools coming out specifically designed to help the agent move forward. It's not about technology. It's about meeting the customer where they want to be. The democratization of technology means even some of the smallest agents today have tools available. If they're willing to think differently, they can do amazing things today. I think that's part of what's different.

Ryan Hanley: You are our fact checkers. The fact that you said it means it must be true. I think you're right. I have loved secretly watching how much of a jerk Lemonade and their CEO were to all of us when they first came in, and now watching them placate to agents because they can't crack 40-something percent retention. On their last quarterly, I find that hopefully humbling to him, although he's probably on some yacht in some Caribbean island at this point. They were really the case study for an app, a personified bit of what they called AI, which was really just CSS code. Could this replace the interaction that someone has with a human? They have proven the case that it just doesn't. I'm not a behavioral psychologist, but to me, how many of these case studies do we need before we all realize that to differing degrees, humans have to be part of the process? There hasn't been a case study to the contrary.

Steve Anderson: I always like to be careful too that agents can't just sit back and go, "Hey, I've been successful. I don't need to make any changes either." That's the interesting balance act that we need to keep in mind.

Andrew Wynn: That Lemonade point was proven with arguably the simplest insurance product. If you can't do that in renters, how are you going to do homeowners, auto, commercial? It gets much more complicated and you definitely need a human in the loop. But I agree with you, Steve. I think we're actually in a really great time for technology-inclined agents and customer-obsessed agents to come and capture a ton of business. People are going to be a lot more efficient and effective than they have been able to be historically using technology. If they're willing to adapt, we're going to have these super agents, people like Ryan, who are going to be able to come and clean up a ton of business. I think it's going to be a really special time for folks moving forward.

Ryan Hanley: I'll tell you what, in particular, Wunderite and Ascend as tools have done for us is open up the E&S market. I was told from the beginning, "Don't go out for small business. There's too much E&S. You can't make money doing E&S. It's unprofitable." I must have heard from two dozen agents when I explained about a year and a half ago, about six months in a row, I did a solo episode where I said, "Hey, we got our butt kicked by COVID. We're pivoting. This is what we're doing." I shared that idea and got a ton of feedback. Everyone said, "That sounds great, except E&S is going to destroy you. You're not going to be able to have a business." What is exciting is that we now have eight people, but for most of our history, except for the last three months, we had only three people. Almost 50% of our business is E&S. It's because of tools like Ascend and Wunderite that are so accessible, even to a small agent. Now E&S, which has been this thing that no one wanted to touch, I'll take an E&S account just like I'll take any other account. It means nothing to me. We don't go in our head, "Ah, E&S." We're just like, "This is what we do. Bing, bing, bing. We put it in here. We get the Accords. We send them into this company. We use this for payment." It means nothing to us. Those are the kinds of opportunities that today have opened up for even small agents that were really only accessible to bigger agencies who had a workforce to handle all that stuff. That to me is a game changer.

Andrew Wynn: Absolutely. I think you look at some of the biggest companies that have really verticalized in the space. What is the best version of this company look like? I kind of think about it like watching a football game in the playoffs. Is there going to be a playoff game where you don't see an ad for a big insurance company? No, they're always going to have ads. These companies have always been around. They're kind of the exception rather than the rule, because a lot of the business that independent agents are writing, to your point, it's not standardized. It's regulated at a state level. It's written regionally. There are these different niches and pockets. Insurance agents like yourself have always had a take on customer experience. It's always been a top priority for agencies, always. A lot of agencies have always known it could be better, way better. You see this not just with Wunderite, but with companies like Tarmika, Agency Zoom, or Glovebox, literally founded by former agents who just knew there had to be a better way. I think back to Steve's point of democratization. We're at a point now where the tools that some of us agents wanted five, ten years ago are finally coming out. As an agent, you have those tools and the barrier to entry is not super high.

Steve Anderson: I saw Carrie Wallace down in North Carolina talking about agency valuations and all this M&A activity. She was doing these valuations and said, "We're going to crest a thousand." I think we easily crested a thousand, pushing up towards almost 1200. What's really interesting to me is despite that, the number of agencies has stayed flat or even increased, because the barrier to entry for agents with these types of tools allows you to be remote, work out of your house. We don't have an office, but we can still provide an incredibly professional experience. That's exciting because now you have all these new people popping up. Some won't be successful and will fail just like anything else, but they get to take this shot that even five years ago, I don't know that they could have launched these types of agencies or gone after some of these niche markets because the tools just weren't available or they weren't democratized enough that they could customize them in a way that would work for them. They had to kind of play within the same rules that everyone had to play in.

Peter McDonald: I've definitely felt that energy. I was down at the IOA in Florida and man, the energy was awesome. It was a ton of new agents building from scratch, starting scratch agencies. If you want to talk about entrepreneurship, that is exciting. You have people in every pocket of the country starting every niche type of agency imaginable. First-generation insurance agency. It was a lot of fun. It was refreshing as a millennial insurance former insurance agent.

Steve Anderson: The most recent Future One study identified approximately 36,500 independent agencies in the United States. That number has fluctuated not by much over the last number of years. What was really interesting to me is 14% of those agencies are five years or younger.

Ryan Hanley: Wow.

Steve Anderson: I believe the M&A is actually throwing off agents, producers, staff who don't want to work for a large organization. They like the smaller feel. The tools they can utilize today are cheaper, better, more useful, more customizable than they ever were before.

Ryan Hanley: I have a question for Andrew since he hasn't had an episode on the show. When you were evaluating starting Ascend, looking at the space for opportunities, you saw payments was a problem. Payments was a huge problem. The fact that premium finance companies got away with operating the way they did for so long is absolutely bananas. I'm glad they can't operate that way anymore because you guys, and to be fair, there are a few who have put some improvements in, so you're not the only game in town, but obviously I'm a big fan. When you started evaluating, was it just that you knew payments? Had you been thinking about payments for a while? Did you do an analysis of the industry to find gaps? How did that come to be?

Andrew Wynn: Praveen and I started from the opposite place of Peter. We were working at a full-stack carrier in InsurTech. We had sold our last business to them. We saw firsthand that the agent channel continues to perform the best. We believed there was a real opportunity to build in the infrastructure for insurance, as opposed to coming and trying to build everything end to end and replace the whole stack, as a lot of full-stack insurance InsurTechs are doing. We said, "There's a huge opportunity to specialize." So what are areas where there is a very industry-specific problem? Payments and insurance are hugely industry-specific. It's not e-commerce. It's not "let me collect my money and then it's my money and I do whatever." It's commissions, endorsements, payables, premium finance. Premium finance doesn't exist in other industries. We knew it was very complicated at the industry level and industry-specific. We were also looking for something that wasn't a brokerage, carrier, or MGA-specific. Pretty much everyone has the same problems with payments and insurance. It's not like everyone does it very differently. That's how we arrived on payments as an opportunity.

Ryan Hanley: What's up, guys?

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 it as much as I do creating the show for you. All right, I'm out of here. Peace. Let's get back to the episode.

Ryan Hanley: Did you see? And thank you for that. That was kind of a setup question to what I really wanted to ask you, which is in that analysis, did you see any other places? Were there other segments, other little dark holes that may exist that you thought, "Hey, here's some other things"? I'm always interested in that evaluation process because I'm not necessarily one of those people who would just come up with an idea for forms or come up with an idea for payments. So I'm always interested in when you do find it, what does that evaluation process look like? Because I'm sure for Steve, and then I'll pass over to Steve too, you're looking for all these ideas, Steve. You're trying to be that aggregator of all this information. So was there anything else, Andrew, that you saw that you thought, "Ah, that'd be interesting, but maybe that's the next business or we'll start that once Ascend is kind of matured"? Or are there any other opportunities that you saw? Or maybe if you don't have any, throw that out to the whole group.

Andrew Wynn: We looked at a bunch of stuff, and obviously nothing we thought was as compelling as payments, which is where we ended up. We looked at the TPA space, which has a huge amount of opportunity, but the lens we looked through was the business model and monetization. There are a lot of problems to be solved in insurance, and not all of them will be able to sustain a meaningful, large business. That's a consideration as people think about starting agency tooling or insurance infrastructure type businesses. So we looked at a bunch of stuff that we didn't think would be a sustainable enough business. I'm curious what other people think.

Ryan Hanley: Yeah. You guys, have you guys—and I don't need you to give away your pocket business that's going to be your next big rocket ship—but are there any other sectors or spaces that you've evaluated or come across where you think, "Geez, I'm really excited for someone to solve this problem or this area"?

Steve Anderson: Well, as I continue to evaluate where things are and where things are going, I think there is a very interesting opportunity for the smaller agent in machine learning. I do not use the phrase artificial intelligence, because we don't have it right now. That is a term I'm on a campaign to eradicate. We won't have it for probably 30 years. But machine learning, pattern matching—there are some really interesting tools. I have a slide in a presentation I do about the democratization of machine learning between Google Cloud, AWS, and Microsoft Azure. There are so many tools that are accessible. It takes a bit more technical know-how, but just as a simple example, on my website I have an Amazon tool called Amazon Polly. Whenever I post an article, the tool automatically converts my text into voice. I get to choose the voice, the country, the language. It puts a bar on the top of my article that says, "Click here to listen automatically." The same process can do a couple of things. One, it can convert that to a podcast. I didn't do that because that's not the experience I want, but it also can be a skill in Alexa. So you could ask Alexa to listen to Steve Anderson's tech tips. Are those gee-whiz shiny object things, or are they worth experimenting with to find the right sweet spot? Machine learning and automated account reviews—I'm working with a vendor right now and developing some stuff for Catalyit. There are just some interesting opportunities. Staying within the insurance industry for me is key because insurance is a great industry to be in—they're five to seven years behind everybody else. So when I talk about something, everybody thinks it's a wow, and the rest of the world goes, "Oh yeah, we did that X years ago." I probably sound smarter than I actually am just because everybody else is farther behind.

Ryan Hanley: Come on, Steve. Follow-up question: what accent did you choose?

Steve Anderson: I did a male US, but you could do British, you could do Australian. By the way, the other thing I do is I actually translate that article into four different languages. Think about that, depending on where you are in the country. It could be Spanish, could be Vietnamese, could be Polish. I'm thinking of different areas of the country that have larger populations that speak a different language. Or in Alabama, it could be a Southern drawl.

Peter McDonald: I saw something like this in practice recently. We changed our health insurance for our company this year. I went onto the portal. They give you a free Fitbit because they want to track your data or something, make you healthy, make sure you get your steps in. But there was a video review of your insurance policy. It was like, "Hello, Peter, here are your family members." It put their names on the screen. Then it said, "Here's your coverage and here's the terms." It was a whole video customized to me. It was definitely cool. I've heard about this and thought about it in our own sales demonstrations, but it was really cool to see an insurance company actually implementing that for the first time.

Ryan Hanley: What's funny is we use Neoteric Agent, which I love Grant Botma, but that's the worst name of any tool that exists in the industry. Grant, I love you, but your tool has a terrible name. But I love the tool and I use it almost every day. It's a video proposal tool. There are a couple of these out there, it's just the one we use and I like it. We do a simple thing: we set an expectation before we sell. We say, "Hey, after I gather everything, the next thing that's going to happen is I'm going to figure out what company program coverages I recommend. I'm going to send you an email. The email has three parts. It has a high-level overview. You're going to get the download of the PDF right from the company so you can see exactly what I see. And I'm going to do a quick video breaking down why I chose this company and the coverages." People lose their minds. They say, "I've never seen anything like this before. I can't believe you took the time to do this." Took the time? It was like five minutes. Imagine a normal sales process is 45 minutes across the table, pushing paper, with an easel chart and graphs. This is five minutes of me just in front of a camera. Half the time I'm in a hoodie, and people lose their mind. When you talk about technology that in our industry is mind-blowing but in other industries is run-of-the-mill video proposals—it seems so remedial, but people absolutely lose their minds. I get people who say, "I don't even care what the prices are, I'm in." The emails we've gotten back—it's bewildering to me. But I guess that's why there's opportunity.

Steve Anderson: I think that's right, Ryan. That is why there are opportunities. When I was putting Catalyit together and doing estimates of what penetration we would have with independent agents, part of what I did was take about 20 to 25 percent of our universe off. I figure that's about the right number of agencies that don't care about technology, never will. They're not going to invest. They know they're going to sell. That's not my audience. I like to try and convert them, but I've decided I don't have time anymore to try and do that. If they don't buy into it, that's not a catalytic ideal agency. It is the agency who is willing to go, "Gosh, that sounds interesting. I'm willing to test that. I'm willing to try it. I want help figuring this out." I'm hoping that percentage will shrink with M&A and all the changes going on in the agency world. But frankly, even some of the bigger organizations that everybody thinks have the resources don't have the mindset to actually be willing to experiment and fail, experiment and fail, experiment and get a big hit.

Ryan Hanley: Andrew, when launching Ascend into the marketplace—and Peter, I'm going to ask you a similar question if your answer is different—what has been one of the most interesting pieces of feedback you got? Either about adoption or something you didn't see coming? Has there been anything unexpected about the process of rolling technology out to independent agents?

Andrew Wynn: That's part of the fun of doing this work, right? Like you were just saying, Steve, it's about experimentation, learning, and readapting. We've learned a ton as we've gone to market. Not coming from the independent insurance agent background, we've learned a huge amount about how client interactions typically work, how payments are collected, and what that generally looks like. We get to bring a pretty unique perspective because we don't have the fixed mindset of "this is how it has been done." We're able to mix in the feedback of "this is how we have been doing things" with a sort of first-principles look. That's part of the reason Ascend has come to save folks time. In terms of specific surprising things, the thing that surprised us most at the highest level was the feedback we got on the novelty of putting pay-in-full or rate plan digital payment collections alongside premium finance in a single tool. That was pretty foreign to folks in the market who were working with multiple providers—someone for digital payments, someone for premium finance. Putting those two things together, we had to explain it a few times before people were like, "Wait, so it's one thing?" We said, "Yeah, it's one thing." That was pretty fun at the beginning.

Peter McDonald: How many people get into—I don't know if we're in a Slack channel with the team from Ascend, but we give them a lot of feedback. We've been on the tool since August now. We say, "Hey, we'd love to have a button here or something." Whether they do it or not, we're just giving them feedback. One of the questions they asked was, "How does our interest rate line up against others?" I couldn't imagine. I'm sure there are agencies that do this, but I just could not imagine. Since you asked me that question, I have pinged some of my little networks to get feedback on this. There are literally people who, on a week-to-week basis, compare the premium finance interest rates from different companies to see whose is the best and where they place the premium finance. I said to them, "You do what? You spend how much time on what?" I couldn't even tell you what your interest rate is. I just create the link and send it off. If someone has a problem, we'll figure it out. They've got to pay the premium. It's funny where we as an industry are willing to invest time versus the things you guys have created and what Steve has been talking about for how many years—all these little efficiency finders and tools. But someone at an agency who makes real money, who owns that agency, will say, "You know what I'm going to do today? I'm going to figure out which one of my premium finance companies has the best interest rate." That seems like a useful use of my time? It just blows me away.

Andrew Wynn: I get it, right? Because it impacts your customer experience. You want to be able to provide your customer the best possible experience, and the rate of premium finance is certainly one of those vectors. That's part of the reason we wanted to build a product that was much more than just premium finance and provided a much better customer experience for two reasons. One, we didn't want to just compete on rate. That's what incumbent premium finance companies do today, and that's where their focus goes, as opposed to building better customer and product experiences that actually differentiate. We wanted to build a product that delivers that better customer experience while staying competitive on rate. We're happy for people to compare our rate to other folks. We're good there too. It's not that we don't want that to be the only reason people choose to use Ascend.

Peter McDonald: I just couldn't imagine going through the traditional premium finance process. Someone said to me the other day, "We're going to be a quarter point lower than whoever you use, no matter what you tell us who you use, and we'll be at least a quarter point lower." That was their pitch to me in a random cold email. I thought, "You couldn't have pressed a button that I care about less." Because I know it's not as easy as that, and my time is worth that quarter point. If that business owner cared so much about the rate on the premium they're paying, they'd pay the thing in full and not be a cheapskate. It's just crazy where we spend our time. If people had just listened to Steve for the last however many years, how much further along would we be? But they don't. They think about stupid shit, like finding a premium finance company with a quarter point less than the one they currently have.

Ryan Hanley: Peter, what about you? You're doing the same thing. People go, "Why do you use Wunderite?" Someone asked me the other day, "Why do you use Wunderite?" I said, "For forms." They said, "Yeah, but one, it's easy. It has all the supplementals, which you don't have. That's a game changer for me. And three, your customer can fill it out alongside you." Those three things—none of them at face value seem like game-changer ideas, but put together, they save a tremendous amount of time. What has been the most interesting thing you've heard from someone who maybe did or didn't decide to use Wunderite?

Peter McDonald: The top thing is make it easy. The reason I arrived at this is, I think where Andrew was very thoughtful about how he created Ascend, I think I was an agent. I was like, "There has to be an easier way." I was banging my head against the desk, or I was having my account manager yell at me or be angry at me for not filling out applications. That's how I started out to create Wunderite—out of sheer brute force. I said, "I'm going to do this. I'm going to teach myself to code to build this thing." I had very opinionated ways about the way I like to work, and that's built into the software. I have a lot of insurance designations. I made cold calls and sold policies. So I'm opinionated. We get great feedback from our users. Sometimes they say nice things to us. Most of the time they say nice things, and they don't always tell us the bad things. So we actually track how people use the software. We anonymize their mouse movements and what they're typing, and we can playback random videos of when things don't go well for them. I didn't even know this thing existed until our product person said, "We need to use this to make the software better." We're super tuned into both the feedback we get—whether it's written, recorded video, Slack message, or Intercom—but even more so, we look at how people actually use it when they're not filtering their opinions. Seeing people get stuck is really painful. You think it's pretty simple—there are two buttons on the screen—and they're like, "Which button do I click?" The message is there has to be one button, right in the middle of the screen, flashing red. Not really, but basically that's what it has to look like because to your point, you like it because it's easy and fast. In the old days, to Steve's earlier point, people would put up with software where you'd have to onboard, take classes, even hire coaches to walk you through how to do XYZ. Today, my own patience included, I have about 30 seconds to a minute of attention span when I'm using a new thing. If I can't figure it out in a minute, I think, "I can order a Tesla in a minute. Why can't I get an insurance policy? Why can't I fill out a form?" We just want Wunderite to be so easy that there shouldn't have to be a user manual. It should be hit-you-on-the-head obvious, but at the same time really powerful because insurance gets complex and there has to be a lot of complexity behind that easy interface. That's been one of the hardest lessons—seeing people use the software and get stuck on something I thought was obvious. My own dad included, who has an agency and is a big fan of ours and uses it. It's painful when I see him use it and he gets stuck. I think, "Yeah, you got stuck there. I probably would have gotten stuck too. I don't know how we released this, but we've got to fix it."

Ryan Hanley: I think one of the most promising trends from 2015, 2016—the disintermediation or whatever words people use today—is the openness and transparency of the evolution of products. Today, I get to give Andrew direct feedback. His team gets direct feedback. Like the other day, there was a screen that didn't have the name of the account on it. Just a super simple thing. I sent him a screenshot and said, "Hey guys, it'd be super cool if the name of the account was on this screen." Whether they do it or put it someplace else doesn't matter. But the fact that I can—and I know I'm not the only one; there's a collection of agencies giving feedback—write to the source and say, "Hey, this would help us do our job better." That was never the case with these other companies. It took me two weeks to get Vertafore to add a user to my PL Rating account. I wanted to pay them more money, and it took two weeks and two phone calls to get that done. You think, "What is everyone doing? I'm trying to pay you more money and you won't take it." That mentality of openness and iterative changes—I love how Better Agency every two weeks was putting out a list of updates. It was almost hard to keep up, but it was cool to see they had a list of what we launched and what we're working on in the next sprint. That kind of transparency makes you feel like you own the development of this platform. You become emotionally invested in its success. That has been an enormous change in our industry that I think is very positive.

Andrew Wynn: Absolutely. I remember being the agent sending out lots of emails to different technology vendors to fix XYZ thing. I get it—it's tough. There have been some learnings along the way. It's tough when you're on the other side of the table trying to manage all the demands. But I think, and Steve could probably speak to this more, with the proliferation of new companies and new startups, the most important thing for us is that our users are having a great experience in most cases. They're coming back and telling their friends about it because it's making their lives easier.

Steve Anderson: Yeah.

Andrew Wynn: One point on that which is interesting and important to remember: Ryan, you're our customer. Agents are our customers. We obviously hugely value and care about what you think. But the question behind the question is, what do the buyers of insurance want? You guys are the conduit for that. Ultimately, we're all working toward better serving those customers, because that's how we win business. That's how you succeed, and as a result, how we succeed. We can't lose focus on that end customer. I think a lot of—even some agents, some of the folks Steve was talking about earlier in that 25% he cut off, but also a lot of technology providers—have lost that focus. Once you've done that, I think it's game over. We all need to maintain that obsessive focus on the end customer.

Ryan Hanley: Steve, have you seen—and I know we're talking about a very big gap between that 25% who are never going to be catalytic customers versus the people at the bleeding edge—have you seen people almost demanding more out of their providers? Has that been a general trend where before we would just say, "Well, this is what it is. This is what we've got to do," but now there's actual demand and pushback from the agent marketplace as to what they'll accept?

Steve Anderson: Very definitely. I think first of Applied and APIs and open access. Historically, they were very resistant to allowing third-party connections. I think a couple of things changed. One, I do think customers—because I talked to some of the big ones—pushed back on what they were trying to develop and wanted more openness. So I think that's one thing that helped them. The second thing that helped them is their new CEO, Taylor Rhodes, who came from outside the industry. I remember my first conversation with him was before he took the position. He was researching it, and I didn't know it. When he actually became CEO, I talked to him and said, "Did I say anything really bad?" But from that very first conversation when he took over, he came from the mindset that APIs were a no-brainer—you had to have them—not the "we have to protect our walled garden" mindset. It's taken some time, but that mindset is starting to change. We'll see how fast.

Steve Anderson: That's always the question. But I think Vertafore too, with their Orange Partner Program, again, is feeling pressure, and that's trickling down, certainly for other management system vendors. So I think there's no question that more agents voice their frustration. And the more I think they demonstrate that they are willing and have the capability of doing things on their own, which was always assumed they wouldn't. And I think that, again, goes back to my first comment on the democratization of technology.

Steve Anderson: Technology. It's, there are a whole lot of people that can do things today that never would have considered themselves technology focused or friendly or capable that definitely are doing things today.

Peter McDonald: It definitely seems like the Taylor Rhodes Applied is not the Applied of the past. No question. I haven't had a conversation with Taylor yet. I've heard some interviews that he's been on. I do not know him. Not sure I'm ready to trust them yet. But appropriate, right. But I do think it's a good thing. I mean, there's so many agents that are on them. People ask me the question a lot about agency management systems, and I'm not an expert, but I certainly have opinions.

Peter McDonald: I'm on NowCerts now, which I don't want to talk bad about them, but it does seem like they don't understand what they've built. An agency management system that people actually pay them for. So all that being said, there is no better agency management system than Epic if you want an agency management system that works, that is going to do what it's meant to do, that's not going to break and blow up and throw all kinds of crazy stuff at you, the downloads are going to work, that's going to be accessible and scale. There's no better, in my opinion, agency management system.

Peter McDonald: That being said, the unfortunate part is until they change the perception outside of their culture, digital agencies—which I believe are going to be predominantly the agencies of the future—are not going to use their system. You look at it and go, "Man, I'd love to plug HubSpot into that." Nope. Or, "Yeah, sure, for a hundred grand." And you're like, if I have to pay you to integrate with you when I'm paying you for the system... That was one of the things I said when I was looking at AMS 360 pretty hard. I couldn't get past the 1987 font and the way the system set up. I just couldn't get past that.

Peter McDonald: But the whole paying for integrations thing, I'm like, I'm paying you to use your system and I want to send data into your system, and you're telling me I have to pay you? I don't know. To me, it's just completely the wrong mentality. It's still that "you do what we say" kind of mentality. And I don't think the next generation of entrepreneurs in our industry are going to abide that. I think that's why you see platforms like Better Agency. There's this woman in Virginia Beach who builds custom Salesforce installations, and she's book solid for like a year because everyone just doesn't want to have the rug pulled from them.

Peter McDonald: That's the part that I think is really interesting. I think I know for a fact, everyone's scared about your two companies. They're like, they're great today, but what happens when Applied or Vertafore buy them? What are they going to turn into? I mean, you guys have probably heard that from people already, right? Every platform that's exciting and young and fun and is growing and adapting and listening to agents gets to a certain size, and then Vertafore or Applied come in with a big check, or Zywave. Right. And then it becomes garbage.

Peter McDonald: When does that cycle get broken, and who breaks it, and how do we break it? Because those three options, I struggle to believe those three options are the future of our industry. I think they're part of our industry forever, and that's something they shouldn't be. But how do we keep independent technology independent? I know the founders got to get paid. I completely believe that. I completely believe that the risks that they took and all that. But how do we keep independent InsurTechs independent in a way that allows them to still be customer focused without the only exit strategy being one of the big three? And then the tool that they built and their legacy turns to crap, which has just happened over and over and over again. That's what concerns me.

Andrew Wynn: Yeah, I think you're absolutely right. And we've heard this from the beginning. We've thought about it. Nick from Better Agency posted about it with the AgencyBloc acquisition recently. I mean, it's out there, right? And it's no secret. I think that with the amount of funding right now going into InsurTech and the amount of new solutions, there's a better opportunity now than there's ever been to have real new options.

Andrew Wynn: I think with the creation of Broker Tech Ventures, which we were a part of, it's actual agencies investing in tech because they want to have a say in control of what's happening. And I think that's been helpful for us. And I think that as an industry, we need to have that ecosystem to support the tools that we want as agents. So we're excited about the future.

Peter McDonald: Yeah, that's good. I think you're right. What about you, Andrew? You're like, "Give me that paper. I can't wait. Send me that term sheet, baby." No, no, I'm kidding. I'm kidding. Andrew's not like that, guys. I'm just busting his chops.

Andrew Wynn: We're in this one. And I think there's a lot of value to be created. And that's obviously a huge reason why some of these big companies snap up InsurTechs. But I think as more and more folks continue to adopt technology in a faster way, thanks to things like Catalyit and Steve, I think some of those teams building in InsurTech will actually start realizing, gosh, it is worth being in this for the long haul as the adoption increases. And we don't need to just tack our product onto Applied's existing customer base, for example. We can go and do that ourselves. And I'm really, really hopeful for that. And that's certainly the approach we're taking.

Ryan Hanley: Yeah, that's cool. I think it's a great problem to have. When you build a great product, it is a great problem to have all these people interested in big platforms. And I think that's tremendous. When I think about independent agents and where we're going as an industry, I know everybody says the same thing about every new tool. They say it about Better Agency and Nick. They say, "Hey, eventually someone's going to come in with a big enough number, buy them up, destroy the tech, and we'll have to wait for the next iteration of the startup agency management system." I think that's sad.

Ryan Hanley: I would love to see a path for founders to reap the benefit of the risks that they took, which I absolutely positively believe that they should be able to do, while staying independent from these large conglomerates. Whether it's just a better ecosystem, a more connected ecosystem where you don't have to be bought, maybe it's a platform like Steve's who are able to get everyone in the same room and allow for that. But I think it's a very exciting time.

Steve Anderson: Yeah, one other kind of comment too, and it really is a result of my work with Catalyit and getting that going. But it's interesting to me how many state associations, bigger than I realized, are actually investing in some startups, helping them get going. Part of it is financial return. Part of it is service and benefit to their members. And I've always seen potentially Catalyit having some kind of role in that. I don't know what that looks like at this point. We got to get going.

Steve Anderson: But again, it's interesting. And I think some of those investments are not as focused on buyouts and cashing out as much as "Are we serving our members and are they getting the help that they need?" So I think that's another interesting aspect of not just the big boys playing and taking it over, but again, investment from agents themselves, and also from associations. There are a handful, quite a few actually, who are able to and are making some of those strategic investments.

Ryan Hanley: Yeah, I think so. I want to be respectful of your guys' time and of everyone listening. I'll just give everyone a final thought here to comment on. If I were to surmise this conversation and the concept of the future of InsurTech, it's that highly valuable products are now becoming downstream available at costs for agencies of any size to really build the type of agency that they want. That makes this one of the most exciting times to be in our industry that have ever existed. That's kind of my take.

Ryan Hanley: Knowing individuals like yourselves and many others who are playing similar games, this is a lot of fun. You get to build whatever you want, and that wasn't the case not too long ago. So I just want to say thank you to you guys. For everyone listening, I'm going to have links to LinkedIn's and websites and any other contact or resources that these guys send to me on my website. But also, just Google these guys, you'll find them. LinkedIn them, connect with them if you're not already. I just couldn't recommend the insights, thoughts, and the tools that you guys are building anymore. I just want to say thank you to three of you for choosing the show to come on and have this conversation with. It's been such a pleasure.

Peter McDonald: Ryan, it's been fun. Yeah, very fun.

Steve Anderson: Thanks, Ryan. Appreciate it.

Andrew Wynn: Thanks for having us. Been a great time.

Ryan Hanley: Thanks for it, and I'm looking forward to the next one.

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