RHS 150 - Solving Industry Classification with Alan Ringvald

Ryan Hanley: Hello everyone and welcome back to the show. Today we have an absolutely tremendous episode for you, a conversation with the CEO of Relativity 6, Alan Ringwald. Now, you may or may not have heard of Relativity 6, and it's very possible that you haven't, and that's okay, because what Relativity 6 is doing is solving a very distinct problem in our industry, which is figuring out the NAICS code for a business, figuring that NAICS code accurately, and being able to consistently deliver results that happen in real time so that we either as frontline agents trying to figure out where best to place business or what industry class to associate a business with and underwriters can easily have a single source of knowledge in which they can communicate around what the proper industry for a business is.

Now, if any of you write commercial insurance, particularly small business, figuring out the industry class can often be a major challenge and can be a tremendous roadblock, especially when there's disagreements between, say, you, the agent, and the underwriter as to what a class should be. And Relativity 6 is solving this problem. They're doing a tremendous job. Any of you who are appointed with Coterie, as we'll discuss, are familiar with Relativity 6's technology in that Coterie is one of the best industry finders in the game, and it is powered by Relativity 6, which means that, from my perspective and the usage of many different portals for all these different carriers that we have access to at Rogue, the work Relativity 6 is doing is the best in the industry. It is a best-in-class tool for figuring out which industry or which class of business a particular business should be associated with.

Okay, so there's a lot of mouthfuls in there and hopefully that came across. It'll be much clearer once you get into the episode. Listen to what Alan and I discussed and there's a lot of interesting stuff in here, not just about Relativity 6, but about the insurance industry in general, technology, what it's like to be someone who did not come from the insurance industry and is now doing work in our space and sharing, selling into our industry and all that. Full disclosure, I'm not an investor in Relativity 6. We don't use Relativity 6 outside of the carriers that use it. And they're not a sponsor of the show. So just like to get that out to you. So, you know where I stand versus this company. I just think Alan's a tremendous guy, think he's very smart, love what they're doing at Relativity 6 and wanted to get just kind of his ideas and the problems that Relativity 6 are solving out in front of you guys.

Before we get there, I want to give just a big thank you to all of you as always for listening and a simple ask. Guys, if you enjoy this show, tell a friend, share the show, maybe leave us a rating, review on iTunes. These kind of things help us grow our audience, get in front of more insurance professionals. There's more new people coming into our industry every day. And if you've been a long time listener of the show, a simple share into social media or just text messaging a friend, "Hey, you should subscribe to this show," helps go a long way of just increasing our audience, helping more people get access to the companies, thought leaders that we bring onto the show. And obviously, I charge you nothing. This show doesn't cost anything other than your time, which I guess is expensive. And I appreciate you helping us continue to grow the show because it helps us match these thoughts, these ideas, the concepts, the way that I'd like to address problems and that the guests that we bring on address problems, it exposes more like-minded people to those concepts. So any kind of share, any kind of support, any kind of rating, review you can give for the show, greatly appreciated. It's how we grow the show. And as always, I love you guys for listening. With that, let's get on to Alan Ringwald.

[Sound of eating]

Ryan Hanley: Yo. What are we eating?

Alan Ringwald: Yogurt. Healthy.

Ryan Hanley: Yeah. Gotta keep looking good, man.

Alan Ringwald: I know. I know. You're taller than I thought you would be too. That's cool. That probably helps in general in life.

Ryan Hanley: I gotta put fuel in the body. There's a lot of body to move around day to day. So for sure.

Alan Ringwald: For sure.

Ryan Hanley: No, I can't tell you the last time I just had lunch.

Alan Ringwald: Really?

Ryan Hanley: Well, because I just sat down and yeah. I just work all day.

Alan Ringwald: I know. I know that there are people, I've heard of people taking a lunch. I know that's like a thing. I don't know that that's happened in my life. It's just like, "Oh, I'm starving. I'm going to walk to the fridge, grab yogurt. Shovel something." Try to shove it in my face before I let you into this Zoom and it just didn't work. I couldn't get it in the face hole fast enough.

Alan Ringwald: Right, right. Yeah, yeah, yeah, exactly. Well, don't put on any airs for me.

Ryan Hanley: Well, good. I didn't. So I'm wearing a t-shirt. I'm eating yogurt. I love it. But no, dude, I'm super excited to talk to you.

Alan Ringwald: Cool.

Ryan Hanley: We have a couple of mutual friends and obviously we met in person and we talked on the phone. I think it may have been many six months or a year ago now. I can't remember when, but it was a while ago. But I'm just so intrigued by what you do. And then I was talking to some of my friends at Coterie and they were telling me a little bit more. And I know you've got a partnership with them and a bunch of other people. And just my experience with what you're doing, with at least some functions of what you guys are doing, has been very, very positive.

Alan Ringwald: Awesome.

Ryan Hanley: So I want to take this time together and just start with, and then I want to talk about some industry topics and get your thoughts on that too. But just start with like, what is Relativity 6? And what is the problem that you guys are solving? Let's start there. And then we'll cook.

Alan Ringwald: Love it.

Ryan Hanley: That'll also give me a chance to eat my yogurt while you answer that question.

Alan Ringwald: Should I just start blabbing?

Ryan Hanley: Start blabbing.

Alan Ringwald: Okay, cool. So Relativity 6, we're actually, it's pretty simple. We're focused on one kind of data point, which is what does a business actually do? So what's their primary business activity? And the value prop, what I think sets us apart in general, is that it's not about what the company did when they incorporated. It's not about what the company did when they got that DMV number. It's not what they did last year. It's all about what is this company doing right now?

And what was cool is actually at that InsurTech Boston conference, I think it was Risa who was talking about how since COVID, 20%, at least of small businesses changed their primary business activity. And that makes a lot of sense. Especially at that smaller tier, that segment that a Coterie cares about, there is a lot of movement. There is a lot of pivoting. And it's hard to narrow down exactly what it is they do now versus what they did when they started or even when they started. It's self-reported a lot of the time. And what do you care as a business saying what you do when you're reporting that, not realizing that it's a massive data point for an underwriting decision down the road.

So what we do is we focus on that. The way we do it is what we think is different in that we're not buying any third party data and kind of reselling it at all. It's a true original data point and it's all about digital footprint. So that's our methodology. It's kind of got into the way that a commercial underwriter would take in a submission and basically go out on Google and try to figure out, "Okay, let's find this company. Let's figure out what they do. And then let's map it to one of the thousand six digit NAICS class codes," which is like the standard way to solve this problem.

Now, I don't know if you've ever done it, Ryan, but it's brutal. It can be a long process. You have to do a lot of these small commercial underwriters doing 20, 30, 40 of these a day, maybe more. It can take half an hour, 40 plus minutes. So what we do is we mimic that with technology. Our technology takes the name and address of a business. We do about 400 pages worth of search results in real time. So we use search engines. We grab all the metadata from that in that moment in time when we do the search. That becomes basically this big corpus of text about the business. We grab all that content. And then we start predicting what does this company do from a six-digit NAICS class code level with some confidence scoring.

We get into things like what are the most relevant websites related to this business? Because a contractor, for example, a lot of them don't make websites, but they're definitely reviewed on Yelp or Porch.com or Facebook. So we compile all that quickly. And then we even add what we call keywords. So these are the most relevant words related to the business. And all of that happens in about one to two seconds. So it's very fast. It's happening in the moment. We don't have a database, actually. So we're not calling anything static. It's live. It's happening in the moment in time. And it's going through an actual machine learning workflow. So yeah, that's the gist.

Ryan Hanley: So you don't have a database?

Alan Ringwald: That's right.

Ryan Hanley: If I'm wherever I am, a carrier someplace else, some other tool that's using Relativity 6 — I know it's hard to say.

Alan Ringwald: No, no, it is. You gotta like, it's gotta be like R6 or something.

Ryan Hanley: I know, we call it R6. I can't even spell it half the time. All right, I'm gonna say R6 from now on so I don't have to keep butchering that word with my stupid Irish mouth.

Alan Ringwald: No, no, no, not at all.

Ryan Hanley: So you are not pulling — when I type in a company, I start typing in a company and I get to address and I've seen it as quick as like, I have the basics of the address and whack, it's already pulled back. That's actually happening behind the scenes in real time. That's not pinging a database. That's really interesting. So my next question when you were talking was like, how often are you refreshing the database with that information? And what you're saying is, this is a real-time function. If I'm using your widget somewhere, your technology plugged into some company, that's actually happening as you're typing. It's taking that data, pushing it out and pulling back what they're finding in real time.

Alan Ringwald: Every single time.

Ryan Hanley: Wow, that is pretty incredible.

Alan Ringwald: I appreciate it. Yeah, it's just different, right? There's nothing — I'm not here to disparage those other ways to do it. This is just a different look. This is what happens when a human does it. A human just can't go over one or two pages of Google without losing their minds. It's a lot of data. We're doing hundreds of pages in that moment in time, grabbing that same amount of content and then displaying it. So we're just trying to make their jobs easier. It really helps with what they call premium leakage, where a lot of the misclassification piece is a big part of that. It just makes things run smoother. And again, it doesn't take away a hundred percent of the work. It just takes away a lot of it. So the underwriters can focus on what they need to focus on and not this kind of stuff.

Ryan Hanley: This classification — I mean, for any agent who's listening, I'm sure you've had, especially if you work in commercial, you've had a classification battle with an underwriter and it's brutal. They'll be looking at one website and you're going, "But this isn't what they do anymore. Look over here. Look, I have seven pages of pictures on Facebook of them not doing that thing that you're saying they do, because on the seventh page of their website back in 2014, they put that they might do that thing, but they don't really do it anymore. And here's all these examples of not doing it." That battle is unbelievably difficult.

And in my mind, I think a lot — this is another reason why I appreciate what you built — is that I'm always thinking in how many brain cycles does it take to finish this task? Not so much time, but how much thought, how cranked up do I have to get my brain going to solve this task? Because I'm battling with an underwriter for a half hour. The rest of my day might be hosed because I just took all the energy and brainpower that I had for that day and spent it on this battle over something as silly as a NAICS code or the word "roofing" was one place on the contract, one line on their website. And now they think they're roofers. That battle is exhausting.

If you can just get rid of that battle, you're just like, "Look, we're going to abide by whatever these guys say, because we trust this technology." And bam, if they say you're a roofer, you're a roofer. But if they say you're not a roofer, I'm not accepting that you're not. And just limit it. You've saved time, you've saved energy, you've saved thought process. That's a huge part of our game. There's just bigger things to think about than something as simple as what classification a business is. But it is incredibly important at the same time.

Alan Ringwald: Yep. You know what, if someone told me that this is what I'd be doing now five years ago, I'd say you're crazy. Because why wouldn't you know that a roofer is a roofer and a carpenter is a carpenter? But it's actually nuanced. It's not that easy, I guess. It's not an obvious thing. So why not have a little piece of technology to help you make that assessment? Again, it doesn't have to be the end all be all, but it'll give you a lot of data really quickly in our opinion on it. So you don't have to spend those brain cycles that you mentioned.

Ryan Hanley: Now, you guys didn't start doing this. Can you give us some of the background and how you got to this being — I'll operate under the assumption there may be more to come from you, but this tool today, how did you get to this place? What was the evolution that took you to get here?

Alan Ringwald: For sure. I was a fresh faced entrepreneur when I started this back in 2016 actually. So it's a cliche startup story. I started with my co-founder in grad school. We were nerding out on actually lifetime value. So like predicting the future value of a company. I'd worked at a lot of different companies where that was BS. They'd always ask you to do that. And it's like, why? Based on what? What they spent the last year or two years? That's not really indicative of much. So the whole concept was could we bring context to the table and make it make more sense, which is why we call ourselves Relativity, which is obviously hard to say and spell. But we thought that was a really interesting thesis.

So we ended up writing a whole research thesis, pulled in a lot of professors, got that going. The concept was could you bring modern advanced machine learning, bring all this external data about a company on top of their internal data, and start being more accurate about what they're going to spend next month, stuff like that. That was really the crux of the tech. And one little tiny piece of that was, wouldn't it be interesting to know what the company does from a contextual perspective? That could be something. And we're not from insurance. So we didn't think anything of it other than within the context of that lifetime value platform.

But we were grad students. We couldn't afford those large database providers and what you would need to actually train a model on that. So we kind of did it ourselves. It was really homegrown and it worked really well. So we plugged it into this platform. And so we were out there for years selling this broader lifetime value platform across all — literally our first customer ever was an aircraft manufacturer. So I'm talking about retail, all these different types of companies. And then insurance was like raising their hand saying, "Hey, we care about LTV a lot, can you start working with us?" So kind of naturally, we started working with a bunch of carriers, brokers, wholesalers, that kind of thing.

And that was the moment of like, wow, they're not very good at classifying businesses. We had no idea. And long story short, during the pandemic, had to do a lot of soul searching of like, what are we? What are we really doing? And I'd be happy to get into why that LTV business didn't make much sense ultimately to scale. But made the decision to go all in on classification because we by that point realized we had something pretty unique. Not knowing that we did because we didn't come from the space. We didn't know all the players in the industry. We really didn't know the value of it. So once we really did, we kind of just pivoted, as they say tech companies like to say, and we went for it. That was probably like two years ago, so still kind of newer on this, but it's tech that we've always had. We just never honed it and focused on it like we do now.

Ryan Hanley: So why didn't the lifetime value tool work exactly the way you wanted it to?

Alan Ringwald: Yeah. I mean, the output was good actually. But to get to the input was a super grind because you basically had to get monthly transaction data from large enterprises, including large carriers, and that was really hard to do on a monthly basis. Also, the data that we would get in was really dirty and we had to actually spend a lot of actual hours of people's time cleaning it to the point where we couldn't make it profitable. We'd spend more money cleaning than we could ever make actually outputting a prediction. So that didn't make much sense.

And then ultimately, honestly what was super interesting is the output of our tech then was propensity to purchase more stuff, propensity to be retained, all that. The truth of the matter is a lot of the brokers and honestly the carriers and stuff, they didn't give us credit. So it was like, "Oh, I knew that person was going to turn anyways, so thanks for nothing," or "Of course I know that that customer is going to buy more, I didn't need you for that." So attribution became an actual battle. And at that point it's like, we can't, this isn't working.

So that's why. And then we were like, man, this one thing we built was super super cool and we're starting to realize its value. And it was hard though. We'd spent years building that other thing and we literally scrapped it and we just went all in on this. So it was hard, but it super paid off. Definitely was the right call.

Ryan Hanley: So the technology that you've built around scraping search results pages and analyzing that and the keyword stuff. Are you considering other applications for that as much as you can talk about it?

Alan Ringwald: Yeah, no, for sure. I think one thing we're working on now, it's really interesting, is address only. So as you think about a lessor's risk and trying to understand what's been going on in that building for the last 10 years, what's going on with it now and maybe the history of that building through web search — we're working on that. That's something we're excited about.

We're doing more stuff around detecting the primary website as well. Are we sure that — which is hard actually in small business — so like is this local coffee shop, is this actually their primary domain or not? So we're doing a whole algorithm around that. On the keyword side, what's super cool is right now we're doing observable stuff like, "Okay, this is a coffee shop, here's all the things that we think that they do from a keyword perspective." But we're adding flags so that you can actually say, "Hey, if the word cannabis shows up anywhere related to this business, make sure that we know about it." Stuff like that. That's interesting.

I'd say that's kind of like what's happening behind the scenes today. But honestly, dude, I don't think we're going to go well outside of what we're doing now. It's a really hard problem technically. We like the idea of kind of focusing on one thing and being the best that we can at it.

Ryan Hanley: The simplicity and the focus from a business strategy perspective is great. Because I always know what the KPI is. What are we really trying to do better? Trying to be more accurate, faster, just easier to use. And just keep beating that drum. I've done this before in other businesses where we spread way too thin and weren't great at anything. It's a bad feeling.

Alan Ringwald: Yeah.

Ryan Hanley: Do you have an internal accuracy score that you keep for the quality of the results that you return?

Alan Ringwald: Yeah, so there's a thousand-ish six digit NAICS codes. We have an accuracy score for every single one of them. And it's constantly evolving actually. The secret sauce here is really good training data. It sounds simple, but it's honestly just the truth about this AI type technology. There's a core truth that if you feed it good training data, you're going to get a good output. But it's actually really hard to get good training data. You can't buy it. So we actually have to create it from scratch.

Ryan Hanley: So is it all just agent or user? Like, "Yes, this seems to accurately describe this," "No, this doesn't"? How do you train it?

Alan Ringwald: No, that's definitely the way. That's the reinforcement learning side where in production, they'll give us feedback and we'll tweak. But it's literally people at our company constantly finding good examples of roofers and carpenters and electricians and this and that and feeding that into the platform. That's what it really needs to succeed.

Ryan Hanley: Gotcha. So you're finding examples of say a roofer who you know is a roofer, they're a roofer, here's exactly what a roofer is. Letting the system do its thing and then seeing what the output is and if the output matches. Interesting.

Alan Ringwald: Yeah.

Ryan Hanley: What has been — when someone, I mean, why would someone push back against using what you're doing? What would be — do they like versus having a catalog of data pulls from say LLC formation data, which is where a lot of these come from? That's a big source of where they come from, which could be 10 years old, 12 years old. Obviously when I formed my LLC, I did it through — thankfully I have now reinforced a few of the pieces, but at the time it was just a LegalZoom LLC that I paid $400 for. And you're just checking buttons as fast as you can to get through it, to get your documents. So to me, there's a fairly obvious advantage to what you're doing. What might be some pushback that someone would give you? What would be a, "Hey, yeah, we're not really sure because of this"? Like what would that be?

Alan Ringwald: Yeah. Honestly, there are limitations to the tech. I'd say one is if it's a holding company, then we're probably not going to find it. The dependent variable for this thing to work is a digital footprint of some sort. So I actually don't think it's a bad idea to use us and one of these data providers that are pulling those LLCs, because then you're going to get the full picture, right? What if we're missing something on the — there's no website, there's nothing related to that company online? That's going to be an issue. So I'd say that's why you should, as they say, waterfall this. Use us and one of those. And now you've really completed the picture and solved the full problem.

Ryan Hanley: Why wouldn't you eventually just bring that type of — make the waterfall part of your product?

Alan Ringwald: Who says we're not?

Ryan Hanley: I got you. Okay.

Alan Ringwald: But yeah, eventually we're trying to add value and solve the problem. So I think that's a good path forward for sure.

Ryan Hanley: That's awesome. So that's very cool. Not necessarily something that an agent would reach out to you to purchase, but our carriers, our MGAs, anyone like that who's listening, any of our lead providers, any of our scaled — really, anyone who's scaling and needs to know industry quickly, underwriters, maybe even claims platforms. Anything like that, you would be a great fit for them. So if they, relativity6.com, check it out.

I want to start talking about some industry stuff. And we'll hit that again. So when you look out over the industry, stepping back from R6 and just looking at the industry in general as an entrepreneur who's been in the business for a few years, four or five years now — it sounded like just dissecting that — but still kind of probably feel a little bit of an outsider to the insurance industry. When you start to look at the insurance space, what are some of the places where you see really interesting things happening? Everyone tends to talk about the places that aren't working in our space, which I think is almost like punching down. What are some of the things that you see our industry actually moving on that seem to be taking shape or taking hold? And maybe not necessarily compared to other spaces, but things that you see us doing well, entrepreneurs who you see kind of tackling problems in the right way.

Alan Ringwald: Yeah, no, for sure. And when I started dipping into insurance, there were way less, I guess, of us. And by "us" I mean outsiders. Usually when you're solving a deep enterprise problem, you probably come from the industry and you've identified the problem in your job and you're like, "Oh, why don't I start a company to solve this?" And that's how it was, I'd say five years ago. Because there weren't that many insurtech companies. It was like Guidewire was considered an insurtech and then there's kind of a blank space and then first wave. And then I feel like we're in the second or third now. But I have a lot more friends that had nothing to do with insurance finally looking inward here. And I think there's a lot of reasons why. One, I mean, stating the obvious, the industry is doing really well, right?

Ryan Hanley: Like, you know, the world is hurting, but I think as you know, at a high level, insurance is still clicking and not really skipping a beat, which is awesome and has been the case. So that's that too. There are so many problems to solve. There are so many problems to solve, and we don't have to get into that too much. But the point is that there's a lot of great applications for technology that can slot in. There's a lot of data, right? Scale is something that is a dream for a tech entrepreneur. And by scale, I mean the volume of people, but also the volume of data available to do stuff. So that's awesome. And I think at a high level, it's kind of open for business. Carriers are... I deal with carriers, MGAs, wholesalers, mainly some brokers, some larger brokers. I'd like to kind of counter your point, but I think brokers could use this in some ways. But the whole... I just don't want to give them any ideas because I have all the ideas and I don't want anyone else to have them. I'm kidding.

Alan Ringwald: Yeah.

Ryan Hanley: But no, there's a lot of openness and willingness where I think before there wasn't. Even from a data privacy and security standpoint, the cloud is now taken for granted. Five years ago, it wasn't. You could say, "Oh, I'm on AWS," and they'd be like, "Cool." It was like, "No, where's all this stuff?" Now if you tell me you're on the cloud, I don't trust it. So that's changed totally. I think it's wide open for business. It's kind of intimidating. I don't come from this space, and I was like, "Whoa, insurance seems complicated," which it is. There's a lot of interesting nuance in how the ecosystem works. But if you can figure it out and really understand where the value is at each point of the supply chain, there's so much untapped opportunity. Come on in, the water is warm. It's a good time.

Alan Ringwald: It's interesting to talk about the different waves of insurtech. In 2015, 2016, I was at Trusted Choice. We just launched Agency Nation. A big part of that platform was about sorting through this new insurtech revolution as it was initially built and all the disintermediation that was supposed to happen. I will very biasedly say I'm glad that most of those a-holes got dashed along the rocks, just for the way they approached the industry. What I love about where we are now, whether it's the 2.0 or 3.0 version of insurtech, is that the first group came in, insider or outsider, very much with a "we know better" attitude. "You're all old, dumb idiots who move way too slow, don't know what's happening, get out of our way, let us fix all your problems." Today, it is such a different conversation when you talk to entrepreneurs, even entrepreneurs who've come into the industry like yourself, who had no prior interest or experience in the insurance industry. It's so much more about "How do we work together? How do we find some sort of synchronous relationship? How do we be a net value add to you? What are your problems? Let us help you solve them." Across the board, the conversations are so much more productive. What ends up happening from that is you get a symbiotic relationship where the tools are working together.

Ryan Hanley: We'll bring Coterie up again. Coterie is an agent-focused carrier. They also have a direct arm. In 2015, 2016, they come in and launch that direct arm the way they did. With the culture of that moment, they would have launched saying, "We're going to change the game." But they didn't do that. Coming in during wave two or three, they've been very agent-focused, very friendly to agents. I'm a fan, so this is no knock on them. But at the same time, they do have a direct arm, and people don't seem to care. I think that's much more the way it should be. Everyone's got a business. Everyone has to attack the opportunities they see. I personally think that them starting their own internal agency is a mistake. I've told them that, and I'm perfectly willing to say that in public. But it's okay that they do that. They need to learn their lessons. They need to learn how to be successful. What we've found is that tech entrepreneurs, or non-insurance tech entrepreneurs, can work hand in hand with very wonky insurance professionals and be very successful. That is one of the most exciting things to me about this moment. It provides opportunity for someone like yourself to come in and provide a tool that addresses a problem I don't know anyone inside the industry would have seen, and addressing it in a way that I had never heard of before, but is obviously making an impact. That's a tremendous thing.

[Host interjects with a request for listeners to subscribe and share the show.]

Ryan Hanley: No, I agree. I appreciate it. Coterie's been an awesome partner. I think they think about automation and technology, but they also think very deeply about the broker experience. That's a big piece of how they design stuff. They've been a huge partner for us.

Alan Ringwald: I love it. You talk about brokers could use your tool as well, and I completely agree. The number one problem that we have yet to solve at Rogue... For most of the problems we have to address at Rogue, we at least know what the solution is. We may not have built it, implemented it, or have it where we want it to be, but we have a whiteboarded concept that is fairly close to what the solution will be, or it's currently in process and testing. The one thing we don't have, and it is probably our largest roadblock, is: where does the business go? Every time I talk about this problem, I reference you guys. So hopefully you take that as a compliment.

Ryan Hanley: I'm blushing.

Alan Ringwald: If you are old school, one policy at a time, one account at a time, this is not an issue. But as soon as you try to scale, where does the business go becomes a major roadblock. To give everyone context, companies that scale end up finding one, two, three, maybe five max partners. The reason is not because that's all the partners they can get. The reason is because they can't manage the appetite of more than three to five partners. As a human, I honestly think... I give absolutely no legitimate data to back this up, this is just watching my team and myself. I don't know that we as humans can understand and regurgitate the appetite for more than three to five carriers. I think that's about all we can have individually. So let's say you're a national digital broker. You're getting accounts from every different state in all different markets, and you're getting them 12 to 15 times a day. Where the hell does the business go? Hartford could be an amazing partner for a certain type of account in Minnesota and just be way off in Iowa. They have their reasons. I'm not knocking them. But the person who gets the business goes, "Well, geez, I just wrote the same exact account in Minnesota, so I'm going to go right to Hartford." Then you look at it and you're like, "Oh shit, they don't even write it there." Now you're backed out, or you're going to Tarmika and going through the thing with Tarmika. Tarmika helps a lot, but it doesn't solve every problem. There's all this mishmash of where does it go? Who's going to have the best price? Who has the best coverage? How as a leadership team do you set a series of levers which allows you to sculpt the business to a certain extent to the carriers that you want? There is no tool in the market that does that. To me, the starting piece to all of it is an accurate industry class code. If you do not have an accurate industry class code, you cannot move forward with that process. It defines it. Maybe it's zip code, maybe it's industry class. It's either one or the other as the starting point for this. If you don't have those two things right, you cannot get to the next steps and you waste so much time. Thinking about that problem, have you seen anyone solve that that you're capable of talking about? Where do you see that problem falling? What kind of ideas do you have about that? I'm trying to get some free consulting out of you right now.

Ryan Hanley: You got it. No, a hundred percent. It's really interesting hearing it from a broker agency perspective, because I usually talk to carriers more, so I'm hearing it from their end. It's nice to hear from your end as well. I don't have a magic bullet. Everything you said is awesome and exactly why I'm thrilled. I don't show many emotions on my face, but I'm smiling.

Alan Ringwald: You have that gorgeous beard. That's the problem.

Ryan Hanley: The man makeup.

Alan Ringwald: Yeah. But I'm thrilled that you're saying all these things. It validates why we're working so hard on solving this one problem. It's just that important and that inaccurate today. So super validating there. We love Ask Kodiak and what they do. We have a partnership with them for this exact reason. What they do is amazing, and what we do helps make them more efficient. It's got to be a tech solution. To your point about the human brain, I'm buying what you're saying. You have anecdotal evidence, which is science. A human can't possibly comprehend all of those variables at the same time. So you do need technology to start pointing you in the right direction. Tech is never going to replace anything or solve that fully. But if it can at least point you in the right spot so you don't have to waste all those brain cycles starting from scratch all the time, if you can get 50% of the way there, then I think we've done our jobs as a tech provider. I will never say that Relativity6 or any other type of company is fully solving any kind of problem. That's a crazy, not real thing to say. I don't ever see that being the case. But it's this whole human-machine working together deal that sounds crazy, but this is a good example of that. Even in our technology, we'll get you a lot of the data that you need, but you should still look at it and double-check as a broker before you ship it off a hundred percent. We're not here to replace the way humans think. We're just trying to automate the process that could take you forever to do and help you do that better and incrementally improve.

Alan Ringwald: No, it does answer my question. The way I was trying to describe this to someone... Someday I'm going to find someone who knows how to code who will help me skunkworks this project. It's such a huge issue for us. I'm not a tech guy, I'm a user guy. In my mind, it's Relativity6 meets Tarmika meets Ask Kodiak meets Arius Analytics. Maybe it's just a platform that sits underneath those four tools. What you need at the front is the industry. The industry tells you what carriers to go to, which allows you to drastically reduce the amount of time, energy, and brain cycles spent picking carriers. Your people aren't going... Also, that immediately allows you to go in Pennsylvania to our E&S provider that we use for this class of business, or RT Specialty, or Excess, or whoever. Now you're immediately getting to the spot, then you're pushing that through. So it's Relativity6, Ask Kodiak, Tarmika, and then the Arius part. I'm just using these four companies that I like. The Arius part is then who do you actually bind it with? So it said, "I got the industry from Relativity6. Ask Kodiak told me Hartford was number one, Chubb was number two, and Liberty was number three." Even though they ranked them one, two, three in that order, after going through Tarmika and actually placing the business, we placed it with Liberty, who was number three. So now at the end, Arius puts a checkbox in: showed these three, Liberty was actually the winner. Now in the algorithm, Liberty might, over time, if that result continues to happen, be bumped up to number two or actually number one. So we have actual appetite. But we all know carriers, when they talk about appetite, "bending the truth" is as nice a way as I'm willing to say it. Or maybe they are just naive to what they put out in marketing materials versus what they actually are willing to underwrite. So you have what the industry actually is, what the carriers have said their appetite is, and actual results returned. Then you algorithmize to recapture. Essentially, what you're eventually getting is a hybrid between Ask Kodiak's "Here's what the carriers say they'll write" and what results you're actually getting. That allows you to get closer and closer to the answer over time. In a high volume shop where you might be talking about hundreds or thousands of quotes, now you know that in Iowa, you don't go to Hartford. You immediately go to Liberty because you know not just that they write it, but that consistently over time they've shown that they write it in that state with the most competitive pricing, and as a company we're okay with their coverage form. Now you're just one carrier quoting all the time over a broader carrier set. That to me is the holy grail for scaling retail commercial lines, especially in small commercial. No one has built that yet. If anyone wants to build it in conjunction with me and give me equity, I am okay with that.

Ryan Hanley: I don't know why you didn't call yourself a technologist. That was great. And I love the word "algorithmized." That was beautiful. Please steal that and use it. You do not have to give attribution. I just want to hear someone use it some other time and go, "It worked." Well done. That's well said. It's not crazy, what you just said. That's not a crazy idea. That makes a lot of sense. You just created a billion-dollar company. Congratulations.

Alan Ringwald: Well, unfortunately, I have zero IP on it. I can't code, and I just said it on a public podcast. So I'm sure someone smarter than me with fingers that know how to make things happen on a computer will make that before me. We'll call it the Hanley.

Ryan Hanley: I'll be your first customer. So, looking out over the industry, where do you see opportunity? Where is there some untapped opportunity or space? You talked a little bit about data. Data is such a weird thing. Part of me, when I hear data, I get aroused. I'm like, "Oh, fucking data. That sounds amazing. Let's do it." And then I ultimately have no idea what that actually means in terms of what's useful and what's not. I get lost in that concept. So when you look out over the industry, where are you like, "If I wasn't doing this, I'd be super into this thing over here"?

Alan Ringwald: No, I mean, look. You're giving data a bad name, but you're not. It makes sense. There's so much of it available. But what I've realized in insurance, again not from the space, is that information, if used correctly, is the strategic advantage. At least on the carrier and MGA side. For brokers too, right? You have all these broker platforms that are now arming people with better information about their client base to go out and take action. It's not that data is bad or good. It's like, what's the problem you're trying to solve and how much information can you gather about that problem to solve it? I personally love this space of trying to create original data points, not resell others and package it together. There's a business for that, and I'm not disparaging it at all. There's a lot of value there. But I like the idea of trying to find something original and bring that to the table. "Here's my opinion on this problem that you're trying to solve." That's what we're doing with classification. But there are a million other data points that need to be discovered to do that. In general, if your question is good, what else would I do? I actually love what Coterie is doing. Not to make this a Coterie-centric ode, but why not? I have a lot of friends at Coterie.

Ryan Hanley: It's all good. They're great.

Alan Ringwald: They're really smart. I think they're really thoughtful. I like how they've architected things. I like that they think about things from an automation perspective, but not fully. It's a good balance. The point of it is to let the humans do what humans should be doing and not what they shouldn't be doing. That's the best way I can put that.

Ryan Hanley: You should build a human-optimized agency is what I hear you saying.

Alan Ringwald: I think so. This came up a lot at the conference we were at. Agents and brokers are not going anywhere. They are so valuable for this process. But can we arm them with more stuff to be able to have them do their jobs more efficiently? Why not? What's wrong with that? It's back to the point of it's not one or the other, it's both. How can the two dance together to make it work versus competing? That's not the way.

Ryan Hanley: I agree. I think also there are a lot of bad decisions around tech made in our industry as a result of considering agents that don't want to grow. If I were working at a carrier today and I was tasked with understanding where we want to spend our time, resources, and energy, obviously you always have to maintain your current plant and continue to do what you've done. But what I see a lot of carriers do, unfortunately a lot of legacy tech platforms, is they look out over their agency plant and they value the opinion of every agent exactly the same. Not that anyone's opinion is wrong, I don't mean that. But there is a substantial portion of the agent population that has no intention of growing, regardless of what they say. They're perfectly content with where they are. God freaking bless them for being in that position. There's nothing wrong with it. This is not a knock on them. But that mentality is not going to push us into the future or sustain us into the future. That is the mentality of a human or a group of humans who've done an incredible amount of work and gotten their business to a place where now they don't want to put more stress on themselves. I am relishing the day that, although understanding my personality, I'll probably never be content. I hope there is a day when I feel that way, when I'm like, "We're good, we're making plenty of money. We just want to keep carrying on." But I see a lot of carriers will say, "Well, our agents aren't really asking for that." And I'm like, "Okay, what about the agents that are growing? How about you cut all the agents out who aren't growing and just talk about the agents that are growing? What are they asking for?" I bet that, although a much smaller segment of your overall population, they're asking for very similar things, and they're not the things that any of the other agents are asking for. That is how I would cross-cut them out. There are decisions... This is crazy, but it has changed in the last year. There was a carrier 24 months ago that I couldn't do business with because I use a Mac.

Alan Ringwald: No way.

Ryan Hanley: Oh yeah. I said to them, "Guys, I'm not getting a Windows computer. Not doing it." I just refuse. I'm not using shitty, virus-ridden fucking technology that doesn't work half the time that I have to update every seven days when I could have a Mac and it just works all the time. Why would I do that? They said, "Well, you can VPN into this hard." And I said, "And our agents aren't asking for it." I said, "I bet if you went out and looked at your growth-focused agencies, I bet many of them have users who love Macs and are using Macs." Now this is a microcosm. I'm not trying to make this a big deal. But that idea of, of course, your agency that's still using big box desktop computers, of course they're not asking about it. But they're also most likely not the agency that's just throwing business on the books and growing and pushing and going to be the future. It's a really interesting dynamic. There's just so much opportunity in our space. It gets me all fired up. I think you've come up with four billion-dollar businesses in the last 20 minutes.

Alan Ringwald: That's definitely not true.

Ryan Hanley: But no, I think it's interesting. You answer this, don't answer it if you don't know or aren't interested. One of the places I see opportunity, this is not about cryptocurrency, but the technology of blockchain. I have some ideas around the application to insurance. Taking cryptocurrencies out of that question, talking about the actual tech of having this distributed ledger that allows us to have a single point of agreed-upon, discernible truth. Do you see application in the insurance industry? And if so, what would be a use case that you think could actually be implemented?

Alan Ringwald: Honestly, I don't know. I've thought about it. I think there's a lot of value to the ledger and smart contracts and tracking where everything is. Why not have a real system of truth to that? There's a lot of value inherently in that. I'm not smart enough from an insurance understanding perspective to know where that legitimately slots into a workflow or makes the most sense today for the way that insurance is consumed. Maybe a future insurance product, but not the second. Do you have one?

Ryan Hanley: Well, one that actually isn't insurance industry related, but I think a really easy first pass at this would be licensing. A universal ledger of truth for licensing that is pinged on by all the carriers. One simple machine in every carrier, every agency, every state insurance department could know the absolute truth for who is licensed and who isn't licensed in which states at all times. At any time, if a carrier wanted to appoint somebody, they would ping that single ledger of truth and know enforced license, not enforced license, and for which states. If you did want to go with a type of currency, if you held a machine or if you were part of a node in the database, there are different types of staking. You could actually, let's say Rogue Risk was one of the entities who was keeping the ledger going. That would award us the ability to maybe pay for licensing. It gave us some sort of currency back which we then could only use to pay for our licensing. So there was an advantage to us maintaining the database overall for the ecosystem of agents. It wasn't a currency that had value out in the real world. It just was redeemable for credits to keep my people licensed, which gave me a benefit to keep the database up to date for the entire ecosystem of agents. I thought of something like that, and I was like, "That would be a really interesting first use case in our industry that would not impact all the craziness of underwriting." I get why this technology in underwriting would scare the shit out of people. We're not nearly there yet. But this would be something that we all could start to use as an industry that could be really interesting.

Alan Ringwald: I like that. It's a closed system. That's cool. That's really interesting.

Ryan Hanley: Fifth business started. You can't help yourself.

Alan Ringwald: Can't help. I don't know what it is today. It's that fucking beard. It's so goddamn sexy. I just want you to love me and think that I'm smart. I just can't help myself.

Ryan Hanley: I'm validating you right now. Yes, you are. Or the beard is.

Alan Ringwald: Dude, I want to be respectful of your time. I appreciate you coming on here. Somehow this turned into me peppering you with ideas. I don't know why.

Ryan Hanley: I've been writing them down. Don't worry. I got the receipt.

Alan Ringwald: But I'm a huge fan of what you're doing. I really wanted to chat with you and ultimately get what you're doing out in front of everyone. The few instances in which I've used a tool that is pinging off your system, I've been incredibly impressed. I've told as many people as I can that I think Coterie's Industry Finder, powered by you guys, is absolutely one of the best in the industry. I just wish you nothing but success, man.

Ryan Hanley: It means the world. Thank you, Ryan.

Alan Ringwald: Yeah. All right. We're out of here.

[Outro: Advertisement for "One Call Close" system.]