--:-- Ryan Hanley: Hello everyone and welcome back to the show. Today we have a tremendous episode for you. We have Michael Malfa, the CEO and co-founder of Boardwalk Insurance, a digital agency out of Canada in this case. Michael and I were connected via Dylan Reed, who was with Wunderright and then went over to Buddy Insurance. Now he's back with Wunderright. Dylan's a great guy and he reached out to me one day and said, "Hey, you got to meet this guy Michael Malfa. He's doing a lot of the same things that you're trying to do at Rogue. He's up in Canada. He thinks the same way as you do and he's got tons of interesting stuff that he's building and doing."
--:-- Ryan Hanley: I connected with Michael and we had this hour-long conversation. It was absolutely phenomenal. I got to the end of it and I was like, "Oh my God, I can't believe we didn't record this." It was just awesome. Sometimes it's good to have conversations that you don't record. I'm not trying to insinuate that you need to record every decent conversation you have. But Michael's a tremendous dude. I love the way he thinks. I love what he's doing. He is going to be a force, and his entire company, Boardwalk Insurance, is going to be a force of nature in Canada. I can't wait to see what he's doing. I can't wait to reconnect with him as we both continue to grow and share notes on what it means to be building a digital human optimized agency in 2023 and beyond.
--:-- Ryan Hanley: You're going to absolutely love this conversation. Before we get there, I want to give a quick shout out to all you guys listening. We've been pumping out a lot of episodes lately and I'm loving getting back into the show. Sometimes life takes over, and I hate when that happens because I just want to continue sharing with you guys. I love you guys so much and I love you for listening. I just want to say thank you for that. I'm glad I'm back on the horse. I feel like the episodes have been dynamic and fun and the conversations have been awesome. You guys are responding and listening and I love that.
--:-- Ryan Hanley: If you enjoy the show, share it with a friend. That's all I can ask. Share the show with a friend. That's the best way to support what we do here. I love you for listening. If you enjoy the podcast, you'll love the blog FindingPeak.com. Go to FindingPeak.com, where we talk about peak performance in business, life, your career, what are the things you need to be doing in your health and your mentality and how you lead and how you sell and all those things. We're talking about what it means to find peak performance in your life. We talk about all kinds of different dynamic things and no one does all those things. I don't do all the things. But what I'm trying to do is share with you different tactics and strategies that you can cherry pick and place into your own life to help you be the best version of yourself day to day, whatever that means for you.
--:-- Ryan Hanley: Go to FindingPeak.com for free articles. We do some really deep dive, nitty gritty behind the scenes stuff for insurance people. Those come out on Tuesdays and those are paid, mostly because I feel like if you're going to step inside my brain, the seven dollars a month is worth it. Plus it helps me bifurcate and prioritize comments and stuff from people. Paid subscribers get priority on comments and responses. But 90 plus percent of the content is free and I hope you check that out.
--:-- Ryan Hanley: Last but not least, I want to give a big shout out to Tivly. T-I-V-L-Y.com. Guys, Tivly is a major part of the success that we have at Rogue Risk. They're one of our largest and most important partners in our business. If you're looking to write more commercial insurance, they have a portfolio of ways to do that. They're tremendous people. I enjoy working with them. We've been a client for going on 18 plus months, probably headed toward two years at this point. Big fan of Tivly and I was honored when they asked if they could sponsor the show and share their message with you. If you want to learn more about them, go to Tivly.com. You can also listen to the episode I did with Mark McClure and Kim Reid. Go back in the archives and you'll learn all about Tivly and what they're doing.
--:-- Ryan Hanley: Guys, I love you for listening to this show. Let's get on to Michael Malfa. I'm going to Shaboom!
--:-- Ryan Hanley: Mr. Hanley. What's up, dude? Hold on. Let me fix my audio here. Let me fix my... I'm not hearing you. You feel... Let's see. I know what it is. I'll tell you what. You look good, man. I know you can't hear me, but you look good. Only the audience can hear me right now. So Michael's working on his audio.
--:-- Michael Malfa: I can hear you now.
--:-- Ryan Hanley: I was just telling the audience that even though you couldn't hear me, you look amazing. The hair. You're all trimmed up. I mean, geez. Stop it. Very intimidating to come into a call with such a good-looking dude.
--:-- Michael Malfa: I just got back from Florida, that's why. You asshole. Much needed.
--:-- Ryan Hanley: How was it?
--:-- Michael Malfa: So much needed. Sunshine was good. Fun. How are you doing?
--:-- Ryan Hanley: Yeah, man. Good. Just doing the thing. All the things. I'm excited we finally get to do this. I know we went back and forth a bunch and we kept missing each other. I think I canceled on you and you canceled on me and we'd go back and forth. It's always the way it is. For anyone listening at home that doesn't have a podcast, in your mind everyone thinks it's clean and easy and you just schedule it. Then life happens. This is always the way it is.
--:-- Ryan Hanley: We had... I don't even remember who originally connected us. You know what it was? Who was it? Dylan. I think it was Dylan Reed. Yes, Dylan Reed. I knew Dylan at Wunderright and then he went to Buddy Insurance and then he left Buddy Insurance and went back to Wunderright. He said, "Yo, there's this dude up in Canada. You gotta freaking talk to him. He's doing a lot of cool shit." We had an awesome get-to-know-you call and at the end I was like, "Man, we gotta jump on a podcast and talk about the business and what's going on."
--:-- Ryan Hanley: Why don't we do this? For everyone at home listening who doesn't know you, doesn't know what you're up to, give them the 10,000 foot view. Maybe not back to birth, but give us the origin story. What's up now? Then we'll go from there.
--:-- Michael Malfa: Yeah, absolutely. High level view, I've been in the business since 2008 on the commercial brokering side. I was doing commercial brokering similar to what you're doing there at Rogue Risk. PNC, commercial PNC. I did that for a number of years, building up that book of business. Then we got to the point where we plateaued, my partner and I. We were both at a direct writer, working for a direct writer as captive agents for like 12 years at Fairfax Financial Company. We decided to branch out to the brokering side. Then we started feeling a lot of the additional workload that's on the brokering side. People have no idea what brokers do behind the scenes. Clients push brokers for quotes, push them for service. They don't realize how much backend work there is, how much administrative work there is. We felt it. As we scaled that book up, we were just drowning in service work. We were like, "Hey, we got to do something here."
--:-- Michael Malfa: That's when we started building out Boardwalk Insurance and building out our own unique solutions, our own technology that's basically the brains behind the operation. You can call it... we don't like to call it a BMS system. For your listeners, the technical ones will understand BMS is Broker Management System. There's also PMS, and we're not talking about the time of the month PMS, like Policy Management System. It's sort of like that. It's housing all of our operations. The reason we decided not to purchase something off the shelf is we built the solution so we can remain agile and flexible and really plug into different providers, different service providers out there, and make this really robust and take away as much heavy lifting as possible from the producer. That's why we did it.
--:-- Michael Malfa: Two years in now. We launched in March 2021. It's been going great. We're writing a lot of business. There are obviously some bottlenecks on the producer side, as you know, but we'll dive into it deeper. That's the high level. We're in Canada, in Ontario, selling mainly in Ontario, but we do sell out of province as well.
--:-- Michael Malfa: I did meet Dylan at InsurTech New York City. We were in a lab, an accelerator with InsurTech New York, and that's where we met Dylan. He had such great things to say about you, Ryan. He was like, "You got to listen to Ryan. He's doing amazing things. He's got..." He was talking about your content, how unbelievable it is. I do commend you, Ryan. The content you're putting out, that's a big commitment and you're doing a great job.
--:-- Ryan Hanley: Well, thank you. I appreciate that. We can come back to that side in a minute too. I think what I find really interesting is what you have done. One of the things that is so admirable and exciting and I'm so interested in is that what you have decided to do is something that every independent... I shouldn't say every. All of the independent agents that I know who are thinking where the puck is going and not where it is today... One of the interesting things about our business is you can think... taking this hockey analogy here. You don't even have to be playing where the puck is today to be successful in our industry. You can still be doing things the way it was 10, 20 years ago and be successful. That's the crazy part about our business.
--:-- Ryan Hanley: Then there are the people who are just kind of going along, operating with the tools that are given to them. They go to enough carrier functions or enough association functions and say, "Ah, I'll adopt this tool eventually." They're all kind of laggards. They're not even the late majority. They're straight laggards, if anyone's ever read Crossing the Chasm, which is a tremendous book for anyone who hasn't read it.
--:-- Ryan Hanley: Anyone I know who is thinking about where the puck is going in our business, and it's a growing group of people which is exciting, they all have this fantasy of, "Man, I'd love to create my own..." Down here we call it Agency Management System, not a Broker Management System. Our own AMS. Then you start to think about all the technical hurdles, all the sunk cost into technology and building out a development team or hiring a third party development team. And you think, "Geez, I sell insurance. I don't know anything about developing software or what that looks like."
--:-- Ryan Hanley: What was it in your past? It's such a big commitment to take on building this out. When did you have that moment where you were like, "You know what, there's no other path for us to be who we are, for what we want to do. There's no other path." Because it is an enormous commitment. I am positive, and I'm sure you talk about it, this has not been very easy, clear, incremental growth where everything's been fine. Talk to me about that first moment when you look at your partner and you're like, "You know what? We have to do this. There's no other option for us. This is where we're going." What was that like?
--:-- Michael Malfa: That's a great question, Ryan. It's pretty funny, actually. It took some naiveness. I'm not going to lie. We were coming from the product side, no different than you. We knew the product very well, but nothing to do with development. My partner is a little bit more tech savvy than I am. He's always had some kind of passion for technology. He's never developed any technology, but he's always been very passionate and avid in learning about it.
--:-- Michael Malfa: It started in a Starbucks, actually. We were sitting in a Starbucks having a coffee and on a piece of paper, a napkin, we just started talking about some problems and some hurdles we were having with our current AMS system and how it couldn't do this and couldn't do that. We just started wireframing. We started drawing screens out on a piece of paper, a napkin. We were like, "Well, what if a screen looked like this when the producer came in and they could access this data and they could do this?" Then we just started snowballing.
--:-- Michael Malfa: We ended up talking to an advisor. We brought someone on early onto our advisory board. He was a VP at a tech firm, a local tech firm here. He started giving us the structure. That took a lot of time, that discovery period of learning how to do this. What wireframing is, what sprints are, development sprints, front end, back end, UX, UI. It was exciting though. We were passionate about it. We love insurance, but it was exciting learning this new portion of the business.
--:-- Michael Malfa: We started investing tons of hours after work at night, in the mornings. We were just researching and meeting with all these different consultants as well, CTOs of companies. We had some friends that were CTOs. We started to gather all this info and we started to get excited. We were like, "Wow, if we can do that, if we can pull this off, this system would be amazing." Right now there's really no system out there for producers that would give them these tools. Like you said, the puck. You could succeed by not being where the puck is, but if you can get ahead of it and be where the puck is going to be a year down the road, two years down the road, then you can start scoring and winning big. That's what we want. We were doing well without the tools, like you said, but it's just not scalable and it's not going to be sustainable over a long period of time. We're young. We got to get ahead of the curveball.
--:-- Ryan Hanley: For a year... I mean, since I got in the business, this is going to be my 17th year in the industry. I've been hearing that AMS has sucked, or it's all behind. There's so much work in writing insurance and then your AMS is a second job essentially. You've heard all these things and they're all terrible. I think St. Peter will judge all of the people who've run legacy agency management systems harshly when they decide to make their trip up north. But it has been a reality. That's just the way it was.
--:-- Ryan Hanley: When I think about this catch-22... People like you and I sit on these podcasts and say, "This is where it's going. This is where the puck is going. One of these days." Then you've got these legacy brokers who are like, "Ah, you young guys are morons. Just go get Epic or go get one of the standard systems and sell insurance. Our job is to sell insurance." I get that. I wholeheartedly get that and have learned that lesson the hard way many times where I thought I was out ahead of something and it just didn't make a difference.
--:-- Ryan Hanley: But there is something in my core. I think this is what we really connected on, even if we didn't verbalize it during our first conversation. I just feel... I can't not believe that there isn't going to be a day... That's a triple negative, by the way, so I get points for that. There is going to come a time when that buck does drop. When being out ahead of it, when having connectivity, when having clean, clear, easy systems that you can train people on quickly, when all of a sudden that flips over and the people who haven't made that jump, who haven't thought about the things that you were thinking about, and we're trying to think about it at Rogue, and there are many others... When all of a sudden being in that game and thinking out ahead is going to end up being a competitive advantage. It's happening. It can't happen in every other industry and not this industry forever. Eventually that rubber band is going to snap forward. The people that are thinking the way you are are going to be the ones that... I don't want to say survive because you can survive without it.
--:-- Ryan Hanley: I did a podcast that hasn't dropped yet and I can't wait for it to. The title of it is, and I think this relates to this, "You're going to be okay, but your kids are fucked." That's my thought. The 60-year-old guy who's plugging along, he doesn't need to think the way you're thinking. He doesn't have to think the way you're thinking at all. He's good. His spouse is always going to have a seven series BMW in the driveway. He's going to have his house in Florida. He's going to take his great trips. Everything's good. His life is set. We're doing this for the next generation. For the next generation, his 35-year-old kid, whether it's a guy or girl who comes behind him, that person is going to struggle. That's the one that's going to be... You're setting your perpetuation up for headache.
--:-- Michael Malfa: Do you have kids, right?
--:-- Ryan Hanley: I do. Yeah.
--:-- Michael Malfa: Nine and seven, two boys. Yep.
--:-- Ryan Hanley: So there you go. Rogue Risk will be ready for them when they come in. It's going to be just the machine that's running itself and they just plug into it and watch it go.
--:-- Michael Malfa: I'm telling you, we make that joke all the time. My partner and I, he says, "You know, when your daughter Penelope grows up, she's six years old, and she gets into insurance, that's when Boardwalk will be ready to just take over." So it is a long-term investment. We understand. You said you're not young. You're very young, Ryan, especially in our industry. In our industry, it is an aging demographic. We are very young and it's exciting to see all this young talent coming in that are very passionate about the direction of the industry. But you're right. If you speak to someone that's nearing the end, it's very insurance risk management. That's important too, like you said. But insurance risk management, the business is going to become more than just that in 5, 10, 15 years. If you're just doing that, you're going to be left behind. We're just trying to future proof ourselves.
--:-- Ryan Hanley: I think it's amazing. Another thing I've learned, and I learned this from one of my good buddies, Gordon Coyle, who's been on the show. Anyone listening, we had a great conversation six months or so ago. He's in his early 60s and dude is absolutely crushing it. He created a five-year goal for himself. He said, "I don't want to be like all my peers who are just coasting in. I want to take my agency and I have X goal that I want to hit in these five years." He's got this great agency with a really interesting focus, D&O and E&O and cyber for VC firms and all this kind of stuff. He's right outside New York and the dude is crushing it. He's thinking the way you and I are thinking. It's not an age thing, but age definitely tends to play just because of life cycles. You can be at any point in your career.
--:-- Ryan Hanley: Here's the other thing, man. I think thinking about this stuff is fun too. Selling insurance is great and I love making money and it's a great industry. I'll never leave it again. I did, but never will again. But man, thinking about this stuff, dreaming about the way things could be, even if it's small little tweaks, it's energizing. It can be frustrating, but it's also very energizing.
--:-- Michael Malfa: It is. There's so much room for improvement and so much room for disruption. It's unbelievable. Your podcast, you interviewed so many talented individuals. It's so interesting and exciting to hear what they're doing. Everyone's doing something a little bit unique and finding a better way to get that puck in the net. Fewer strides to get there. Right now we can get that puck in the net, but we're really striding, taking a lot of strides. We're skating hard. We're short-staffed, we're undermanned. That's another thing. Talent is another thing we should talk about. I don't know how it is where you are, but finding experienced commercial PNC producers, it's so challenging.
--:-- Ryan Hanley: I'll tell you what. You have people who live in Florida licensed in Canada because Florida is such a shit show from a marketplace. There are a ton of really talented people in the state of Florida who've been let go or are just fed up with the market. We actually find a lot of really talented people in the state of Florida because Florida, all these traditional agencies in Florida, it's a shit show down there. Not anyone's fault, just the hurricanes and the weather and all that kind of stuff. A lot of people get churned or spit out or agencies fall. What we've found is that there's a lot of really talented people in the state of Florida who, because of that marketplace, are either disenfranchised with their business or they're kind of stuck, or they've been let go, or there's nowhere for them to go because it's such a terrible market down there. I don't mean terrible like the agents are terrible. I just mean they're really handcuffed by what they can do. There's a lot of talent in other places too.
--:-- Ryan Hanley: Have you thought about reaching down into... We're lucky in that we'll hire anybody from anywhere in the States. We don't have the talent issue as much because we have such a large pool to pull from. Have you ever thought about coming down into the States and getting people licensed in Canada?
--:-- Michael Malfa: You know what, we haven't. We've thought about getting them from other provinces, but never going into the States. I guess just because of the regulatory licensing requirements. They would have to get their Canadian license. We've looked into getting the US license. If you're not a resident, it's very challenging. You need someone there that's a resident that can get that license. You know more about it than I do. We thought they would have the same hurdles coming North versus South.
--:-- Michael Malfa: Are you using a recruiter to find these individuals or are you actually going out and hunting yourself?
--:-- Ryan Hanley: Part of the content is recruiting. Part of the content play is recruiting. Part of talking about who we are, the way we do it. I have this little blog, I guess you could call it, called Finding Peak. I have to create content and get it out of my system. I don't know if you've ever seen a superhero movie where if they don't get rid of their power, they blow up. It's kind of like that for me. If I'm not creating and writing, I get a little crazy. But it's also a recruiting tool to say, "Hey, this is the way we think here. This idea of peak performance and small incremental growth and getting 1% better every day. If you like this mentality, then we could be a good fit for you." The content helps.
--:-- Ryan Hanley: We use Indeed, LinkedIn. For a lot of our positions, the vast majority, we do not use a recruiter. However, we recently needed an accounting person that could sit in our... We've been outsourcing our accounting and commissions. I have nothing negative to say about the companies that we used. It just got to the point where we needed someone in-house. To find that specific expertise, we had to use a recruiter. We're also hiring a Director of Sales and a Director of Service right now for similar reasons. We had some hodgepodge and we've matured to the point where we need dedicated people in those positions. We're going to use recruiters for them too. For some of the more very specific skill-based stuff, we've used... I have no affiliation with them other than we pay them, but we use The Jonas Group. That's the name of the recruiting firm that we've used and we've had a lot of success with them.
--:-- Michael Malfa: That makes sense. Your producers that you're bringing on, are you putting them through like a Rogue Risk class? They come in junior to you, maybe just licensed or about to get licensed, and you start to train them up and move them through the ranks. Maybe they start in a service role and they move up into a sales role. Is that what you're doing there? Are you looking for people ready to sell?
--:-- Ryan Hanley: If any of my producers are listening, I'm going to talk where the puck is going and not where it has been. Depending on when you came into Rogue, you got a very different experience. Some of the early producers and people that came in, it was an absolute shit show. It was like, "Go do insurance." There were so many things on fire. It's a startup, it's only natural. What we're actually building out, and the reason we're looking for a Head of Service, is because the woman who was running our service actually has an affinity for the patients, the mind for training and development. She's really good at putting things in SOPs. I had that. She's big, right?
--:-- Ryan Hanley: She's just, and again, it was, we just figured it out by accident. I asked her to do a couple of trainings on stuff. I had her handhold a couple of people that were struggling with things. When they came out of working with her, it was night and day. Her name is Leslie. I just said, "Leslie, it seems like while you're very good at service, this is something you're passionate about."
--:-- So we are currently building out what we call the Rogue Digital Producer School. I'm not going to use Killing Commercial, Mick Hunt, Kelly Dono Pirro, Charles Speck. There are a bunch of people that can teach you the core, classic, tried and true way of selling insurance. What we do at Rogue is different. It took me a while to realize how different it actually was.
--:-- We've had a couple of fits and starts on producers. It's because you're either a digital producer or you aren't. If you take a classic producer and try to make them a digital producer, they have to have the right disposition. You can't take a classic producer, plug them into a digital model, and expect them to be successful. I was not aware of the amount of difference between those two things.
--:-- So what we're building, and what Leslie's building, we're going to start by launching this to our internal team. Every producer that comes in will go through the Rogue Digital Producer School. Eventually, we'd like to expand it to our parent company's network, the SIA network. Then eventually, we may open it up to a broader ecosystem. I do think this will be the best in class digital training. I don't want to compete against these in-person trainings. That's not what we're trying to do.
--:-- This is going to be a Teachable-style format that you go through with tests. You essentially come out with—and I feel like you're interviewing me now, so we'll flip this eventually—but we will eventually have something so good, so valuable, so important to the growth of a producer that they take that badge and put it on their LinkedIn profile. That's what I want. I want people going, "Look, I'm a digital producer." That's exciting.
--:-- Michael Malfa: That must be a big undertaking to put that together. That's full time.
--:-- Ryan Hanley: Yeah. That's why we had to move her. These are some of the decisions I've found when you think about your agency as a business and not an agency. The decisions you make are different. You and I can have this conversation because one of the things I picked up on very early with you is that you think about your agency like a business, not like an agency. Agency is what you do, brokerage is what you do. That's how you make your money. But it's a business, and you have to make business decisions.
--:-- I think this mindset—business versus agency or brokerage mindset—is going to be one of the things people look back on. When we look back at this period of time, this block from 2015 to maybe the next five or ten years, if anybody writes books about the insurance industry, they'll look back and say this mindset was the delineation. Not digital versus traditional. This time period is: do you think about it like a business, or do you think about it like an agency?
--:-- Taking on the added expense of moving our head of service to training and development and hiring a replacement—that's a major expense. It's a fixed cost, another human. But it's the only way to get to where we're going. Those types of decisions are what you have to do. It's risky. It's stress-inducing. But it feels necessary to me.
--:-- Michael Malfa: I'm glad you touched on that because this is not just a digital play. It's more than that. You summed it up really well with looking at it like a business. We're not just building technology here, no different than you. We're embedding SOPs and KPIs into everything we do. We're optimizing our CRM. We have consultants that come into our CRM to optimize how we're communicating with our clients, how we're following up on upsell opportunities and renewals.
--:-- There's a lot more to it than just the agency side and the tech side. It's the business as well. What are your marketing strategies? What's your key audience? Your ideal client profile? How do they want to be communicated with? What channels are you giving them to communicate with you? Not every client is fully prepared for that full digital experience, so we do offer a hybrid experience where they can still get a traditional approach with a little sprinkle of technology.
--:-- It comes down to what you said. It's more than just tech and insurance. There's so much more, and we're trying to push the limits on everything—not just the technology, but the actual business.
--:-- [Ryan Hanley interjects with a sponsor break for the show.]
--:-- Ryan Hanley: Let me ask you this. When you think about the customer journey—and this is something we ask ourselves all the time—are you more in the camp of "This is the way we want to do business, and we're going to find customers who want to do business the way we want to do business"? Or are you in the camp of "I want to provide customers who want to work with us with whatever experience they desire, and we will adapt to the way they want to work"?
--:-- Michael Malfa: Great question. I'd love to be in camp number one, and we're striving to get there, but it's taking a little bit more time. When we launched, we were more like, "This is how we're doing it," and we wanted to attract a customer that fits that profile. The problem is the Canadian marketplace is not massive here, and it's a little bit slow to adapt. Canada is usually a little bit behind the US.
--:-- We found that a lot of these customers weren't ready for the way we wanted them to interact. So we've had to step back a little bit, be a little bit more flexible, a little bit more patient, and give them the opportunity to interact on their terms. Then we start to slowly introduce things like a certificate of insurance. Instead of emailing us, we'll give them a portal link where they can create their own certificates.
--:-- Ideally, we want every customer creating their own certificates. But the uptake, believe it or not, is low on that. It's getting better and better as businesses start to adopt technology and as newer, younger, more tech-driven controllers come into place. But we've had to slowly move into it. "Hey, we'll do your search manually if you send us an email the old-fashioned way. But we also have this great new way that saves you time." We try to incentivize them and nudge them forward to using the technology because it helps everybody.
--:-- Ryan Hanley: How do you manage the cost-benefit analysis? We want insured clients who desire and are willing to use this self-service COI portal. That type of client crushes it with us. But at the same time, you have to make money to grow your business. There's going to be process, procedure, and expense to building out a process that wows them the traditional way.
--:-- One thing I constantly struggle with, and I'm really interested in your take on this, is I know where I want to go. I was complaining the other day because I had to let somebody go. It was one of the harder things I've had to do in a very long time.
--:-- Michael Malfa: That's never easy.
--:-- Ryan Hanley: It was tough. There was no part of it that was a sense of relief. It just start to finish sucked. I was bitching to my boss—he runs all of SIA, Mad Ciel—and I said, "Man, I can see so clearly what Rogue is. There's no fogginess. I know exactly where I want to go. However, if I were to just push all my chips into that path, we're not profitable for five years."
--:-- In order to make money and make sure my people get paid, we have to do these other things. But doing those other things takes time away from getting to that vision. It costs. So how do you manage that? How do you manage the realities of making money and being a growing business with that path that excites you and gets you up every day? Some days it's easy to manage. Some days it's very difficult. Sometimes they click, and sometimes they're diametrically opposed. How do you manage that?
--:-- Michael Malfa: That's another great question. You're definitely good at digging out information. I have an interesting answer for this, Ryan. I think you're going to like it.
--:-- What we've been doing is creating a digital experience first for our brokers. That's how we're getting around it. We want to give our brokers this digital experience first because we have a little bit more control over them. We can attract staff that understands commercial and tech. We can train them on the tech. We eat, sleep, and breathe that philosophy into our business, so they come on already with that mindset.
--:-- We're giving them this tech experience. We're letting them be the guinea pigs. They're interacting with everything very digitally, very tech-forward. Then they can choose to give that same experience to the client or do a more traditional approach with phone calls, emails, and PDF documents.
--:-- Once we feel that the client is starting to buy in slowly, we're going to push that experience right to the client. A lot of it is backend now. A lot of the technology we're doing, our customers don't feel a lot of it yet. We're giving them bit by tidbit—the certificate feature, pink slips, automated rapid renewals. Just little things at a time.
--:-- Our producers and our staff see it all. They're interacting with this system very digitally. Eventually, it's going to get to a point where we start flipping the switch and moving it directly to the customer. Instead of our producer going into the system and inputting the submission info, they'll be able to share a URL with the customer where the customer can input that submission info. We're releasing it slowly but surely to our clients. Right now, it's all backend. We're pumping as much technology to our producers as possible and seeing how the uptake is with how they're interacting with it and how they're communicating with the clients.
--:-- Ryan Hanley: I got a couple of questions out of that. One of the mistakes I made quite a bit early on was trying to do too much too fast. I love what you said about thinking in small bits. I literally write down "small bits" because that is something I have had to learn.
--:-- I've said this before, and people have had different opinions on it, but I'm like a wartime general. You don't bring me in when everything's going great and you just want to maintain. That's not me. You bring me in when you're like, "That hill has to be ours. Here's what you have. Go figure it out." That's what I can do. When I get to the top of the hill, I'm like, "All right, I don't want to be here anymore. Give me another hill to go get."
--:-- Michael Malfa: I can see that.
--:-- Ryan Hanley: That's my way. One of the reasons Lincoln chose Grant to be his field general against Lee in the Civil War—if you don't know those references, I'm sure you do—is Grant was all offense. He fired two of the generals directly below him almost immediately because they were very defensive. His whole thing was you can play offense and defense, but you can't win only playing defense. You have to push. You have to apply pressure. When you apply pressure, that creates cracks. Cracks create opportunities, and that's how you get in.
--:-- In war, that makes a lot of sense. How does it make sense in business? You don't know what works and what doesn't until you apply pressure to systems and see where things blow up and break. I believe in that philosophy wholeheartedly. However, the hard lesson I've had to learn—and I promise there's a question in here—is that in business, applying massive pressure to multiple systems at one time does not work. It overwhelms your people. It overwhelms your ability to understand what's happening well. That is a mistake I've made. I've moved too fast, tried to make too many changes too quickly and in too rapid succession, and it's created problems.
--:-- One thing I've never had is a partner. I've only ever been a solo op. I've many times thought to myself, "Jesus, if I just had someone else talking to me—even if it was like an angel and devil on my shoulders—maybe it would be better." Do you think having a partner allows you to throttle up or down better? Do you think that is a competitive advantage for you, that you did this with a partner?
--:-- Michael Malfa: A hundred percent. But it has to be the right partner. Before getting into business—we deal with a lot of business owners, so I've got a lot of advice—the wrong partner could be the worst thing for your business. But if you have the right partner and they complement your skill set and come from a different lens, it's huge.
--:-- I'm a lot like you. Maybe not as much of a wartime general, but I like to push forward and drive results. My partner is a little bit more conservative. He's very methodical. He loves to think. Sometimes it's analysis paralysis. I just like to do. I want to get out there and bang things out. He's more like, "Hey, let's stop. Let's plan. Let's test. Let's QA."
--:-- It keeps me grounded. A lot of times when I just want to jump into the waters, he may identify some sharks before I dive in. Having that second opinion is a huge help. We all have our uptimes and downtimes. When you're not on your game, it's nice to have someone else you can rely on. But it has to be the right partner.
--:-- Ryan Hanley: Are you able to pull from US-based insuretech companies and bring that into your marketplace? Are there companies that provide crossover for you, or do you mostly have to watch what's going on in the US and either find similar companies in Canada or recreate it yourself?
--:-- Michael Malfa: I would say it's a little bit more than before. When we first started looking, there wasn't much we could apply from the US because the flexibility wasn't there. Different wordings, different docs. WonderWrite, for example—we spoke to them. They're great at completing documents and applications. The thing is, they're US applications. When we first spoke to them, a lot of those Accord forms weren't relative to the forms we use down here.
--:-- But they're becoming much more flexible. Now they're willing to adopt our forms and program them into their system. We use CSIO forms instead of Accord forms, and we can actually program our forms into their system. So it is opening up a lot more. We're starting to look at some providers south of the border. It's very exciting. There's another one we're looking at as well—I forget the name, Andrew's talking to them—another provider from the US. They've been great to help us with ingesting information into our system.
--:-- Ryan Hanley: Early in my career, I realized that because the insurance industry is so far behind, I could just look at what was going on in other industries and recreate it in insurance. People would be like, "Oh my God, look what you're doing." And I'd be like, "They've been doing this for 15 years in the marketing industry." Because it's such an insulated industry, people were blown away. That has changed a lot today. People are more aware of what's going on outside the insurance industry, and technology has helped with that.
--:-- Do you find that because you're dialed into the US market—being part of InsurTech New York and having connections down here—it allows you to seem like you have superpowers? You can see this big huge market and pull from it. "Hey, I really like what this company is doing. We could create that in our own system." Are you using your connections in the US market, pulling them into your market, and building them into your system? Is that giving you an advantage?
--:-- Michael Malfa: Big time. Before we joined InsurTech New York and before we started networking into the US with some of the agencies, insurers, and technology providers, a lot of the stuff we've seen south of the border does not exist and is nowhere near development here in Canada—especially on the MGA side. In the US, you have so many tech-forward MGAs with API connectivity. We don't have any of that here. It's wild to see what's being done down there.
--:-- It has given us a bit of an advantage because now we have that foresight. We know where things are eventually going to go. We can see that and start to position ourselves to capitalize on it. We know this API is coming in this segment because Hartford's doing it or Travelers is doing it. It's only a matter of time before Travelers Canada starts to adopt that as well. So let's start getting ahead of it.
--:-- One thing that would be good for you to look at—and I'm sure you already have—is the UK and Europe. There's an InsurTech conference out there. I think they may even be ahead of the US. They're either on par or ahead. The technology happening there, the plays out there, are also mind-blowing. We don't see too much because we haven't been participating in any events out there, but I am on the newsletter. I've been on a few panels where they tried to interview me on what's happening over here. I felt like a dinosaur compared to what they're doing over in the UK.
--:-- Ryan Hanley: The interesting part about the UK and even the Western European market is that from what I can tell—and I will say I have not spent as much time in the UK market as I think I should—it's funny you say that. I was listening to something the other day. I did a mastermind last week that Doug Benz put together. He's an amazing agent out of Buffalo, New York. Go Bills and Sabres. We were in New York City. He brought in 15 agents. It was really cool, really well done. It was an awesome mastermind because it was event-based.
--:-- One of the things we did was go to Lloyd's London's headquarters, the US headquarters in New York City. Hank Watkins, the president of all US Lloyd's, gave us a really detailed breakdown on Lloyd's and what's going on. He was contrasting the UK and the US. One thing that hit me is that from a carrier perspective and a distribution perspective, in many ways, the UK is so far ahead in terms of what they're able to deliver from a technological experience.
--:-- However, when you look at their broker model, it's almost archaic compared to the US model. I don't want to say this for sure, and if someone listening knows, please school me on this. Hit me up on LinkedIn. I'd love to learn more. It almost felt like the gap between what they could do D2C and what the brokers were doing got too big and untethered. Now you have this broker model and this D2C model, particularly on personal insurance. I don't even think there are brokers that sell personal insurance anymore. The brokers just didn't keep up.
--:-- In the US, that hasn't quite happened yet. But I do feel like we would be naive to believe it couldn't happen, especially in certain segments. We've already seen it in personal lines with Lemonade and Hippo. I just feel like at some point that market is going to get detached. Right now, they kind of follow each other. One takes a little bit, one takes back. But I feel like at some point they're going to get detached.
--:-- I don't think, especially for downstream products like BOPs and standard personal lines, that brokers and agents are going to win in those games. I think eventually, the way the UK has gone for some of these smaller downstream products, the market is just going to say, "If I'm buying a business owner's policy for a thousand bucks, I don't need to talk to a human."
--:-- Michael Malfa: It's true. You're right. There is that school of thought that the agency is alive and well and strong. It's not going anywhere. And it's true. It's not going anywhere in certain lines of business. But in the lines of business you mentioned that are very homogeneous like that—a lot of these smaller, very micro BOP policies and small personal lines—they're not looking at coverage. When you're going to buy car insurance and home insurance, 90% of the buyers are just looking at the price. They don't want to speak to human beings. They want to go online to a Bel Air Direct—which is in Canada—and just buy their insurance online, get the best price, and be done with it.
--:-- Ryan Hanley: Here's the other thing. A BOP is a BOP is a BOP. I have these people go, "Wow, you don't understand. I've got to make sure their coverages are set up properly." I'm like, "What don't they have?"
--:-- Ryan Hanley: Yeah, that's what I don't understand. Everything's in extensions. You just throw a bunch of extensions in a package of extensions. It's all in there. Every year the carriers put more shit in. And again, my market is commercial, so I'm thinking BOP business. Every year they just put more shit into the BOP, more shit into it. What don't they have? What are they missing? If they go online and they click Hartford or whatever, like a bakery BOP, what are they fucking missing? I don't get what they're missing. Workers comp, what are they missing in workers comp? What are they? Workers comp now. Okay, commercial auto, yes. Commercial auto, maybe you set some "can't go below this limit" kind of shit. I guess I get it. Your manufacturers, your wholesalers, your distributors, large contractors, construction general, that kind of stuff. Some of the technology businesses. Yes. Okay. I get it. And that's the market where the brokers dominate and should dominate because you do need a human in there. It's anything that requires a substantial amount of underwriting or some unique coverage, some specialized coverage based on a niche operation.
--:-- So if it doesn't have that specialized coverage based on a really niche or unique operation, or doesn't require extensive underwriting, there's no reason why they can't fulfill it D to C. And this is the distinction that I think a lot of the purists miss. I think, and I'd be interested in your take, what I'm not saying—and I don't think you're saying—is that it doesn't mean they don't need good service. If they need help, a human should be involved. If they have questions, those questions should be answered with experience, guidance, and expertise. But they don't need it to purchase the policy, right? To purchase the policy, a human does not have to be involved. Once the policy is purchased, it doesn't mean someone can't go behind and go, "Okay, this looks good. Check, check, check, check, check, check. Okay, this looks good." Or they call with a question and you need someone who's licensed who can answer that question and be there for them and care for them. It doesn't mean the service side goes away. I'm saying from purely a sales perspective, if your BOP is—I'm going to go so far as to say—under $5,000, what do you need a human to sell that policy to you for? I don't think you do. In our numbers and what we're doing, I do not think you need a human to sell those policies. Service, renewal, cross-selling, sure, for sure. But I don't think you need a human to sell those policies. And I think customers are rapidly getting to the point where they don't want a human involved because they only slow it down and muddy it up.
--:-- Michael Malfa: Yeah, exactly. You're right. And as long as the experience answers the questions of the customer—because that's the only thing that would come up while they're going through it—the customer is going to have questions. They're going to be like, "Okay, well, what's CGL? Why do I need liability?" As long as the flow answers those questions and you give those descriptions, then I can't see there being any issues with that.
--:-- Ryan Hanley: Yeah, yeah. So that's the only barrier we see. Sometimes I'll have some questions, but if you have a really good online flow, you should be able to answer those questions. And if you can answer those questions, there's a chat, there's a line they can call, and they can get those questions quickly answered.
--:-- Michael Malfa: Yeah, I think I mapped out this vision years ago. I pitched TrustedChoice.com, the company that I worked for a few years ago, on it. So everyone listening to this is going to hate this, but we listened to every one, we saw everything that happened. A lead would come in—they did a massive amount of leads, they put a massive amount of leads into their system—and we would see what would happen to those leads. Most of the time, the agents wouldn't follow up for days. This was 2014 to 2018. Today I think that has gotten a lot better. I think we rapidly improved our response. Well, I'm not saying you, but in general, that human is the bottleneck.
--:-- Michael Malfa: So I'm watching all this and I pitched them on, "Why are we giving these to agents?" Do you know how much money TrustedChoice.com would make if we just said, 'Fuck agents, we're just going to sell this insurance ourselves'? Because they obviously don't want it. We're watching the numbers. They get these emails—we would have read receipts on the emails—so we could see they didn't even open this email for like three days. And then they're bitching at us that it's a bad lead, all this crazy stuff. And we recorded the phone calls, so we could hear agents on the phones being like, "What do you want? Who are you? Why are you calling me?" And I'm like, "Oh my god, we just sent you a person who raised their hand on the internet."
--:-- So I pitched them on, "Guys, what if we created—we still send leads—but we've given customers this option where they can do their own path?" I mapped this whole thing out. I think there are ways—and I'm happy to discuss this offline too because it's probably not appropriate and we're running out of time—but there are a lot of ways. If you look at really well-done flows using call-out videos, call-out boxes, rip cord polls, chat features, customers like "You commonly chose these things," good, better, best. There's all these classic but important customer behaviors that you could add into it that I have never seen ever in an insurance flow. That would drastically improve, I believe, the close ratio.
--:-- But here's the other thing, man. I don't think anyone—and I would even put Lemonade in this as well—has fully committed to the DTC model. Because you look at Geico, Geico's flow kind of sucks. They only take a small amount of information, but their flow is kind of not great. Next is the same way. It literally looks like a freaking wedge in an iframe. It's clunky, crazy stuff. I look at it and I'm like, "Wow, no one is really committed to this full experience online." They're just kind of like, "We ran an ad, click here, buy this thing." And you're like, "Jeez, your business model is D2C and your flow is kind of..." I don't understand. So I feel like there's still a tremendous amount of opportunity for DTC out there for certain segments.
--:-- Michael Malfa: The flow is everything. When you get a chance, have a look at—they're competitors, so I don't really want to shout them out, but I'm sure you've heard of them—As Insurance. They're in Canada, they've done a pretty decent flow on BOP policies. And they are a brokerage, but they're backed by an insurer so they do have a direct flow. It's pretty interesting. But you're right, when you're selling direct and you're selling online, the flow is everything. You have to put everything into it. You have to run through that flow over and over again and find out where those friction points are, where they're dropping off. You have to have trackers and tags on every page. Where's the customer dropping off? Where are they unsure? Where are they reaching out to us to chat with an agent? It's a huge undertaking. But you're right, if that's your business, you need to invest in that area. It's number one.
--:-- Ryan Hanley: I think what happens to a lot of these DTC companies—and I don't know their business, this is my best guess—is running the insurance part of the business is so hard that they put up with it. They get a certain amount of inbound business that allows them to make money, and they kind of stop there from an improvement of flow standpoint because it's so difficult and so labor intensive and costly to actually run an insurance company. When you're reporting to a board of directors or investors and you're like, "Yeah, we're putting millions into improving our flow," they're like, "Eh, how about you put millions into your underwriting? Because that's where we make more money." And I get that. But I think it leaves opportunity for idiots like you and me who are stupid enough to try to take these things on and figure them out because it's all there. It's all there for us.
--:-- Michael Malfa: So we started that flow. We have a little online capture and we just saw how big of an undertaking it is. And it is a big undertaking. We're going to revisit it next quarter. We're going to use a third-party provider to help us with that. We're going to connect in. But you're right, it's a massive undertaking building that flow out. We don't have the resources to do it all—to build the technology, to run the brokerage, to manage the insurance partnership side, to manage the employees and the service team, the SOPs, the KPIs. You're literally spread so thin amongst everything. You only have so many brain cycles. And that's one of the biggest lessons that I've learned.
--:-- Ryan Hanley: I think it's probably a good place to leave this conversation, which has been tremendous. I appreciate the hell out of you.
--:-- Michael Malfa: Likewise, likewise.
--:-- Ryan Hanley: I think it is very difficult to explain to people who aren't in this space how hard it is to manage all the different veins of thought that you have going on in your head at one time. And you probably only listed a third or maybe even a half of the things that you have to think about every day. Your brain has to jump from SOPs to some service person having a baby, and now you have to figure out a way to backfill them. And all these different things. You're like, "Oh my God." You're right, generate leads. And then after you generate the lead, the producers want leads and then they don't call the leads. Like you said, it's true. We have that problem too. "Okay, we got leads for you. Call the leads. Why aren't you calling the leads? Do the training." It's endless. It's endless.
--:-- But dude, I think this has been absolutely wonderful. I'm rooting for you. Hopefully we can do this again. Anytime you want to come back on and just chat, let's do it. Where, if people just want to connect with you a little bit more about you, LinkedIn? Where's the best place to learn more about you and your business?
--:-- Michael Malfa: Absolutely. I would say LinkedIn, just look me up, Michael Malfa, or Boardwalk Insurance. We're also online at myboardwalk.ca. Feel free to connect with me on LinkedIn or send me an email at
[email protected]. It's been a pleasure being on the podcast, Ryan. I got nothing but respect for you. Kudos to you for doing this. This is not a sprint. We're in a long race. We'll get to the end. We'll get to the finish line.
--:-- Ryan Hanley: Absolutely. Be good.
--:-- Michael Malfa: You too. Thanks, Ryan. Take care.
--:-- [Closing music begins]
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