--:-- Host (Ryan Hanley): Hello everyone and welcome back to the show. Today we have a tremendous episode for you, a conversation with Brian Falchuk, the author of *The Future of Insurance*. This is the third edition, but not edition like he's rewritten it three times, edition like there's been three separate versions of *The Future of Insurance*, each building upon each other. You can get them on Amazon. We'll have links in the show notes. And Brian's just a great thinker in our industry, really dialed in. I think he has an even keel, but very future-minded perspective, has played the game for a long time and I just love our conversations. They're deep, they're rich. We talk about all different kinds of topics and really dive into what is happening in our space and what we should be thinking about as insurance professionals.
--:-- Before we get there, guys, if you love this podcast, you're going to love Finding Peak. So much of what we do is technical and tactical and all those things are fun and interesting. But the deeper I get into this business, the longer I'm a founder and a CEO and a leader and a manager. It's the emotional and psychological perspective, the leadership qualities, how we deal with stress, how we interact with employees, our communication. It's the soft skill internal stuff that we have to deal with every day. The battles that we face with ourselves that really defines who the winners and losers are and that's what we talk about at Finding Peak. So if you're into that kind of thing, if you're looking to up your game, if you're looking for 10x ideas to find the freedom in your life that you need to be the best version of yourself, then go to findingpeak.com. That's findingpeak, like findingpeakperformance.com. Subscribe. It's free. You'll love it. I promise.
--:-- Also, big shout out to SIA. Guys, if you want to maximize the revenue in your book, if you want to join a community of professionals that is pushing forward, if you want to be part of the future of insurance, and like I said, just you're doing all this work, you're putting premium on the books, why not get the most value for that premium? Go to SIA.com. Check out SIA, a wonderful organization. I'm happy to be proud of them and represent them and be part of the executive leadership team. We were Rogue Risk. My agency was purchased by them, acquired April 1st of 2022. We couldn't be happier that it happened, and we've grown exponentially ever since.
--:-- Guys, this show is so important to me. Putting these podcasts out is so important because I love helping you. I love putting these thought leaders in front of you. And I just, I say this as often as I possibly can remember to when I'm doing these intros. Thank you for listening to this show. I love you for listening to this show. It means so much to me. I hope that you continue to find value and hope you have an absolutely wonderful day. And with that, let's get on to Brian Falchuk.
--:-- Host (Ryan Hanley): What's up man, how are you doing?
--:-- Guest (Brian Falchuk): I'm good. Just living the dream over here.
--:-- Host (Ryan Hanley): George Michael?
--:-- Guest (Brian Falchuk): Yeah, yeah. It's funny. People used to say I've heard that one a couple times. But people haven't compared me to any celebrities in a long time. Hopefully that's a good thing. But like when I was younger, I used to get Jim Carrey a lot, which is a weird one. I never saw that ever. In high school and stuff, people would be like, "Oh, you look like Jim Carrey." I never understood that one at all. I think I look like basically every other white dude with dark hair. Just kind of standard vanilla white dude with dark hair. So if there are people who look that way, I probably look like all of them.
--:-- Guest (Brian Falchuk): So what's going on with you? What's up?
--:-- Host (Ryan Hanley): It's been good. And then I got a new book coming out called *The Future of Insurance* — because they're all called *The Future of Insurance* — but it's the third one in the series. That's why I reached out, to see if I could get some help spreading the word about it.
--:-- Guest (Brian Falchuk): So what's *The Future of Insurance*?
--:-- Host (Ryan Hanley): It's bleak. [Laughs] This one is all about traditional carriers and some insurtech solution providers and how they collaborated. It's not about the solution, it's about the lessons and how to make these collaborations better, smarter, faster. Some of it kind of hits at what you were talking about when you were a guest on my show, about carriers being willing to try things and pushing on it and not just sitting on the side. When you talk about the State Auto acquisition by Liberty, it's like, well, that takes off the market someone who was willing to give stuff a try and be weird. You're going to get more variability, but at least it pushes things. And you're not going to see that now. So it's sort of like, how do we move faster? How do we actually get what we talked about and not just gloss it over at a conference, but actually deliver it? Because everyone's conference story is perfect. It's like, "Oh, it's great, everyone loves it." It's like, no, it was a shit show. It took eight years and should have taken two, and you still ended up with a lot less than what you expected to have in two years, even though you took four times as long.
--:-- Guest (Brian Falchuk): I'm going to say something that is going to be... I've been traveling for the last three weeks, had a couple speaking gigs and a couple conferences, was all over. And when I travel, I try to use that time for reflection. Airplane time, I try to use it for reflection and mapping out where I'm at and taking stock on my opinion on things. I basically have come to the conclusion that technology is the opioid of the average and underachieving agent. We talk about tech so that some shitty agent in the middle of nowhere who hasn't grown in a long time has something to think may help them. And it's all so terrible and so bad. There is no one doing anything innovative or really even that different that is actually implementable in the marketplace that anyone outside of the top 100 can actually use.
--:-- I've chased the shiny object. I'm a recovering addict here. This is not me talking from a place of superiority, but rather as the result of my 12-step process. But I honestly just think that it's a joke. Our tech is so bad in this industry. It's a joke.
--:-- Host (Brian Falchuk): So that's the reality we have. And InsurTech got the absolute crap beat out of them. They came in in 2015, 2016. We've talked a bunch of times. Obliterated. Just nothing. The number of D-bags who stood on stages and told us that we were terrible and they were going to fix everything, who now are probably account associates at Salesforce making $45,000 a year... it's crazy.
--:-- So now we're left with legacy tech. And you look at legacy tech and we're like, "Oh, Applied isn't terrible anymore." This is like a big revelation. Thank God for Taylor Rhodes and what they're doing and they're trying to be better. I get all that. I'm happy for that. That's not a negative. I'm just saying if we're being honest, what we hold up as the bastions of tech in this industry is terrible. I'm invested in some of these companies and I watch them and I look at how slow it is and I look at what's happening. There are good people trying to solve good problems, but none of it is going to move the needle. None of that's reality.
--:-- So to end this little diatribe: it's people, process, and premium. That's it. That's the business. I literally just did this talk for my leadership team meeting about an hour ago. I literally titled it "The Main Thing is the Main Thing," which I stole from somebody. I don't know who. I read a whole bunch of books the last three weeks. I have no idea who I took that from. Whoever the smart person who wrote the bestselling book that I took that from, I'm sorry. But I literally said to them, "Guys, premium is the thing." I get that all the purists say, "Oh, you can't spend premium." Yes, you can, because premium turns into revenue. And all carriers care about is premium. They don't care about revenue. So you can talk about revenue all you want, but carriers care about premium. Carriers run the industry. Why are we fighting that? Agents don't run the industry. Carriers run the industry.
--:-- So instead of fighting them, instead of getting up on stage and talking about why they won't do APIs and State Auto being acquired... they couldn't care less about us. They honestly don't care. Carriers don't care about us. I don't care if you're super regional and you know everyone by name. If they could toss you out and replace you, they would. That's the truth.
--:-- So what do we do? We have to find great people who we can trust and are going to work our process. We have to document that process. And we have to hold ourselves accountable to that process. And then we have to focus on writing as much premium and keeping as much premium as possible. Whatever tools, be they analog, digital, I don't care if you're taking cash still — whatever gets you max premium on the books that stays on the books is the answer. That's it. That's the job.
--:-- To think that the job is anything else is where I think everybody gets lost. And I could be wrong. I'm super interested in hearing your perspective, because I've been kind of... this is the first time I've said this on the podcast. But I honestly believe that it's people, process, and premium. That's it. Screw technology, screw carrier relationships. Nothing else matters. All those things are derivatives of people, process, and premium. That's it. What do you think?
--:-- Guest (Brian Falchuk): So you said something a minute ago that I want to hit on. I'm going to drop like a C to that, but then I want to get to this point. I want to come back to robbing banks. I think that's how to frame up the whole technology thing. I wrote it down. We'll come back to it. I won't let you forget. In private, I actually talk about it as murder, but that's over the edge for too many people. So we'll say "robbing banks" and you'll see why in a minute.
--:-- But I actually agree with you. This is why some of the flack I take on my books is like, "You didn't tell us which thing we should buy or which tech. Is it Azure or is it Google Cloud?" I'm like, "I don't care which one it is, and neither should you, unless you do the exercise to figure out which one." If you have to move to the cloud, which one of the three or four you're looking at? There's an answer out there for you. Hopefully you make the right one. Often we don't. But why? I can't tell you that answer in the book. I can't tell you, "Well, if it's claims, you have to invest in this and you need that one." You have to go do that part yourself. And none of that will be for anything if you don't do the first bit.
--:-- That's more where I focus. Like you said, people. It's culture, it's values, it's how you engage. It's the way you bring yourself to the table. And the single biggest thing that I keep seeing get in the way is ego. What do I look for in a leader? I look for someone who's humble. Someone who's like, "You know what? I don't know what the answer is," or "I screwed that up." Or even if you didn't screw it up, you take responsibility for it because it's your organization. Because guess what? You did screw it up in the end because it's all on you.
--:-- So when I see someone who... my book is all about carriers and an insurtech partner they work with. It's like, you have to be willing to say who you are. I interview you firsthand. It's all real. The ups and the downs. In my second book, Ken laid off a huge proportion of their staff, and that's in there. They were like, "Oh, it's all perfect, all the fundraising was great, revenue is a straight hockey stick." Until it fell off a cliff and we almost went out of business. You have to be willing to tell that story.
--:-- I had a carrier who refused to say their name in the book. They said, "We'll be in there, but you just have to refer to us as a top 10 P&C carrier." I'm like, "First of all, have you ever read something that instead of the name of the company just keeps saying 'top 10 P&C carrier' and then 'an employee at top 10 P&C carrier'? It's going to be the most cumbersome thing to read. Also, everyone immediately discounts all the findings of that thing because they don't know who it is." 100%. And you look terrible because you're not being honest. I get some carriers say, "Well, we don't want people to know who we work with. We don't do press releases." I'm like, "Fine. But that means you're not in the book." It's as simple as that. Either you're honest and open about it, and I need to never have to question whether what you're saying is real.
--:-- "This went really well." Did it really go really well, or are you saying that? And this is the real problem they have. It's back to that ego and hubris point. They pat themselves on the back a ton, and I watched them take four years of back and forth and this committee and that to even agree to consider potentially maybe possibly one day thinking about doing a pilot. I'm like, "No startup has four years. They're not going to be around." So it's great that you just made that decision. They went out of business two years ago. So what good is that?
--:-- And this is to the bank robbery point. I think so much of what you're saying about "this thing that isn't terrible anymore" — that's how we measure success in this industry. I used this a bunch of times, so if you want to steal it, you do have to credit me with this. Last year we robbed 12 banks, and this year we robbed five or six. And we're like, "Look at the progress we've made. We are excellent. We're only robbing six banks now." It's like, "That's great. You cut the number in half. I'm really proud of you." You're actually not supposed to rob banks at all. So rather than claiming victory, you need to change who you are. You can't be a bank robber and robbing fewer banks isn't somehow still okay.
--:-- Substitute in "murder" and people are like, "Well, we got the money from..." I'm like, "All right, let's call it murder." And now there's really no way. Some people will be like, "But Dexter was a murderer." I'm like, "All right, you get the point." You were terrible before. You aren't as terrible today. That is not the same thing as you're doing a great job. And that's where we need to get honest with ourselves.
--:-- Host (Ryan Hanley): So this is why I've started coming back to what I would like to... internally I'm thinking through as a rational solution. The carriers don't mean to be terrible. Almost everybody working in every carrier is a really good human. Actually, I think individually on an island, they want to make real progress. The problem is how are they incentivized?
--:-- If you're the Eastern Regional VP of whatever, and I come to you and say, "Look, I got this great idea. We're going to make a shit ton of money." The only thing that can happen is that person gets in trouble. That's it. If it works, it's a nice incremental increase in production. They get a pat on the head, maybe an extra couple thousand in their bonus check. But if it doesn't work, they get fired. And now they have a black mark on their record when they go to get their next job. They're seen as someone who's a loose cannon or doesn't understand risk tolerance.
--:-- I've had so many people inside of carriers explain this exact thing to me. You get a couple scotches in them at the back of a restaurant at a conference and they open up about how they're truly incentivized. The problem is they're large bureaucracies. They're not built to innovate. They're not even built to be good. At this point in the evolution of most of the nationals, they are built to sustain. "Don't lose anything" is the goal.
--:-- Think about what their business is. Their business has nothing to do with "good" because it's the mirror image of what a venture capitalist looks for. Insurers underwriting is not looking for winners. What's winning? $20,000 losers. You're looking for not losers, because a loser is a $5 million or $3 million or whatever bottomless pit. And a winner is $20k in premium minus expenses and commission. So $15 grand. It's negative $5 million versus $15. It's not about picking winners. It's about picking not losers.
--:-- Whereas a venture capitalist is like, "Yeah, we're going to have some strikeouts, some singles. We just need one or two home runs. We're just trying to find a couple of those grand slams. I don't care what the rest of it did. They can all be losers. We put in $500k or a million and we lost it. That's as bad as it's going to get." For a carrier, it just keeps going depending on the line of business. It literally could just keep going. You could be funding someone's opioid addiction for the next 30 years.
--:-- Guest (Brian Falchuk): 100%. I have a client right now who, literally for the rest of time, will be paying $400 a month for someone's marijuana prescription because they now have anxiety because they fell off a ladder. Forever in perpetuity, as long as that person doesn't do something obscenely stupid and get fired, they will have a $400 a month marijuana prescription that the insurance carrier has to pay for as part of their workers' comp claim. Their weed habit is taken care of for life. All they have to do is not mess up too much.
--:-- Host (Ryan Hanley): Yeah. And that becomes a subconscious wiring for us. So how could you expect someone who's taught and trained from day one — another 30 years on because they're at the senior level, they've got the gray hair behind their tenure — and that's been ingrained from the very start that you're not here for winners, you're just here to stay away from the losers? If they were a stockbroker, we'd fire them. "That's great. I haven't lost a ton, but you've never done anything. I gave you $1,000. I have $1,001 now. That's not good enough." But to an insurer, it's about maintaining. And that becomes just a part of how you're bred.
--:-- I think, again, humility. You need to recognize. Someone asked me the other day, "Why haven't you started your own thing?" I was like, "Oh, I started the advisory." They said, "No, no, no. I mean like an insurtech." It's because I'm risk averse. And that's not who I am. I can help people with that. But I know myself well enough to know I don't think I have what it takes to go out. First of all, I don't have an idea. But even if I did, to assemble the engineering team and get the funding... that's just not who I am. I'm willing to recognize that maybe I'm missing out on something. But I also know I'm not wired that way. So I don't think I'm the guy. I'm happy to support the guy.
--:-- Guest (Brian Falchuk): That's an incredible point. And this is why my mentality is... I don't think the carriers are wrong. I want to be clear about that. These things that we're saying, I think they're doing exactly what they should do. They should be filled with bureaucrats. They should have multiple layers. They have to go through all these committees to make all these decisions. It should take 10 years because their job is to weed out all the losers. That's what they need to do. They don't need winners.
--:-- So for everyone who's not trying to climb the social hierarchy of an insurance carrier, what do the rest of us do? Specifically the group of people that I care about the most — it doesn't mean I don't care about the entire industry, I do — but the people that I try to help the most are independent agents, or agents in general. Captives too, but I don't really know their world.
--:-- So if that's the reality, and you're not going to change that reality, and frankly they're actually not doing anything wrong — this sounds very negative towards carriers, it's not, I don't mean it to be at all, it's the reality of their situation and their business model — then we can't keep looking to them for solutions.
--:-- You know what happens? These agents sit back and they go, "Well, if only the carriers would connect via API." They're never going to do it. Unless you are Gallagher and you can say, "Hey, an API connection, I'll slam $10 million a month into your business." They are never going to do it. The number of conferences I have been to where people are like, "If only we can get an API..." They're never going to do it.
--:-- So let's back up a little bit. What can we control? We can control the people who work for our business. We can control the processes that we operate through. You can put a hat on those two. That's culture. That's your business. And you can focus on every single thing you do: writing new premium and keeping the premium you have. That's what you can do. That's all you can do.
--:-- To worry about all the rest of this stuff to the extent that we have for the last decade, to me, looking back on it, incredible waste of time. I think we needed to go through this process. I think we needed to learn the carriers are not going to move. We didn't know that before. We all kind of thought... dude, 2014, 2015, 2016, we're all like, "Oh my gosh, in five years we're going to be flying data around and writing policies. It's going to be amazing." We've learned that's never going to happen. It's only going to happen for the elite. And 95% of the people listening to this are not that. You're never going to have enough premium for them to care about you. So don't do that.
--:-- Focus on the things you can control. And then by listening to people like you, by listening to others, figure out as a derivative of those things the technology, the partners who are going to fit what you're trying to do. Instead of asking somebody for something that you're never going to get back.
--:-- Guest (Brian Falchuk): I think that... so I don't agree with "never," but I think materially for all of us it's going to feel like never because it may be another generation away. At some point, but frankly, at that point that will have been the way it used to be and we will be wishing for the next thing that they're never going to do.
--:-- I'm interested in your take. I don't mean to cut you off. That's a great point. I actually think what's going to happen — if I had to spitball it, if I had my tin foil hat on and I'm making my prognostications — I think unfortunately we're going to jump to AI. And a lot of this shit is just going to be beyond us.
--:-- I'll tell you what. Right now, if Rogue was taken away from me today, just gone, and I'm starting from scratch, I would create an agency with a very small amount of AI. I'm not talking about some big thing. Very tiny bit of AI where I just pumped business directly into insurance carrier sales centers. I would never touch it. I could grow agencies at a ridiculous margin with a very small amount of operating costs. I would just arbitrage leads into carrier sales centers and never touch it. You could run a massively new business.
--:-- Now, granted, there's some hiccups in there. Not everything's perfect. AI isn't perfect. I get all that. Dude, the shit that I can do today with Rogue hacking together third-party tools that some 17-year-old in Bangladesh wrote... I can do a massive amount of work with AI today and I don't even know what I'm doing. We get three, four, five years from now with the pace of this and the ability to use... I got buddies who are using bots to do shit that would blow people's minds. And they're dummy bots. They're just algorithm programs running through. They're not even learning anything.
--:-- So to me, I feel like we're going to have this... there's going to be a leap. And I feel like that leap is going to leave people behind. I don't think this is going to continue to be incremental. I think it's going to be incremental, incremental, incremental, incremental, and then a big leap. And a lot of people are going to pop their head up and go, "What the fuck just happened?" I don't know. What do you think?
--:-- Host (Ryan Hanley): No, so I think that you're probably right. I think it's the last piece where as an industry, I think when we're like, "How did that happen?"
--:-- Host (Ryan Hanley): That's a shame on us moment because it was all blatantly obvious, except everyone refused to see it or refused to accept it. And I mean, that's actually one of the upsides of the slowness of this industry is you get a hell of a lot of warning time. You know, because you will have watched it happen in other industries for X number of years. And then like Progressive will do it, or someone will be an early mover, but the rest of the industry will think it's stupid and won't do it. And we'll dig in. And then everyone will get like the dongles in your car. Progressive started that stuff in 2008. So like the earliest, I think it was even before that. Yeah. Actually I was in business school.
--:-- [Brief interruption for a host message to listeners]
--:-- Host (Ryan Hanley): So that's been around forever. No one else is doing it. And I remember one laughing at Progressive at how much money they were losing. And I remember thinking, yeah, they are, but it's Progressive. If anyone understands pricing in this industry, it's them. And maybe we shouldn't be laughing. That's what bothers me. It's the hubris thing. The amount of times people say, "No, that'll never happen."
--:-- I was in a post office in 2006 and a guy was asking the clerk, he's an older guy, bringing all his letters. He's like, "I think this email is a flash in the pan." I was like, "All right, dude, first of all, it's 2006. The pan has flashed. We're well beyond that."
--:-- Guest (Brian Falchuk): But there's still people who do that. Like, "I don't know about this usage-based thing." Well, maybe not usage-based yet, but the dongle thing. People want their 20% off and they'll let you watch them for three months to get it. And then they'll go back to driving too fast. But it's over half of new business from carriers who offer them being taken up that way. It wasn't that long ago. It kind of took the pandemic to push it. It's like, "Well, my car is sitting still, so I might as well get my discount right now." But it did happen.
--:-- And so many other things. You look at ChatGPT. It failed the bar exam. Six weeks later they released the new one and it passed the bar in like 90% of states. The progress of these things is huge. So for anyone sitting here saying, "Oh, but I didn't know," no, you did know. You're just living with your head in the sand.
--:-- Host (Ryan Hanley): So I think you're right. I think no one really has the right to claim ignorance on this. They just have to open their eyes more. And this stuff you were saying, people be like, "Okay, that's so beyond me. I don't even know where to begin." That's okay. You don't have to. But go sign up for a ChatGPT access or invite or Bard from Google and just mess around with it. I know nothing about this stuff. I'm not an expert on it. I mean, I don't know nothing, but a lot less than a lot of people talking about it.
--:-- So in my new book, guess who wrote the last chapter? Well, I did with some help from Bard and ChatGPT. Because I'm like, if I'm talking about where this is going, shame on me for not actually including part of where this is very well likely going. So I threw them the same question. I did two different questions and I got their answers. And I'm like, "So here's what I think is going to happen in the industry. Here's what they think. And let's talk about that." So play around with it. Get a picture of yourself that looks like George Michael, whatever it is. But you have to start with that stuff.
--:-- That's why grandparents doing FaceTime during the pandemic. People said, "Oh, this is just for the younger kids." Now it's like everybody. 93 year olds on Zoom.
--:-- Guest (Brian Falchuk): But you've met two of our clients in person. Two of our clients in person. And you have more than those two.
--:-- Host (Ryan Hanley): So like, we have a large number more.
--:-- Guest (Brian Falchuk): So it's like, I go to these conferences and I say that, and you should see the look on some of these people's faces. Like, "What?" They can't even wrap their head around the idea that I could have an agency that last month did almost $800,000 in premium and I've met two of my clients in person. They think you're lying.
--:-- Host (Ryan Hanley): Yeah.
--:-- Guest (Brian Falchuk): They're like, "Those must be shitty clients."
--:-- Host (Ryan Hanley): Yeah. Your two clients were $400,000 each.
--:-- Guest (Brian Falchuk): It's like, to me, I think that's fine. What's amazing about this industry is it's a choose your own adventure industry. You can do this however way you want. Which is why I've come back to this idea for us of people processing premium. I've realized over and over again that I simply don't know what the solution is. I just don't. Going back to your humility part, I like to talk a lot, but truthfully, if anyone ever saw behind the scenes on how I run the company, I am 100% service leader. I do not know the solution. I have a vision and I have a vector, but beyond that, I don't know what works and what doesn't work. We do not put anything up on an ideological pedestal. Outside of, we're going to take care of our customers. The human part of, I want to make sure these people are properly cared for, properly insured. But outside of that, I'll cut a tool in a heartbeat. I don't even care if I'm an investor in the tool. If it's not helping us, if it's not helping our customers, I do not care.
--:-- We are running businesses that are meant to do a thing. I think that thing at its core is if you take care of the people that you insure, regardless of what that product is, you need to make money. Those are the two things. So when we get so jammed up on, "Well, we're local, so we need to meet people in person," just because you're local doesn't mean all your customers want to come into your office or want you in their home or their business. That ideological pedestal is not necessarily helping you. Maybe it is, maybe it's not. But I feel like what we don't do enough, too many people get so hung up on what used to work that they forget that out ahead of us is this whole new frontier that is constantly changing. We are insulated enough that we've been able to get by, but I'm starting to feel a lot of cracks in that insulated nature of our industry. I feel like societal culture, buyer culture, is starting to create a lot of cracks.
--:-- Host (Ryan Hanley): 100%. 100%. This country is hyper divided. So as soon as you say, "Well, I'm local, so my customers are local," that's fine if that's who you want to serve. But if you want more than that, you have to understand there's a different population as well. We can't just go down like, "This is what I know. This is what I like. This is how I'm going to work." If that's what you want, good for you. But just understand that means your pie is this big. It's not the full picture. If you don't recognize that there are different people and different buyers or companies to work with or employees, you could potentially be missing out on something.
--:-- I do think it is a cracks thing because that division, it's not just like, "I like it this way. You like it that way. So be it." It's like, "I like it this way and you're the enemy. You like it that way." So people won't allow you to not work the way they want to work. Employees will ghost you. Customers will leave and they'll bash you in the process over something that you probably didn't even realize was a thing. You do have to figure out how to be more flexible.
--:-- I was talking to Margo Giles about this and she had a really interesting point. I was talking about selling into the agency space as a solution provider and how hard it is. The sale itself might be easier than selling into a carrier, faster, more flexible, because the principal can make the decision on the spot. But that one sale is not going to fund your company. Whereas you sell to State Farm, you're golden for three years.
--:-- Guest (Brian Falchuk): Right.
--:-- Host (Ryan Hanley): But she was saying part of the problem is historically agents were all direct competitors of each other. You go into a market and you're all vying for the same food. But with COVID, things getting more virtual, even your customers are more virtual because suddenly they couldn't just sell locally or they go out of business. It allowed for more cohesion, more collaboration across agents. She said it's almost like agents unionized in the process.
--:-- Guest (Brian Falchuk): We didn't though, just in case any regulators are listening. We have not unionized. No, we're not collectively bargaining.
--:-- Host (Ryan Hanley): No, but there's a sense of, "We're in this together." And a willingness to be on the same page of, "This is what our industry needs." It's less of a combative nature between agents. It's not necessarily like you make one sale as one agent and you get 20 of them. Unless they're all under the same umbrella. But it was like the needs didn't have to be 75 separate conversations and develop for 75 needs. It's like, we can talk to this as more of a collective group, which I think is interesting. That could be opening up the door for new kinds of solutions, including AI ones, which would inherently have the flexibility to respond to those 75 unique needs without having to develop 75 different solutions.
--:-- So there's interesting things brewing. I do think there will continue to be choke points. As soon as you get to the carrier side. But I think there's also some tools that may be helpful in getting around that. I don't know that they're here yet, or implemented yet, or easy to put in place. But as much as you talk about the barriers, I think there are people who don't like barriers and will want to find ways around it. Then the question is, how workable is that solution? Do the carriers do something else that blocks that solution from getting through? I don't know. There's a lot of "I don't know" right now. But I do agree with you that the ground's been shaking. It can't be the way it's been.
--:-- Guest (Brian Falchuk): There's a solution in InsuranceGig. Kind of a single point connection. I think InsuranceGig is a great idea. I think Michael is a tremendous guy. I think he's one of the smartest guys I've ever met. Good dude, really cares about what he's doing. It's a huge lift. To be the, I know he would describe it a little differently, just so the audience, and Michael's been on the show, if you guys go back and listen to the episode. But more like a Zapier for insurance, where you can connect one time into a thing and then have all these connections. I think that's one way to get around it.
--:-- There are other solutions. There's tools like Better Agency, which is trying to use actual Zapier and some baked in integrations to help people with a flow and give the startup agency or the slightly larger than startup agency a really efficient, high quality tool. You see these things happening. But then the other problem is, and I don't want to use them by name, but there's a tool and a guy I really like. We were a client of theirs very early. Then they signed up Gallagher and then they AF'd us on pricing because they had Gallagher. Now guess who's coming downstream with a downstream solution? To be honest with you, I love the guy and I think the tool is interesting. I will never buy it because the classic play is as soon as I get one of the top 100, I'm going to AF all the small agents until I need them again. Then I'm going to come back. I've seen this over and over.
--:-- My point in saying all this is, is that a best business practice? Probably not. Do I, well, I might have to do some Hail Marys for having those thoughts. But the truth is, this is part of the problem. Independent agents in particular, and this goes way up. We're not even talking just about small local guys. We're talking about regional, even super regional agencies. The tech companies come in, they bait and switch. They over promise. They under deliver. They use all this funky technology. The straight shooter tech company is very, very rare in the insurance industry. Maybe it's rare in other industries. I just don't have a tremendous amount of experience in companies outside. But the level of skepticism of most agency owners and agency leadership way up the chain is so high. The idea of starting an insurtech to me, I would have to believe in the idea so deeply. I do have a risk tolerance. I don't give a shit. I'll try. But I can't do it. How could I come in and say I'm different because of this, or I'm different for this way, when they just have been messed with so often, so many times because some MBA dick at Harvard Business School did a regression analysis and decided that insurance agencies were a good opportunity.
--:-- It's over and over and over again. So now they sit back and they're like, "Yeah, no, we're good. We'll just keep doing it the way we're doing it because that's time, effort, money, people. And I don't believe you that you're going to give me what you said." That's the truth.
--:-- Host (Ryan Hanley): And if you're going into one of those projects and it goes upside down and it's $50k over or six months behind, that could be the end of the agency.
--:-- Guest (Brian Falchuk): Yeah. To a big carrier, $50k, no one likes spending $50k they didn't have to, and it wouldn't be $50k for them, it'd be millions. But they can handle it. I signed a claim, the last claim I ever had to approve before leaving my chief claims officer role, was $19.7 million. It was not a happy time, but there was not a passing moment of, "Are we going to be okay?" Fast forward to the startup I went to. It was like, "Do we need to get the headphones too? Could he use his own?" That's a $40 difference. That's the mentality. But that will destroy your business.
--:-- Host (Ryan Hanley): I actually know an agency who had this very thing happen. They went all in on a piece of tech, spent about a hundred thousand dollars. Didn't work the way they wanted, had to punt and back out about a year later. What he said was more than the hundred K, which is a lot of money, was the time. We lost so much time to making this change, to implementing it. I think that's one of the things that so often everybody forgets. Carriers included. Carriers will come down with new programs, new implementations, "Hey, just do this or our cyber tool that does this thing." And you're like, "Yeah, but it's time." Everything you ask me to do multiplied by every carrier and every vendor that I use is time. That's the one thing that agencies simply do not have. This is a labor intensive business. Even more than the money, it is often the time. How much time does it take to get this into market? And if it doesn't work, can I back out? That is a key selling point that so many people miss.
--:-- Guest (Brian Falchuk): I don't think I ever told you this story. I shared it with other people, but I don't think you heard this. I used to do sales for this insurtech that had a texting solution for claims. I was a customer of theirs, so I knew I wasn't selling snake oil. I watched it work. Founders came in, we did training in two hours, including people eating bagels, and it was good to go. So I was selling to one of the farm bureaus. We made all the promises and the guys were stoic Midwesterners. So I didn't think much of it, but it's because they've been lied to so many times. They're just like, "Yeah, whatever guy. We don't believe you." But they said, "All right, we'll do a pilot." So we're like, "Okay, we're going to block half a day for training." They said, "Do you mean a full day for training to deploy?" I'm like, "No, we'll be done in a few hours." They said, "All right, well, we're going to block the day." I'm like, "Okay, fine. We'll block the day."
--:-- They get the training room. They got 15 people come in for the pilot. We do the training and we lose the group within about 20 minutes because they start sending each other poop emojis and stuff. They're like, "It's texting. We know how to do that." And it works. So they're like, "Yeah, we got it. We're texting people." You just hear people laughing. So we stopped the training after like a half an hour and they went off and they started using it with customers. By the end of the day, they'd done like 200 claims, which we don't normally see for weeks. They'd already put that through in the balance of the day.
--:-- That lead guy who was so stoic was, honest to God, teary eyed leaving. I was like, "This is kind of awkward." He's like, "No one has ever been honest with us and actually delivered what they promised. You said what you do. I didn't believe you. And you did it. And my people are smiling." He was emotionally moved. Over some texting thing. It was really beautiful and awesome and also really sad that this guy's moved to tears over a texting thing being able to do what we said it would do. But that's the state of things. You shouldn't be crying over that working well. But that's what it was. That's the ridiculous thing that we're in today because everything is a lie otherwise.
--:-- Host (Ryan Hanley): Dude, this is the thing. I'll give you an example. We use Slack. SAA uses Teams. I literally said to them, I will physically, I'm excited, I can't, I don't want them to get mad. But I did say this. I was like, "We will have a physical altercation if you try to take Slack away from us." I don't care if Teams comes with gold coins that rain down from the sky and we can grab as many as we want. You cannot pry Slack out of our cold dead hands. It runs the agency. Everything, our entire history from day one, from the time I got my first employee. The day I got my first employee, I got to communicate. You had Slack. So that was it. If you went into our email, you wouldn't know what business we're in. You would have no idea. We don't communicate via email. If someone sends me an email who's on the team, I'm like, "What's wrong? Why is this happening?" Everything happens in there. We have all the funny stuff in the general channel where people do the gifs. But then we have all the serious stuff too. Everything is there. It works. Why would we ever switch? I don't care what your thing does. This works. We're not leaving. You will blow us up if you take this away from us.
--:-- Now, there are other things. God, please take this piece of technology. But we have to figure out the things that work. We have to implement those things. And then we hold on to them. If technologists, carriers, vendors, partners, whoever come in, you can't hold up the independent, choose your own adventure nature of our industry as this positive and then wonder why your solution doesn't work for everybody. Those two things don't mix. They're oil and water.
--:-- So hopefully AI or whatever can start to create easily customizable solutions. Or the other side is maybe we just continue to iterate and define and be our own little things. Some of us will be slower and smaller. Some of us will grow faster and quicker and be technology driven. Some will be niches and some will be general. We will continue to be 35,000 to 40,000 independent journeys operating with a hodgepodge of tools that works for us, hopefully, wasting less and less time on technology and finding more and more solutions that we can piece together and work.
--:-- I saw my very first demo of Margo's tool. Tell me the name of it again. What is the name of it? Iris?
--:-- Guest (Brian Falchuk): Iris.
--:-- Host (Ryan Hanley): The other day. I think she's amazing. I think the tool is great. I like what they're doing. I think they have a heavy lift ahead of them. It's a big concept. As I shared, she knew this, but there's been a few similar sounding tools that have come along before her that she's going to have to overcome and differentiate from.
--:-- Guest (Brian Falchuk): Yeah.
--:-- Host (Ryan Hanley): I think that her kind of, she's kind of created something where you can plug this in and it doesn't matter what thing you plug it into. That feels to me conceptually more the future than everybody's going to be on this tool. It just doesn't seem like that's ever going to be the case.
--:-- Guest (Brian Falchuk): No, I agree with you. Her interview on my show dropped today, oddly enough, which is why I'm able to quote her and reference that because it's fresh. So whenever you're listening to this, go back and listen to Brian's interview with Margo. She's tremendous. She's super cool. She's also aware of that. She got into the whole, the buzzwords work against you. If we say what it is, then people are like, "I don't know, because I've heard those words before and they're meaningless and they're lies." So you're kind of trapped. You can't tell people it's quick and easy or it's microservices or it's cloud or it's digital. You can't say anything because those words have already been co-opted by people who actually don't deliver on any of that. The skepticism serves.
--:-- Host (Ryan Hanley): It's true. Well, you need a VC to insurance agent translator. This is one of the things that I try to talk to, so I have a few startup investments and then do some advising or whatever on the side. I just love the space. Trust me, I sound so negative. I do love the space, but I'm passionate about it. I like to live in reality. I see these things and it's not reality like what I believe it to be. I've had the shit kicked out of me and my friends have had the shit kicked out of them and we've just learned. Everyone talks to each other, like we talked about before.
--:-- I think the key so much is the people who fund you, you have to say buzzy click, you have to use all the words, because they got to check those boxes to go to their boss and say, "Here, we need to write a $2 million check." So you got to say those things. But then you have to translate that into insurance terms for your insurance agent people. Because if you come in talking tech to independent agents, they're like, "You're not one of us." Even if you are right. So you have to like, I don't know every industry, but to me, independent insurance agents and the people in that industry are particularly sensitive to, "Are you one of us?" Does it mean you have to have sold insurance? It just means, "Are you one of us? Have you lived in this space? Can you speak our language? Do you understand how we live?"
--:-- I went through a lot of that even in my TrustedChoice.com days when I was building agency, even though I had sold insurance for eight years. When I talked about certain things, they'd be like, "Yeah, but what have you ever done?" I sold insurance for eight years and had a decent-sized book of business. You have to speak their language. You have to translate those terms. AI, ML, it just means nothing. They just go, "Nope, don't care."
--:-- Guest (Brian Falchuk): No, I totally agree. Especially in the agent channel. More so than the carrier side. It's helpful on the carrier side, but you can overcome it. I think it's next to impossible on the agent side. If you haven't walked the walk, it's really hard to understand. I think justifiably, it's really hard to genuinely understand what it's like to live in an agent's shoes if you haven't actually been there.
--:-- Host (Ryan Hanley): It's funny. I want to be cognizant of everyone's time, so we'll wrap up here in a second. But I was at an event last week in Utah. The first day of the event was in Shurtuck, Utah. Utah is beautiful, by the way. It was my 42nd state that I've been to, which was cool. I haven't checked off a new state in a long time. Utah is absolutely beautiful. I loved it. I did not realize, I forgot that it was the desert and how dry it was. I felt every morning, even though I hadn't really had much to drink, I would wake up and it would sound like I had had about 30 beers and smoked a pack of cigarettes.
--:-- But we're in Shurtuck, Utah. There were great companies. Margo was one of them. One of the guys came up and he was talking about a company. He's talking through it and he was a VC who would become the CEO and whatever. The guy next to me, who's a buddy of mine, leans over and goes, "This guy's never sold insurance. Shut off."
--:-- Host (Ryan Hanley): In his mind, whoop, shut off. Over. Conversation over. Doesn't matter what that tool did. You could smell it on him. I mean, you could smell that he had never lived a life and he'd only read about it in books and probably didn't even care. Frankly, he kept referring to agents as brokers. There's just a weird thing where you could kind of... you just could smell it on him. He had never lived a life and had no appreciation for it.
--:-- And this was unprompted. My buddy leans over and goes, "He's never sold insurance," and leaned back over and started looking at his phone. Yeah. Game over for my buddy and me too. But that tool and the way he was talking about it, he could never sell that at scale to agents. You might get a couple people who can see through it or whatever, but you just could smell it. You could smell it on them. If you sound like that, if you can't pull off the "I've been there" or at least "I appreciate what you're going through and have spent time learning your life," you've got no shot.
--:-- Guest (Brian Falchuk): Yeah, yeah. So interesting.
--:-- Host (Ryan Hanley): So dude, where can people get the book? When can they get the book? Where do they go? Give us the pitch. Give us the whole thing.
--:-- Guest (Brian Falchuk): So depending on when they're listening to this, it's coming out June 8th. Maybe it came out. This will come out after June 8th, so you'll be able to get it. It's on Amazon. It's part of the Future of Insurance book series. If you search for "The Future of Insurance" on Amazon, it's Kindle, print, hardcover, audible, the whole nine. Or future-of-insurance.com, which is cumbersome because of the dashes. "Future of Insurance" is owned by Accenture or something, and I don't have big enough pockets to buy it from them. That'd be a big price tag. The dashes were free, so I went with that.
--:-- The whole point of it is your people point. The whole book series is not about any one specific thing. It's about the lessons we personally need to start living to make the change where we can. Maybe that is at the organizational level, or maybe it's like, in my book of business, I can do that. I may not affect global hunger or whatever, but I can make that piece of this puzzle a little bit better and get to a place where, like Margo says perfectly, "Do your systems respect your staff?" Your systems, your processes, back to the people thing. Are you trying to get things to a place where it's still tough, but I get it? And I understand why it is that way. At least that makes my life a little bit better. You add that up and you start to get somewhere.
--:-- Host (Ryan Hanley): Yeah, guys. And I can attest to the fact that one of the things I love about your work, Brian, is that you're not pushing solutions on anybody. It's filters, frameworks, ideas, concepts that you then can use to make the decisions that work best for you. That's what I love about your work in general. You're giving people the tools to make decisions. You're not forcing solutions or decisions on them. I think it's tremendous. I always enjoy our conversations, and as always, I wish you nothing but success, my man. We'll make sure everything's linked up in the show notes. But I'm sure you all know where Amazon.com is and can type the words "Future of Insurance" into the little bar at the top of Amazon. So just go there and buy it. If for some reason you need, I will also have links in the show notes.
--:-- Guest (Brian Falchuk): Awesome, bud. Take it easy.
--:-- [End of interview. Podcast outro begins.]
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