Why Customers Have No Good Options For Insurance:

Ryan Hanley is the founder and president of Rogue Risk, a national, tech-enabled independent insurance agency helping small businesses put their insurance on autopilot. Ryan is also the creator of The Ryan Hanley Show, the insurance industry’s most popular podcast. He has performed over 200 keynotes to insurance audiences over the last decade, helping independent insurance agents across the country digitize their business.

The following are excerpts from a conversation between Ryan and Andrew Wynn, Co-Founder and Co-CEO of Ascend, the first modern insurance payments platform that provides automated all-in-one financing, collections, and payables.

AW: What are some of the top insurtech trends you’ve noticed this year?

RH: There has been a move away from disruption and disintermediation and a shift into true partnership and enablement. I think this is something that’s very healthy.

In the US market specifically, we’ve been seeing agents more willing to work with tech companies and different channels that are offering tremendous products and useful tools. Agents are being more accepting. There was a phase in 2015/2016 where techies were coming in and claiming agents know nothing despite being in the industry for so long. We’ve gotten past this and have finally arrived at a more healthy, optimal relationship, which serves as the basis for a more humanized model. Now it’s more a question of: how do you take the really smart tech and innovations coming out, and work it into the human aspect of business? How do we allow people to do more business, better?

AW: What are the opportunities for technology to create a more humanized, optimized model?

RH: In fact, Ascend is tackling one of those bases — payments and integration are major problems. This is a conversation that’s happening almost every day, which is: “I love this tool but it doesn’t work with any of these other tools I use.” The fragmentation and lack of universal integrations and adaptors doesn’t really exist in our space right now. Zappier is a great tool in other spaces, but it hasn’t been adopted widely in insurance yet. What we need is a Zapier-esque tool to become a hub for data to pass through so that carriers, agents, whoever, can use the tools that they need to serve their client-base without having to make tough decisions on how to serve their people. Tools need to communicate together.

Getting into lines of business — there’s an opportunity in small commercial insurance. Some may disagree, but I think that there’s always opportunity. It’s like a churning wave — every year, people have to renew their insurance, meaning that there is always a new opportunity. Embedded solutions is a really obvious one right now. I’ve been saying it for a while now, but agencies need to be prepared for the day when insurance doesn’t even reach them anymore, because people decide to start paying for their auto insurance directly through a service like Clearcover. Embedded solutions, across every line, are wide open and full of opportunity. People who can solve business, personal, and life insurances (or all three together) have a huge opportunity.

AW: How can incumbents do a better job at working with the tech enablers?

RH: This is tough. It’s honestly a conversation I find myself having a lot. One of the things that I think every technology professional coming into or operating in the insurtech space needs to hear is: they don’t need you. You are not changing the game for big traditional players like Hartford. Nobody is. Their process works, they have a ton of business, they’re profitable. Anything you do or offer isn’t going to change the game for companies like that. They don’t need you. That’s not to say that these companies don’t have issues — they do. But as a technology professional trying to integrate with traditional players, the best advice I can give you is to have respect for what these incumbents have done. If you can invest a small amount of time into understanding how companies like Hartford and Nationwide became the powerhouses that they are, then you can figure out how your tool fits in to help them grow. They don’t want you to solve their problems, they want you to help them grow, be more integrated, save capital, make things easier, etc. There’s tons of opportunity to step into this kind of role. But the worst mistake you can make is walk into any of these institutions thinking you know more than they do.

AW: What is your customers’ biggest pain point today, and how do you solve it?

RH: Customers today are forced to make bad choices. They either have to go with “easy” or “good” from a service perspective, not a product quality perspective. An example would be Next Insurance — they’re a great company that I personally really like, and that everyone in the insurance ecosystem (even the incumbents) have on their radar. As a customer, Next is super easy to do business with. You enter some information, click a button, and suddenly have insurance. It’s great. But when you try to get that policy serviced, you’ll be met with a very SaaS-model service, which is incredibly frustrating to consumers, because insurance is something that’s already confusing and difficult, but also important. And even more frustrating, is a lot of these companies don’t have a number to call and talk to someone directly about your problems.

Alternatively, if you go through traditional independent agents, you’ll find that they’re tough to do business with and require a lot more time and attention on the customers’ part. However, if you call these traditional players with a problem, they’ll solve it in an instant. This is why companies like GEICO are establishing local offices all over the country right now. People want to know that, if something goes wrong or they have a question, there is a place they can drive to and talk to someone to fix their issues.

Customers are met with pros and cons no matter what route they take with insurance. They’re forced to make bad decisions, because that’s all that’s available to them. I believe that you can solve these issues and pain points by mashing together the best pieces of technology and people. It’s difficult to do, and not many have done it yet. But I do think that it can be done.

AW: What are some of the biggest challenges carriers are facing right now?

RH: Carriers are struggling with distribution and understanding what the future holds, and thus struggling to figure out how to set themselves up for the future of distribution. They all understand that there is a large cross cut of traditional independent agencies that will not be around in 10 years — they’re going to be bought and merged into institutions that already exist. As those things happen, these entities will hold an incredible amount of leverage over carriers, forcing them to pay higher commission rates, contingency rates, etc. Aggregators are also becoming huge. On one hand, they offer tremendous opportunities to scale your business. On the other, this gives aggregators leverage over you. Carriers are also looking at direct channels. Every single one of the largest independent agencies has a direct agency. Some of them hide it, some of them are more open about it, but they all have one.

So there’s a direct model, a subsidiary agency model, small and large networks — there is so much going on, and it makes it very difficult to understand what the future holds. Most carriers are half-in on all of these models, and because of this, you don’t see anyone really killing it in any one channel outside of the companies that were specifically built for a certain channel like Hippo or Next.

AW: Do you think there will be a full circle where tech folk are helping carriers and vice versa?

RH: Right now, we’re in a second inning of a major consolidation phase. We’ve seen some of it in the retail agency space, but we haven’t seen anything in the carrier space yet. We’ve seen attempts at it, but it still hasn’t happened properly. We’re going to see major players take on subsidiaries that allow them to grow their ecosystem and fully surround the market in a way they haven’t yet.

What I do see everyday is that the people who are moving forward, whether you’re traditional and slow or small and fast, are creating so much space between themselves and others. There will come a time when they start to play two different games.

AW: What do you think insurance will look like in 10 years?

RH: I think we’ll see a lot of consolidated brands. It creates a sort of feeder program — you have consolidation at the top and a backfilling of endless opportunity below it. That’s the beauty of what’s finally happening in our space — you have all these ideas hit the market, some are successful while others aren’t, that result in new and old people seeing more opportunity and going back to the start with their new idea. It’s been happening in nearly every industry except for insurance. But that’s how we keep innovating and growing. This cycle should be celebrated and supported, and that’s why I’m glad it’s no longer adversarial. It finally feels like a lot of us are moving in the same direction.

AW: What’s something you wish you learned earlier in your career? What’s a piece of advice you’d give to someone starting out in insurance/insurtech today?

RH: Spend the first few years as an apprentice. If you’re interested in tech, retail, whatever it may be — find someone and apprentice for them. This idea of apprenticeship has been lost with the rise of big tech. Everyone is trying to be the next Zuckerberg and go from an 18 year old in their parents’ basement to making a billion dollars. I think a better play is to have an idea of what you’d like to do, find someone who is awesome at it, and try to work and learn from them. Meet their connections, sit in their meetings, and just see how things are done. I got to do that myself, not purposefully, where I sat in a lot of rooms that were above my pay-grade. I was able to sit there and listen and learn so much from these people who had way more experience at the time than me. And I’ve been able to take that and become successful in my own right. So that’s my advice: to learn as much as possible, make connections, and use this to launch your idea.

AW: Anything else you want to add?

RH: We’ll start to see more fintech players diversify into the insurance space. And I’m not just talking about embedded partnerships, I mean actually moving into the insurance space.

Look at a major player like Square, who’s dealing with an insane amount of transactions every single day. If they begin to move into the insurance place and become not only partners, but players, the game will begin to change very rapidly. Imagine if one of them buys someone like Clearcover, or if your insurance is integrated into your Paypal transactions. Where things could go is unimaginable.

Bio: Andrew Wynn is the Co-Founder & Co-CEO of Ascend, the first modern insurance payments platform that provides automated all-in-one financing, collections, and payables. Prior to Ascend, Andrew built a home maintenance startup called Sheltr, which provides homeowners with routine preventative maintenance service and diagnostics to offer data-driven proactive care to catch issues before they become costly repairs. The company became the first acquisition made by insurtech unicorn Hippo because of its intuitive and technological approach to building an insurance product that went beyond the customer interaction. Prior to Sheltr, Andrew was at Instacart, leading the company’s product and data integration team.