Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Patti Harman (00:06):
Hello and welcome to this edition of the Dig In Podcast. I'm Patti Harman, Editor-in-Chief of Digital Insurance. There isn't a single aspect of the insurance process that has not undergone some type of technological transformation. The variety of digital technologies available and the use of AI are changing the insurance experience for agents, brokers, underwriters, claims professionals, and customers. Today we're going to look at the use of technology in the agent and broker space. And joining me is Bryan Davis, executive vice president of VIU by HUB, a digital insurance platform with independent insurance agents and brokers who help policyholders find the right coverage through any of their more than 50 insurance company partners. Thank you so much for joining us today, Brian.
Bryan Davis (01:02):
Thank you for having me.
Patti Harman (01:04):
So I thought that we would start with a quick look at how policy holders have traditionally purchased their insurance when they're working with an agent or a broker. What did that process look like? I feel like I'm going back in history a little bit here.
Bryan Davis (01:20):
I was about to say, do we want to start when Lloyds sent ships over to the U.S. or before? No, primarily I grew up on the carrier side. I spent my whole career on different carriers, whether it's captive agent carriers, whether it's independent channel carriers or direct carriers at USAA where I was before joining HUB. So depending on how far you go back, that was an in-person experience back in the day I guess we would call it. And then that definitely was a nine to five experience. The communities were very closely connected back in the day, and you had your State Farm agent or your Nationwide agent in your local community, that was the place that you placed all of your insurance on. Or you might've had a local independent agent who had many different carrier options, but most of that was, Hey, you call 'em on the phone or you go in person.
(02:21):
There were no things like instant quotes and text messages on a quote presentation or teams chat. None of that was there. And so to get placement or coverage options or choices, you had to put some miles on your car and drive to different places to do that. And so I'm saying back in the day for me, let's say that's 25, 30 years ago, Patti. And so it was a very disjointed experience and you didn't really have a lot of choice in neutrality and in fairness, some consumers didn't necessarily want choice in neutrality. Then it was, Hey, I'm going to get insurance to my local State Farm agent. He's the one who sponsors the little league team. I mean, I grew up playing football my whole life. It was Lester P. Jordan on the scoreboard at the stadium. And so that's what I would say experience was historically.
Patti Harman (03:20):
Right, very much so. It's interesting because those relationships were important and yet today with so many changes in the industry, they still continue to play a huge role with the introduction of online platforms. How has that process changed? What are some of the pros and cons with that?
Bryan Davis (03:39):
Yeah, it's kind of like when the iPhone came out, you had the first generation of the iPhone and then you got to probably four or five generations of the iPhone. Then the capabilities, the adoption and the things you could do on the phone just kind of went to a whole new level. So there's a step between, hey, that historical phase that I described to, hey, things went direct. And so usually that's where Progressive and Geico really dominated that space. Even though at State Farm you can go online, they're still going to push you to the local agent, the checkout. And so to get that kind of fast digital experience of quoting, there was this online presence which was primarily driven by carriers. But then there was another phase after that where you had some kind of aggregators kind of popped up on the scene where it's like, Hey, how do I get a choice?
(04:41):
How do I get multiple carriers? And so aggregators brought this like, Hey, we can give you multiple quotes with Geico, Progressive, Liberty Mutual, all the carriers who would be a part of that aggregator network. But what they were doing is they were giving you a choice of quotes from multiple carriers, but really selling your data to those carriers. So that's how the math works. And they certainly weren't giving you any advice and counsel, they were just what their name was. Hey, we're aggregating your data, getting Patti's data, giving you a quote, which you were looking for, and then farming your data out to the highest bidder on the carrier side. So that was an interim step, but now technology has really created a way to bring the best of all worlds for consumers. And so that's the rise of the Vue by Hubs of the world where, hey, we're just bringing a brokerage experience, but we can deliver it in a way that is effortless, like what you got in that interim experience with carriers.
(05:51):
We bring choice and neutrality, but we don't sell your data. So you're getting a plethora of companies as options, but more importantly, after you say you secure coverage, we've given you neutral advice and counsel in an ongoing manner. And so technology has enabled what I call a full stack value chain interaction with intermediary in this case Hub and a potential consumer or small business owner, which I think is quite phenomenal. And you can apply that concept in many different places, whether it's embedded insurance, whether it's traditional e-commerce is kind of funny. We talk about e-commerce as traditional now, but that's traditional. So one stop shop is a kind of way to say it, but all the things that the customer kind of grew into wanting neutrality instead of, well, the only option I have is State Farm or Hey, I get a choice, but I'm going to get 50 million phone calls from 50 different people trying to sell me insurance. That's not a great experience either. So technology has advanced to give the customers a one-stop shop in the right manner. And what drove that was really was kind of a blessing and a curse, but the world literally went digital overnight. So things like cloud computing, APIs, SDKs makes it easier and more cost affordable for a broker like Hub. Although I'm reminded from Internal Hub that view wasn't cheap, but relatively speaking, it was cheaper to bring a great experience to life that I just described.
Patti Harman (07:37):
And it changed the entire insurance ecosystem for the policy holders because it gave them just a wide range of choices and it made it easier for them to go just one place or get a lot of different options by just contacting one person. Along with that, I'm wondering, are consumers more comfortable, or as consumers become more comfortable with purchasing everything online from toothpaste to cars, are you seeing them adapting to purchasing insurance online then?
Bryan Davis (08:11):
Yeah, I mean, my answer to that is,
Patti Harman (08:15):
Okay,
Bryan Davis (08:18):
And you've probably been asking this question for a long period of time, however long you've covered this industry, and I've seen it go from, hey, when Progressive and Geico went direct that the independent agent or agents are going to be obsolete. And fast forward to today, that didn't quite play out the way a lot of the experts thought it was. Now, maybe on the captive side, I've seen Nationwide, we went from captive to independent. You can see Allstate going from captive to more independent. I think they're going to be few and far between captive agents that survive. State Farm might be the lone survivor in that space. That's just my opinion. So Covid comes along and consumers were forced into interacting with non-traditional means not only in insurance, but financial services to talk to your broker. You weren't going into the office anymore. So what happened on that, Patti, is we call 'em digital refugees.
(09:22):
So you got digital natives, you kind of got digital immigrants, like I'm more of an immigrant. I was analog. That transitioned into digital. But then you have what we call digital refugees that they were never going to be digital ever on anything. But because of Covid, they were forced into a digital and they got there like, man, this thing's pretty cool. So that a cohort of people who want a primarily digital interaction has grown quite a bit from Gogo. I mean this from Covid, this stink about when Zoom came out to where we all are today, it didn't quite work, but then it had to work because that's the only way you could have a birthday party with Covid. So now the technology has caught up that. We interact on Zoom. It's so common that you don't see the, I don't want Zoom or something like that.
(10:22):
So that's caused the consumer attitude towards a text transaction, a chat transaction or a Teams transaction to evolve. But I say, but there's still a desire for humans to be involved in the process and not only the really credible consumers who are lifetime value customers want advice and counsel and want education on why they're buying this insurance. Are they adequately covered for their risk? What are their options? There's still friction in the system when you bring in your carrier partners. So everybody is not cloud native yet. So you do need a human involved in that process. But having a human involved in that process doesn't mean you have to come to the local office between the hours of nine to five to get it. It doesn't even mean you have to call me to get it. I can chat with a human, I can Teams with a human, I could Zoom with a human, I could text with a human.
(11:31):
So all of that, we call it view digital or omnichannel for, and I'm not a big fan of omnichannel, but it means so many different things. But that's a side, it's very nuanced. Some consumers are okay with a completely digital experience when they're just looking, Hey, I don't want to be bothered. I'm at work and I'm bored on this Zoom meeting that they got me on and I'm going over here and shop my insurance. So that could be digital, but now when I'm ready to really give you my EFT or write a check, then I need to talk to someone about this to make sure it's right. So, technology has enabled an interaction methodology that adapts to the consumer versus, hey, you're forcing the consumer into one type of interaction model. And if you're smart, we like to say, if you were creating acquisition and service of insurance, however the customers prefer, and I give the example of, Hey, I go to Starbucks.
(12:38):
So that's my time with my two daughters. I have two teenage daughters, 17 and 15, so please pray for me. But I get time with them in the morning by taking them to Starbucks, but I got a short window. I got to get back on a call, take them to school. So we order on the app and we're like, Hey, we want to pick it up in the drive-through. So my Starbucks is probably like your Starbucks. You get there and the line is around the block. So I have a little secret, I cut out of line and I go around the back and I come to the front and I'll walk in the store and guess what, my same order that I ordered on the app and said that I was going to pick up through the drive-through window, I decided to go in. It was much faster and my coffee is there. That's more real of a customer experience. So I think that's why I say yeah, but right, it's very nuanced and you got to deliver that kind of omni-channel versatile experience for consumers to be effective.
Patti Harman (13:36):
Very true. And I agree that the pandemic had a huge impact on technology and technology adoption within the insurance industry. The reputation had always been, oh, we were a little bit slow. And I think almost overnight because of the pandemic, insurers just learned how to pivot and change how they operate in so many different lines. And we were talking earlier too about insurance and how much it is just so relationship-driven. So with the digitization of the purchase process, how are agents and brokers then still able to interact with their customers and answer their questions and maintain those relationships? And I think you alluded to that just a few minutes ago, but what else are they doing to kind of strengthen those relationships?
Bryan Davis (14:25):
Absolutely. I mean, insurance education is still critically important, especially amidst the current challenging market conditions. Whether you believe in climate change or not, there's something different. I mean, it's hailing in Arizona, it's icing in San Antonio. So no AI can predict ice in San Antonio, and that's a story. Take flood insurance for example, Patti, most people if they're not in a flood zone, don't even consider it. Heck, carriers who don't sell flood insurance are never going to talk to you about flood. But a broker can advise and educate that says, Hey Patti, 40% of all flood damage occurs. Guess what? Outside of a flood zone. And as climate change continues to impact weather around the country, conversations like this will be vital for protecting homeowners. So flood, you need that protection and choice options can help with the affordability of it. So need and affordability, that's where brokers can really come in and play a role and fill a gap that carriers are not necessarily neutral on. Who can fill that gap in the right way?
(15:49):
You said a couple of things when we spoke earlier. Now how do I deliver that to a consumer is where technology comes in where I can give them that education and advice in a way that they can absorb it around their daily lives. Hey, our customers told us pretty loud and clear, no offense insurance industry, but I'm busy. I'm busy with my heart and heart for them is their kids. What am I going to binge on Netflix, and what Amazon Prime order do I need to have, and what's for dinner? What's held up transactions or insurance and financial services and the industry for so long? And I was one of them. I grew up building products for a living. I mean, we used to think the customers were excited about the new vanishing deductible that's coming out and they're not. They're excited about the new iPhone and the new Air Jordans that are coming out, but they're not necessarily excited about the things the industry thinks that consumers are excited about. So they want it easy. They want education and advice. They want you to have their interest at heart versus yours, and that's the role brokers can play in this marketplace.
Patti Harman (16:57):
And you help them to see that there's more to just the coverage that they're purchasing, why it's important and help them to relate to it. I think a little bit more too, it's interesting. Your business model makes the purchase of insurance far more transparent for brokers or for customers and brokers. So how is the use of digital tools changing the sales and the purchase processes for insurance then?
Bryan Davis (17:23):
Absolutely. Great question. The preferred customer experience is hard to find. The current system often forces customers to settle for one of two options. Okay? If you want digital quotes, you have to go to each carrier's process or into an online marketplace, neither of which offer neutrality or unbiased advice. Or you can go to an independent agent to receive multiple quotes and advice, but often not in the digital experience we just talked about, I mean a real scalable, like an Amazon like experience. You're not going to most likely get that at the local independent agent. So there's a fractured nature of the customer experience. So no one provider delivers across all steps, lightning fast quotes with choice, neutral advice on coverage options. My data is not sold, ease of purchase, especially at points of sale, effortless management service, and then ongoing neutral and proactive advice. And yes, I am biased because that's the experience of a broker. That's the experience of Vue by Hub is we offer all of that. We're saying to our consumers, you don't have to sacrifice neutral advice to get an effort experience. You can have both.
Patti Harman (18:56):
How do you think that traditional brokers then can make that transition to becoming more digitally focused?
Bryan Davis (19:02):
Yeah, big commitment. I mean, most large brokers, I mean Hub, we're a top five broker in the world, but most of your large brokers are commercial insurance, middle market, commercial insurance. Hub was in that unique space where approximately 20% of our revenue was in the personal lines space. So there was a business case on paper, Patti, to invest in this business and deliver a great experience for those customers because it was a fair amount of density of that in our revenue side. So one, you have to understand and believe that it's the right thing to do. It's the right thing to do for your customers to give them a great experience to advise and give them choice and neutrality. And I say that in all fairness because if you don't believe that it's the right thing to do, then the other things that come across that capital investment is probably not going to happen.
(20:04):
But if you believe that it's the right thing to do for your consumers to give that experience that I described, then you would make the capital investments across talent tech, processes and data. It is a big investment. And if you're asking the typical brokers, particularly large brokers, do you believe in, Hey, you're a small commercial or your personalized customers should have this type of experience, here's the typical answer you most likely will get. What's the return on that investment? Small premiums, and are you going to ask me to put that much millions to deliver this experience? Then that's probably what has happened.
(20:47):
And then if you do believe and you want to try to do it, you have to bring in the right talent. Most of the talent to build this out and to create this is not on the traditional brokerage side. You have to bring folks from technology companies, carriers. That's where most, a lot of the folks on my leadership team come from technology companies and carriers. So we're mixing the expertise of understanding the value chain, building things for scale. We would build at USAA or at Nationwide, but understanding the strategic right to win as a broker, that's hard to find out there to secure that talent, which is why you haven't seen too many brokers make the play in this space. Hub is certainly way out front in that.
Patti Harman (21:36):
It's been exciting to see how this industry is changing and evolving. I've been covering the property and casualty area of insurance probably for about 20 years or more, and then just have really expanded what I've been monitoring in the industry. And for me, it's exciting to see how technology is transforming this and making things that we never thought were possible before, like almost an everyday occurrence. What role do partnerships with service providers play in the success of digital brokers then?
Bryan Davis (22:09):
Yes. Part of this is, like I said earlier, a lot of the talent we brought in came from the carrier side. So I can't do this without strong partnerships with one, my carrier partners, I mean, I meet with my carrier partners monthly, and we talk about eliminating the friction between distributor and partner and APIs and data cloud capabilities make that possible. And not only just an acquisition and binding, but also with servicing, advising and all the way to the claims experience. So minimizing the friction on the experiences is what is going to take a, I call it a team of love. Then you expand that out into other types of partners, Patti, who's necessarily the best engineering. I mean, we have some great engineers inside of view for sure, but Google that's an engineering company. Hopefully my IT folks won't throw me out the building hearing that I love them.
(23:15):
But you got to be true to who you are. I'm trying to be a great broker. I don't subscribe to folks who get on calls and say, we're a technology company. Stop. You're an underwriter. Be a good underwriter. I'm not saying I'm technology company. I'm a broker enabled by technology service providers. And I think if we take that approach, then we can deliver the best experience for the ultimate consumers as partners. And the advancements in technologies make that affordable to do if you know what you're doing. And then there's this other layer of partners, whether it's marketing partners or we like to call 'em strategic partners, who instead of me trying to build something that they are experts in, that's where I can partner with them to bring a great experience for my client. And they might not be the best PNC broker, and so they could partner with me.
(24:19):
So what I just described as the concept that's emerging of this ecosystem approach wherein, hey, you declare what you are in the ecosystem, and this is advanced a little bit further in Europe, the market's different over there, more nationally regulated versus the U.S. and state by state. So I do see a strong case that ecosystems are really going to have a lot of merit in the future. How the customer goes from one place to the next with single sign on across multiple different platforms on different things. And if my customer's needs go to like, Hey, I'm good on my insurance, I'm well protected, but thank you for saving me money by shopping my auto and home insurance for me, what's the best use of that opportunity cost? Well, why don't you go talk to your IRA advisor and put more funding into your retirement plan. Well, I'm not an IRA expert, but I can have a partner over there that makes that seamless connection. And so the world around our customer, who we internally call Annie, we, that's the ecosystem concept. And so that's what has emerged with this. And then when you put AI in there, I mean you can make that even more effortless for Annie to think about how her financial world or protection world all connects between insurance, banking, financial services, different types of protection products. You can see where that service providers from carriers to strategic partners gets pretty wide,
Patti Harman (26:09):
But it makes a huge difference to have that network of the right service providers that you can partner with because what it does in terms of customer service for your customers is huge.
Bryan Davis (26:21):
And I think entities make mistakes trying to be something they're not. Yeah, I'm not Merrill Lynch, and that's okay, right? They have expertise in should you confront your IRA or invest in puts and calls. That's not how they viewed us, but we can make the effortless connections to that. So that's where I see that going.
Patti Harman (26:46):
Yep. And that's a really important aspect of that I think. Is there anything that concerns you as more of the sales process becomes automated?
Bryan Davis (26:56):
Yeah, I think you got to be sure not to lose the human touch. And I think sometimes we think of the human touch as literally physically touching, but the human touch is interacting and building communities and understanding. And I listen to calls quite often and pet insurance, it's one of our products. And what's pretty cool is to hear one of our advisory specialists talking to a client and their dog's barking and they just have a natural conversation about pets, right? It's like, man, what did you do? What did you want? I mean, what food? I mean it just takes on a whole life of its own. And as much as the world is becoming digital, I think you got to be careful not to lose community and human touch. And so that's why our answer to, I mean, we are as technology-enabled, as they become a cloud native open architecture platform, but we strategically see humans being vital to what we want to do for our clients, even with AI.
(28:10):
And I think you have some folks on the opposite end that say, okay, hey, AI can eliminate a human. And whatever your sociology or psychology take on this, this has been proven throughout history, is that the right spot is when tech and humans work together. And so I think if we continue to find that balance, I think ultimately we deliver the right experience in the right way to consumers. And so that is what concerns me is when you're trying to always replace replace, and I understand the business case for thinking that way. So I don't need a human to process a transaction when that can be completely digital. So the value of the human is more up into interactions with community advice and counsel being prospective versus retrospective. So I do agree with the triaging being more on what we would call complex interactions, but it's never, in my opinion, elimination.
Patti Harman (29:33):
And I think it helps you to be more proactive and it helps identify these are the things to pay attention to, or maybe this is something you want to ask. And it really does free up your agents and brokers to spend more time on a personal level getting to know their customers and what their really specific needs are. What excites you the most about the opportunities for today's brokers that they have with using technology in new ways?
Bryan Davis (30:00):
Absolutely. I mean, we're definitely currently looking at ways to bring predictive analytics throughout the entirety of the life journey of a client. I mean, we were at USAA very focused on doing that. You got to think at USAA, you were talking about members who are on submarines.
Patti Harman (30:24):
That was my son actually.
Bryan Davis (30:26):
Right. So that birthed the OCR scanning of checks because military members needed to deposit things into the bank. And so you can see, if you're really homed into your customers, you really can be innovative around what they really need, not necessarily what you want to sell, but what they need. And so that's one of the things I really excited about how the team at view really goes about all of the embracing of the new technologies. And so think of things with loss prevention. How often in the personal lines or small commercial world has a broker been in the loss prevention business? I mean, we do that par for the course in middle market commercial. I mean, you got risk managers, you got, Hey, you need to put some rugs down, you might need to put some sprinklers here, but what if we could do that for consumers, right?
(31:27):
In the personal space, Hey, guess what? We know your car is not garaged, but there's a hailstorm right down the road, get your car covered. And that type of technology is things that carriers have been playing around with. And we bring that technology, we brought that technology at USAA, but I'm excited about bringing that technology as an independent broker to my customers. And as we continue to provide our customers an omnichannel or digital experience, we are looking at ways to incorporate predictive analytics and AI through our data flow information technology capabilities. That's a big cost savings for us in our call center triaging. We're thinking about the call center of the future, which is, hey, they're not processing transactions, but they're advising clients not only on new business, but on retention activities. And then we're thinking about ways to disrupt distribution value chain. I mean, not everything in this world has to be Vue by Hub.com. So we're excited about what we have on the table to evolve Vue even from what it is today, to understanding that consumers really care about their heart transactions. So how can I be in that world of heart transactions where you don't even know it's VIU by HUB, powering that experience, but it's viewed by hub, powering that experience, and that's really exciting. So those are some of the things that I'm excited about.
Patti Harman (33:14):
Well, I can understand why you're excited about them. We've covered a lot in the last half hour or so. Is there anything that I haven't asked you that is really important for our audience to know about digital solutions in the agent and broker space or anything else that we didn't touch on that you think they should be aware of?
Bryan Davis (33:33):
No, I love your questions. You can tell you're very much a student and understand our industry very well. I think it's important for brokers and agents to understand their roles. And with all the technology and digital and APIs and Python code, I mean, I get involved in all of that here at Vue. Ultimately, you have a job to do for consumers, small business owners and middle market partners. And that's to be completely focused on their risk needs and protection needs in a neutral manner, agnostic to any other entity. And if you think about those things and you think about that being your role, how can technology be leveraged to deliver that? That's something that is really refreshing, and I like having the conversations about because it expands. It's a call to action from my teammates. Like I said, I'm very passionate about this industry evolving from within.
(34:39):
And so legacy entities like legacy carriers or brokers, I think can reemerge themselves into this tech digital world. So I was asked this question at Insurtech Connect last year, what's next for the future of digital and distribution partners? And I was like, it's more of a back to the future. Some of the things that we had on the table 10 years ago, and we thought they were going to take shape because of urbanization, was one of the trends that we had. I remember talking this in strategy meetings, but some of the solutions were ahead of their time. Legacy entities were not enabled. Carriers were not on Guidewire, Duck Creek, Majesco in the cloud, but now more entities are in the cloud. And so we can revisit some of those things that were probably ahead of their time. So lots to do there and lots to unpack there.
Patti Harman (35:40):
Thank you for listening to the Dig in podcast. I produced this episode with audio production by Wyn Wys, Jean Marie. Special thanks this week to Brian Davis of VIU by HUB for joining us. Please rate us, review us, and subscribe to our content at dig-in.com/subscribe From Digital Insurance, I'm Patti Harman, and thank you for listening.