Summary of Goosehead Insurance’s Q4 2020 earnings call

A summary of Goosehead Insurance ‘s Q4 2020 earnings conference call (February 23).

• Over 713,000 policies in force as of Q4, 2020
• Employee count was 949 at the end of 2020, up 59% from 595 at the end of 2019
• Total premiums placed for the year were $1.074 billion, an increase of 45% over 2019
• 1,468 total franchises, an increase of 55% from the prior year (operating franchises – 891)
• Corporate sales agent count at the end of the year was 364, up 47% versus the year-ago period (the majority of these agents are added in the second and third quarters of the year, coinciding with college recruiting calendars)
• The recruiting team currently stands at 98 compared to 61 individuals at the end of 2019
• Presence in 43 states
• Built a model that combines a choice product portfolio, sales and service agents, and technology
• 88% client retention
• Agents on the Goosehead platform gain access to more than 140 carrier partners, a cost-effective go-to-market strategy of developing referral partner relationships in the homebuying process, proprietary technology and “the best service centers in the world”
• Its go-to-market strategy leads with homeowners insurance hence client base tends to have more favorable characteristics of better loss experience, higher retention, and multiple policy needs
• Growth is driven largely by its go-to-market strategy of engaging with the mortgage and real estate professionals; about 2/3 of its new business is generated from this go-to-market strategy
• In late 2019 – implemented online client portal, in 2020 – saw over 250,000 clients engage with the agency via the direct portal
• Enhanced its comparative rater utilized by agents, adding products such as flood, jewelry, renters and motorcycle to the rating platform
• This year to launch a client-facing quoting platform
• Looking to use AI to improve retention, quoting accuracy, and recruiting efforts
• 1/3 of new business generated from client referrals
• Ann Challis – new Chief Marketing Officer as of Jan 2021 – to further develop an enterprise-wide marketing strategy
• Looking ahead to 2021, expect total written premiums placed to be between $1.48 billion and $1.55 billion
• “Many direct and insurtech carriers have tried to build models which eliminate the complexity of working with independent agents. What most have found is that a large portion of the market still prefers engaging with an agent in the sales process, particularly with homeowners insurance. Goosehead allows these carriers to access a very attractive segment of the market without the traditional complexities, and many of the direct and insurtech carriers are currently on our platform.” – Mark Jones, Chairman and Chief Executive Officer of Goosehead.