Dayforward, Led by Former Huge CEO Aaron Shapiro Enters Life Insurance | This Week in Coverager (12/4/20)

Over 2 years ago, Coverager published this article called “Behind The Scenes“. In it, Avi quoted Aaron Shapiro, author of the book Users, Not Customers. Aaron is now the CEO of Dayforward  a new life insurance company (what was Avi’s influence on this???)

With PetPlan partnering with the Dodo and now a former agency CEO coming into life insurance, does this signal a new phase in insurance where the marketers come in and place insurance “behind the scenes” by putting their marketing experience in its place?? What does this mean for companies like Bestow and Ladder? Does this signal a new move into alternative distribution strategies. We discussed that and more on This Week in Coverager.

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Outro music –  Gathering Crowds by John Scott
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Transcript

Hello, everyone. Welcome back. This is, This Week in Coverager. This is the podcast where we discuss interesting, hot topics of the week, go into a little bit more detail, have Avi, Shefi, myself and sometimes a guest, and we'll debate those and talk about those give a little bit extra perspective. I am in podcasting headquarters in Naples, Florida, in Coverager headquarters in Queens is Avi, and in Coverager's main headquarters in Brooklyn is Shefi. Happy Friday,

Happy Friday.

Okay, so what is let me kick it over to Avi, what is going to be topic number one for This Week in Coverager.

So I don't know if it's chance or luck or destiny, but a man I quoted in an old article on Coverager is entering insurance, the former CEO of Huge, the advertising agency, big, successful advertising agency. He wrote the book, users, not customers. And it's something we we touched in the past, as we always say, and I'll say it again, just because if you're new, insurance companies do not have the right to be consumer facing brands. And the reason for that is because the product, my friends, is not meant to be used! Only for emergency situations only when you have a claim. So you really is no usage. And, you know, we've seen in the past, you know, many years, I would say at least what we remember, Google and Facebook and Instagram and WhatsApp, they benefited from the usability of their products, which got people to use them more. And it gave them a lot of power to eventually sell advertising or sell products. And this guy, Aaron Shapiro is the CEO of Day Forward, which is a stealth life insurance company that is promising a better way to protect your family. And it's a new type of life insurance. We don't know exactly what the new type is. But they've received an investment from Munich Re Is that correct Shefi?

Well, they're backed by Munich Re they raised about 20 million. And that's based on their form D which was filed in August 14. So two days after my birthday, that was pretty much the top clicked link, at least for one day of the email. I don't remember. I think it was Wednesday that we covered it.

Yeah, I think so

But yeah, so not much is known. And what we do understand is that they want to become a full stack insurer so that they can influence the product. And that's something we haven't heard before. Munich Re certainly in the picture, which kind of, you know, begs the question, is this going to be something similar to what Swiss Re has with InfyTQ but for for now too many unknowns. I guess what is known is that there's someone that's coming in with a really strong marketing background.

So a non techie.

Welcome.

And that's good. And you know, yeah, look at Lemonade. You know, we talked about kind of their little bit of their marketing backgrounds, although Shai is a tech guy. But yeah, I mean, I think it would be interesting to see what they do, I would be very disappointed, If it's like one of those things where, hey, if you have students that you should get life insurance, don't wait until you're 35. It's never too late. I doubt that that will be the case. And you know what, there is a chance that he read the Coverager article, or someone else that read the Coverager article said, Who is this Aaron Shapiro guy? Let me reach out to him and give me him secrets of how to create usage and maybe that got him into insurance. We never know...

If that's the case. Then if we find that out to be true, then going forward every single influencer post on Twitter better have you as number one, if that's the case!

I saw you I saw you drop I saw you drop significantly this month. I think you went to number 47 and 46 you're almost out of the top 50. And and whoever's making this list, whoever's making this list, I want to tell you, my personal dream, I've never said this to anyone. But yeah, we want to make history as the first brother and sister influencer on the top 50 Insurtech list. And I've been working on my Twitter game, I've been getting followers. And you know, I try to be controversial, but I don't have a lot to tweet. But maybe, maybe I'll be a thought leader as well. You know, I see new new faces coming in out of nowhere. And they wonder what I need to do to be on that list. Maybe Coverager should create a list will always wanted to Yeah, definitely charge money for it.

Who has the best COVID hair...Nick! I think that you're getting on like, I don't understand why you're not on Avi. First of all, but

I think they they think we're the same. I think they think we're married. And it's like, well, we're gonna give him two spots. There one! They are one entity. But you know, we have different personalities, we don't like the same thing. Shefi and I, we argue a lot. We're not the same. So you know, if this is what you need to consider, then this is my pledge to you.

This is the most I laughed this entire week, which was really crappy, to be honest with everyone, but Okay, this is going

People love lists. So I think we should make a list, you know, maybe we can be very magnanimous and not put ourselves on the list.

Inn Forbes. Forbes really came out with 30, under 30. This week, and I saw someone said, Let's make 400,000 under 30. And we'll increase our total addressable market significantly.

I get it. Yeah. I think that's what these lists are used for. So maybe that's not bad, as part of the business model, if we want to. But with that said, with this particular story that I'm reading right now, with Aaron Shapiro coming in, so when insure tech was first forming, right, and you had a lot of tech influencers coming into insurance, I thought that was a good thing. I'm like, oh, they're gonna bring a lot of positive stuff. And they have, and so it moved the needle, but it didn't, you know, they had these lofty goals of what was going to happen, I don't think they reached that, but they definitively influenced what was happening. This would be really interesting as well, like, if they could come in and bring a marketing/advertising, bent to insurance, especially like the non GEICOs, Progressives bring that sort of thing, kind of reminds me of this story kind of reminds me of PetPlann a little bit, Avi, um, you know, like a different different angle.

It's, it's really, if you look at it like, there are no surprises with life insurance. And we've talked about this, if you have the good organic positioning, like PolicyGenius, also, like Nerdwallet, you get the traffic, like the average consumer doesn't know PolicyGenius. They don't know Nerdwallet. They don't know what we know. And they go through the process, they read the article, can I get a quote, it says get a quote, they put in their information, they hope to get a quote. So if you have that organic presence, you're going to get that traffic. And obviously, it's up to you to execute well, to to get that going for you. But what is the answer for companies that cannot be on Google? Because we don't see many TV commercials for life insurance we've never seen, we spoke about this. And that's one of the reasons why there's a lack of awareness because you don't see it as much as you see car insurance. So now the trick is, if people are not searching for you, how can you get them to think of you and with that? I mean, that's display advertising, that's social media. That's billboards, so many other things. But that is the risk, by the way, because we've seen this play out not so well, with Health IQ. They went on social media, they went on LinkedIn, radio, all these channels to kind of try to get people interested. And there's a reason why Google charges more than Facebook, because this is the place for high intent shoppers. So you got to be very careful. And you got to figure out first your target market and then an effective channel to get to those people and obviously, everybody knows to go to mommy blogs and things like that, but but you'll need to figure that out. And I bet you Aaron Shapiro and the team. I can't imagine if they'll do something similar to everyone else because like come on, it's just a joke. We're suffering already. Like do something different.

They'd better It better not be like Pacific life whales crashing in water. Like what the heck does this have to do life insurance thing. The other thing Shefi would be it would be very disappointing. If...so I have high expectations on the marketing and the advertising for this So I'm expecting something creative here. But they're going to the full stack insurer like, if you're gonna make that move better do something good with the product to like, if it's just Term Life or like, Avi said selling life insurance to folks that have high student loan debt. That would be disappointing too. Because then I think the marketing is just still putting lipstick on a pig. But you know, we you got a you got a thought on that?

Well, I think the fact that they have Munich Re in the picture and what we've seen in the past with Munich Re is that they're willing to take bets on emerging risk and you know, emerging demographics to be honest with you. So maybe they'll give them the opportunity to to try something new. I don't have that that much high expectations, we're still talking about life insurance, I still think that the traditional life insurance the product as is works, it's just a matter of communicating it differently to the different demographics. So the focus isn't necessarily on the product the focus should be on the messaging and then of course the channels how do you actually go and get that customer which in a way so obviously, the context of the story the reason we talked about they forward with because Bestow announced that it acquired a carrier to be honest to some of these carriers and I think this this came up with Hippo buying Spinnaker, it's not that I've never heard of these carriers before is that I never have any context about these carriers in terms of activity that they're doing. So same thing with Bestow, they acquired it, who did they acquire North American? No, they they work with North American they sent in so with North American, and they're still going to continue to work with so they're still going to keep their MGA unit. And then they acquired clearly somebody without a brand awareness now cinterion life insurance company, right, so this this has been kind of a sleepy carrier for a bit, they're not accepting new business. But this allows Bestow to be licensed in the states that it needs and kind of carry forward with influencing the product. Now there's been some interesting moves, right? It was the marketing gala Haven Life is not working for Bestow. And then there was another there's another individual for Massmutual working at Bestow. So they're focusing on building their their talent, obviously, focus on product, we'll see, if I remember correctly, Avi, they're the ones that had some trouble with their engineering team.

They have trouble with the technology. And you know, they they share that they sold 10 billion in coverage, if you do the math. In the worst case scenario, most of their policies are sold or under a million dollars. So maybe 10,000 policies, maybe 15,000 policies may be 20,000. policies. So I mean, it sounds a lot 10 billion. But you know, if you really think about, you know, the ultimately what it means it's 10 billion in coverage. And it's a problem because they are not able, they don't have the organic presence. So that means they're going to pay to be seen. And so either they buy the leads, and most of their business comes from lead gen. And that's a problem. Because, you know, it really is a long sales cycle, like Nick, you could go for life insurance, you could put in your code, your Sirius customer, but it's going to take you maybe a few months to decide if you want to buy weeks. And to me, I don't understand how you can do that without having like someone on the phone making sure calling you like, hey, Nick, it's time it's time, it's time, you need someone to bug you to not lose it. Because if it just online, you're going to probably lose the customer. So obviously, for them going into the insurance aspect. I think they wanted kind of that subscription revenue, instead of usually there's no residuals with life insurance, you get that big sum at the beginning of the policy term. And that's it. And of course, they're working with agents. So how can you justify being an mga and working with agents, you're a middleman now you're bringing another middleman. Too many middlemen, being a carrier will allow them to justify working with agents, because it really is a product where, again, unless you're the king of SEO, where you're getting a good flow of leads, you're going to need to convince people to think about the product, look at the product, and all of that.

I'm with you there. I mean, I think I think this this conversation is going to segue into alternative you know, sources of distribution. But what What other choice do you have? Right? Like, if you if you can't come up with a good angle, you can't really go direct because it's going to be way too expensive. So you have to use agents or financial planners. When it comes to life. It's this it's it's a if for those that are listening feel like we keep banging this drum. It just kind of keeps circling. Back to this the product, a Shefi, you said the product works, it does work. So if you can't do anything that's like outrageously different with the product, how there are hundreds of companies selling Term Life Insurance, how are you going to get cut through that noise, it's either going to be you're going to have an agent, broker or financial planner, or you're going to have to come up with something clever on the marketing side to, to get in front of people. Because it is it is a long sales cycle, maybe that's the change that needs to occur in the product, is figure out a way to shorten that sales cycle, you'll get more, you'll get, you know, better hit rate, I think what

but what is the competitive advantage? Like the problem is that if you go to like, obviously a high net worth client, you know, price is not a factor, he's probably going to go with a company that's been around for over 1000 years. But then if you go for people that are a little price sensitive, then you're one of many, there's also Ladder, there's Ethos, there's AIG, there's and Haven life. So now what are your chances of getting selected. And that's why we always said like, give people choice. That's why like PolicyGenius, they give people joy, so it doesn't matter who they choose, don't get the commission. Like I get the fact of being a carrier, they're talking about data science. And this is, by the way, a bad time to be in the life insurance business, I find with COVID, like people still don't know what the long term implications are for people buying life insurance now. And if they got it, does it shorten your lifespan? Maybe it makes you live longer, I don't know. But there's also some challenges there. But again, I understand the move. I thought that to begin with, you know, I would have liked to see them do something different. Like, to me, that was kind of the where I would even looked at Clearcover, you had the technology help other carriers integrate at the point of sale, be up plan, you know, for car insurance, how about Bestow be the plan for life insurance, of course, it's not a point of sale, but maybe you can integrate, and you could partner with different money management apps, and so many other things like to still go try and do it on your own, it's going to be very difficult.

And we're still going to come back to this topic, because essentially, this all boils down to timing and execution. So there are cases where even alternative distribution that doesn't work, nobody's really reinventing the wheel, you don't have to reinvent the wheel in insurance. And if someone tells you that they do, it's probably a consultant that is trying really charging you a certain price, in order to justify that you have to go a certain route that you really don't need to. But even if we look back, and even within the history of Coverager, there's enough history to say something works, something didn't work, right. So Prudential with their life insurance for moms being placing that on baby lists, right? This is, this is a great idea. And something that Avi tells me all the time, right separates a solution from the execution. You have great ideas, but sometimes the execution doesn't work. And what happens with Prudential and baby list one? Well, there's two things that could happen. Obviously, one, maybe it wasn't available, the link wasn't, you know, readily accessible, people weren't aware, because obviously new, you know, parents to be, are in the market of buying life insurance. The second thing is, and this is something that I'm going to give credit to ap intego because in his interview, Steve was asking me to see what a success look like. And then if this actually didn't make, you know, coverager.com, but it was kind of a conversation we were having. And I told him, you know, what was success. And the first thing is when you have to define what success is. So we'll start with we'll, we'll, I'll keep that to you to define what success is for you. But you have to have a committed partner. And that goes both ways, right. And maybe Prudential wasn't committed enough because he had other channels that sell life insurance to them. So baby list was maybe this small player to him.

But you have to learn how to grow in a modern way. It's not an option for you to decide whether you are on Google or on Instagram, it's just a matter of figuring out how you play around in all these channels, and what budget you allocate, and how big of a distribution is alternative channel versus how big of a distribution is working with independent agents versus direct I mean, there's a lot of value in being direct and being organic and in having brand recognition not just what happened with Bestow about this carrier that was relevant to somebody somewhere sometime but isn't relevant to us anymore. Right so there's there's that right so you know, Prudential obviously Prudential and maybe list didn't work out. But this week, we learned that Hodinkee that media company for for watches and luxury watches I should say that they're the ones that are started working with Chubb to sell watch insurance and if you go to their

You know, to their website, the first thing you see is Hodinkee insurance all the way at the top.

That's a committed partner. And he's probably committed also, because it's a media company and media company are looking to grow their e commerce on.

Yeah.

There's cross selling opportunities. So there's the, I mean, my we'lll sort of see how all of this kind of plays out, but it, it, the, the lack of creativity, I think is going to be the cause of lack of execution. Here.

You know, Shefi, you when you said, like, it kind of hurt a little bit when you said, you know, how did you phrase it? Like, everything, that's all the products that are there, like, they've always been there? No, no one's building anything that's really new here, really. And if you think about that, it's, it's kind of it's, there's, it's a, it's sad in some standpoint, right? That there's no one's actually doing anything new. But it just means you just have to execute. Like, you just have to get through the clutter, through the noise in order to get people through. And it I think it you know, defining what your level of successes and be not only having committed partners but being committed to the market that you're trying to serve, like show some enthusiasm. I was listening to a podcast with the viewer ever heard of the rucksacks The, the military backpacks that you can put like bricks and stuff in to go hiking to go you know, really rough, rough, rough. So like, I listened to that guy and and I would have had no interest in a rucksack. But I listened to the passion that he had about why he was doing it. And it was beyond just like a stitch in a in a backpack. It was he was committed to building this community of people who got together and you know, former military guy worried about mental health. I immediately got to my computer and looked up rucksack, right. Who are these people, these CEOs, at least Dan Schreiber is out there. I you know, I think he I think he built gets a lot of business for Lemonade, just because he's out there. People know who he is, at least, for better for worse, you know, what he you know what he stands for? Right. And a lot of these companies are owned by or run by no names, there's just, there's, there's nothing to get excited about. It's just a, it's just a commodity, whoever has the cheapest price is going to get the business. But if you can't even make enough noise to get in front of people, then it's, it's lost anyways.

And by the way, this is really like execution, we understand that it's difficult. But for Bestow to send traffic to PolicyGenius, when they can provide a quote, that's about business. I'd rather you not send that traffic, because when you send that traffic, yes, you'll get money from PolicyGenius you're making PolicyGenius stronger, and a strong PolicyGenius. Maybe now when you're a carrier, you'll be able to be on PolicyGenius. So they could sell you like they sell AIG and protective and other companies. But go find yourself car insurance company that targets millennials or younger parents and give them the business. Help them, you know, don't help your enemy. And this is the problem because, okay, we can all agree that

that's a really good idea. No, but but but but that's, but that's the thing, like you're helping a lot less competition, there's a lot less competition in this industry and should be a lot more competition. This isn't Pepsi Cola versus Pepsi versus Coca Cola. You we have a lot of players. And the problem is, you know, progress. And you know, obviously, we really should give recognition. So first of all, we're really, really sad to hear about the passing of Everquote CEO started with that. Berenbaum Yeah, obviously, this is a new territory for us. But we were absolutely shocked and condolences to the team to the colleagues.

But

yeah, I don't know what to say about that. But you know, in different contexts, news, right. So you have to understand who you're playing with. If you are partnering with lead gen. What does that look like? Can you partner with lead gen, and then vice versa, go ahead and partner with independent agents, independent agents, same thing, you have independent agents working with legacy insurers that are solely solely selling through the penet agents, and then going around and, you know, working with digital insurer, so I think at the end of the day, it's everyone to himself. And you just have to be with that mindset and decide long term that this relationship makes sense.

You know, it's, it's, it's funny because, you know, you look at Geico and Geico, you know, they keep their cards to themselves, but they play with whoever they want to play. And, you know, it's all part of a strategy. And there are one company that's selling one product, they can do that, because they're, they're going crazy, like, there'll be everywhere. If you're Bestow, it's going to be very hard for you, because you don't have the capability to do something like that. So then now, you really need to be creative. And you need to be very careful with you know, where you spend your money and who you partner with. And it may take you time. But again, it's a challenge, like I, I saw this years ago, I wouldn't bet on on Ladder or Bestow or Ethos, or maybe someone will acquire them, and they'll be a success. I'm not saying that's not going to happen, but you're not going to change. Right now, the way the dynamic is with consumers, you're not going to change the fact that they want to compare and you know, what companies like Everquote, we've criticized them in the past. That's their business to make sure you compare to give you options, and it might be a broken process. It's not 100% Yes, in the past few months year, they've been increasing their traffic from Google search, which means better quality traffic. So eventually, you got to believe that Everquote is going to be better, and they're going to hurt you, because they have the power because they're just in the business of facilitating the connection, they'll always have buyers. And if you're again, alone here, then you gotta be very smart. But it's going to be very challenging for you. So you know, it definitely be interesting to see day forward, you know, bringing all their marketing expertise, how that's going to look like. But the places are running out, like, you know, there are people paying for YouTube bread, no advertisements, people paying for Spotify, no advertisements, Hulu, no advertisements, that is the customer that you want a customer that cannot be bothered by advertisements that he's willing to pay not to see ads. I want your money, because yet, State Farm i think is celebrating one year on Reddit, like one year and a month or something. So I had a chance to interview Peter crow saw which he's an adjuster, and he has tons of stories.

A was just marvelous. Listen to him. I know. And the thing about him is that he was talking from an insurance standpoint, right? What happens after a claims and getting to deal with what the customers feel? And I asked him, so what has changed? And and, you know, yes, of course, the business sped up, he told me and I said, What about the customer? Has has he changed? And he says, Yes, I mean, there's a long answer to that. And people should read the interview. But one of the answer is the customer is is more sophisticated. And we say this, often, the customer now is smarter about insurance. The thing is, he may not get his insights from the independent insurance agent, they're going online, they're going to social media, maybe they're just speaking with their, with their friends and their family. Maybe they're speaking with Reddit. And even the other day, there was a company that I've never heard of Reddit already know about it.

So that's the world that we live in. And that happened that that so you have to kind of address that as well. Right? don't have

it. It's more complicated. And I'll tell you what that like you think about distribution. And you really need to think about the basic stuff. And the basic is that convenience is important. Obviously, an insurance price matters more than convenience, because you don't shop every day. But the only thing that can win convenience and price is guilt,

emotions. I want to make you feel bad, Nick, for not coming to your local bar and tipping your it's called you don't want to go out, I'll make you feel bad. And you'll come you'll pay more than you need. And you'll order dessert or an appetizer. That is the only thing insurance companies can take advantage of is guilt, because they'll never be the cheapest, and they'll never be the most convenient. And how do you do that today with you know, obviously small businesses struggling and all of that. That is your opportunity. And whoever will deliver guilt at scale is going to win distribution. Because Google is not your place. Instagram is not for you. Facebook is not for you. This is for the Nerdwallet it's the PolicyGenius that could pay top dollar of course companies like Geico. But if you're a smaller insurer, look at you know the basics, start making people feel guilty, guilty for going to Google. That's what you need to do. That's your only chance and we'll talk about Nerdwallet Yeah.

Before you transition over there because I want to. I think that's a really good point, Avi for emotion, because I'll tell you a personal story. I was talking to an investor about my business, and they were asking me about climate change and like

Nick, are you worried about climate change? And what's the going to do to floods and wildfire? So yeah, of course, of course they I said, but there are trade offs to that the flip side is that it brings immense relative relevancy. It's in the news all the time. And Avi, to your point, it's not guilt fear, right? You people who ordinarily wouldn't think of it now it stops them in their tracks, they're at least gonna think of it. And emotions bring relevancy, you know, and so that's what's missing. You know, with the long the long sales cycle in life insurance, it has to do with relevancy. It's, yeah, I got this kid. And I know, but it's like, I'm busy, and there's no relevancy, whereas auto insurance, you don't get your auto insurance and you get pulled over, you go to jail, right? Like, you have to buy it, you know, or you won't get your mortgage for your house insurance, you have to buy it. So it's, it's always gearing towards making it relevant. That's part of the execution. So

I think that's a segue to alternative distribution. So Shefi, I'll try. Okay, so we've defined alternative distribution in the past, but I will define it again, just to make sure that people understand what we are referencing the alternative distribution is not a new concept. But the idea is, is that we have

a company from from outside of the insurance industry, working with a company from within the insurance industry to offer the product, that company can be an insurer or broker may be an enabler company, like boost, for instance. Hi, Alex, if you're listening, so it could be all of the above. But really, the focus is, is on the non insurance company, because often time and this is how we started, these are the companies that have users, right, they have some some sense of usability. So if we go back way back, when, before I even joined the insurance industry, this was probably known as affinity partnerships. But what has changed is that there is an integration element. Users are more aware of their credit score score and how much money they don't have in the bank. So there is this element of shopping and saving and switching that is being pushed by outside, you know, outside players. So Nerdwallet is a company like that, that has, you know, they had a strong year, I'm going to say, because they've acquired two companies, they went overseas to the UK. And they didn't, you know, formally or officially announced this for 54 million, but according to their filing, that's the last amount that they raised. And this was done this week. And what we what we're seeing is that they're sending out of the top 10 outgoing links from Nerdwallet. So aside from them sending traffic to Google, the other two are companies in the insurance are basically websites that pertain to insurance, and they get about 700,000 hits the last in the last 12 months. So if we if we put that and this isn't this isn't apples to apples. But if we put that in the context of Travelers announcing today or yesterday that they acquired insure a match from Plymouth Rock insurer match, despite in like 2015 2016 being called a super agency, I don't know what that means. I know what a super app is. I don't know what a super agency is. But it's called a super agency. It's called a digital agency, I wasn't able to get a quote online. So as Avi always tells me, digital is objective, right? So it's all it's it's all a matter of where you are, where you were, how you started, where you going, and how digital the process really is. But ensure match gets about 400,000 website visits throughout the year.

Now, there's a lot there's a really big difference between hits between, you know, sending traffic versus somebody going to ensure a match. I understand that. But the question is, where's insurance match going to be in five years from now? Not even five years from now? People are moving fast nowadays, whereas insurance that's going to be two years versus Where's Nerdwallet? going? In two years? Right? what's what's going to what, who is growing in the right way? Now, let me tell you something about insurance match with that, you know,

not a bad number of traffic visits.

Most of it comes from organic search, and the search terms are, what is the Deductible? So I want to ask you, Nick, who is this person that's googling What is it Deductible? Do you think they already have insurance? Do you think they have a claim and now they're telling him You have to ban Deductible? Is that the case? Could that be more of the cases because if it is then insurance is not relevant for them. And that's why they have a high bounce rate where people come in, they see the article, and they get the hell out of here and Oh, let me this is what we talked about basics, and you have all these tools available. So

technically or if not Coverager has them

Coverager. So technically, if you go

through organic search, when you're searching for something, to insurance companies, traditional insurance companies like Geico, Progressive, even Root, you're gonna have a lower bounce rate. Because you're here for something, you're going to go beyond one page, you're gonna see the first page and get the hell out. This is not the case with PolicyGenius. Why is that not the case with PolicyGenius? Because PolicyGenius appears on Google's first page when you search, how to avoid a check.

So you searched it, you saw PolicyGenius, you get to the article, how to avoid a check, or how to write a voided check. You get your information, and you get the hell out, you're not here for insurance. Now, this is PolicyGenius strategy to build a brand because out of those people that come in to see how to avoid a check, you know, maybe they'll go to the homepage and see the insurance offerings, and maybe they need to avoid a check for their new apartment that they just leased. And maybe they need renter's insurance. So the case with the insurer match, obviously, they're no match to PolicyGenius, I had to do it with the name. I'm sorry. But if you look at the searches, what is the Deductible or things like that? These are questions that people are asking. And I wonder why they're asking that because they already have interaction with insurance, some interaction, maybe you have the product, maybe you have a claim. So now you're that now what's interesting about Travelers doing this acquisition, Travelers is very competitive across PolicyGenius, Gabby and Jerry,

and they're getting a lot of business from these companies. So I wonder if Travelers is thinking to themselves, oh, boy, we're paying off a lot in commissions to Gabby, Jerry and PolicyGenius. Maybe we should have PolicyGenius, which, you know, ensure a match in a way. You know, they're in the same space where let's compare and through content on Google and stuff like that. They have articles so and they have business for commercial insurance. So this can be their angle for personal lines. Again, it doesn't it's not clear how much tech is there doesn't feel like to me what policy genius doesn't have that as well. It's all phone based. It's not about tech that's like really, if you can get people to the experience, to like really compare 100%?

Who has tech? Who has like, I mean, Jerry has a nice quote for but can you buy immediately at the moment? No, they still give you a quote, and that code may change, Gabby, the same? So I really think it's about setting these expectations with consumers like not, of course misleading them, they think they can buy online, but then it's not the real quote. So then you have unhappy customers. And I think that's, you know, for example, PolicyGenius they were able to do that, get the person on the phone, talk to them have that human to pressure you even like to say okay, It's time. It's time to buy give you the confidence. You know, I had questions about my Geico policy that I bought. I didn't know the answer. Okay. Not Not only this, he didn't know the answer. He called the gentleman. He wasn't, he wasn't ready to buy you guys. There was not ready to buy however, the person in Birmingham, he had pressure on this. So I think we're like an hour or two. I'll be high coverage. Geico. Geico. Let me tell you, he wouldn't let me off the phone. He wouldn't let me off the phone. And you understand that? Why Geico once you know, all these website visitors are through The Zebra or Everquote. They want a chance to speak to them because they have very persuasive sales people now, aside from that, which I don't know how Geico does, because when I went for a quote on Geico, and Geico is listening, they read Coverager. But don't don't take away my rate, because it's going to be a problem for you. But

when I got into the quote, it was like $980 for six months. I get on the call. And the guy's like, oh, let me find your credits. I said what credits? What can you get me? he lowered my price by $150. I said, What credit Did you give me I want to know, five years safe driving history. I said I've never driven before. This is the first time we're having a matter. You haven't had an accident in five years. He yet he gave it to me. He sent me a link to do the defensive driving course. That's another $62 off don't get now it does cost me $20 to do the course. But still, I'll say $42 so this is the benefit online. I'm never going to online again. Geico. No freakin way I'm going to call and I'm going to say give me credits. Just like I could do that. You know what? They saved me overall. $400 from Travelers. I had Travelers when I wish I got originally through Gabby. So Wow. This reminds me of like Comcast. This is like calling to cancel Comcast. Oh, they send you to that special team. And then next thing you know, it's like you're still with Comcast but they took $100 off your bill.

And then it's like, okay, I might as well I might as well stick around you have to call.

exactly that. And you know, that's, that's what they do. And by the way, I said this, they have a welcome team, would they call you the next day,

which is like to, I don't know, bring you forward and they send you emails, I still get the emails from them for home insurance. I told them Lemonade was cheaper.

I get the identity protection, they want me to buy the identity protection. And that's the power of a big company. And that's why I say like, really, you need to keep in mind that the average consumer doesn't care about you, not because they're, they're bad or anything, because they have other things on their mind. So you know, find good partners, find committed partners, be very careful. And, you know, try to execute as best as you can. And really, as I said, you know, it sad, but guilt is your only hope. It really is sad that we got to this point, because, you know, we speak to insurance companies, they kind of they criticize Root and Lemonade, like, what did they do? What did they do? Hey, you're to blame that Lemonade and Root are successful. If you would have built a better business than they wouldn't have a shot. But you didn't. And really is, you know, getting to that emotion place emotional place. That is your only chance because

I don't want to pay for someone going to Google and typing car insurance. That's not a loyal customer. He's looking to compare. Oh, Nick, in the last 12 months. How many hits did Geico send Lemonade? For renter's insurance?

12 months?

I I I didn't even know they were doing that.

A year since we wrote the story of blue lemonade. Yeah. Um,

I have no idea how any of that works. 80,000 I was gonna say 100,000. See, trust your intuition. So are you saying that Geico is a big source of lemonade business?

I wouldn't call it big, but a considerable source. Definitely. Well, they have a million policyholders. Right? Yes, but a hit is a hit. You know, you could land but I think if I'm not mistaken, Geico sends more traffic to Lemonade. And so far, is that correct? Oh, for sure. Now, here's the here's the interesting part, like so fi that's like a big company as well. They get a lot of traffic, they're online. But the when we say a committed partner basic stuff, people go to GEICO to buy insurance. So there is relevant so fi people don't go to buy insurance on so fi and you have to think about that.

That's why you have to be able in order to gain insights, you have to be able to be willing to play which brings me back to Munich Re being willing to play with day forward, whatever they forward has coming up. Maybe it's it's not much, but hopefully it's the opposite. Right? So you have to be willing to take the risk and experiment on the creative and advertising and marketing side. Okay. Okay. So I take that as a given. So

it's called cost a lot of money to be to get a carrier and to go full stack. Couldn't they do the same thing less expensively in an MGA model?

I'm not, I'm not a proponent. I'm still second. Sure. Why would you be an insurer? I don't understand. I don't understand. No, I don't think anyone of us and this team, listen, if you knew what Tesla is building, then you wouldn't want to be an insurer. Because there's no shot that you can do what Tesla does no way in a few years. You can say good bye. To Tesla owners as Bob policyholders. Okay. This week, I've learned that Tesla has a dog mode. Oh, yeah, they had it for a long time dog, you know about the dog mode? No, go ahead and explain. I know when I hear, you know, when you you know, you leave your car in the dog in the car, because you're just jumping to the store one second, then people look, it's like someone left a dog in the car. Let's break the window, get the dog. So they have a dog mode, where it sets the temperature to be, you know, with air so the dog can breathe and everything is fine. And it displays a message. Don't worry, my owner is going to be right back. So don't break my window. Don't call the fire department. So, you know, because it's an electric car. It doesn't it's not actually running. Yeah, it can it can run the air conditioner off the battery. Exactly. Yeah. So so why would you want to be an insurer? I mean, if you're already an insurer and you're making a lot of money, fine, but like, What has changed? Like how did Root change the product? How did Clearcover change the product? How did Hippo change the product aside from making it more comprehensive, but it's still the same product?

It's not like their sensor can make sure your roof isn't going to be blown off. So, so I'll give, I'll give. I think there are two perspective. One is, I think, with what happened with lemonades IPO, I think there's this feeling that the market will reward

these these companies if they are full stack that Oh, yeah. So they'll get rewarded for it, because oh, you'll have more control, because there'll be fear from the investor side that like, hey, you're dependent on these other entities for your capacity. And if they pull it away, you're done. Sort of type of thing. Not understanding that insurer has the same problem. Lemonade is fully dependent on their reinsurance, same, they just transferred it up one level, it's the same thing. So I think there's that, that they'll get rewarded for doing it. And

you know, I think there's this fear feel, feeling that you can have a little bit more control over what it is that you're trying to do. I just don't, I just don't see it. I think that anything that you want to do, if you want to get a Munich Re, you can get Munich Re to back you on something, they'll back you and you can, there's plenty of opportunities to find a carrier that can kind of step in. For something like that. This is very expensive. Here, 10s of millions of dollars.

A lot of you know, you know, a lot of responsibility, like, you know, you have to deal with claims. You know, that's a big deal. Like, there's so many elements here, but you know what, I don't know, I told Shefi this a while ago, Why the hell would anyone even want to work in insurance? Why? And you know what, I'm not 100% convinced that the best talent, even as founders came to insurance, I think the better ones may have gone on to build companies in different sectors. But yeah, I mean, can you like, can you ever build a product where the customer is going to say, I want this one? I want this one. I don't care that it's more money. I want this. I don't care that they have a shitty website. I want this product. You know, okay, well, it's rare. It happens in what in what lines of business? What Well, I mean, as as a broker, I remember having a customer that

didn't want to go with the cheaper option. They want to Chubb, because they were like Chubb pays their claims. And if that, can you do that at scale? That's the question. No, I don't think so. So that Well, I mean, because Chubb has a reputation for that. So I think there's this. So Chubb will operate in areas where a positive claim settlement is seen as an asset. So high net worth,

you know, the type of commercial customer that's looking that's is especially geared towards coverage, that that kind of person is like, hey, if I'm buying this coverage, it better pay off. If I need it, they'll go to Chubb. So yeah, in a way, I think Chubb can, has kind of proven that you kind of can do that. But for the most, well, the closest you're gonna get that kind of product at scale is going to be with pet insurance.

Yeah, pet and the pet parents are pet parents, not pet owners are absolutely grateful every time a claim is played. Oh, and then the the other way, the other side of this is also because you don't expect it and you get to the point where and it's emotional. It's an emotional process. times, right. And you know, the dog doesn't complain, like, not my dog tell me I want to be insured by this company. Um, I mean, this was this would be a good conversation to maybe have someone come in and talk about that mean, we can get this marketing guy from huge. Yeah, I mean, brand brands like cuz I'm so Shefi I would say FM Global

has a particular brand where people seek it out. There's, there's because they bring the engineering and the lost control to it. So you know, if you got an FM Global Policy, you you're meeting like, very high criteria for fire safety and other safety, and you're getting the best rate possible. Like so. so obvious point, Avi, you are getting the cheapest price. But you have to do all of these other things. People do seek it out. But there's not a lot of that. It's really hard to do at scale. I just I heard that Musk is moving to Texas. He's moving to California. So I'm sure Chubb, if they aren't doing him, they're happy. No more wildfires. Hopefully he's not moving to Houston. But if he's not moving to Houston, they should be very happy and others as well are moving from Dropbox. They're moving to Texas as well. So it should be good, but the question is really

These are like affluent, obviously rich, rich people. These are not the county, it's not me. I mean, I, you know, I'm shopping for car insurance people are shopping to get affordable to bundle. So you can do that at scale. You can't. And the only as I said, you know, don't really the only way. And people are saying what the hell is guilt? Like? How can you sell through guilt? How can you sell insurance through guilt? You'll see very soon how you can sell insurance through guilt. And that is what you have, because that is what Google doesn't have. They don't have humans. It's technology. What are they? Who the hell cares about you? You know, the end really, that is what's left for, for insurance companies. And obviously can Geico do that they're too big. But a Plymouth Rock can do it. Boston mutual can do it.

If I live in Boston, I'm proud I'll buy from Boston mutual I won't buy from Prudential. So that is, you know, what we look at and, and it's not too late. Like, you know, you've, you have many of these startups, they have so much in funding, be creative, like go merge, like if you're a life insurance startup, go merge with a car insurance startup, come together, you know, offer more, that would be interesting. You really and don't don't believe you know, the illusion of Lemonade, and Root. And Hippo. These are not good examples. Because you can't tell you that they were able to raise a lot of money. And they're telling you were this and that and that most of the policies that Hippo sells is through agents.

Not technology. It's not consumers coming online and buying so you cannot do that. He can do that Lemonade can do it. Root can do it. Understand, you know what you have play with your cards and you know, try to be creative and you may not be eliminated, but you'll be a niche player and people will buy you for the niche because you control that niche. Well, I think we heard it here. If you're a carrier out there and you want to sell by guilt reach out to us. We'll Avi will teach you how to do that. Oh, yeah, we have many, many tactics.

Okay, well, this is the week. Short. Where's my calendar? week ending November 4. Avi Shefi. Thanks for a spirited discussion. They appreciate it.

Thanks for having us. We can have it. Have a nice weekend. Happy next week, everybody. Thanks for tuning in. And until next time, thank you. Thanks, CIA.

Transcribed by https://otter.ai