E37: Closing the Protection Gap with Jumpstart CEO Kate Stillwell

For many reasons, catastrophe insurance is very expensive. Aside from being bad for the property owner, this is a horrible outcome for communities and society as one of the easiest quantifiable benefits of a robust insurance market, is that the market mechanism helps communities bounce back from natural catastrophes. Enter Kate Stillwell and Jumpstart.

Jumpstart looks to provide first-dollar catastrophe and extra expense (think no property damage, but perhaps your local school is closed and you need to hire help for your children). Jumpstart has started with earthquake coverage in California (where only about 12% of homeowners have coverage). Cleverly using parametric triggers (requires only lots of ground-shaking and not property damage to pay out), Jumpstart can provide a financial jumpstart to policyholders in about 48 hours. Necessary cash during potentially chaotic times.

We discussed this and a very unique distribution mechanism of adding Jumpstart coverage to corporate benefits packages.

Watch here:

Connect:
Kate Stillwell (LinkedIn)
Jumpstart (Homepage)  

 

Musical Credits:
Shadows by David Cutter Music:
https://davidcuttermusic.com
https://soundcloud.com/dcuttermusic
Free Download / Stream:
https://bit.ly/shadows-david-cutter
Music promoted by Audio Library:
https://youtu.be/qiBHOiEl9EI

Video Credits: Intro Stock Footage by Videvo

Transcript

Nick
And we're live, we're back. This is the Coverager Podcast. I can't think of a better way to end a Monday after a long day on Monday afternoon, then by putting on my propeller hat, propeller hats and geeking out on insurance and science with one of my first Insurtech friends, Kate Stillwell, Kate, welcome.

Kate S
Thank you, Nick.

Nick
We've been friends before the word Insurtech even existed.

Kate S
That's true. We go way back,

Nick
we go way back, we go to somewhere in the Bay Area where we got together and we sat down and we talked about insurance and natural catastrophes and talk through like, you know, what's an mga? What's a carrier? What are the trade offs? dealing with that? I remember, we got deep into, like, regulatory conversation, like, is, is a parametric policy, even insurance? I don't know.

Kate S
That's how I knew we were gonna be friends. first meeting, we got way deep

Nick
Way deep! you know, and it was, it was so awesome. And then we've been able to keep in touch and you have one of my favorite Insurtech companies you're solving and attempting to solve...I'm using both of those words a really gigantic problem. We'll start with earthquake, but your company is called Jumpstart. Why don't we give the audience a little flavor? Let's give you a little elevator pitch first, who is Kate Stillwell? And what is Jumpstart?

Kate S
Thanks, Nick. I'm the CEO and founder of Jumpstart. And Jumpstart has brought parametric insurance to consumers, starting with earthquake risk in California, and the elevator pitch to consumers is we provide you a "financial jumpstart", after the shock of a natural disaster.

Nick
Yep. And so our initial in our initial conversation, one thing that was very clear, for those of you that aren't in the West, or have never purchased earthquake coverage. Buying earthquake coverage is interesting, because one after you get over the sticker shock, and you will realize that these policies have extremely high deductibles. There's one of the reasons Kate that I think earthquake take up is so low is that the consumer rightly is thinking, Oh, god, I'm paying a lot. And I'm not sure if I'm ever going to use this thing, giving that deductible and use you solve a bit of that problem you solve that smaller piece that primary dollar of Hey, an earthquake just occurred. I have a loss. And you may have a policy, the policy may or may not kick in. But you have an immediate painful loss right then and there that you need cash for?

Kate S
Yeah, I think that what I'll say is that the existing indemnity product for earthquake is right. It's the right product for a lot of people, especially people who own a very large proportion of their home, people who have the means to be able to pay their deductible people who are financially sophisticated, people who are insurancephiles, I guess you would call it but a majority of the population doesn't fit into any of those categories, very neatly. A lot of people who a lot of people are renters, a lot of people who are homeowners have low Home Equity, a lot of people don't have a ton in savings. And the the jumpstart is the earthquake insurance for the rest of us you might say

Nick
which is which is extremely important because the take up rate is so low and so let me let me ask you a personal question about check whether your insurancephile, do you have earthquake insurance?

Kate S
I have jumpstart both my husband and I have

Nick
I hope so.

Kate S
But you know, I you know this and a lot of folks in the in the listeners know that I started out my career as a structural engineer. So when my husband and I were buying our house in 2006, that was a really high criteria for me, it's what are the bones of this house? And how is it gonna tolerate an earthquake? how's it gonna fare in an earthquake. And even though our house is actually literally a stone's throw away from the Hayward Fault, which is known in the scientific community as the sort of the most likely fault to create the next big one. It was a custom house was built right before the war. And so it was built before the home production became very mechanized and sort of assembly line. And I was really,I satisfied myself with the, with the with the structure of the house. And in fact the house wasn't even staged. It was the only house we looked at this was in 2006. That was completely empty. The floors hadn't been redone. And the selling agent was like, are you sure you want to come see this house because it's not ready to be shown yet. And I went as soon as I went down into crawlspace. It's like my I started doing the googly eyed thing like, Oh, this is good. This has good bones.

So I do not buy traditional earthquake insurance

Nick
I can picture your lap....earthquake insurance...Yeah, I can completely picture you with your laptop, like sitting there just like, hold on. I'm just gonna quickly model this. Run a few simulations. Wow, this one, this one's strong. But not everyone has your deep level of expertise in this. So I remember when I moved to California having a conversation with one of the actuaries at the company I worked for who should know better, right? And he owned a home? You know, I asked them, Do you have earthquake coverage? He said no. And I said why not? And he said, Well, um, you know, face turning a little pink, getting a little embarrassed, you know, because he is an insurancephile. He basically said he made the economic decision. The deductibles are very high. And he preferred to take the bet, and cross his fingers. And hope that if it was really bad that the government would sort of step in. And that's a whole other topic. But the point is, here's someone that understands in the the issue for society, which is what I love your products so much, because it's not just a win win. It's a third victory here for society, the issue with society, you have too many people taking that bet. That's not good for people in California, outside of California, you know, like, who's gonna pay to get these people back up? Like, that is a Katrina on steroids. You know, with people living in tents, when that big one does occur. And so that's where I see Jumpstart as being like, just really vital, a vital product, because it's first dollar, it's where that deductible would be, but it's fairly inexpensive. So let's, I want to rewind the tape all the way back. But before I do that, since I already brought up price or whatever, let's tackle that piece of it. You've you've first talked about parametric for the audience that doesn't understand the difference between parametric and traditional indemnity insurance. What is a parametric product?

Kate S
Parametric means a policy and if/then policy, basically, a payout, a lump sum payout that is triggered by the occurrence of a predefined data metric. And usually that data metric is transparent and publicly available metric, thus parametric. And so it really reverses the mindset of insurance from being a Oh, I'm gonna buy this too, because I'm afraid of something bad will happen into you know what, I'm going to buy this because I'm a resourceful person. And this will be the resources that will help me be resourceful.

Nick
Yep. So I'm from what I understand, let's let's see how good I am in understanding your product. So the the background parametric is the USGS earthquake, shake map, or shake footprints, are they basic, so an earthquake occurs, and the USGS will create a footprint of this is how the earthquake sort of transferred its energy through the ground, the ground shaking, the intensity of it, over intensity, you got it? Yeah, over space and time. So it it, it starts here and kind of goes out. And the further it goes out, the you know, the energy kind of begins to dissipate. That's why you rarely have earthquakes in San Francisco that are felt in Los Angeles, and vice versa. And so that is publicly available. And when I think

Kate S
It's a color coded map, people are used to seeing these color coded maps.

Nick
So like me, I'm on Twitter, and there'll be a tweet from the USGS recorded earthquake at a particular area, and there'll be a picture with like a star and like a color map. Okay, so you're what you're doing is you're taking the actual values that the USGS is publishing and saying, if you're in this vicinity, you could be compensated because this occurred and you probably had some damage from that. And so talk about that talk about how the product is structured and how, what the what the potential benefit, the insurable benefit is.

Kate S
Sure. Yeah. So everybody who is who is in all customers who are in the payment eligibility zone, which is the area of Intense shaking intensity, otherwise known as the red zone of the of the shake map, we push notifications to them saying, hey, you're eligible to claim your jumpstart payment, will you experience extra expenses as a result of this earthquake, so they don't have to experience physical breakage to their personal belongings or to their property, they just have to be able to anticipate that the earthquake is going to cost them something. And, you know, we've all been through the last seven months experiencing a macro level crisis, which for a lot of people, especially those of us who have kids created extra expenses that we could not have anticipated and extra expenses that lasted a long time. And so the idea is, jumpstart is meant to get you over that hump for all the surprises that you couldn't have anticipated.

Nick
So that could be in, of course, when people think earthquake, they think of like buildings crumbling, it doesn't even have to be that, like I'm looking, I'm looking at your screen, and there's a like, I think there's a sliding door behind you, that could be like the sliding door is off kilter, and no longer will no longer open, right, or the stairs to the front door of your house, one of the stairs gets kind of popped off, or shingles fall off the roof. Like things that where you're going to have to pay to fix it. Or it could be a small thing that's preventing you from actually having usage of the home, like I can't get the door open this, the frame has bent and I'm gonna have to have someone come over, I'm gonna have to like punch a hole through it. It could be as small as that, or the plumbing doesn't work.

Kate S
Yeah, you know, there are all those things that are related to the physical things, but there are things like, Okay, my kids school is closed, and maybe the school doesn't even have damage. But maybe this school closure is related to something that happened at the district office. And therefore, I have to either take time off work or hire somebody else or you know, I'm, I'm out of luck in terms of childcare, or my mom Senior Center is closed, same thing, I suddenly have responsibilities and expenses that relate to eldercare, or my apartment building, all my belongings are intact, the building is perfectly intact, the doors all open and close. But there's a gas leak halfway down the street. And that is closing a whole section of buildings. And so now I have to either go couch surf, or move back to Reno with my mom.

Nick
And we were finding this over and over, you brought up the COVID thing. But in insurance, I think I sort of hypothesize that the risks that we humans, companies and communities face, there's probably more of risk and exposure that we face that's uninsured or under insured. Because we're not actively thinking about it, we can't it's like second or third order thinking, second or third order problems that we can't immediately associate with the thing right then and there. When it comes with an earthquake or a flood or a fire or something like that we're immediately thinking of the property. And that's like an amazing part of what your offer is just that you just need to be affected by it. Right. And it's likely in any red zone, you're affected.

Kate S
It's a red zone, that means there's some level of disruption, that's gonna affect lots and lots of people. Yeah,

Nick
excuse Excuse My French, but there's the common saying that, you know, the shits gonna hit the fan, the BART subway is going to be out, like you're not going to be able to get to work, like things are going to go bad. And that's what this is meant to fix. And so it's binary, you're either going to get paid or you're not going to get paid.

Kate S
The way the jumpstart works. Yes, yeah. And you know, I want to riff on this for just a moment before you change, which is that you mentioned the triple win, right? So there's a win to the customer, which we've been talking about. And there's a win to the to jumpstart, and our partners, whether those are capacity partners or Investment Partners or distribution partners, and then there's the wind to society as well. And the window society is really related to the wind to jumpstart and the insurances. They're all entangled. Because if you think about the PNC industry as a whole, this is its last numbers. I remember off the top of my head is $1.6 trillion worldwide annually in gross premiums, and about half of that is in the United States. But that's only for the insurance, the risk that's currently insured. If you think about all the risks that are not insured, all the things that people aren't thinking about just you know, continuing on from your last thread. That's probably at least double the size of the of the of the of the current market. So suddenly, what's an six or $800 billion a year market insurance and PNC only becomes 1.5 if you consider all of the uninsured risks and the power of parametric is to be able to use technology And data to cover those uninsured risks at now, so that suddenly we can double the size of the insurance industry within our lifetimes

Nick
helps just to give a flavor. But this is this is the to me the most exciting thing about parametric is connecting immediate problem to an immediate payout. Should should there be event should there be claims, and we're going to talk about that with jumpstart, but with a parametric claim, how quickly can someone get a payout,

Kate S
they can get a payout as soon as the next day after the earthquake. So the way jumpstart works is there's wait happens, USGS starts to release their data feed the data stabilize, after six to eight hours, as more and more of their seismometer stations come online and start to transmit data to central to the central processing center. So at the 24 hour mark at 24 hours after the earthquake, that's the data set we use as the definitive data set to determine payment eligibility. And so at that moment, we send out the notifications to everybody. And the same day that they respond, we authorize the payment transfer. So like if they if the earthquake occurred at 6am than 6am. The next day, they respond, they respond to their push notification, yes, I'm gonna have extra expenses, then by you know, 6pm Eastern, which is when the payment transfers all happen in a batch batch, so it's 3pm our time, then the payment is initiated. And it can happen, the transfer can happen as soon as that day if they have a debit card on file as their pay payment receiving method on file. And a couple days after that, if it's an AC h transfer.

Nick
Okay, so let's compare it to indemnity. So let's even assume that there's a low deductible, my guess is that they would get a payment, if they could get in, it would take a week or two, maybe to get the first adjuster out to their property. And of course, they're not even going to get paid for the extra expense. Like the stuff that like you have to actually have physical damage. So let's assume the door can't open. Let's assume the deductible is very low. It's a natural disaster, you're lucky if you're going to be able to get a phone call through you know, it could be

Kate S
anything, it's going to be so chaotic that the last thing anybody needs his the hassle of having to coordinate with, you know, a third party, that, you know, the phone lines are gonna be jammed. The internet is going to be you know, patchy. It's really difficult. But I mean, I want to step in and say I'm not here to trash the existing Oh, of course, there will be insurance companies who do provide an initial payment. It won't it will be it will be initial, it will be relatively fast. won't be as fast as jumpstart but it will be it will be something upfront, but it's only for the people who are actually

Nick
yeah, let's riff on that. Because I don't think it's trashing. I just think it is a limitation to the indemnity model, which is really a model that comes from fire based type of, you know, insurance from 300 years ago, where you're unlikely to have several claims all at the same time. So you'd have one and you send an adjuster there and that one wouldn't be adjusted. And it'd be done. Like you could pick up the pick up the phone you you get in touch with someone and a day or two later, it would it would start to begin to resolve itself. Where you and I live in the natural disaster world where it's complete chaos. And so the the indemnity product, and I'm still a fan, like I still think like, indemnity is not going away, because you need to make sure that the lot you become fully hold afterwards. And parametric by itself probably isn't going to resolve that. So they never need to get married, sudden some way to each other. But the but you're you're solving like a massive problem you're solving non property damage, extra expense that everybody is going to have with quick payouts where it is not is not incumbent upon the policyholder, to do the heavy work. You've built technology that's going to do the work for them, you will inform them that you hate. We know that this this location that you're in was in the zone, right? Text notification, which is low, low data centric, you know, so not a phone call, which may not get through and now you're playing telephone tech. So you've sort of laid all of that out. It's it is the it's the society problem. And I think that the To me, the big society problem is that you have a lot of people that would like to buy coverage and the indemnity is not a good solution. And you have too many people taking that bet. Which means that they're going to have a lot of homeless people.

Kate S
Yeah, you know, and you know, one element of it is the 10 cities. But there are a lot of people in the Bay Area who are not so dead. Anybody who can afford $20 a month is probably not so destitute that they would necessarily go into a tent city. They're the lifeblood of the economy, who are going to make the choice, am I going to be able to make it over the hump, as I said earlier, and stick it out and have the wherewithal to help the neighbors? Or am I just really going to get in my car and, and fleet? And so the the biggest policy problem from the point of policy from the public policy point of view, is, how many of our How are our cities going to change in character in demographics? Is there this whole segment of people who are young, energetic, capable and contributing to society that are suddenly going to go live somewhere else, whether that's whether that stocked in whether that's Minneapolis, whether that's Tokyo. And so there's the runs the risk that then it bifurcates, our cities even more into the very rich and the very poor, and that's already that, that enact inequity is just going to get exacerbated by natural disaster unless we can have this private market economic stimulus, that's essentially the function of a parametric product for any crisis, any macro level disruption is to, you know, bring the force of the private market to bear on reinvigorating jumpstarting the economy and communities.

Nick
Yep, hence the name, which is a beautiful, perfect name. for that. And the we've been really focused on the individual, Ruby really focused on an earthquake. But the there are bigger ramifications here. Obviously, I think anyone that's listening, with any sort of imagination can start thinking well, what about flood? Or what about the community? Why? Why couldn't the community itself by a parametric to get an immediate jolt of cash has communities have the same problem, all of their, they have this incredible task of trying to coordinate 50 million different things, you know, we have to have, we can't have looting, and we have to, you know, protect our citizens. And then we have to make sure that everyone is safe. We have to if they're fires, we have to make sure that the catastrophe isn't exacerbated. We have to get people who are harmed to safety. So they're coordinating all these things, and would be very easy for a community to just sort of run out of cash, like they would be dependent on like bigger government say, Hey, we need some help. How long could that take?

Kate S
Right. So there are mechanisms in place for states and cities to plan in advance for being able to tap into FEMA funding. Nevertheless, the applicability of parametric to public entities, whether they're municipalities, whether they're utility districts, whatever they are, is has been proven. And you know, there are some very smart capable people at Edwin's at Swiss Re who are able to structure these kinds of policies at the community level. Nuts that's not unprecedented. In the my favorite success story on that note is the 2017 earthquake in Mexico that was offshore on the off the west coast of Mexico triggered parametric cat bonds that were the recipient, the beneficiary was the the the Federal District You know, this capital city's police force. And so then the district was able to pay their police and their first responders without having to tap into and draw down the municipal reserves. But by being able to use this hundred and $50 million to pay for these first few weeks of emergency response,

Nick
it's it's one of those areas of parametric that I'm that's so interesting is that you can directly tie a problem with a solution. Right? So you can you can definitively say, Hey, we're going to have this problem. We don't have a financing mechanism after this natural disaster. And you can literally build a parametric that says if it you know, if the ground shaking, wind speed flood depth exceeds a certain threshold, we get an automatic payment that will solve this particular problem, just that problem, whether it's the Mexico City police or you can get really creative and how how you want to apply those funds. So can you give us you hinted at the price, let's talk about what the customer gets and what they have to pay for.

Kate S
Sure. The price is something that we structured the whole product around. We wanted a product That was accessible, widely accessible to a large swath of the population, not necessarily for the poorest of the poor. But something that was equivalent to, you know, a few lattes, or less than a gym membership. And so it was really important to us to get to a price point that was somewhere around $20 a month. And we did land there, which is that every zip code in California is eligible, the population weighted average price is $20 per month. And that's taking all the zip codes and you know, taking the population, most of the zip codes in the Bay Area and in Southern California are between 18 and $24. And then San Diego is 14 $15 per month. And so it's really in this range of you know, I could swing that, you know, it's not it's something you have to think that a lot of people have to think twice about, because it's not $8 a month, you know, it's not the price of an app, but but it's also not as expensive as a gym membership. And so, you know, being able to get a first layer of protection for pretty much a no brainer, signup process, and no brainer distribution of the money. That's an that's an easy first step for people to get themselves covered, especially people just moving to California. People who just suddenly felt an earthquake, people who's out of state grandmother is saying, you know, I'm really worried about earthquakes, it's sort of a slam dunk thing that folks can do to get prepared. And then when they're more financially ready, they're better prepared mentally to be able to spring for the indemnity product after they own a home.

Nick
Yep. So let's talk about distribution. Low premiums, right? So give us your answer of how consumers can buy the product. Right. But I think talk more about what that what that decision what that. So let me let me let me we want, it's like now now you got me like really terrific, how to how to consumers buy your products.

Kate S
We are available online, jumpstart recovery calm, you can do an internet search for jumpstart insurance and will pop up. And the signup process takes less than four minutes. It's very seamless, and consistent with the frictionless buying experience that today's consumers are used to

Nick
so direct to consumer, you made that decision? Was Did you have that decision initially, like early on? Did you know you were going to go direct to consumer? How did you sort of think through that?

Kate S
Yeah, thank you so much for asking, um, we incorporated as a benefit corporation, because of knowing the sort of societal impact that at this level of this magnitude of economic stimulus will cause the potential providing, and the specific public benefit is to increase economic stimulus after natural disaster. And we got early advice, not too long after you and I met, but it wasn't from you. That said, You know what, parametric is cool. But you should start with high net worth individuals with $100,000 payout, and then you'll be able to, you know, have higher premiums make money faster, and then you can go down market, well, being a benefit corporation, which is a C corporation, which is a for profit organization, means that we are allowed to the Board of Directors is allowed to also make decisions based on the public benefit, in addition to maximizing shareholder profit. And so the decision was you not now we we are a consumer product, we need to make what we have available widely, because, you know, if we create $100,000 product, it becomes completely has to become complicated, because then you can't have an automatic dissemination of hundred thousand dollars, because then there's too much opportunity for windfall and blahdy blahdy blah to completely undermines the simplicity of parametric and the just the if, then, and if we're going to create a new product category, we're really going to make good on doubling the size of the PNC industry, then we have to make it really different. And that's really what drove us to start b2c, we know we knew at the time that we would reach scale, there would be a phase of our growth, that would have to be one to many. And the route to scale would be through a partnerships, distribution strategy. But what the b2c channel afforded us is to understand who's buying why understand the customer stories, understand when they're buying. And so then we can take that rich data, those stories, and inform and narrow down and focus on Okay, what types of distribution partners are going to be the most bang for the buck, who is going to be able to get parametric out there fastest, and really create this new product category with us hand in hand.

Nick
Yeah, that to me would be the most critical decision that you have to make because the premiums are very low, so there's not a lot of margin for you to do a gigantic level of marketing online. Because it could take years for you to recoup the costs on that. And so understanding how much it cost to acquire a customer is going to be huge and, and with low premiums, it's like they, we either need to keep the costs really low, or they need to stick around for a very long time for the stork and that and that's a problem with any kind of insurance product. But I'm sensitive to the, to the low premium ones, because there's not a lot of room there to just sort of make it work and you've specifically built it for the customer on the low premium facet. So it's like, we can't keep adding marketing cost to making this more expensive, because that defeats the purpose of what it is you're trying to do. So um, it's so I love how you kind of went into that story. And part of kind of giving it away for the audience. Part of like, why I like desperately want to have this conversation with you is that you found another angle, like you're, you're so intense to sort of get your mission out there really expanding it out there. And you need to do it in a way where you can reach a lot of people inexpensively, that you've that when you told me that that was just like my my mind exploded like, that is genius that you did that. Can you talk about how some, some people in California can get exposed to purchasing your product?

Kate S
Yeah, besides b2c, you know, one of the things that is driving our partnership strategy, as I said before, is the stories. So there's a little bit of revenue in there to be able to share, but that's not driving the decisions for a partner to be able to want to partner with jumpstart what's really driving it is improving the customer experience of their constituents of their stakeholders. So like, for example, the to outside of the context of feeling an earthquake, somebody feels an earthquake, they find jumpstart, and they're that we acquire them almost for free. But outside of that context, the what we've learned from when our customers are buying jumpstart is when they're moving, when they're starting a job, or when they're otherwise buying insurance. So let's take the example of starting a job.

Unknown Speaker
There are two

Kate S
sort of value propositions to the partner to the to the employer or to the Employee Benefits platform. One is you have people moving so it's very connected to this, this this journey of moving people moving into California, not so much now with the working from home, but it'll come back. And they're saying, okay, but what do you what do you have about earthquakes, I'm really worried about it. Oh, we have this thing for earthquakes for the employer is, you know, what we are part of our identity is resilience in our culture. And we're putting our money where our mouth is we have the resilience plan for wildfires, we have a resilience plan for cyber terrorism, we have a resilience plan for all these things have the role of the chief risk officer is a strategic executive level role. And so it's only natural that they would want the employees all individually to also be resilient in many different ways, including being financially resilient. And so organizations like these, they've heard of parametric at the organizational level, it only makes sense that they make parametric available as a voluntary employee benefit as well. So that each individual can take care of their own needs and be able to contribute as a team player for the rest of the company as the company responds to whatever disaster it is that caused the parametric kickin,

Nick
no, or the company could could pay it could pay that element as a benefit, right? So the company could say is 20 bucks a month, right. And it is very important to us resiliency, you brought it up, it's very important to us that our employees are taken care of. And so we don't want them to have this extra burden. Because if you're a good executive, you realize, well, that's going to come back and bite us. If they're, you know,

Kate S
afford to lose half the workforce know, you know,

critical care centers is a perfect example of something where you really need your people to come back to work as soon as they can meet their own first needs. And the faster they can meet their first needs, the faster they'll be able to help your organization meet the needs of the rest of the community.

Nick
Yeah, you're you're you're incredibly academic, in your approach to this, like very organized. And you you know, you went through the painstaking detail of what you just told me it was very interesting, because you said you you listed three elements where you're very likely to have your product exposed to the market, talk about the research, talk about like, what work you had to do, how did you uncover? How did you find out that a change of jobs would be one of those scenarios where this you know, you could you could open up and actually have a conversation because, listen, I Californians know that the earthquake risk is there. But you know, they get other advertising and they still don't buy it. So what what made? What did you see when you were doing your research that told you, hey, this, this is a good time to actually have a conversation about this really awesome product?

Kate S
Thank you for asking that. And, you know, the answer is not very academic. It is good old fashioned. picking up the phone, we attempt to call every single one of our customers that that comes in, we mo almost all of our traffic in this first two years in the direct to consumer channel has been organic and word of mouth.

Nick
The real, real Paula, you're calling every policy holder or something like that?

Kate S
Okay, we don't actually connect with all of them. Some of them are like, okay, no, I don't want to answer that question. But we we end up talking to a good percentage of them, you know, like, maybe 30%. And hearing their stories and getting a sense for who they are as a personality and between the staff members is not very academic yet. But we are known to talk about the policyholders by name as if we know these customers. And it does kind of feel like we know them, because we've heard the stories. And so that's how we were literally just talking to them understanding, wow, we're seeing these patterns start to emerge. Yeah, so could just touch on something a bit the risk of interrupting, I want to touch on something else that you brought up in the last line of questioning, which was people see the advertising and yet they don't necessarily buy it. So there is an increase in advertising about earthquake preparedness and earthquake insurance in particular over the last two or so years. And so there are messages out there. What I'll say is that, what, there are two points I want to make. One is before the structure of earthquake insurance changed in approximately 1996, which was when the the California Earthquake authority was formed, before the Northridge earthquake, which caught which precipitated this restructuring of earthquake insurance 29% of Californians got non mandatory earthquake insurance. So, there is demand out there, people would buy a product, as long as they felt as though the value proposition is compelling. And our mission, part of our mission is, together with other what whoever else is out there, which, as far as I know, is no other parametric. But there are other insurers out there to get that number back up in the 25% range. Yeah, because that's gonna double or triple the amount of money that flows in after natural disaster. So the first thing 29% we could get there. Second thing I want to bring up is actually happened right around the time that you and I met, it really set the direction of jumpstart, is in the 2014 issue of San Francisco magazine, there was a retrospective of the Loma Prieta earthquake since the 1989, World Series earthquake, and this was the 25th anniversary of it. And there was like an eight page spread all dedicated to all the good work that the structural engineering community had done that the city of San Francisco had done all the retrofit ordinances, all the brick buildings that were now more safe. And then there was this at the very end, there was this tiny little sidebar by a local author named Gary Kamiya k m, i y A, and it says it says the case against preparedness. And it was tongue in cheek. But it gave several reasons of you know, why I don't prepare for earthquakes. But the the seminal line was storing up water and memorizing your exit paths is just not commensurate with a live fast die young, legal, beautiful corpse attitude. And that's the light bulb went off. For me, I was like, oh, people believe in themselves to be able to get through this. I'm like, I don't ever earthquakes, I'll be able to get through this. And so on the one of the one of the secrets is to be able to create a product that taps into that mindset of winning, instead of losing the mindset of, you know what, I'm gonna get through this.

Nick
And so I just that I think if I just get a little cash right away, I can get through this.

Unknown Speaker
Yeah.

Nick
Interesting, very interesting. And I learned something about about you and about how how this thing got started and how you were going through it. I mean, it's just such an interesting backstory, because like, I feel like I got you know, I got behind the curtains view.

Kate S
Totally. I have all that pretty much anyone else, you know? And he did email Gary kumea though and tell him

Nick
and he said thank you. You were you were my inspiration. customer. Um, so I don't want to I don't want to leave the topic yet of employee benefits because I just think when when you first said it, it didn't immediately strike me as something that would be useful, but I was still in indemnity mode. Thinking and I'm just like, ah, I don't know if someone would. But then I thought of the price tag and what it is you were accomplished. And it's just like, Oh, yeah, that would work like that is exactly. That's the type of decision and employees making when they're going through their list. And they're like, 20 bucks a month for this kind of an earthquake insurance coverage? Yeah, sure, sign me up. And you get the you get the ability to reduce churn, you get the benefit with the company. And so where could that go as a distribution mechanism, because that solves a lot of insurance problems.

Kate S
We're very bullish on the Employee Benefits channel, not least of which, because of the inroads we've made with Employee Benefits brokers and platforms, in particular, for tech integration, but also employers themselves. One of the larger employers in California, we're in discussion with wants to bring jumpstart to their employers, employees, excuse me, because they have this culture of resilience. And the chief risk officer has a strong role to play in the organization. And because they have parametric at the organizational level, it just makes sense. And so for them to be able to talk about that, and as a premier employer in California, to be able to have that as the offering right next division right next to life insurance. Right next to pet insurance. Well, goodness, if you offer pet insurance, something absolutely should offer resilience insurance to jumpstart insurance.

Nick
And so this can go to the let's this can expand to all resiliency. So we're talking flood, wildfire, like there's there's a lot of things here. Because again, back to our original, original point, the extra expense around an afro catastrophe is just, it's mind boggling. And as much as people think they can get through it, it's hard. There's a lot of stuff going on. So there's an opportunity for you here in a parametric way to have a true resiliency package of stuff that could be very useful to different people in different places across the country.

Kate S
Yeah, not just natural disasters, either really any exogamous shock that creates disruption at the macro level.

Nick
It's to me that's, that is like the one aspect like when we when you and I talked about that's like I gotta get this to our audience. Because not only is just jumpstart just a really good story, a good story about how to create a startup in a field that's, you know, it's a product that no one really wants to buy. I think you when you and I first talked earthquake was one of the things on my list too. And I had to scratch it off, because I couldn't. I'll tell you, frankly, it was outside pressure that was just like, there's no urgency to do that. It's like, yeah, focus on flood first, because there's no urgency with quake. So I acquiesced. But it always been on my mind like that disaster is just, it's going to happen. And I felt felt really poor about it. And so the challenge of not only a startup an insurance, but in an area where it's, you know, the big one may not come once every 10 years, once every 20 years. And so the relevancy but the societal impact is just massive, and what you're doing.

Kate S
So thank you, Nick, thanks for the opportunity to bring my story to your audience. It really is my life's work, my legacy, and the legacy of all those who have helped us along the way. So thank you.

Nick
Yeah. So I want to I want to make sure in the show notes, not only for those, because right now you're selling just in California, correct? Correct. Okay, so for people that are in California, well, I will put on the show notes how you can get the jumpstart if you want to do a D to C, but I think more importantly, I will I will put Kate's connections, if you're outside of California, like this is important for any employee benefits broker or anyone else that's looking for this sort of resiliency package. I think we it's incumbent upon us now to get Kate, Kate's got to go on a world tour. You get we got to do we got to have one of those shirts, where the back of the shirt is just like, you know, Los Angeles, San Francisco and Seattle, Portland, Boise, you know, and then you can come all the way to Naples. And we'll we'll once you make it to Naples, we'll know that you've made it. You know, it's it's fine. I'm not kidding. But Kate, this is this was awesome. This is just a I can't say enough. Like I'm just so thoroughly impressed with the product, the mission, how you've done it, and I got a behind the scenes view. I hope you have a librarian that's keeping track of this. We got it. We got to get it into a historical Chronicle. So I don't mean to make you blush, but it's that is how I feel. That's why it's like got to get you on here too. Awesome. So Kate, thank you for everyone that's listening. Please be safe. Please subscribe. But again, be safe. Yeah, something is going on out there like everything's coming back. So wear your mask and be respectful. It's not that hard. We will get through this. But for Kate still well jumpstart I'm so grateful that we're friends and so grateful that you came on. Thank you.

Kate S
Likewise. Thank you Nick.

Transcribed by https://otter.ai