EP19 – Bryan Falchuk on His New Book: The Future of Insurance – From Disruption to Evolution

In this bonus episode, Bryan Falchuk, insurance professional and author, sat with me as we discussed his new book The Future of Insurance: From Disruption to Evolution. Bryan researched how innovation was occurring in insurance and with the use of case studies, detailed how 7 different companies are innovating within the space. We discussed the 3 key takeaways that any insurance exec should focus on when looking to evolve and innovate, even when legacy issues have prevented such innovations in the past.

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Transcript

Nick
We're live in the Coverager Studios of Naples, Florida. I got my new carpet behind me. I'm back in my office and I get to redecorate. Like I should try to get it like my guest here, Bryan Falchuk, Bryan.

Bryan F
Hey, man, it's good to see you, Nick.

Nick
Good to see you too. Are you in an office like you like basically wrapping yourself around with you know, you know, green screens?

Bryan F
it's not green screens. What this is, is when you do a lot of public speaking and you are showing at events and whatnot and those all get canceled. Then you got all these backdrops and you know, you kind of want to hide the basement scene from everyone. So suddenly, I get this branded covering of like staircase and toys and workout equipment.

Nick
Well, no, it's good because I was wondering if like, you kick that in is there like, will we see? You know, your your 225 on the bench press?

Bryan F
Yeah, maybe 2 - 25's. That's Yeah.

Nick
So welcome. This particular episode is geared around some publicity. Yes. For a book that you have written. I know a little bit about some of the details around it. But before we even get started on that, why don't you give yourself a proper introduction, Bryan Falchuk, go.

Bryan F
So I'm Bryan Falchuk. And as Nick said, I'm an insurance guy, like, you know a lot of people who are on this show. I'm 20 year P&C veteran. Most recently I was a COO and then Chief Claims Officer for a carrier. Two different carriers And then I went to the Insurtech side. So I had been an early customer of this Insurtech company called Hi, Marley and joined them for a year, help them grow. And I decided to leave at the end of the year to write this book because of what I was seeing, having been on both sides of that equation. Something became really clear to me about this moment that we're in, in the industry. And so my third book, so like, this is what I do I you know, I think about things and I write about them and try to help people figure out how to navigate through situations or in and I've never written anything in insurance before. It's always been in other spaces of self help. And the joke I make is, this is self help, but the self is an insurance company or maybe an industry now. But there was a really clear moment that we're facing, that's quite unique. And a lot of people you know, being in a sales capacity at a tech company, I kept having the same conversations with, you know, different people in different roles in the C suite whether it's underwriting or claims or CEO or CIO or COO, they're all feeling stuck. And they're feeling stuck because of all this legacy baggage we have or the constraints we have all the typical things that we talk about in the industry is what holds us back, right? Our culture, politics, regulation, IT debt, like whatever it is. And at the same time they're watching customers have rapidly changing and changed expectations, because everything else they do in their life is different, right? It's all digital. It's all on demand. It's instantaneous, like people are paying their rent or their mortgage, like, you know, like, everyone I know who has Venmo who's over like, 35, it's because of some rent transaction. Like, that's how I learned about Venmo is like, yeah, it's like, people are paying their rent through Venmo. Like, that's, everything's different. And then you go to insurance, and it's like, we're one of those three industries where fax machines still exist. You know, it's like us doctors and lawyers and lawyers, sort of a crossover with perhaps doctors and lawyers, but we still are we're doing better, but we still do things a different way from what customers want. So carriers have that pressure on the one hand and more and more frustration from their customers for not meeting that pressure. And then the other hand, and this is, you know, the realm of Coverager is all the startups that are coming out...that's not necessarily anything new like determines your Insurtech as a newer word, but there's been tech and insurance for years. But if I go back to when I was starting the industry in 2000, lots of disruption around the idea that agents/brokers are gonna be gone. It's gonna be all these exchanges and that was like you spell exchange with just an x, or like the letter E, because the iPod wasn't out yet. So no one was using a letter I was all like, e commerce, e this, e that, e exchanges and lo and behold, Marsh, Aon, and well not Willis but sort of Lockton public, they're all still around. And maybe some of them aren't because they're part of someone else. But the agent/broker channel is alive and well.

Nick
If they if anything it's bigger.

Bryan F
It's bigger.Yeah, and I mean, literally all of those exchanges are gone. None of those disruptors who were predicting the end of this antiquated channel are here anymore. The difference with the tech and the disruption going on right now, and this is the second pressure that carriers face is, yes, there's lots of enabling tech and it can change, you might say, threaten, maybe it's creating opportunities, the way that we work, like, yes, there are exchanges now. They're aggregators and stuff, but a lot of them are not to displace agents and brokers, that's one of their customer bases. You know, they're there for direct sales, but they're also there to enable the intermediated sales. So you have a lot of new technology that's really about changing how we work. What's different is you also have tech enabled carriers. So you this is the first time you've really had a slew and really high frequency of new carriers entering the market and they don't have a lot of the legacy constraints. They face regulation, just like all of us in the incumbent world do but they don't have the legacy IT debt, they don't have the same culture, they don't have, you know, 10s of thousands of employees that they need to figure out how to work with. So there's, there are these new players coming up, that are threatening might be too strong of a word, but certainly creating disruptive pressure on the incoming carriers. And so when I talk to those incumbents, they're, they're frustrated, they're stuck. They're feeling like we've got these pressures from the outside. And we can't act fast enough, we can't do anything we're too far behind. And actually, that's not true. Because tech is different today. You know, you hear innovation, it's not like 10 years, $300 million, and you have all these SIs and and it's like miserable, and you get like a 10th of the scope that you were hoping to get and three times the cost like, that's not when innovation has to mean anymore. There are ways to move ahead. There are ways to meet those pressures, the disruption, the threats, the opportunities differently, more flexibly and being on the side of one of the providers who is doing And talking to these carriers who felt that way and then we're like, oh, actually, we can do something. And they tried it. And they did. And it had a big effect. I wanted to tell that story. And so that's actually Nick, you were the first person that I told this to, like, I called you up. And I think I got maybe six words into a much more succinct pitch of what the book was. You're like I'm in what can I do? And I was like, Well, I haven't even told you like, I don't. Let's do it.

Nick
Well, I'll tell you from my vantage point, because, you know, I was aggressively involved with Rob Galbraith's book, The End of Insurance. And I'm always eager when someone that has extensive background, but like you're you're not old. Right. You're so you, you're closer to the digital natives.

Bryan F
Yeah.

Nick
And the other thing So you're very comfortable in a world with computers and digitization. And so you because you're comfortable, I think your voice carries a lot of weight, as far as I'm concerned, because you can see both sides of it. And you recognize, especially with your consulting background, right, you recognize like you can you are able to compute and put basically a return on investment that is so desperately needed. Like the you know, a lot of these insurance executives don't want to move or get paralyzed. I think that was the word you use. That's the correct word like they are paralyzed by it. But at the end of the day, when it boils down, if someone can come in and basically be a trustworthy voice, to give dollar and cents figure return on investment, this is what you can expect. This is how you're this is how it's going to change the culture of your organization. That voice needs to be amplified. So it's like yes, I was I was all in.

Bryan F
No you were great. And you're right. I mean, I should said more of my background like, Yes, I've been in the carrier side, you know, gave a couple of roles, big carrier, small carrier, specialists, whatnot. And I was a consultant at McKinsey for a couple of years in the P&C practice. So I saw a lot of other carriers as well, people like, have you just been fired a lot? How do you see all these different carriers? Like no, some of it was consulting. So I've only been fired a little and been consulting too.

Nick
We've all been fired and we all have bosses. Yeah, what what's the name of the book?

Bryan F
The book is called The Future of Insurance from Disruption to Evolution.

Nick
Okay. And you took a unique approach to the book.

Bryan F
I did

Nick
It's less narrative, and focuses I think, again, your consulting background really comes into play here. Talk about the approach that you took

Bryan F
Yeah, in writing it. So there's three sections to the book. The first one is me sort of summing up this situation that we were just talking about, you know, like what what is the current state of affairs And a little bit about the past. So you know, what was that year 2000 ish sort of point of disruption? What's going on today? And why is it different? And with that context, what are some carriers doing to fix that? And like I had options, there's a lot of press releases out there, as well as articles written on what different carriers have done here, just scan the market and written stuff up. That's fine. That's interesting. You know, they're, they're cool stories. But I've been really lucky to build some great relationships across carriers and where I don't have relationships. I've also been really lucky to just say, Well, why don't I try asking? And if they say no, then what have I lost? Because not talking to them now. So a mix of people I knew, and people that went out on a limb and asked I got seven carriers that shared firsthand what they did. And so some of its stuff they've been public about. A few of the things are things that actually we're in the midst of coming out, or they weren't even announcing them yet. So the timing of the book mattered because like, was writing the case before they even announced it to the public. But by the time the book came out, it would be out. They shared really openly. So this is all firsthand discussions with the actual people at the actual carriers who were doing the things that we talked about sharing their story, The Good, the Bad the learnings, which is another way of saying that, you know, the struggles and what they took from it. And it's CSAA insurance groups. It's the biggest AAA carrier, the State Compensation Insurance Fund of California (SCIF). At one point was the largest comp carrier in the country. And then almost overnight, saw their market share drop, like in a heartbeat, which is about the same way that they became the largest. It was like instantaneously, everyone backed out of California, and then some regulations changed and then all of a sudden, they all came back in, right. So that's really interesting situation. And by the way, they're unionized. And they have civil servants on their staff. So you talked about constraints like SCIF faces regulations like pretty much no other carrier does, and they're part of the California government like they are state entity. We got CNA talking about their work with shift technologies and fraud in claims. Employers who's done some really cool things another formerly state entity in a monopolistic state in Nevada that is now a public company and done some really cool things on the API front with their alternative distribution, digital distribution. We have Ohio Mutual, amazing mutual carrier based out of Ohio, hence the name, who I'm lucky enough to have gotten to work with firsthand. That was one of the accounts that I worked on when I was at Hi Marley. So I got to know that team really well. And we talked about their work with Hi Marley, which is actually like a 10 year journey to figure out how to text and there are so many failed attempts, and they were just brutally honest about the good and the bad.

Nick
It sounds ridiculous, though, right ten years to learn how to text but right, but

Bryan F
that's, that's why people feel stuck is like I just want to send a text to my insureds, and then look what you have to go through or...there's other carriers that we worked with at Hi Marley that like they had a solution and they did something wrong with it. And like Verizon blocked them from texting any Verizon customers, which is like, you know, 40% like, it's a

Nick
lot.

Bryan F
So there's all these missteps but like they talk about it, and they talk about, you know, that could shut us down. Or we could say, well, why didn't that work? What was missing? What do we figure out through this attempt, that makes our needs clearer? So they were fantastic. Who else did I, USAA, a little carrier down in Texas? Yeah. And that was the one that everyone's like, Oh, no, you know, USAA Won't they won't do it. They won't participate. They won't tell you anything. They did. And that's not one that I knew someone at even though I'm actually a USAA member. You know, I've been to conferences with these folks and seen them in passing, but I didn't have deep relationships like I did it like AXA XL is another one that's in the book and I knew some of the folks there. Seven carriers, really open, really honest and from their stories. Each one has its own set of learnings. But then across all of them, I aggregated up and there are three things that really stand out.

Nick
Yeah. Oh, please go. That was gonna be my next question.

Bryan F
What's the takeaway? And like, this is this is the trick with writing a book people like, well, don't tell them. Don't tell the conclusion of it, because then no one will buy your book. And my perspective is, tell the conclusion of it. Because if it's interesting, and you want more than great,

Nick
You can see how they did it

Bryan F
Yeah. Because there's there's a lot more to it. But three, basically, if I if I use three single words, its Customers, Employees andFocus. So customers is exactly that. You know, we started with that pressure from customers or expectations have changed. You teed this up really well. And I think it's not this past week, the week before the Coverager Week in Review that the chat that you and Shefi got into about the indifference of customers in the space.

Nick
Yeah

Bryan F
She put it perfectly. She's like, this is an industry within different customers. If you're working on something they don't want...stop it. So the way I would like, yes, it's a bit provocative and direct, but it's also true. And what I would add to our sentiment is, ask them what they want. If you're not engaging with your customers and listening to the answers they give you, you're probably working on the wrong thing. So first and foremost, and you see this across the cases is you must start with what the customers actually care about, or what moves the needle for them. And that's like, that's why Ohio Mutual kept fighting through to figure out how to get texting working, like yes is better for their staff, but customers kept asking them on claim after claim, like can I just text you? to keep having to say, No, that doesn't cut it.

Nick
When you keep hearing it, there's like lessons to be learned all over the place when you keep hearing the same complaint, over and over again. It's a sign

Bryan F
Yeah

Nick
Right? Like and we as business professors, funnels, I think where we get stuck too often working in the business and not working on the business, and that's part of working on the business.

Bryan F
Yeah.

Nick
Is hearing those things? And like you said, customers expect?

Bryan F
Yeah.

Nick
You know, sometimes, you know, sometimes Bryan, what happens is the demand sometimes falls off. But it doesn't fall off because there's no demand falls off because they don't think they're being heard.

Bryan F
Yeah.

Nick
So it's like, why am I complaining? You know, and those are the worst customers because they're just, they're their connection to you is so paper thin, that any reasonable alternative, anyone that gets in front of them at the right time? They're gone!

Bryan F
Yeah. No. And those same customers make I think are easy to blow away. If you just do things well, if you listen, if you implement, you do some of those simple things that their expectation was that you were going to be terrible. And it's like Oh, that was actually really nice. These are vocal customers, so they can go from being detractors to being promoters. If you just listen, yeah, it doesn't mean you can do everything. But it also doesn't mean you just don't listen because they're squeaky wheel.

Nick
Right

Bryan F
So figuring out, you know, figuring out that balance, it's, is reminds me of when I was when I was at Hiscox running claims, and we were looking for different electronic payment providers. One of the largest ones in the industry...you know, they're, they're well known, they're great, you know, all good stuff. But I talked to their sales guy, and he's telling me about the options you could offer customers. And he's like, you can give them a branded debit card, like with the Hiscox on it, and you know, you can do an E check and I'm like, Uh huh. I'm waiting. Like, I'm like, I don't want a debit card, because I'm gonna have like 38 cents left on it. So instead of getting like, or whatever, like, that's not interesting to me. Oh, and e-check, okay, like a ACH, okay, that's not like, I can I just have an electronic? Can you Venmo? Like, can you do Apple Pay cash? Like, what other options do you have? And so I asked about PayPal, because that was something all of their competitors offered. And his response was, Oh, yeah, we don't you don't want to do that, because PayPal charges too much for the transaction, as like, and?? he's like, well, then we don't we don't make as much off of it. It's like,

Nick
yeah, there you go.

Bryan F
But customers are asking for it. And your reason for not doing it is because your profit margins thinner, which by the way, you're passing those costs on to me, so it actually doesn't matter to you at all. That's the wrong attitude. And you see that time and again, so if your customers are asking for something, listen, and if they're not asking once you go and ask them because they have the answer. You're just not engaging with them. Yeah, so that's, that's number one.

Nick
is there a particular area of So that was one of three, right? one of three. Yeah. Okay, so I'm interrupting you, I apologize. No, no, this is good. Maybe this is part of two or three. But to the effect of customers, is there, do you find that the tech is being incorporated in a particular area of the company? Do you find it's mostly claims, mostly distribution? Like, where do you are you seeing traction somewhere that's disproportional to the other areas?

Bryan F
Yeah, well, so like, I have a bias because I was in claims and the tech space that I was in, when I left Hiscox for Hi Marley was still primarily claims. So there's probably a bit of confirmation bias for me. So I feel like there's a lot going on in claims, but the reality is, there's actually a lot going on across the board. There are a few themes that really do stand out, putting the function like the functional area side, customer experiences, first and foremost, there's no question about that things that are are focused on how you interact with your customer or how the process of going through whatever that lifecycle phases, whether that's acquisition, or renewal, or claim or paying a bill. That's where there are tools focused on making the customers experience, frankly, more like everything else they do in their life. And because they don't expect that they'll find a light. So like those payment options, when we did a demo with one of them, and they paid us each $1 in my team, or they paid me $1 because I was head of claims they paid all my VPs 50 cents, which I just think is disgusting. Like treat your customers equally. Because they all notice that you, you know, you could bet that, we were all like completely blown away as if we had never heard of like getting money electronically before. We were just totally blown away. So CX enhancements, enablement improvements, with technology that's already out there in every other industry. That's, I think That's first and foremost, there's another theme around advanced intelligence or analytics or data science, AI, ML being applied to making better decisions. So you see that an underwriting, you see that in claims, you see that in marketing, a really cool solution out of California called Pinpoint Predictive that's it's using a bunch of data that none of us in the industry has access to psychometric data to predict people's propensities to do things like your likelihood to take one offer over another to renew, to lapse, to file a claim, to commit fraud to anything even down to like agent's behavior. So can you start to make smarter offers or maybe reach out to someone proactively so you don't lose an opportunity you would have had if you just appealled to what they care about. It's really interesting stuff. So using using data intelligence, for smarter proactive interactions with customers and smarter decision making. So that you know, that's another area. And then there's a lot of stuff that's sort of maybe a bit more cutting edge, and a little bit more all over the map. But really, it's just a very interesting time that new ideas are coming out. And that includes things like some of the IoT stuff that's going on.

Nick
You know, customers is like such a, it's so logical, right? And common sense. I bet though, there are a lot of executives that are just like, Oh, yeah, we listen to our customers. Oh, yeah. Like, everyone says, Do everybody thinks they do. Everyone thinks I was on the Elevate panel, two weeks ago, and Bradley Flowers was talking about how every agent he talks to is just like, Oh, yeah, we're great at customer service. Oh, yeah. He's just like, how?. And then just like, which is great. Yeah, it's like, but nobody knows how they're great. So it's, it's the Lake Wobegon effect. I have a feeling a lot of insurance executives think they are much better than average when it comes to that, and so is they're going way off track. We're still on point number one here. We agree. But I don't want to relinquish it because maybe also some of the problem with tech is that oh, well, yeah, it becomes this ambiguous thing, just like the customer becomes this ambiguous thing. But maybe that's part three of the focus part. Like how do you know if you're actually listening to the customer correctly?

Bryan F
Yeah. So it's not it's not quite part three. But what I would say is, there's a starting question you need to ask is, who's the customer and this came out, especially in the Employers case, where, I mean, it comes out in all them but Employers made a very conscious decision. I've been at enough carriers or sitting around in a you know, consulting meeting. With the decision makers that the carrier about who is the customer? And actually, I think this is one of the reasons why we as an industry have fallen behind because a lot of carriers will say, it's the agent or broker, and then the insured is their customer, we're not allowed to treat them like our customer, because that's not our direct relationship. And it's a threat to the channel if we do that, and some agents and brokers will be defensive about it. I understand that. But that means the guys at State Comp Fund put this really well brokers want something different than what an insured does. Yeah. So they got Dante Robinson, who is the VP behind their quote and bind solution that we talked about in the book for their direct business was we had been treating our direct channel customers, the same as our brokers, our broker customers or brokers. Because in either either case, like that's the person who's interfacing with SCIF, it's the direct customer or the broker so they just treat them the same and some brokers are saying transact me. And customers are saying, help me. for insurance, it's a different thing. And so the tools you have to give the interaction is different. Brokers don't want information. They don't need you to walk them through it. They don't need you to explain things, they just need to be done. Right? They want to get the information and get it processed, click/bind, and get their money. Totally makes sense. If you treat a customer like that, who doesn't understand comp, who doesn't want to buy it in the first place, but has to, and they're probably you know, doing it like at night while the TV's going, because that's the only time they had especially in the small business space. You can't transact them. You need to transact quickly and efficiently. But you have to do it in a way that supports them and educates them and guides them you can't overwhelm them because they don't get it and you can't just brush them off to get the transaction done. It's a different interaction. So if you don't understand who the customer is, and going back to Employers, they made an they made a decision that some carriers said Well, that's a cop out. You're not answering it. I totally disagree. I agree with what Employers did is they're all our customers, the insured is our customer. The broker/agent is our customer the distribution point because this alternative distribution too, so maybe it's an MGA, maybe it's some third party like affinity group. And what about the injured worker, because in comp, you have another party involved. It's not a third party claiming, it's a claimant who happens to be a part of your insured's organization. So it's not the same thing as like an adversary, you know, they're not coming in here, maybe committing fraud like they might be. But this isn't some random person, this is someone who's affiliated with your insured. And so you have to treat them differently. And you have to respect their needs. Because if you get them back to work, that's good for your insured. If you get them back to work, they're less likely to be upset about it, they're less likely to raise a problem with you know, the HR person or whatever, who's going to make that that decision or feed into that decision right when the renewal comes up. So you can't just worry about the distribution or just the insured or just the injured worker, however, you have to be mindful of all of them. And in each one of those customer relationships, there are answers to be had. So that's why the customer focus is so important. And why it takes a lot more time than people think. So to blow it off as very good about customers. Ask yourself what that means, like literally pen to paper, write out who's your customer? And how are you good to them? And are there other constituents out there that you are serving with your product or in hope of serving directly or indirectly? And how are you doing that with them? And guarantee you if you're willing to be honest, you're gonna come to some dead ends, or some question marks. That may feel uncomfortable. You may not like that. You may be like, Oh, this is nonsense. Like this guy Falchuk doesn't know what he's talking about. Or you could say like, Oh, this is great. We just unlocked an opportunity. We weren't even thinking about this, like look at it that way. This is a stagnant industry by and large. If you unlock a space where you You weren't playing before, or you weren't playing effectively or interestingly enough to warrant the business. That's a pretty cool opportunity that is very hard to come by because your only other alternative is just discount more. And that ain't when

Nick
it's either discount more follow the leaders. Yeah. Have someone else unlock it?

Bryan F
Yeah.

Nick
There's no opportunity left?

Bryan F
Yeah. SCIF CEO Vern Sater, who is amazing. I love that guy. He's incredible. He's just he's a lot of fun. He's really interesting. And he's super responsive and on it. When I had written the case, and I sent it to him to have a look at and he's like, You're being too nice. He's like, we failed. We fit like when they went from being large in the country to like overnight, shrinking dramatically. He's like, you need to say what that is, is like we did not deserve the business that we had. We only had it because people had no other alternative. And we never woke up to the fact that they deserve to be served better. And so as soon as they had an option, they fled in droves. And we got what we deserved. And it wasn't until we woke up and we started to treat people the way that needed to be treated and the way they're asking to be treated, that we got the business back and they're doing very well today. Yeah, that's really telling and he was, I mean, I didn't expect in sending any of the cases in draft form to anyone at the carriers there. They were going to be like, can you please be harsher on this year? But that's just to the point like they were really honestly. Yeah.

Nick
So executive summary. Yes. These companies were excessively focused on listening to the customer. Yeah, and things of that nature. Point number two.

Bryan F
Point number two is your people or employees, what is the single word? So this is the other one? No doubt the executives in the company are brilliant. Have lots of answers are very capable people and you don't know everthing. And even if you did, it's really hard to move an entire organization when no one but you is a part of that answer. So in case after case after case, you'll see a very clear story of the people were part of the solution. And it may not be all the people or it may be all the people like for skiff, they put their literally entire organization through design, think training. I mean, like executive assistants like everybody went through it. And they all participate in projects to come up with ideas. Again, I mean, everybody USAA is not notorious...they're famous for this. They have this tree, the patent tree in their headquarters, and each leaf is a different patent with the name of the employee whose idea led to that patent. And like this is a famous thing. And if you Google it, it's one of the first things that comes up if you look for USAA and patents, a security guard is the the source of over 25 patents for them. So you might be like I see innovation people are It's like a senior underwriter, or claims it's like a person who's like deep in the insurance, no! a security guard and I'm not putting down security guards. I'm just saying it's literally everybody. So that's to the point that like when you engage your people on the idea of moving the organization forward, that's great. That's step one. Because if you engage them that they have ideas, you're like, Okay, thanks. Now back to what I thought we should do, then you've done that all for nothing. So the carriers engaged their people, take the ideas and do something with it. So State Comp Fund their people came up with I think, was 30 ideas through these series of like design think challenges that they had 18 of them are either implemented or in production right now. And it's not to say the other 12 weren't considered but like, I think 18 out of 30, I don't know carriers who have that hit rate for like innovative ideas that get deployed. That's pretty awesome. And that just came from the people. And the story keeps repeating itself across different carriers. were the people were the ones asking for it. Like Ohio Mutual, they had the customers asked him to text on the one hand, and when they tried things, they had their people being like, look, this isn't cutting it for us, or this is good, but that's not working for us. And they listened to all that and they were fine. And that story goes on and on and on, where the engagement of the people was so critical. I have minute carriers that label themselves all these things like you were saying, you know, we're all people like, oh, we're great with customers. And the other one is like we're non hierarchical. Well, everyone says that. That's a great recruiting pitch. The vast majority don't actually are we're a meritocracy is the other one. It's like maybe/maybe not. I was at a carrier who's sang that praise up and down about themselves. And they could not have been further from that. They would start in all hands meeting about the new core system they're deploying and the CEO started with or behind schedule, I don't want a single question about it. No one is allowed to speak in this meeting. Like he killed people's ability to raise their hand or come off mute. It's like, Well, how do you think they're gonna feel about engaging these conversations? When you start the conversation by silencing them?

Nick
It's, this way we feel like in all these points, we're going to keep coming full circle, because it's common sense, but it's not so common. Right? It's I will guarantee you that almost all executives will have some will feel as though they have been beneficial or benevolent to their employees. But that's not exactly what you're talking about. This isn't being nice.

Bryan F
Yeah.

Nick
This is more of like on what you described on the customer side, it's giving your employees a voice in the operation and understanding that if you don't, it's gonna be really difficult for you to keep the ship moving or get the ship moving in the direction that you want it to. If they're paddling the wrong way and they can do it in so many different subtle ways that it could it could basically, you know, disrupt what's going on, if they're not fully engaged in what it is you're doing. And I think part of it is it can boil down to resentment, too. Right? Like, you're putting this burden on us to have this production level these, you know, KPIs you need to produce to this level, but you're not giving us the tools to be able to do that. And we don't even have a voice in the vote or a voice in the tools. You guys just haphazardly decide what's best for us and then say, okay, produce,

Bryan F
yeah, yeah.

Nick
It's crazy.

Bryan F
Yeah, no, you're absolutely right. And going back to the first point about customers, you know, forget if you're in the C suite, how close to the customers are you? Maybe you are

Nick
far away

Bryan F
or like strategic accounts. Are you in that big broker? Or like, it's your people who are actually at the coalface and That's a point. You know, I people outside the carriers as well, like Jeff Goldberg from Novarica, gave me some thoughts in the book. And one of the points that he raised was for a lot of carriers, because they're intermediated, and they saw that as the end of the customer journey for them, it was the agent or the broker, they were too far removed from what the customers were asking for. So don't replicate that same false barrier internally by only letting the senior people come up with the path forward, when it's your line folks and people up and down the levels that are actually the ones who are talking to the customers every day, seeing what their needs are and their issues.

Nick
It's like the beginning of time, you know, with I'll use like a war analogy, because it's the frontline folks. Right and in and it's been common since the beginning of time, that like senior military people, the ones that are successful listen to the frontline folks, frontline folks say something's happening, then something's happening.

Bryan F
Yeah,

Nick
you know, and again, I think it's circle a lot of where we are as an industry circles back to, we think we are doing these things. We think we're listening to the customer, we think we're doing the right things by the employees. These are common sense stuff, which is really funny, right? Because you're talking about innovation. Right? But you're I have a feeling a lot of what we're going to find in your book boils down to the ability, we're going to get into focus now the ability to focus on more fundamental, common sense things that will produce the seed that are seeds for for innovation.

Bryan F
Yeah. Let's talk about focus.

Nick
Yes, let's do this.

Bryan F
This is a this is an interesting one. And you know, I think the audience of the book is probably mostly folks that carriers but I also had my Insurtech brethren in mind, brotheren and sisteren in I don't know if that's the word for it. But the folks there because for startups, the numbers one problem is shiny object syndrome. And it's very similar and innovation because there's so much out there and you don't know what's what. And, you know, you'll notice I haven't like none of the top three, these takeaway points is like SAS or blockchain or API's I like that's all in there. But that's not what this book is about. It's not about technology, it's about solutions and how you get to them. And so the last case is USAA and theirs is a little different than the others. The others are all about a specific innovation in a specific area of the business, like texting in claims or CSAA's is using ride sharing in place rental car coverage in auto, which may not sound like a big deal to people, but three and a half years ago, when they did it like they worked with Lyft, Lyft was so much smaller than they are now ride sharing was not I mean, yes, it was somewhat common, but not to the extent it is now cabs were definitely still a powerhouse. Lyft was something like a 30th the size they are now. So you know, it was it was different USAA is innovation is the innovated on innovation. So the story there, and it's a great one and the case is on is it's about how they had an innovation function. And they made a decision that you know what this is great, but it's not actually serving where we think things are going. And we're missing out on something. So we need to augment it and change its remit a bit. So they spread it out. They kept their core central innovation but added some specific functional innovations. So that one for the auto product for the homeowners product and then for claims, so kind of underwriting product and claims for the insurance side. And they have other businesses as well but on the P&C space, and their portfolio projects, like a lot of carriers see was very technology focused. So for example, like I mentioned blockchain you'll see, this this came up a slack group today was like What happened? blockchain that's all anyone was talking about in like, three years ago and where is it? Well, when you lead with the technology, you may not actually be solving for anything, or you may miss the right way to solve it. So USAA went through their portfolio of all their projects. And anytime It was about a technology like AI adjusting or you know what I'm making this up, like, whatever it is, they killed it. And they said, everything in our portfolio needs to be about a problem or solving or an opportunity we're going after. So it's not AI adjusting it's how do we shorten the cycle for people to get back on the road? For for the lift solution that CSAA built, it wasn't this guy, Brian Gaab, who I interviewed for the book.

Nick
I know Brian,

Bryan F
okay, great guy, really, really honest and helpful. What he said is we had been for years making the rental car experience better and done a great job at that and, but ultimately, when you ask the question is like how can we make rental cars smoother, like renting a car, how Can we make that smoother? Every answer you come up with will be about renting a car. But customers aren't saying my car got an accident. I got in an accident. My car's out of commission, I need to rent a car. They're saying I need a car I need to get from here to there. So the way he said it was that I just asked customers we're trying to solve for getting from A to B. Yeah, what if we phrase it like that, then we can come up with anything. It's not about making rental cars faster and easier. Or like trimming the return process time. It's about getting customers to where they're trying to get to. That's a problem. rental cars are a technology, if you will. Depends on the maybe how bad the cars but

Nick
yeah, well, that's, that's I don't know. Whether who's the who's the innovation, the Harvard Business School guy that just died?

Bryan F
Oh, when you said just died and I'm like, Well, I don't know if he died. I was gonna say Clay Christensen. But I

Nick
Clay Christiansen. Yeah, he did die.

Bryan F
Oh he did?

Yeah, he did recently. He i think i think it was him that was saying people don't buy drills or drill bits. Right? You know, they want to, they need to make a hole. Yeah. Right. Like, that's what they want. Like, that's what the that's the the ultimate solution that they need for this.

So not a dad, though, because I would totally go and look at drills for hours. And

Nick
well, I mean, we You and I both have, you know, fascination with certain types of technologies. But yes, we're, you know, we're the exception to the rule. And I think the rule is most of the time, it's just like, I need something to hang something.

Bryan F
Yeah.

Nick
Is it a hole in the wall or whatever. But it's similar, right? Like, that's totally like, what do we what do we ultimately it's what are we talking about here? And when it comes to focus when you when these companies that were doing innovation groups, do they do anything? Did you were they able to expound on you know, Boss cites working working around like thought experiments and you mentioned design, design process these, like, how do you bust out of this is how we do things and you got him. You can't even imagine a world outside of rental cars or holes in walls.

Bryan F
Yeah. So they talked about that a little bit, especially the AXA xL case, where they they use their methodology that the president of their construction business, which is where I focus on this guy, Gary Kaplan, he had started out his prior company, consulting came in and taught them this thing called RRI. It's rapid results initiatives. And it's effectively design thinking with a very clear structure. So you turn everything into this 90 day project. Which they go into all of that, like how do you make that work? And they started to use it for their pilots, which means like, they brought customers into those projects, and the customers had to live by the 90 day cycle, which you would think like, Oh, we can't do that actually. The customers right. This is So much better. We know exactly what we have to do and when we're going to be done with it, you know, like, we can take people off their job because it's fixed time versus like, yeah, we'll do this project with you and you know, six months later, they're still in it and they're not there like we could dedicate resource to it, we can get it done. We can see if it works and if it did, then there's a step two and if it didn't, and we move on. So they go into that what I would say is, this is an area with a lot of help out there. You know, there's a company like kickin arrow comes to mind as an amazing shop that helps with that kind of thing actually ran a workshop at a conference I was at, I don't think I've ever had in like an hour, hour and a half session as clear a sense of what design think is and get the whole, like, you know, 80 of us from insurance, really humming on it. So a shout out to kick an arrow right, rightfully so they did a great job with that. But there are lots lots of places like that. So you can bring some people in to learn these things. And you do like what's gifted where you can then broaden that out to the whole company. You can have real expertise in your innovation team. Or like Brian Gaab seems strategy and innovation. Like they're all designed thing people. Brian's boss actually had been a consultant before that and ran a, like an accelerator program for us at Hiscox that was all designed thing based. So like, we lived in this teeny little space in San Francisco, like very startup II. And, and she taught us all how to do this. So like, I know they have those skills in house, but there are those people out there. So you can bring it in. And there's a very specific way to go about it that really brings people back to opening their mind and thinking about the problem or the opportunity, rather than like, we found this technology that I heard about at a conference, what do I do with it? Like, oh, you try to fit it in. So when you when you start with a problem and you stay focused on and I said problem, but it could be opportunity to you stay focused on that. That helps keep you From fluttering all over and looking at different stuff. Case in point, employers with their API's, they were very purposeful that like, it has to produce a quote, and the quotes got to get bendable. And we're going to hear lots of other things people want it to do. And there's going to be different functionality and different ways that could work. And like, Oh, we wanted to present this way. And we will like it this way. We have to see really true to that intent. And this is where focus becomes so critical. And same thing for the AXA XL stories, or CNA, really any of them. They kept getting feedback from a very defined set of early adopter distributors that they were working with. And they purposely limited that to like, we can only deliver this. So we're going to work with this number of people and we'll have others that we're talking to but like two, four, go live. And we're going to stay to that core. And when we hear ideas that are a little bit off, we're going to take it back to the group and unless it has universal appeal, we're not going to do it because we're not going to get any get into the business of customizing the solution over and over and over again, for each person's new idea. And having been at a startup, it's really hard when you have carriers who could potentially be, you know, a marquee customer for you, and you want their logo and your sales stuff, and

you know, if the revenue matters, and they're asking you for something you can't do and you're like, Can we divert all of our six engineers or however small your team is to make this happen? Yeah. What's the cost of it? Could you talk to them about like, that's a fantastic idea. We'd like to spend more time with you to really understand that, so that we can make something of it when we have capacity for it, and then we can slot it in our development plans, and make sure we get it right. Because invariably, when you jump on it like that, you're not going to get it right. And it's going to take you three times as much resources as you thought it would. So stay focused. And the trick with this one is, you still need to be open to other ideas. You still need to be open to better solutions that are out there. So it's not like blinders but you need to stay focused on the problem or the opportunity. So you can make sure that's what you're delivering to doesn't mean scope doesn't change doesn't mean new technology doesn't come up, but you need to know why you're doing it in the first place. And that I think is is the you know, the customer focus the employee focus is important. Once you have those in you know, your ideas the thing that will do you and take you off track and lead you to what we tend to think of when we think of these projects going on forever and costing so much more and delivering so much less is because we lose our way and we lose our engagement with it. And the business relegated to it stops caring stay focused standpoints damn message with people who are bought in because your customers wanted you to do it. That's how you're gonna move forward.

Nick
And it's also how you you can brand to right like in your that focused on let's say like one particular solution especially If you can execute on it, you become well known. Yeah. Like, it's like they can do this. They can they can, you know, and that I think that also helps within the within the organization too. It's like a victory within the organization knowing that, hey, we set ourselves you know, the the even the rank and file employee we set out to do this and we executed on it. We're capable. We know, we know how to do this. We can do this again. Yes, we keep doing this. Yeah. Are there any lessons around what I just described, which is you, you innovate? Like, take a carrier, any any carrier? They decide to do something positive, they decide to innovate. They do innovate. They are successful. Then what?

Bryan F
Yeah, then it just happens once and they're done. Right? That's, that's what you want to avoid, is you're trying to build it This sounds silly or cliche, but the culture of innovation, you need this to replicate. And that's, that's why those are the three takeaways and not like, be mindful of cloud solutions. And because who knows? I mean, it's hard to imagine that those would exist, right? Like, yeah, it's irrelevant. So, so I am launching the book of connected claims on the 24th. Or actually, now, I think it's the 23rd. But either way, I spoke in the first connected claims in 2017, when I was at Hiscox, and everyone else is talking about drones and whatnot. And I was talking about people connection. So it's a little bit weird on stage, but it's talking about the cultural fit like claims cannot exist in a vacuum. It has to be connected to underwriting and product and HR and like you can't actually succeed without that. Because if claims doesn't know what's getting underwritten, how do they know what's going to happen is claims and if they're not feeding back to underwriting product, then are you ever going to get your policies right? Like, oh, we keep denying these claims that I think we meant to cover we should change our wording or like, did you even realize this was the exposure you're Writing, we need to think about that differently, right? You have to stay connected there. And you know, I can go on for all the other departments. Someone was like, you shouldn't do this.

Nick
It's like, Well, why?

Bryan F
Because that's kind of Hiscox secret sauce, or at least when I was there, like that's we felt like our connection culture was unique. And that's why we were able to execute the way we did. And I was like, You know what, I'm not really worried about it. Because I don't think most people are really going to take it in. Because of what you said, they'll be like, Oh, yeah, we were already integrated and we listened to our customers beautifully. We our underwriters and claims people talk every day. Now they don't they talk to the watercooler but they're in their cubicles, their offices are on different floors or different buildings. They're not really integrated.

Nick
Yeah, only only at the the annual off site.

Bryan F
Right. And and even then, there's still like an mightiness

Nick
there on one side of the room and writers are like out

Bryan F
there and the executives are over there. How many party it's like, Why are six adjusters and crowd around this three person table Because like three of you can be off talking to someone else. Yeah, it's, it's no different. So here is another one of these cases, if you're really open to it, if you really want it, it does mean a change. It means an openness it means getting rid of ego or hubris. So I think for startup carriers, it's hubris. I think for incoming carriers. It's the ego, where you need to say, like, actually, you know what, I don't know everything. But I bet you if I open up to my people, and I just listen, we will start to as an organization, know everything and in the process, start to change the way we feel about these thoughts. And we may actually be able to keep doing this because none of these examples is a carrier who's done it once. There's no one who's only had one innovation, they have created an ability to keep moving forward. Right. And that is about engaging in these three key things.

Nick
Wow, awesome message. We went almost an hour and I feel like I want more which I can get more I can look

Bryan F
You can get more Yes.

Nick
So how is I'm assuming it has it once, when's the release date? So it comes out on the 24th of June, but it's

Bryan F
available now for pre order. And it's coming on every format you could possibly want. But people can just go to future dash of dash insurance calm. There's a pre order button. But yeah, however you want it ebook, paperback, audio book, whatever. I got you covered. Some are up for pre order. Some will be out on the 24th.

Nick
Whose voice for the audiobook? Mine. Oh, it's perfect.

Bryan F
Well, for me, you know what, no one likes the sound of their voice. So I don't know, too many people who would say that, but I get a lot out of it. And I think from an editing standpoint, when you read something out loud, you hear it very differently than it sounds in your head. And so I actually think I've always read my own books for audio for audible. I think it's really critical.

Nick
Yeah. I missed I missed a comma there. Gotta go back and put that on. Yeah. This was awesome. If you're listening, I will put all of that information in the show notes. For you, but so excited.

Bryan F
Thank you, Nick, thank you for believing in this literally from the very start.

Nick
It truly the future of insurance, which is in in a lot of ways back to it's back to fundamentals in Yeah. so to speak. Yeah. And, and in the in the lessons we can learn from technologies, just how to innovate and kind of bring those in versus just slamming technology and I love the message.

Bryan F
Yeah. That's great. Thank you, Nick.

Nick
Bryan, thanks a lot. for everyone. Show Notes. As usual, please stay safe. The pandemic is not over. Continue to wash your hands continue to be smart. We can do this. So to everyone, Bryan. Thank you, everyone that's listening. Thank you. Don't forget to subscribe. See you next time.