This Week in Coverager (6/25/2020)

“Patience, Patience…Power!”- Shefi Ben-Hutta

This week, Shefi, Avi and Nick discuss Health IQ’s pivot to the senior market and what that means to other insurtech’s abilities to market to younger buyers, Allstate’s continual push to eliminate captive agents and the Jetty/Farmers partnership.

 

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Transcript

Nick
And we're live!!!! This Week in Coverager...it is, I try to keep my calendar close by and I can never see it. It's Friday, June 26th early in the morning, long week post getting close to Fourth of July and so I want to introduce my co hosts Avi, Shefi, good morning.

Shefi
Good morning.

Avi
Good morning.

Nick
So this is the show where we talk about items that have appeared in Coverager, Hot Topic items, items of note. So I'll kick it over to Avi to to get the the first item for This Week in Coverager. What do you got? Avi?

Avi
Well, it felt like a slow week but actually some big stories this week. And the first story is something close to my heart at least is a Health IQ. They've been expanding into Medicare now they're building a P&C team. And they're kind of going the route of Select Quote, in my opinion and others in that area. And I'm, I'm personally disappointed and I'll tell you why. When Health IQ came to this world, I spoke to several insurance carriers that were so impressed with the company, how they're able to get millennials to think and talk about insurance, how they have this innovative approach. So they promised us or others talking about them promised us millennials, and now we're going to end up with another company that's selling to seniors. Because seniors, they're retired, they're at home, they're still naive enough to answer the phone. They like to talk to people. What's going on? And to me again, this is a big issue because who is going to target millennials? Are you still an Insurtech company if you target seniors now?? Like, really I'm asking is, are you still an Insurtech company? Because when Insurtech came to this world, it was all about connecting with the digital consumer, with the millennials, the ones that want to experience. A senior buying Medicare, they're happy to do it over the phone, they're not complaining.

Nick
Is it? Is it possible that that the shift to that direction really indicates just how difficult it is to market insurance through digital media? Like it? Or does it seem like companies are essentially not necessarily giving up, but are just like, this is really hard, it's expensive. We need to find another source of revenue, where it's not so hard to get customers.

Avi
So if Let me

Shefi
Let me tell the story. I want to tell a story because our mom was our mom. But my mom for now, was reminding me this week how I used to rejoice every time a new subscriber signed up for Coverager. She would say that I was like the happiest. And it would be one a day, if at all, we're talking way back when before Avi knew before you even came up with the name Coverager. The it is a long, you know, a long process. It's a challenging process with anything, not just with insurance. So I think if you're coming in with the expectation that everything is going to be easy, or you're a bit arrogant, which I think is the case with Health IQ, then did you don't stick to the plan? And maybe the plan wasn't segmentation was awesome for Health IQ. And to Avi's point, I think people to this day, many insurance companies you know, just talk really positive about Health IQ. But here's what I've learned. If you ask a follow up question, and people begin to stumble or don't have an answer, or they say it's off the record...BS!! You don't know why you like the company. That's what it means. If you have to, you have to go beyond like that, that appearance and Health IQ, you know, had the best appearance I remember, appearances are basically marketing, Facebook, on Instagram, these are messages that resonated, of course, the whole story with Google, I mean, you can you can read a Netflix documentary out of this without even knowing the ending. So I think the biggest red flag was when Health IQ turned down their Facebook reviews which were really telling about it, you know, it's a same life insurance application experience, really what attracted the, you know, the customers the Health IQ was the notion of fair price. And, you know, there were targeting those that do yoga and those are run and those that are vegan, right, all those all those groups, communities, if you will, because I do think it's a lifestyle kind of movement, and it worked really well. But there were they were also known as the king of spam. Right, just tons of advertising. And then they did quizzes. I don't think they do that anymore, not based on their reviews on Google app and Google, what is it?

Nick
Ad words?

Avi
They still ask you to go through a quiz, when you like put in your information? We need more information. Yeah. Let me tell you something about their marketing. Okay. So you know, Lemonade, which I respect when it comes to marketing. I think they're very creative. They were paying $270 per policyholder (CaC), something like that. Now, when I see I'm not a runner, I'm not a vegan. I don't lift weights. I don't swim. I mean, sometimes they soak in the bathtub, but you know, I don't have my bathing suit on or anything like that. But when I see an ad like that, I say, Who the hell is this company? I want to click on it. I want to see what runners because I always wanted to be a runner. I always wanted to be a swimmer. You know, and believe me, this is not just me. Other people click because they're curious. Now here's the problem with this marketing model. You pay for the clicks. So now people that are not runners, not vegans, not weight lifters are clicking now. The other element is and this is from the beginning and I don't know I felt like he was doing this to show investors traction. Look at us, we're growing. And you have to compare it to Policy Genius, because a lot of carriers compare them to Policy Genius. So here's the comparison. Health IQ went for display advertising, social media, websites, anything but Google where people actually express interest. So Instagram, Facebook, places like that. Now, if I'm on my mobile and most of their traffic comes from mobile, by the way, You know, looking at restaurants following my friends, seeing them and insurance ads, I mean, am I going to stop and apply for life insurance who even said that I'm interested in life insurance. So they did that they spent a ton of money on marketing, their conversion rates are really bad. Why are they really bad? Because if they were really good, you wouldn't see a decline in traffic, they wouldn't stop what they're doing. And they wouldn't go into Medicare. They're they're willing to license and train Medicare agents. They're going to enter P&C, I think they're all over the place. I think whoever believed the promise, and I have to go back, like really, you don't have the right to be a consumer facing brand in insurance. It's very simple. And if you're trying to get someone else to do your work, it's not going to work because you can give Health IQ much money as you want. It's not going to show the results. I'm not going to be there. And it's not a model that anyone can replicate and do it properly. So Policy Genius went the other route and said, well, we're going to be really good on Google. So whenever people search, for example, when people type in routing number on check, who is that person that doesn't know where the routing number on a check is...probably a young person, right? That may be their audience that in a year from now, two years from now, three years from now may need life insurance, and they might remember, Policy Genius, and it takes time. And that's, you know, Health IQ was running, running, running ahead of Policy Genius, now all of a sudden, whereas Policy Genius ignored his Health IQ. So you asked Shefi, what do you do when it's hard to me? If you promise something, and you can deliver on that promise? Quit, return the money, do something else. Don't go into Medicare. Don't go into auto sales. Don't try to save yourself.

Nick
That'll never happen...

Yeah, but that's what I would expect. Because you can't say that it's business as usual. That's the thing is, here's

Shefi
the thing about expressing. Go ahead.

Nick
No, I I'm just confused right when I saw the post in Coverager I don't know what day it came out but when I saw it It didn't make any sense right? It was like you're leaping into this other area that you have no familiarity with...reeks of desperation. Right? And then the branding how are you going to actually even pull this off with a straight face? That was my that was my first knee jerk reaction.

Avi
Yeah.

Shefi
No, tell the Health IQ will become that just the culture brand of the company. Are they the ones with a ping pong table? Not ping pong tables, but they're very health conscious.

Nick
But but it's funny Shefi because they took the same tagline of their Health IQ original. Finally lower rates to vegans, weightlifters, all that to Medicare. Finally, lower medicare rates to keep rewarding healthy lifestyles. How do you know that this senior is now healthy? What are you going to do there? Now, their blogs are about people smoking, if you're a smoker here, you can still get insurance. That's that wasn't why they came into this world that was not the concept of Health IQ. And, you know, that's a company that went on to raise money and all that we understand that sometimes that's the game. I'm personally disappointed and I think a lot of insurance companies that supported them should be disappointed as well. But you know, we'll keep an eye out.

Yeah. Shefi were you gonna make another point about Health iQ?

Shefi
Well, everyone's talking about, you have to express interest. So just to make sure that when you go to Google and you're sharp, and you shop for auto insurance or home insurance or life insurance, you have expressed interest that means that you're in the business of shopping for insurance, vice versa on Instagram or Facebook or even alternative distribution, right we've seen this week, I think Bold Penguin announced a partnership with Zen business, right? So targeting the same audience, because Zen business is helping entrepreneur. burners launched our first business from, from a legal perspective, right set up, set up the company. So this whole notion of alternative distribution, which is getting a lot of interest, and rightfully so because you want to avoid Google and Facebook ads, you have this challenge where you have, you may have a captive audience, but they're not necessarily ready to buy insurance. So it is going to require a lot of marketing and a lot of communication to this audience in order for you to see a return, right? People don't go intuitively to entrepreneur.com to buy insurance, they go to read the news, right? So you have to make that that effort to convince them and to get them to know a different brand. But again, to my to my earlier point, nothing is easy. Play the game, play it right. Stay in the game, right? Stick to what what you said if it was a good, good idea, right? If it's a bad idea, obviously pivot or you know, go into Medicare, but I think I can acknowledge

Nick
Yeah, I can kind of see two points to that. Shefi one is I personally it my business instincts are to try to play the long game. But that's not investors' instincts. Investors' instincts, they'll talk a good game talk about playing the long game. But then they'll they'll ask, Well, you know, how is your quarterly revenue growth? Right. So they're looking at that. So to me, it seems like there's the conflict is in the balance of the two. Right? I think I think the big growth is playing the long game, creating new markets, satisfying those markets. And you know, by doing that, by being by having patience and playing the long game, you essentially create a little bit of a moat because others will not want to play the long game. They'll want to play the short game, but how do you pay the bills in the short run? There's that conflict that I think what I think that's what we're we might be seeing here whereas these companies they're just losing patience. They don't they may have stakeholders or others that are just like, we don't have time to play the long game. So...

Shefi
it's time to play that. No, no, no, not everybody. This is not a right. There's so many startups right and think about this. We can't treat everybody equally. This is one of the top funded startups for an insurance startup that was founded in 2014. No excuses! Did you hear me?

Nick
I heard you Yeah.

Avi
Oh, I, I was it was my It was me. Yeah. Okay. Yeah.

Shefi
So I just I think, you know, no excuses. stick to what you said you raised a lot of money do to do the job.

Avi
You're the one you're my comment about what you said Nick, about investors want growth and you know, the whole concept of raising money is to to go fast. You have to understand the problem with insurance. This is not Netflix where you're going to see mass adoption because people like to watch shows. No one is waiting for Clearcover to buy insurance. No one is waiting for Lemonade to buy insurance, no one is waiting for Health IQ. consumers don't care. So we get that you want to grow fast, but it's not up to you and it's not up to your investor. So you could try to generate that interest, it's going to cost you a lot of money, then you're going to go into a problem. And it's not that your model was wrong. As you said, you just needed to play the long game, you probably should have done it on a smaller scale. And slowly, slowly, slowly, just like Policy Genius is doing slowly, slowly, slowly. And it may make others upset like, okay, what's going on where are the policies?, wait, wait, wait, and then you'll see, but it's not going to be fast insurance, nothing is going to be fast.

Patience, patience, power. And there are insurance investors and there are not insurance investors like Andreessen Horowitz right. So we have to hold different parties accountable for different things like you expect the insurance investor to understand the dynamics and the DNA of this business.

Nick
yeah, I respect the non insurance investors. The insurance investors should know better. I, I'm not sure that they're bringing they're necessarily bringing their wisdom to the table because I feel like they lose patience as well, but they should know better. The tech investors like Andreessen Horowitz, companies like that. There's, an interesting play there, right? Because they're, they're used to how tech, like Avi said, you know, it's like Netflix. It's, you can get mass adoption very quickly. Just look at Parler app. Now, that's competing with Twitter with just, I mean, just amazing growth, right. I think a lot of tech investors expect the same thing. Like why wouldn't we expect the same thing?? This is these are the economics these are the dynamics This is what we should expect on the insurance side and But they're also I think, wise enough, I think to be introspective and say, should we expect that kind of growth in insurance? And I wouldn't be surprised if you saw a lot of tech investors leave because the dynamics are different. So

Avi
a really good point.

Nick
Yeah. So what is topic number two? Who do I go to?

Avi
Okay. I think Allstate.

Shefi
Sorry, Jetty

Avi
We'll save Jetty for last.

Shefi
All right, and then a positive note.

Nick
So Nick, I want to ask you what do you think about Allstate? Kind of going the Liberty Mutual route saying, here's a discount if you buy online if you skip the agent, here is a discount. Allstate is looking to do the same they got approved in a few states 7% discount. If you're an Allstate agent. Are you upset?

Yes.

Avi
Why?

Nick
Because they're going to carve you out. So, it would be, it would be a red flag to me to begin the process of becoming an independent agent.

Avi
Yeah. I mean, it's from a consumer perspective, you can understand.

Nick
Yes, of course,

Avi
You're gonna understand from a brand perspective, like from a company perspective, you say they wanted to be stronger, more competitive, you can understand, but then again, you have these captive agents that you know, I think they have over 10,000 agents. It's very delicate. That's what I'll say. It's very, very delicate. And it's already hard for insurance agents to be agents, whether you're captive or independent, and there's a whole indie movement. You know, don't be captive be independent. While some will say well, Allstate has a brand, like you know, their marketing helps me close business. So there's that element but

Nick
but you're trading the brand to to have the captive audience but I think like, just like the topic we just talked about, I think there's a lack of patience in and also there's a I think they see the growth of Geico and they're just like we should we should be we should replicate that. Like, just look at what they're doing. We're already spending a ton on advertising. Why don't we just go the whole way? It's, they don't want to rip the band aid off though. Doing just gently, gently peal it one hair at a time.

Avi
Yeah, no, it's it's, it's really interesting. But I don't know, I don't think they could play. Like you have to be fully committed. As you said, you want to rip the band aid off, rip it off. Don't be here and be there because you're going to make people upset. You wouldn't know your direction and Consumers dc 7% here 15%. They're 20%. They're 52%. Here, they've seen a lot of discounts in their lifetime promises for discounts. That's not what's going to probably get consumers to buy from you, they may get the quote, they're still going to compare you. So that's the thing when you when you move away from the agent, and this is I always say, in the old days offline, the beauty of it was that you make people feel guilty. I would feel guilty calling an agent saying, Hey, buddy, I want to cancel. I don't want to work with you anymore. You crazy. I mean, who will do that? When you take away the agent when it's 100% online, it may be easier for you to convince the customer to buy seamless experience, but you're going to lose way more customers than just looking at Lemonade, for example, their retention rate. If you're 100% online, then you're going to have bad retention rates because there is nothing there. There is no piece or element that makes you You feel guilty and makes you say, hey, let's let's figure it out, you've got an increase. Let's see what we can do, you know? So it's a very dangerous road a very dangerous road to me.

Nick
You know, I'm thinking one of the advantages all state has is that unlike Geico, and unlike Progressive Allstate has, they do a lot of stuff so they do auto, homeowners, small business, life. There's a they have a broad suite...who's going to sell, who's going to cross sell all that stuff at you know, like that's part of what having an agent is forming that relationship with someone so that you can be become a trusted adviser. I know I think I'm falling into your camp Avi I just I see the independent agent system as being immensely valuable. Just because everyone's moving away from it that and as that over time becomes more and more valuable, because once that trusted adviser forms a relationship with someone that's really it's going to be really hard to separate that person from that agent. And if that agent has options, multiple carriers, etc, then it's going to be almost an unless that agent screws up, it's going to be impossible to sever that relationship.

Yeah, but you know, you have to look at if Allstate is doing something like this, then maybe they're not as happy with their growth. And maybe they're kind of putting the blame on agents where you're not working fast enough. You're not selling fast enough or whatever it is. But that's what it in my opinion, that's what it says because if they weren't happy with the agents, the results they wouldn't do something like that. So

I don't know about you, to me, this is the big the, probably the single biggest conflict I see in my day to day operating a business. This is the inability to discern the difference between a an expense...and an investment. And I, you know, the independent agent Shefi is viewed as an expense to Allstate. They're subtracting that number. I don't know, I think it's more of an investment. I think it's an asset that delivers over time and that needs to be cultivated. It's not an expense. It's just what you need to feed that asset to keep it alive. I view the independent agent system is more of an asset than an expense.

Shefi
The problem with the system is that it comprises of so many different individuals and what Allstate still can do is maybe if on the broader scheme of things, the commission is lower. There are still bonuses and way for them to incentivize the really good agents and for those agents are getting more money, either via a bonus or a different kind of program, they will still stay loyal to Allstate, because they're probably giving and bringing in more business. So I think it's just really hard to look at the independent agency channel as just this cluster. I always had a challenge with that when I was working at CNA, because there were some really fantastic agents. And there were just a lot of agents. And that would be no, you know, give us business here and there, but there was not enough to go by. So everybody has that, you know, kind of that 20% that they want to invest in. Right. And maybe that's what it boils down to. I see this as just as an opportunity for all states to offer more competitive pricing. And whether there's a conflict or not, they have to do it. They have to be the game. They are online, they are investing money in marketing and advertising. So they need to protect the business. And And to your point if agents cross sell, and maybe there's more opportunity, but when I look at the journey, you know, it's probably going to be just 100% you online for certain individuals, and then when the agents come in, they come in and you know, for the advisory role, but you know how much of the advisory is actually taking place for auto insurance or for the commodity business, it's going to come later on. So we need to be able to kind of understand, as an insurer, you have to understand your business understand what you know, a channel fit, and how to compensate not just like first year in business, second year in business, And to me, that's what Allstate is just figuring it out. And, you know, I thought it was a good, good initiative.

Nick
At the end of the day, the consumers today that go to Google, do not search for agents. That's That's a fact. I believe, from our research 2.7% look for an agent on Google. So they're reacting to the environment. Well, that 7% help? You know, we'll see. But consumers, the young I assumed other young people going on Google, they're not looking to for agents for different reasons. But that's that's a fact. Well, the

Shefi
independent agents aren't the only ones struggling. Yeah, like we like to look at them as sometimes we look at them as victims, but everybody is trying to take a piece of their pie and all their great work. But you know, first of all for years and years, you could be an insurance agent and still have a bloke and earn really nice commission for a job that changes very little over the years. But everybody, everybody's feeling the competition, right? I, you know, look at insure me on today versus insuring on seven years ago, not the easy market that had, right. But they were at one point considered a threat to independent agents for the carriers that they worked with, and even insure me on will tell you well, I also have this conflict of interest because hey, here I am selling Hartford, but Hartford is competing with me. So I think everybody's competing with everybody. And

Nick
so but that it's like the beginning of time, right? There's been this conflict with the agency system and I can't help but kind of go back to if they're, someone has to sell your product. And Avi brought this up at the beginning, which was the, you know, it's everyone's gonna go digital. And that's somehow going to make it easier. But it makes it harder because it's so easy to go digital. It's so easy to get online, to have a web page to do digital marketing becomes more expensive and ultimately becomes harder because there's more competition. In the old days, agents would form these very strong relationships with people at church, temple, sports, bingo, whatever, they form these relationships and those relationships would be very difficult to sever. And so this seems like it's this seems like the endless conflict of many These agents are making way too much money. And the agents are saying, Do you know how hard it is to run an agency and how expensive in the overhead is? So there's this like, lack of trust between between the two parties. But at the at the end of the day, I just keep thinking, well, who's going to sell your product? Right? Like, I don't think it can be fully digitized. So I don't know what the answer is. But I just I think there's a like, it just seems like an endless conflict.

Avi
We agree.

Shefi
I don't think that conflict is going to resolve any No,

Nick
I don't we're just and we're not the right people to solve it. But we'll we definitely have strong opinions. And you know, and I think you know, what, what I loved about what I love about the work that you're doing is you bring to light, Coverager over the years bring to light, like just how difficult it is, how expensive it is, but how necessary it is to go digital. Right. And so I don't know I think I think it could it could all boil down to that, you know, these insurance companies are there. It's the indifferent consumer. Right Shefi, Bryan Falchuk brought that up in my interview with him. He got that from you. Consumers are indifferent about the product. Right. And I and I think that the executives, the leaders of this company don't really have that innovation mindset. They're...they're not creative in how they're reaching these people. And so I think the conflict become the conflict manifests itself just in the dynamics of the business. Bad, you know, bad product, bad in that the customers don't aren't actively seeking it. And you have business owners, managers, executives, who are scratching their head saying, how do we sell more in that environment and they're not they just Can't Be creative enough. It's not there. It's not their bailiwick.

Shefi
So to begin with, you know, every time I used to ask agents, how do you how do you get your leads? One, I would never really get a great answer, because it's not the first thing that they would do when the phone rings ask how did you hear about us? But I think a lot of times is that with agents or the way that we grew our business, and even the way Coverager grew its business Originally, it was word of mouth. Right? So it's not you don't go out there and you say, I want to sell you something. Right. And that has been, that has been the business of agents. Now carriers are forced to play a different game, right? So everybody needs to look. You can only solve this problem. If you start from the specific independent agency you want to solve it for or for the insurer, because the dynamics are so different. CNA is so different from Hartford. Hartford is so different from Travelers.

Nick
Yeah, yeah. So topic number three Shefi. I think it has something to do with Jetty.

Shefi
Yeah, so this is a good topic or a good story at least it's a good ending and a new beginning. So if you remember, we've covered Jetty, let go of, you know, a good portion of its workforce unfortunately, part because of COVID in part because Munich Re basically asked us to stop writing business just they were in the rent deposit scheme and obviously with COVID and whatever happens in New York real estate or so a lot of concerns. So that was there was a better way that Munich Re could have gone about this or there's a better way for Jetty to have communicated but a lot of it was kind of a top down approach. And what we've learned this week is that Farmers Insurance will be taking over the reinsurance portion of Jetty so any future products that Jetty is selling is going to be on Farmers paper. So if you think about Farmers, which is you know, obviously, owned by Zurich but Farmers also has the Toggle brand, which they launched, I think about two years ago. And it was it's a renter's insurance offerings. So they're, you know, at the time, you would think, you know, Jetty is competing with Toggle, and in a sense are playing in the same space. So to me, these are basically two competitors that are facing the challenges of going online and going direct and, you know, acquiring one after one and they're, they're doing all the right things like the user experience, going beyond insurance with different elements rewards everything that we see trending, but still, it's a long game and they're they're probably realizing that they could do better together. And I remember that being 2017 you did a week before and after Jetty basically capturing their workflow and I don't have the code in front of me but it was along the lines of Jetty is competing with Lemonade, but We were still waiting to see if Trov is going to enter that space for renter's insurance that was the talk of the town back then. So, you know, three years later, you know, Lemonade is way over there and Jetty has some, some work to do and obviously their renters insurance as long as no longer direct to consumer, it's only b2b. So it pivoted a bit in terms of its customer acquisition. Trobe obviously pivoted a bit as well they're no longer a bit not true pivoted a lot they're not that direct to consumer and are focusing on mobility for for for the right reasons. And right now well, we just have to see okay, where is this Jetty/Farmers/Toggle trio going to take us?

Nick
Yeah, I to your point. Shefi. In the beginning of the it did look like they were competing with each other but I do think they complement each other well, because toggle, you know, just because they come from a big insurer. Don't think they have the budget. I'm sure they do. But I don't think the insurer farmers are saying, Well, here's an endless budget. Let's go see what we can do. So they're very conservative. So they found Jetty which is, I think, doing good things and real estate industry that they originally started if people remember, they were promoting $5 renter's insurance as on Google, as answered, eliminate, of course, when people went in to get the quote, it wasn't really $5. And, you know, they understood they couldn't play that game because they didn't have the funding of Lemonade. But they pivoted, they called themselves a FinTech company, which is interesting. And they renter's insurance completely went behind the scenes and it's only offered now through their partners so consumers can get it on their own. It's it's a competitive market, there's at least like they're in Rhino, but I actually think as a renter, it's a good product like it actually is. product that you would like to have instead of putting that deposit down. So I think it's a really good product, it's going to become more mainstream. There's a lot of states now with different rules and this when it comes to renting, so it's going to be more mainstream. The question is, will they win the business? Or is it going to be lease lock, Rhino or, of course, don't forget Assurant. They're also a player in the space. But I thought of this as like, Hey, you know, we want to be innovative. But we need like an Insurtech or a FinTech player to actually go and do the work. Help us do the work because it's one thing to build the website to build the product to build the experience and all that distribution is a different ballgame. And I think that's where Jetty can help tago and of course, Jetty found a new partner and I'm pretty sure they're happy about that.

Shefi
So the counter move is for Lemonade to buy a renter deposits company. There are so many of them. I mean, Pick and choose.

Nick
It's a good, it's going to be a good industry and the big markets where Lemonade operates California, New York, Texas, where there's a lot of renters. And again, no one wants to put now a $5,000 deposit if you could, you know, pay $300 or something like that, keep that money, buy yourself a new couch and a TV. I mean, who wants to put that money way? It's, it's a big, it's a big issue.

There's abundant there's a bundling opportunity here.

Avi
Oh, yeah.

Shefi
Well, I found landlords are preferring the rent deposit scheme, because it all depends on the kind of product that says, you know, these folks are offering but for for some landlords that I mean, this is peace of mind, because if they have to evict or if they want the tenant to be out, and it all depends on how much depends on the coverage, but some of these coverages can go up to six months of payment. So it's not only from the perspective of the deposit, because I remember When I first read it and this was, you know, obviously my kind of, I am a to a audience, not everybody but I thought I would rather put the cash Why would I want to pay somebody a fee? That was my take and obviously Avi has a different thing, but

Nick
She has more money than me. So that's why she rather put the cash because, well,

Shefi
you know, these are not free products, but you pay for them. It's a different.

Nick
My, my father in law keeps on telling me, oh, why would you want to pay credit cards interest every month? Why don't you pay it in full? I said, Well, I don't have any money and you do. So that's why, but obviously, no one wants to pay interest or fees. But we're poor. I mean, you

Shefi
know, but some landlords aren't going to push for these kind of products, especially in the in this environment in New York City, right. These are very urban,

Nick
and especially now with COVID-19. You know, the finances of people. Yeah, it's not going to be easy. And every landlord is going to try to make it easier for people to be able to rent. Get down with that crazy, you have to make 40 times the rent 100 times the rent. Forget about that. And don't forget, we've been speaking to a few companies giving up their commercial real estate, not renewing their leases. And now everybody's saying well, commercial real estate developers need to turn that into residential so if now you're going to have more apartments on the market, you know prices are going to go down maybe so it's going to be very difficult and you want to make it easier for renters and Jetty lease lock Rhino, they have a product that makes it easier.

Shefi
We now know have to in New York City based Insurtechs but have given one has given up the office let go of the entire team. And the second one is giving up their office till the end of the year. That one was the kind of a WeWork arrangement. So we'll see what it's a lot easier to give that away and pick that up next. Yeah,

Nick
yeah. One of the other advantages so because of the small premiums, small margin in renters it's makes a lot of sense if you can have relationships with property managers as well. So to me the bundling is is advantageous, because then you can potentially, you know, slide your renter's insurance product and have the property manager promote it. Like you need renter's insurance to fulfill the terms of your lease, we recommend you go to XYZ company, and they happen to be doing the, you know, the deposit insurance or whatever i like i like that bundling. The the renter's insurance by itself was always just like he can't make it. How are you going to possibly make any money doing this the premiums are just way too small and it's too expensive to get a customer have to somehow get it in bulk in mass in order to make the numbers work out. So I think, to me, it seems like that's a natural and it'll be kind of par for the course everyone will sort of be doing this at some point.

Well, I think and I said this to Shefi. When I saw the partnership, I said, Well, if anyone is going to acquire Jetty, it's probably going to be farmers. That's That's what I think. I think if they, if the collaboration is good, yeah, if anyone will acquire it will be them. And don't forget all the platforms out there. They're going targeting the real estate industry, the multifamily industry, streamlining, the renting the listing, insurance, all of that. So they're going to be big players. So whoever is going to partner with them, or whoever, maybe maybe an insurance company acquires a player, as we always say, they're going to have a say, because they have access to the landlords, the building developers so very interesting. Thing space, but it is a space where you really need to get there's one way to distribution and it goes through the landlords. Yep, buildings. That's the way not mines not one at a time can't do

Shefi
it really requires a lot of doughnuts. A lot of them because they're just that's one tactic you know you have to get the the property managers to say yes, so

Nick
Yeah, I agree. I prefer Munchkins though. The easier just like this.

Yeah, you know, small you don't feel guilty. You know, you eat it's like, oh, this is small. I was any 30 but they're small.

So that's our, that's our fade music. This is this was good for such a slow week. There was, there's actually some really interesting stories that have occurred. So we'll see. We'll see if we can continue the momentum next week.

Avi
So, yep.

Nick
For Avi, for Shefi, this is June 26th This Week in Coverager. Please subscribe. We're still in a pandemic. So please be safe. Wash your hands, put your mask on, just put your mask on. It's not that big a deal. And we'll we'll see all of you next week. Shefi, Avi Thank you.

Shefi
Thanks everybody.

Avi
Bye