This week in Coverager (7/10/2020)

This week, Shefi, Avi and Nick discussed:

– Walmart opening an agency
– Allstate purchase of National General
– Lemonade IPO

Watch here:

 

Transcript

Nick
And we're live. And we're back...This Week in Coverager. Hope everyone had a good Fourth of July. It's pink shirt Friday. I'm getting my COVID hair back. So it's time to kind of get all crazy. My co hosts as usual, Avi and Shefi. Good morning to you.

Avi
Morning.

Shefi Ben-Hutta
Good to be back.

Nick
So we've had actually, two weeks prior, it was a fairly quiet week. We pretty much had a we could have we could have gone last weekend with some really big news. But that news continued over to this week. Let's see if we get to that. But there was a whole bunch of other stuff that actually happened this week. This was a pretty action packed week. Avi, I'll kick it over to you. What was your top story from the week.

Avi
In terms of clicks, no doubt Walmart forming an insurance agency was the biggest story of the week. You know, interesting story, because I remember I still hear people wondering, when Amazon, if Amazon will enter insurance, what will it look like? And then Walmart comes in and launches probably the best product they could have...Medicare. Just because they have the pharmacies and the target audience. And it's a really, really interesting move. And I have a few questions, of course. And I'm, you know, Originally I'm from New York, so there's not much of a Walmart there, but I've been in Maine for the past four months. I'm going home, by the way, on Saturday, so it's time and I see Walmart here and I went to Walmart, and they have the slogan, "Save money, live better" and for a brand, that is the ultimate promise, like without being too fancy or live or the fact that you're breathing doesn't mean that you're living and all that sophisticated stuff. Very simple. People relate to that. Walmart here in Maine, you know, it's like a it's like a thing. You know, it's part of the community. People go in to get their hair done to buy jeans, to buy groceries. So, obviously, they have the distribution now....the thing is, it's probably going to be cold calling, I believe, is what

Nick
what is it going to be called?

Avi
Cold Calling, they're probably going to cold call customers. Okay. Now the thing is, when you get a call and says, Hey, this is a Walmart on the line. That's a positive. When you get a call, hey, this is a Health IQ Assurance, IQ. Select Quote, who the hell are you? We know exactly. Yeah. And that's the advantage of Walmart. My question is, will they do this business properly and I bet you they will. They won't try to oversell like other companies do, they don't try to sell you something that you don't really need. So I believe they're going to keep it clean. They're going to only try to do the right thing. But it's a big deal. And I wonder how this will impact Select Quote now that it's a public company, Assurance IQ. Of course, they're preparing for q4. Walmart is planning to start this new initiative in August, when kind of the season is about to start. So it's a big deal. I think that's a really good product for them. I don't see them going into P&C and all that I don't believe they want to, but the Medicare, with the pharmacy, with the live well and all that stuff, I think it's a smart move.

Nick
Shefi?

Shefi
Well, I think so Amazon is in the healthcare insurance business, but obviously healthcare is very much different dynamics than the traditional accident and health and property and casualty, right? So they're coming at it from a different angle, I think it is safe to say that everybody wants a piece of the insurance pie because when insurance is done, right, it's a neutral/positive product. Right? I mean, and people need it, so it makes a lot of sense. There are still open questions. Who are they going to be? Whose the insurer behind this? Obviously, they're an agency. So they'll be working with some and what we've seen is that, you know, big brands tend to attract big brands so Amazon attracted Berkshire Hathaway right so let's see who Walmart is going to attract they don't necessarily

Avi
United Healthcare, Humana, all the big names are going to be there any other Yeah, they'll have to be there.

Shefi
The game was is going to be distribution. But that's what it is. And here's an opportunity to make more revenue for Walmart and be a one stop shop. And you're listening to Israelis talk about Walmart. I've been to Walmart probably once in my life, why not?

I visited Maine and I went specifically to the place or everything to get a haircut so I can see what that looks like. And you know,

Avi
you get a blowout for $30 for a woman that's like a bargain.

Nick
Yeah, well, yeah, well uh, Walmart's, I wouldn't say they've reconfigured their business model, their business models always stayed the same. They've changed aspects of their business model. How they get to their target customer and the and how they interact with them. So I used to be a Walmart shopper. You know, prior when I was younger, then I wasn't for many years, not a I was not a Walmart shopper. And then during the pandemic, I became a Walmart shopper again, because in new when I lived in New Hampshire, Avi, I could pull up and someone would deposit the groceries in the back of my car and now

They here in Florida they just deliver the groceries you know all the brand names that I want they just deliver it to to me and it's like almost same day like we just put the order in someone comes over rings the doorbell and there everything is they make it so easy to use...the insurance thing seems like a no brainer It smells like Sears in and Allstate you know why not? You have a you have you have an audience in your store, especially that target audience who is looking to save money so, like you said, it fits the brand, right? It's healthcare fits the brand perfectly, save money live better, fits it perfectly. They're already coming into the store. So these aren't, they're since they're coming into the store. These aren't necessarily people that need to do a significant amount of digital shopping. They don't want to do that. They want to talk to people. And like you said, Avi, it they have become part of the community which I think is kind of ironic given their history, and what they've done to some of these communities, so

Shefi
to me, it's really help with that, that Walmart,

If you think about it from a competitive standpoint, it simplifies their, their options when all eyes are on, right there considering this one player, they're looking at what Amazon is doing. They're launching a product that competes with Amazon Prime. So they kind of have their future cut out for them because they can see what works. Vice versa. I take this back home and we're going to talk about Allstate in a bit for Allstate, they have to see what works for Progressive and vice versa and what works for Mercury and decide whether they're looking left or right. And what options are they going to take to make sure that they get market share. So it's, it's an interesting, it's an interesting play.

Avi
Yeah, you know, Nick. Yeah, go ahead. Go ahead....

Nick
No, I was gonna say that the age the brokerage that playing the distributor, Distribution part is an absolute no brainer, super high margins because the customers are already there. So acquisition costs for customers should be really low, you're probably looking at really high margin. So it's another reason why I have never was never concerned about the Walmart's or the Amazons of the Google's like getting into the risk bearing part of insurance, it made no sense. It's low margin business, they had to figure out a distribution strategy, where customer acquisition would be customer acquisition costs would be minimal. So that could really wring out the margin and at least meet the opportunity costs that they have in the other segments of their business. So this Walmart move when I when I first saw it, on your, on your newsletter, it was just like, yeah, of course they should have done this years ago, but it really does fit in the direction that they're going and who they're competing against.

Avi
And you know what? It would be interesting to see Because everybody will need to attract agents to be able to sell. And I wonder what the compensation will be like for Walmart. And if an agent would say, Do I want to really deal with bad leads at Assurance, IQ and try to do my magic or let me just work at Walmart, have an inflow of quality leads come in, they know the Walmart brand, they trust the Walmart brand, it's going to be an easier sell. So Walmart has that advantage. But it's still going to be who is able to get these agents, the good agents, but I really think Walmart can prove that you can do Medicare in a clean and nice way. Maybe the insurance won't be as happy because they won't see as many sales. But again, this is Walmart. So you should be lucky enough to be on the platform and do this properly. Very interesting. And I mean, again, bad news for Assurance IQ. It's been a bad year for Prudential. Bad news for Health IQ.

Select Quote, of course, good for them. They went for an IPO. They made the money but I predict that the stock is going to go down a bit.

Shefi
And if you think about it from a career standpoint, if you go to Walmart, you start as a, you know, a sales aging call center, whatever it is, you have ways to ladder up. And this is something that currently in insurance where there's a problem, where people feel like they're stuck in the same position, and we got to work hard to attract that talent. This is something probably the modern entrants are doing a better job at then than the incumbents, as I mentioned, all the way up. So we're hearing right so I, I've been saying this for a bit, I don't think insurance is still a stable career choice. It all depends on what pockets of the company are working out. And of course, it's kind of a clicky business. So it depends what area and who you know, right? I wish all of that will go away. But when I look at Walmart versus Health IQ versus Select Quote, from a career standpoint, attracting better talent, I'm going to bet on Walmart.

Avi
Definitely

Nick
Walmart. Walmart has a history of doing that. So that's there's no surprise there. So, I do think Avi you said no plans to go into P&C. I don't see how they don't.

Avi
You think,

Shefi
you know, we do have some something in the P&C space? Right? I saw an article from 2014 where they act as a lead gen and they send consumers to I think it's autoinsurance.com, I believe so they have something but nothing substantial. Right.

Avi
I think I'll tell you what the thing is the thing with Medicare, it's completely understandable that it's a phone driven process. They get that.

Nick
Yeah.

Avi
And with auto, I think Walmart, you know, you said Shefi. They looked at what is good for Amazon and they looked at what is good for them. And they really utilized their locations, you know, to, as you mentioned, to the curb side, to really offer that same day delivery. Now they said, Well, this is not a liability, this location. This is an asset. Let's leverage it. Let's take advantage and I feel like a lot of these brands like Walmart is now a great digital brand...acquisition of Jet. And you know, they're really competing in that space. I feel like if they go into auto insurance, they would say, Well, can we do this online? Should we do this online? And then if it's not 100%, online, they would say, well, maybe let's wait, maybe down the road, I believe Yes, definitely. I think they could look at that. They have all these a lot of locations, have all the where you replace your tires, and you come to service your car. So definitely make sense distribution standpoint. But I think it will take some time for them to go to that place. But definitely, why not? I mean,

Nick
they could do it.

Avi
I just thought yeah, oh, they could do it. They could do it better than than anyone. But yeah, the question is, will they go and do it?

Shefi
Well, it makes you make what you said basically, they're focusing on the distribution part not being a full staff. So it makes it a lot easier to go into different products bring on partners that they feel worthy of playing along in this game with them and...

Avi
Yeah, and let's not forget, they acquired some assets of Care Zone, which is an app basically, that helps you, you know, schedule your medication and access your insurance cards. So there's a technology play. That's a company that was licensed to sell Medicare in 50. States. Well, so you know, it's a marriage.

Nick
Let's skip over P&C. What about life? Right? So we, how many episodes have we done a life based conversation for This Week. And it keeps coming back to how difficult it is to actually be able to issue a policy. Think about their customer base. They got the pharmacies, like they have a lot of assets already in place where people are coming in, they could sell life insurance right on the spot. And the medical exam is right there. To be had...

Avi
able to think about Yeah, but think about the consumer in that case. So for example, when we did the story about Walmart, so we see clicks on, you know, who opens the email. So there was a company that

Shefi
say everything that we see,

Avi
we don't see everything...but a company that's very popular

Nick
I think you guys see everything.

Avi
Well, a company that's very popular in selling annuities and more to the older demographic, they open the email a bunch of times. And I think what they were thinking was, Hey, could we work with Walmart that they'll offer our products to the client base? But if you look at life insurance, for example, where you really target the younger generation...30/35 I don't see how someone like me, for example, not that I'm so sophisticated, I would say great Walmart, sure, but am I getting the best price? Let me check this. Let me check that. With Medicare, they could close the deal with one call. They'll have the the customer will have that confidence the that they don't need to check anything else. They're getting the right price. I don't think they want to do a business right now with checking their conversion rates as much and again, the consumer went online and he went, but definitely they can do it. And if they do, it's going to be a big headache for a lot of competitors in the space. But I think the target audience, the younger generation, we think, you know, we ask too many questions. We don't have any money. We're idiots. So they don't want to get to that yet. I believe they will. Because again, why not? The money is on the table. Go get it. Yeah. But But yeah,

Nick
I think the the moral of the story is, Walmart, has a lot of assets that digital players do not have. Advantages, those stores, those are anchor stores in the communities, as Shefi said, or Avi, you know, these communities these are, it's an important asset. And that's something that Google doesn't have. And one of the reasons why I thought Amazon bought like Whole Foods was, you know, to get more into the food space, but to acquire Retail assets, building assets. So it's I never I always thought from a retail perspective that the internet wouldn't didn't necessarily have to kill retail. I thought that what's killing retail like the Macy's of the world and the Brooks Brothers is they never, they did not digitize and make the business model a full, make the building the property itself an asset of the digital world and have them play on each other. I think Apple was the first one that showed Yeah, you can do this. This is these two can play nicely with one another, and one amplifies the other. They complement one another. Walmart starting to do that...huge advantage over someone like you know, companies like Amazon, and Google, you know, trying to pull something like this off. It's, it remains to be seen, but this is this is one of the few stories where it's just like, oh boy, this this is a big deal.

Avi
I very big deal a very very big deal.

Nick
So let's let's transition over to the other captive spin off of a very large retailer...Allstate, which thanks, thanks to my friend Matthew Queen who informed me that Allstate was a captive of Sears Roebuck became so big, they spun it off. And I'm old enough to remember going into the mall, walking through the Sears and seeing the Allstate you know, business there. Allstate had some big news this week as well. Shefi Why don't you want to talk about that?

Shefi
Yeah, I'm still thinking to myself, What is Allstate thinking? But here's the story. So Allstate announced that they they're acquiring National General for 4 billion and National General is basically the sister company of AmTrust and Maiden Re basically owned by the same family. So it's a family owned business. There's a lot of talks about AmTrust. So I'm going to leave the that me now I'm going to leave that the gray areas aside, but if I think it was two weeks ago that they were fined 10 million for fraudulent reporting or some sort, right, I didn't go into the details. I just saw the number and I thought, well, that's enough for them. So, okay, somebody slapped them on the wrist. But National General is basically a specialty niche carrier they generate about 80% of the business for from 10 states a large portion of their book is auto/non standard auto obviously they sell through agents so for Allstate, this is a this is a deal where they're getting closer to independent agents. And how they positioned it was we're looking at Progressive and Progressive is doing well. doing really well with an independent agency and let's make a one four. Let's see what we could do with it. So, National General has quite a history. It was so back when everybody wanted to be in insurance, General Motors, this is 1919/1939 decided that in order to sell more cars they need to help with with financing. And they launched the General Motors GMAC with the acronym so I don't know how they pronounce it. I'll come out pronounce it as GMAC, but I'm not sure that that's correct. I wouldn't. I would not listen to anybody pronounce it via audio. The the gist of that Corporation was basically they started, you know, financing came first because about 80% of the cars are being financed, right? People don't don't pay cash to buy a vehicle. And then they went into insurance. And then they went into mortgages. That was like their biggest mistake ever because by the time 2007 came in 2008 they really struggled, they got some money from the government. So in a sense the there there was a period in time where the government owned more than 50% of the company. And then they started...insurance was always profitable by the way, which goes back to Walmart, like the insurance piece. The General Motors financing arm was a-okay and part of that piece was also warranty and car services or servicing contracts. So that was fine. Mortgage was was an issue obviously financing at one point also became an issue. And they started to kind of sell the company Maiden bought with basically bought GMAC and then renamed it to Maiden Re and later GMAC was we need International General. So a whole like, just a lot, a lot of history. And basically this is the company that to this day is growing for acquisitions, right? They bought Direct General, they brought Farmers Union from QBE. It's a call center kind of job. So nothing about this deal sounds modern in my mind and and they make a good amount of money from servicing fees. And you know, so basically installments, reinstating a policy, all the things that the modern players don't talk about the free model that we're in about, you know, transparency. That's not National General. And that's not what Allstate is basically getting. Lots to talk about its policy admin system, which if that doesn't raise your eyebrow, I don't know what it is. But the whole idea with the policy admin was about I think it was three or four or five years ago, National General acquired their policy admon from Amtrust for $200 million. So That's it. That's all I have to say. Right? That's, that's the company that Allstate acquired. And by the way, if you go to Yelp, they probably have like a star and a half to their name. So if there's not a lot of positive reviews, go visit Glassdoor you will get a kick out of the like the first five reviews, the good ones, and the bad ones weighed them all. But you know, I'll just take Allstate's word for it, which is to get closer to independent agents. There's a lot of ways to get closer to independent agent. But do you understand that the independent agent is independent for a reason? I mean, they're not just like to offer Allstate. That's, that's what this means. Right? So.

Avi
Avi I don't understand.

Shefi
I think

Nick
I don't understand what Allstate's doing there. Yeah, they're alienating in basically eliminating their direct captive agency system. They acquire National General which requires an independent agency system. But I got the sense just a couple weeks ago that Allstate was trying to go more direct to consumer and in and basically be a Progressive in that style. And it sounds like they're doing a mishmash of stuff. And to me feels desperate.

Avi
You know, I looked at the marketing materials of National General when it comes to independent agents, to me, it feels that they're talking to agents that just graduated kindergarten and need a lollipop for an incentive. That's what it feels like. And, you know, that's, that's what it is and what Shefi said, the fact that you are getting closer to independent agents doesn't mean that that agent is going to sell you because if the product is not good, if that's not gonna help them close the deal, they're not going to sell. Now, the problem is and this is a I was talking to Shefi about it. The problem is that Allstate thinks that their product matters. It doesn't. The reality is that there are way too many insurance companies out there you are here by mistake. By mistake. There is no need for so many insurance companies that offer the exact same product, a piece of paper with a promise, there is no difference. You really need to look in the mirror and say, Do I have the right to be here? The answer is no. How do you have the right to be here? Do something different? Do something different take that $4 billion dollars...be something else be a different company? You know by Acorns? Yes. By acorns do something different. To me, it's an acquisition of the past. It doesn't get you anywhere. The reason why Geico and Progressive are successful is because they market the hell out of everything. They're very smart. Allstate doesn't have you know,

Shefi
let's let's talk about substance...National General. Being young in terms of marketing, substance, everything we're talking about a substance but National General thinks it's compete with Geico and Progressive. They wish they were competing with Geico and Progressive. The reality is is during COVID Geico gives 15% off for six months or up to 12 months policy. National General gives 15% off for the month of April. That's it. They don't even respect their customers at this lousy time.

Nick
Yeah, it's a head scratcher to me. I have some familiarity with National General with my time at QBE. Nothing stands out. You know, I'm not I'm not really in a position till to say they're better or worse. Just nothing stands on like Avi says, That's not good enough. My guess is my sense is that Allstate will acquire this book, and this book is gonna bleed out. So they're just gonna, it's just going to get chipped away. And yeah, maybe it'll be worthwhile in the long run, but it just sounds like a mishmash of we're gonna buy a book and get this revenue stream and get closer to independent agents and, but we are getting rid of our captive agents. I think I'm really Avi, I'm in your camp here. I just I don't they don't need to exist. Like when I think of what Allstate does, it's like there's it's almost no different than what State Farm does. And I don't know it's just it just seems so like desperate.

Avi
It's, you know, it's a it's a strategy of the path and we talked about this, I believe, two weeks ago where we said there's no speed in insurance because Even if you do get closer to independent agents, you still need to wait on that person to prospect, close the deal. There's no scale, you can't do it fast. Now, again, this is the problem with the product, we understand that the question is, are you in the business of making money? Or are you in the business of insurance? If you're in the business of insurance, great, go buy books of business, get closer to independent agents go that route. If you're in the business of making money, don't think about insurance. It's very simple. And you know, they had the opportunity. And I get, as you said, Shefi, Walmart thought of trying to be like Amazon, and I feel like in the early years, they wanted to be like Amazon. And then they said, Why should we be like Amazon? We have other places we can go to and they went that route. And they were very successful in they're very successful and they're catching up and all that. Allstate is looking at Geico and Progressive, but you shouldn't look at them because that's not the right model. That's not the right model for them. It's right Because they want to, they want you to play that game. That's the thing. They want Allstate and State Farm to come and play that game.

Nick
They can't they can't play that game. One thing that's misunderstood about Geico for instance, Geico. So Geico is one of the fastest growing insurance companies over the last 10/20 years. It's a huge advantage when your parent company is Berkshire Hathaway. It's a huge advantage when you don't have to buy reinsurance. It's a huge advantage when the CEO of your parent company, Warren Buffett is telling youbecause there's an accounting feature in insurance, when you sell an insurance policy, you have to book the expense of that sale 100%, right away, but your your premium does not get earned until over time. And so for insurance companies, growth is horrible, because you're accumulating all of this expense, and the revenue is kind of Coming in, later down the road, most insurance companies cannot bear that. So they have they have very strict growth governors to make sure that the expenses don't go out of control. Warren Buffett told Geico don't worry about that. Just keep growing, grow as fast as you can within the target that we're going after. No other insurance company can really do that. They just yeah, reinsurance costs and, and what that looks like for your quarterly earnings when you having like these massive spikes in expenses, because you have to book them. It just the regulator's don't like it for Geico. It's a different story. They had plenty of support to be able to pull that off. So the only other way to do it, Avi the way is the way you describe it, you have to buy it, you have to buy the business. And I just that seems,

Avi
yeah, that's fine. Again, if you are offering one product today, and it doesn't matter if your name is Geico Progressive or Allstate unless you come in with a good price or you have this agent that is able to sell you no matter what. You really can't expect to get all the business and what I feel like Allstate is trying to force their way to get more business. That's not the right approach. It's not smart, money wise, like how much are you investing to get back? You need to understand that if you are offering one product that is exactly the same as everyone else's you can't expect to win someone's business on a regular basis. It doesn't work because everybody's different. If you need to go out just like Walmart did. Walmart didn't say, hey, let's be a carrier and offer one product. Now let's be a broker offer a lot of products that someone decided, whatever, who cares, we're going to still make the money. That's the mindset you need to have today. If you want to win in insurance, you're not going to be Geico, you're not going to be Progressive. And if you don't think that way, then you're going to get into trouble. Very simple. Yeah.

Nick
I would like to finish this episode of This Week in Coverager. We had a little discussion beforehand. I think we'd be remiss if we at least didn't bring it up. So instead of bringing it up and beating it like a dead horse, I want to get Avi and Shefi's opinion, eliminated IP owed at $29. In two days and went up to $95 giving it a market cap of 5 billion, which is remarkable. I think they're down into the 70s now, so a year from now, both of you. Where's the where's the stock price?

Avi
Shefi?

Shefi
Oh, gosh.

Nick
Want me to go first? Yeah, yeah. Okay. A year I they're gonna have for quarterly earnings and an annual report that they're going to have to release My guess is that the stock price, it's going to be hard for it to come down until those quarterly earnings come in. I think ultimately, that and the pressure of the founders who are going to release their shares, they're gonna they're gonna want to try to capitalize on this. My guess is at one year from now, stock price will be around $35.

Avi
That's, that's, uh Yeah, we're

Shefi
back you up on that. So

Avi
we're not, we're not experts on, you know, speculating

Shefi
You can't be an expert on public opinion. Yeah. public doesn't understand insurance enough. It's not necessarily that that's the only thing that you have to go buy nowadays. Lemonade has proved everybody holding on to KPIs and, you know, equity analysts of the world but they're wrong. Right. You can't Go in and get this crazy valuation based on market perception of where you're going to take the company to and that's the game that they're playing in.

Avi
The thing is that we talked about, you know, the, the damage and the success of Lemonade, like what was good and what was bad. And I feel personally now that they are a public company. I feel like the industry can let go of Lemonade. I really feel that they can say okay, that kind of ship has sailed. Because my opinion is that a lot of what Lemonade said some insurance companies took to heart of delighting customers and chatbots and digital first and mobile friendly and all that stuff. And it's important to have these things it's really important. You're not going to win with that and Lemonade is proof. Lemonade is going to really because if you give them a like a checkmark on speed. Lemonade is probably one of the slowest startups in the history of startups. They didn't do much they stuck with one product didn't change anything about their website they Yes, they launched an API and that policy 2.0 that went nowhere they didn't add any new products they didn't expand nationwide because again for them it was all about a game...let's come in with the most potential on damages we talked about that's what they did you and now they're gonna have us he says next is gonna be pressure and they're going to have to say well, okay, here are new products. They can just stick with renters because if they just stick with renters are the price is gonna go down. And at the end of the day, the founders do want to sell and want to make the money. But I feel like with Lemonade, it was always about taking one step, and then strategizing again because it didn't go according to plan when they launched. They had a few places where they were stuck, and they needed to figure it out. I think the IPO for them was, let's take a deep breath, we did step one. Now, let's think what we can do to show that we're not just renter's insurance and to talk about that graduation and all that stuff. But I feel like the industry really needs to let go. Because Lemonade is not the answer. It's really not the answer. And now focus on what you can do to be better. And again, it doesn't start

Shefi
360 view here, right? Walmart focus that Walmart was looking around on all those years focus on what it could do. Okay, lets you know, Lemonade founders, as well as to your point are going to be some sort of exit from shares. We've seen what Lemonade can do. Everything else is TBD. Let's not forget they've got Softbank behind them and you've said this in previous episodes and a lot of it is the connections The founders and that ecosystem and obviously when they bring somebody like Scott Galloway to talk about them, and you connect the dots and you see that Scott is the founder of L2 and L2 is backed by General catalyst, General Catalyst, Lemonade, and you've got this ecosystem of companies and people that are promoting them. Let's put that aside. Not everybody can replicate them. But if you're the Travelers of the world, get to a point where people know where your policyholders know the CEO by name, let's say, I mean, that's where I would go, right make it personal, I think that's the only way to move a little bit from from the traditional world of insurance we live in and get people to buy in because again, insurance is a good product. There's not much for you to do, but stand behind it. And I know most of the crowd here is is male. Right? There is a there's a company called The Ordinary and they basically do, you know, Beauty Supplies. So creams and all that fun stuff is the

Nick
name of the company,

Shefi
The Ordinary,

Nick
The Ordinary,

Shefi
The Ordinary. And the whole idea with them is that they basically said, you know, all other creams out there are a scam, because you pay 50 bucks for a cream or so. And The Ordinary something like $7/$8 the most expensive product is probably $15. They stand behind what they say. And what I mean by that is when somebody has a question, they respond. And let me tell you something about this whole modern entrants or the new world of Insurtech that we live in, right. It's it Why is it the same? Because when people complain about a claim online, nobody addresses it. Nobody makes the consumer smarter about why the claim was denied or why he isn't getting the support he needs it's all DM us or some saw a private email. There really isn't transparency, transparency, it's just a word we use very lightly. Right. So that's the opportunity. It's so easy for us. We can sit here for two hours and talk about the Lemonade IPO. It's over. Now do not take your this is your chance you've seen everything you can see from Lemonade are going to go into pet insurance. They're going to go into the kind of the low small tail risks everything that they can kind of predict is

Nick
life insurance.

Shefi
Maybe life insurance might be said there's eliminated Life Insurance Agency, right.

Avi
I tell you what, I'll tell you something about Lemonade and this is a few like the kind of like the startup scene and I credit Twitter for this and I got scammed as well. I can tell you, when I bought All Birds, everybody was tweeting about All Birds, the shoes and I was like okay, I mean hip Cool, whatever I hate Nike, Adidas, they stink, whatever. I bought the shoes, piece of shit. Okay? And for $100 over $100 and I made that mistake again. Okay, so here's my second mistake because they want to be cool and hip. I bought Adams. I don't know if you saw that company and they came as an alternative to All Birds and they have this box and amazing box that opens like with a magnet and closes they redesigned the shoe box. That's what they did. And Adidas apparently stole that design. So I bought those shoes. I actually got a private message on Twitter from the investor, one of the investors with the $20 off. So I bought the shoes very nice design much better than All Birds, I can tell you, but not comfortable at all. And then I said you know what, Avi it's time to go old school and I went and I got Cole Haan which was owned by Nike. And what a great shoe and you know what I did with Cole Haan? Let me tell you what I did when I was desperate. I said I trust a brand This is trust. I bought a final sale, you know what a final sale is you cannot return it. You cannot return a final sale they say this item is non refundable. So if I got that is that is trusting a brand. And, you know, that's what you need to strive to. And I feel like Lemonade benefited from the whole like Twitter community of cool tech people that have a lot of money and authority. Like oh, I'm waiting for Lemonade. Oh, blah, blah. And when we saw that tweet from the Greycroft partner, and someone said, Well, at least Lemonade doesn't require me to fax anything and someone said, Well, I just bought from Geico didn't ask for any faxes. It just there's no advocates for Geico online. Because Geico is not looking for that I think, and there's a lot of advocates for Lemonade because that was part of their strategy.

Nick
Yeah,

Avi
No one. can do that, you know, it's not something you can do on a regular basis. It's not real. Don't focus on it at the end of the day once you raise the prices to those cool tech people, they're going to be also the first to say Shame on you. Why did you raise the price? It's a trap. Don't buy All Birds don't buy Adams. Don't go for it. go old school go Walmart, go Nike, go Adidas. They know what they're doing.

Nick
Hard to end on a better note than that. But I'm going to add one more thing not to beat a dead horse. I still hate the name. I'm sorry. I still think it's a horrible horrible name. Lemonade. Like it just still like who thought of that like that's, that's terrible. Sorry. I don't like it. Anyways, busy week. Wow. Like a basically a magnitude seven earthquake hit insurance over the past two weeks, and it's why we do this particular podcast? Of course, I don't have my fading music out. So maybe I'll, I'll plug it in. As we're, as I'm editing this, but Avi..Shefi, we can only hope there are more weeks like this. So thank you so much. It's the week of July 10. I forgot to open up with that. And that was like memorizing that date, the week of July 10. Thank you all for listening, watching. If there are any topics or whatever that you think are important, you can always reach out to Avi, Shefi or myself but always parting with. It's still a pandemic out there. So, wash your hands, sanitize everything and just wear a mask. It's not that big a deal. Come on, people just wear a mask. So Shefi, Avi, thank you.

Avi
Thank you. Have a good week.

Nick
Have a good week, everyone. Thank you.