This Week in Coverager (Week of 5/18/2020)

This week, Shefi, Avi and Nick discussed:

– The SelectQuote IPO
– Haven Life’s new no medical exam product, fully API
– How the new cyber insurers are bundling insurance and risk management

Watch here:

https://coverager.com/haven-life-launches-100-no-medical-exam-product-and-new-api-solutions/
https://coverager.com/sofi-and-ladder-expand-partnership-to-include-estate-planning/
https://coverager.com/coalition-expands-coverage-to-canada-based-companies/

Mentioned:
Select Quote
MassMutual
Haven Life
SoFi
Ladder
Ethos
Prudential
Assurance
IQ
Pat West
Coaltion Cyber
Cowbell Cyber

Transcript

Nick
And we're live. We're back with This Week in Coverager. Thanks, everyone for joining in. This has been a pretty big success for us. I think it's a really nice format for folks who can just jump in and hear some of the top stories and listen to Avi, Shefi & I I debate what the importance of them. So we as usual, kick it right off over to Avi for this week's one of the one of this week's top stories. Avi...Shefi, good morning. Good morning, honey. Hi. Let's go.

Avi
Well, yeah, I mean, we'll start with today's big news item, not something we covered in a big way. But it was out there. Select Quote, became a public company, I believe yesterday, congratulations. The stock is doing really well the first day of trading. So we kind of took a little look at their S1 filing. And if anyone thought that they cracked the code, or we're actually doing well selling to modern consumers...think again. A majority of customers, majority the most popular products elect what sells is Senior Health Insurance. I believe that represents over 50% of their revenue. And it's interesting because it makes you feel and this is a debate of course, maybe Insurtechs are trying to solve a very difficult problem while companies like Select Quote, Assurance IQ, are seeing success targeting an audience that is still nice enough to talk on the phone. And I bet you that there are other segments of auto & home & life...I bet you these are probably older demographics as well. So when they're on the phone with the person selling, you know, the health insurance, hey, let's look at your home insurance, let's look at your auto insurance. And I see that I believe that's where they see most of the success because again, it's not something that a modern consumer would do because if they are uncomfortable doing it online or or doing get even on the phone with, you know, like minded individuals, then he will definitely not do it. What's it like what but Congratulations to Select Quote. You know, it's interesting because it now it this is more of a problem for Prudential and Assurance IQ. That's a serious competitor.

I think he's being sarcastic, though.

Nick
In what way?

Shefi
You are. You're truly congratulating that. So I think there'd be

Avi
Congratulations!. So the company

Nick
you're being sarcastic in Prudential, Shefi...the congratulations?

Avi
No. Well, I'm not happy because I'm not getting any money. But I think, you know, they had a plan. Obviously, you know, it's not all flowers and sunshine, they have liabilities. You know, it's a very challenging business model. They spend a lot in marketing, but for the company founder, yeah, the company founder the company, the executives are gonna you know, make some nice money and yeah, for the business it's a success. I would say after 35 years to go public I think for them they're happy.

Nick
How long? How long have they been in business?

Avi
35 years since I believe 1985.

Nick
So well before the modern day Insurtechs

Shefi
I think they they like to say or that they were one of the first if not the first to go virtual

Avi
b2c.

Shefi
Yeah. Phone is a big part of their selling proposition. And you know, the first takeaway for me is when they go when you go to the press release these companies talk about consumers, but there has to be a different segment for seniors. These are not seasoned...seniors today or born after the internet. And just like with Millennials are the separation between millennials that came with the internet after the internet before the internet again, I'm a millennial, my sister's millennial, completely different behaviors. There needs to be we need to talk about seniors today versus seniors and 15 years from now, 20 years from now, those are probably will be savvy or enough not to fall for something that isn't genuinely good. Right. And and we see that. So seniors, also there's a where there are seniors, sometimes there are more scams, and that's not being brought up or discussed.

Nick
Yep. And so, someone came up with the term on Twitter, they should change the name of the company from Select Quote to Senior Quote.

Avi
Shefi found out that apparently that name is already taken, so too bad for them. But But you know, I, in my opinion, and this is just my opinion, because there are a lot of scams...to me if you reach a certain age, I believe the important insurance decisions that an individual is making, especially around final expense, should be up to the kids, because at the end of the day, it's going to fall into kids anyway to take care of, you know, the funeral arrangements and things like that. So when I, when we kind of broke the Prudential/Assurance IQ story, the things that some agents were doing, just not right and I feel like the the kids, the children should be in the conversation making sure that the parents are getting the right thing. I think it should be regulated. Of course, it's not. But again, they found a shortcut. And when everyone when Ethos, Ladder, you know, Bestow, they're all trying the hard thing of actually getting people to buy online and feel comfortable in the decision and of course, the expensive marketing costs...this company comes in and just is very aggressive....targeting a very naive audience, there's no other way to say it. I mean, if you still have a landline and you talk on the phone, then I wouldn't call you a modern consumer. But they they've done it at the end of the day, money talks in this industry, and I'm sure a lot of their carrier partners are happy, I know a lot of them are in the health space. But yeah, that's what they did. So nothing new under the sun. This is no, it doesn't mean anything for the industry, it just means that the old players and the old enablers are still in business are still doing good while the new innovators are trying to figure out how are we going to succeed because...

Shefi
Because one has a more challenging demographic to boil down to the the average millennial knows their way around the internet, doesn't mind shopping around cares about price, yada yada yada. There's just so many differences. But But you know, one is going to be long lasting and one is going to face a really big question mark again down the road. You know, the soon to be seniors or not so soon to be seniors. Where are they going to go to? But for now, it's congratulations.

Nick
So Select Quote, probably targets in a particular way where it's, you know, "cheap Medicare supplemental insurance".

Avi
And on specific sites, Publishers Clearing House just like Assurance IQ, you know people with a lot of time on their hand going to gamble and win that big check. So yeah, that's what it is.

Nick
And then and then there's a whole marketing behind it so soon as you put your phone number in, it's it's a lot of direct contact you to keep moving so Shefi to your point, that's all very old school you know, method. It's lead gen with lots of follow up. I was buying life insurance, I made the mistake of giving my phone number and all of a sudden I was getting text messages and phone calls every five minutes for weeks and weeks and weeks and weeks, I could not block enough numbers. So that's, likely to keep going into the future, right? Like just the overwhelming, we have so many different ports that we can connect to, it's likely these lead generation companies are going to use all of them. And insurance is a tough sell. So, they're, you know, they'll create a funnel, fill the funnel in with those that have put in their numbers and then hammer away.

Avi
But you know, if you think about it, it's a very beautiful business model. Because when you target seniors, even if you like, really treat them poorly, they don't know to go online and write bad reviews. Maybe they'll go to the Better Business Bureau, which is great, because when you make bad things with millennials, the internet will know about it.

Nick
Yes.

Avi
Which seniors you know, they don't know what to do. They don't do anything. So people go in and like there's not as many bad reviews on Assurance IQ compared to Ever Quote and Ever Quote is an angel compared to Assurance IQ.

Nick
I'm I'm trying to find do Do we have a stock symbol?

Avi
stock symbol?

Nick
Yeah, the they went public Do they? Oh, I'm just trying to get what there. I'll look it up while you guys are talking, but I'm just trying to see what their market cap is. Oh, yeah. What was it worth? What was it worth to them?

Avi
They went up 40%. And, you know, I saw comparisons to Ever Quote and they said, Well, you know, Select Quote makes more money. You know, they look to be in a better position. So, I think investors are happy

Nick
Nice website. You know, I mean, not scary, doesn't

Avi
know. not scary to look does look

Nick
so awesome. I'll keep looking that up while? Well,

Shefi
Gary, you should just visit Glassdoor and read the reviews.

Nick
Okay, I'm not I'm not surprised. I just went through it. It's annoying and Avi, what you're telling me means that this particular model probably has a shelf life. Once you get a little bit more savvy digital consumer coming through the funnel, they're not going to put up with this.

Avi
Well, you know, again, the question is to target seniors and do very well there...that's a big market. There is a big market and as a matter of fact, Prudential now calls Assurance IQ a seasonal business, and they're all about the Medicare and the health insurance. So it's a big market. You could make a lot of money there. And they're smart not to target millennials because they know the acquisition costs are just too high and they wont see as much success, but they're successful, they're making money, what you can say a lot about other insurance companies trying to do it the right way. So it's the ultimate question, what do you do? Maybe you should start off in a bad way. Do this and then go into Insurtech and maybe acquire a millennial facing brand. Maybe that's what you do.

Nick
Yeah.

Avi
But it's a it's a it's a big question. Because, you know, at the end of the day, you'll have carriers enabling this and saying, We need the sales, we need someone helping us sell more products.

Nick
Yeah, so hit the news story is they raised 570 million dollars, in the IPO, it did. It's it is up around 40%. From its opening, so probably, I mean, that's that's the amount that they raised their $60 million profit on $263 million in revenue. I know they raised 578....market cap $3.25 billion

Avi
that's I believe, is that more than Assurance IQ or the same the same level?

Nick
I think it was around the same level. So, wow. Okay. Well, there's a story here. I think that we're going to continue in future versions of This Week in Coverager, or why don't we transition to story number two, what was another important topic that sort of pops out as we can Coverager?

Avi
Yeah, story number two, definitely was a Haven Life, their announcement of a new product, no exam 100% online, a set of API's. It got a lot of clicks. I don't know if it's because of the Haven life name or the Mass Mutual name, but it's always interesting, and I saw someone posting on LinkedIn in regards to the story. This is something we did that New York Life in 2012, or we're about to do in 2012 But it was shut down. So, you know, they kind of they saw the future. Yeah, eight years ago,

Shefi
Eight years ago.

Avi
And I think it's nice. I still think if I'm not mistaken, the no medical exam, it has a limit to how much you can get, you cannot get 5 million in coverage with no medical exam. So it's a very limited product. And, um, you know, I say you need to have it, yes, you should have these capabilities if someone wants to partner with you. But you look at even at, you know, you look at SoFi and Ladder for example, if the application could have been done via SoFi without having to go to letter I think consumers that work with SoFi that haven't accounted for itself, it would say, you know, what, I trust SoFi i trust them selections of partners. I don't need to research any other insurance company. Let me get this done. Haven Life is not partnering with a SoFi that's taken by Ladder. And still I don't believe it Shefi if I'm not wrong Ladder doesn't use an API itself. I think you go out of you. So to me, the question is, why not? Like, if SoFi is a truly digital company? And they are, why not allow that digital experience? And I believe it's the same with Lemonade. Lemonade has an API, but you still go out to lemonade.com to do the process.

Shefi
Unless you are Rhino, we know of one. So some user API.

Avi
Yeah. Yes. So to me, you need to find a very specific partner that has a very good name like for example, I don't know maybe thinking about Monzo, so for example, when they come to the US and they say that you know, haven life is our partner. That's it, you know, you can do your research, but you can get it online 100% and that would be a good use case and some customers will be comfortable, you know, trusting the Monzo brand, that haven life is a good brand. Let's do it. But I don't see it going mainstream. I don't believe that just because they have an API now everybody's gonna say oh yeah, let's offer Haven Life and they'll win the distribution game yeah, I don't think that's going to happen.

Shefi
I think the elephant is in the room is how Mass Mutual is some somewhat managing this channel conflict with Haven Life or they work with agents, work with with Haven Life and, you know, probably issues arise, but they go through it and Haven Life is doing its own thing and, you know, growing and improving Mass Mutual is of course, okay, right. They do their own thing. I just, there's some nice synergy over there. I mean, we like to laugh at it that it's not really a startup. It's kind of backed by mama mutual, as I like to say but it's working.

Nick
Was was Haven built within Mass Mutual always was it initiated into Mass Mutual did Mass Mutual buy them?

Shefi
No, I believe it was initiated within Mass Mutual.

Nick
So this happens in property/casualty all the time there's these channel conflicts are real. This is not this is not well, we'll put up a firewall, we'll you know, we won't we'll change the name of the company. Like it sooner or later you do get that channel conflict where, you know, you insult your current distribution, and they just decide it's not worth it. Well, you know, our company we're selling for is competing against us, we're just going to go somewhere else. So that I foresee that to be a serious problem like I I'm not sure that's easily handled.

Shefi
No, but you know, I have to say that you have to find a way to just do it. And what I mean is, yes, there is a channel conflict but, honestly, there is no other way. I remember working at CNA...this is a topic that used to come up a lot. What are the options? Some people aren't seeking an agent. So if you take into consideration all these factors, all the different user demographics, the fact that Insurtech is about selling insurance in 1000 different ways. I constantly say that it's about segmenting and reaching an audience, then you you kind of, you know, it's not clear cut corners, but they're, they're probably not overlapping as people thought they were, you know, back in the days,

Nick
yeah. Then the issue of the medical exam I am still confused. Anyone that's listening to this that's on the life side. I'm getting conflicting information. Does the medical exam actually make a difference? Like, I'm not

Avi
a medical exam?

Nick
Yeah,

I mean, I'm hearing it just really doesn't make that much of a difference. So that it's it's it's a legacy of the past. And so if it's not providing any value, why are we still going through it? Because it is a pain in the butt! And now, you know, have you said that, you know, there would be less, less less capacity? Let's limit that someone could buy if they don't take the medical exam, and I'm just wondering, is it truly a relic of the past? Or does it actually provide value?

Avi
So when I went through two medical exams, one with AIG, and one with Northwestern Mutual, they came to my apartment, then with that, you know, portable scale and they took blood, they don't have to give, you know, all the other samples. And I asked my team, yeah, and I asked the person doing the exam, okay, like, What's this about? So, apparently, if you lie in your application that you, for example, have a disease and you didn't disclose it, and they saw You up, and you know, you're covered. If that comes to life, the life insurance company still has to pay even though they you lied. That's from what I understood from them. So they want to check the most accurate, you know, lab results. And in my case, it actually increased my rate because they discovered they have high cholesterol, so I'm paying more. So for me, you know, it wasn't good. But, but yeah, that is I think the reason I believe there's a way around it if you go to your primary care doctor and you do the latest lab results, but there's still a process of someone going through these paperwork like all your medical records, and I think that's one of the services these companies provide to life insurance. So it's not just about making sure everything is accurate. It's also going through all the information then presenting it to the underwriter and saying okay, we went over 100 pages of his medical records. He has high cholesterol You know, that's what we found. So I think there's a service there. But, you know, we saw I believe, who was it? Erie Insurance that said, okay, no more medical exam. But it was also up to a certain amount. Yeah, up to a certain amount because you don't

Shefi
feel comfortable giving someone 5 million, that's convenience. They can always they have a customer and then they could upsell or, you know, check up with him and, but but they've got a customer because I mean, we've said this many times, like Insurtech was born out of the need to offer a more convenient products.

Nick
That's what that's what I think as well. And, you know, the medical medical exam is one of the biggest sticking points, and I use sticking in two ways. One is that it adds friction to the entire process, so it delays it. And as our good friend Pat West says he's been through a lot of situations where he can't sell the life insurance policy or he had he hadn't been able to. I don't think I'm not sure if he's doing that now, because the person that wants the life insurance is afraid of needles.

Avi
I can I can tell you that friction point, you mentioned that it goes in so many other areas as well. And I'll take the Assurance IQ example. One of the reasons they were so successful, is the fact that they chose a product that could have been, you know, underwriting over the phone, like no need to have a person come in and sign the documents or no need even for sending an email or having the customer fill out the details. When you can do everything over the phone conversion rates go up. Of course, there's also risks associated with that, but the more you ask of the customer, you'll see the conversion rates go down. That's typically how it goes. Especially with a product like life insurance that, you know, no one is very excited to get.

Nick
Yes. No, it's and it's true. And I'm not sure how it works when you want to do comparative shopping, but if, let's say you wanted quotes from two or three different companies do you have to actually buy one and then take a medical exam? Or do you don't have like three medical exams

Avi
you have to have I had two medical exams so though the second yes for quality talked to a financial advisor, he sets up the appointment for the medical exam, after the medical exam, they give you a quote. Now in letters case, for example, they give you a coverage for that period of time, you can buy until you get the medical exam to see what your final rate would be. So that's nice for people that are like on edge. I need to buy something right now. But yeah, you have to go through it, which I always thought was weird. Like, why not just go for one medical exam? AIG could ask Northwestern Mutual principal last night yeah, like share the effect. They don't do that. They work with different selves and work with different labs, different companies. So I wonder what that's about. But I don't know. You know, I feel like if you take that process away from life insurance, then you really have like, no touch points whatsoever, at least you remember, you remember that, you know, you had a medical exam. You remember you have high cholesterol, you remember that there's such a thing as a portable scale. I thought it was a nice experience. But that's me.

Nick
That's him. Okay. So So haven has, so they have this particular product that's, you know, with potentially no medical exam or with with lower coverage, and API, any again, Any word on like, connecting to Apple Watches or I always feel like they create these products and there's always like, something important missing from it.

Avi
I think, Haven Life They were one of the first if I'm not mistaken to kind of go beyond insurance and they offered like a benefits haven life plus it's called where you can get a free will to write your will and they had a partnership, they may still have a partnership with time shifter, which is an app that helps people, you know, eliminate jet lag when they fly. But I don't believe they do anything around smartwatches Yeah, yeah, I don't believe they do. And you know, it's an investment. It's a big investment. I think the space is very crowded. And I don't know I feel like you know, haven life. A lot of it is, you know, the direction of massmutual. And they are very, you know, they're not, you don't see them talking about disrupting the industry or eliminating agents, you know, because that's, they can say that, but you don't see it yet. And It's going to be interesting because our next topic, when we talk about cyber insurance, I feel like how cyber insurance is done today. That's how insurance companies should have done other products in the past to me.

Nick
So let's, let's segue. So,

Avi
so Coalition raised $90 million this week, and their product and I know, you spoke to another person on the Coverager Podcast that does something similar. They offer the platform to help people mitigate cyber risk, and they offer insurance. And I always said that, you know, a life insurance company, my view, you want to keep people alive, right? That's, that's your goal. You don't want people to die. So instead of Volvo creating the safest car, why not the life insurance company creates the safest car out there. You know when people are about to make an extra Didn't you prevent that with all these sensors and things like that, that to me that that was the vision that was where you want to know. You don't just want to provide the coverage and sit back waiting for something to happen or waiting for another companies to kind of mitigate that risk Apple Watch Apple Watch saves people's lives, like literally people going into falling phone calls emergency. It's just amazing. And I thought an insurance company should do that. You know, in a perfect world, of course.

Nick
Yes. I mean, it I it's, it's, I'll tell you as someone who sells insurance for a living as the selling part is unsatisfying. I said it there. Yes, I get I get a thrill that should there be a claim. I get to put people back. Make them whole again. But this the unsatisfying part is that I know a lot about what's going to happen, what could happen, how they could prevent those things from happening. And we have not as an industry connected the dots to do that. And in 10 years if we're still selling insurance in the same way, I'm gonna be pretty pissed off. Frankly, you know about all that it's, it's we have all this information, let's prevent or mitigate. I just don't see like this should be given life insurance, how much should be giving the Apple Watches away? I don't know, are selling them at a discount, and then building that information into the policy because it saves lives keeps the policyholder, alive, and now, both the insurance company in the policyholder they have the same incentive. And that's a struggle and insurance is to get the incentives to align.

Avi
You know, I think that The ship has sailed for a lot of I think, in general for the insurance industry, at least for traditional products. If Volvo tomorrow wants and they say to progressive look, we have in vehicle cameras, we can know if the driver is distracted or if he's drunk. Give us a good rate, like we have our technology that stands behind a potential claim. They have real leverage and progressive would be very happy because you know, they mitigate risk. Everybody talks about how insurance is about claims. That's the product, the claims. And I think because of that, at least we always say that coverage or that insurance companies are going to go behind the scenes because they have no actual way. You don't see Geico. It's funny because when Tesla went into insurance, Warren Buffett said, it would be as if Geico was Manufacturing cars. Not at all. It's more difficult to manufacture cars. And they're only I believe 16 car manufacturers in the US. And there are thousands and thousands of insurance companies. So it's clearly easier to be an insurance company than to be a car manufacturer where you actually have to stand behind a product and you can't go to court and say, Well, you know, we didn't mean that, like someone died in your vehicle. That's a big deal. They recall cars all the time to make sure everything is working so much going into it. And automakers, travel companies, so many of them they have the data, they own the experience and if they want to make more money, they could just say to an insurance company look or maybe some Hey, let's work together let's let's do something to help prevent the risk and, and the problem is now that it's up to the automakers to choose some companies and the ones that will be chosen are probably the brand names, the ones that can give the highest commission the ones that have the better claims experience because you know, you do want to eventually offer a good service to your customers. So to me the ship has sailed but what we're seeing in cyber, I think it's good signs a company like Coalition, doing everything, trying to provide like a comprehensive experience as much as we can because a lot of the cyber risks are unknown. You don't know what's going to happen and a lot of it you cannot prevent Of course, but it's a good sign. And if they do this right, then they have a good future in my opinion.

Nick
And cheffy i don't i don't see for cyber I. I was it was always a head scratcher to try to figure out when some of the larger carriers were offering coverage. You know, they they have expertise in house but it was not a comprehensive the way Avi described it. So you have contour you have Cowbell Cyber which who we just interviewed and their uniqueness that they're bringing into the table is proprietary algorithms, unintrusive pneus in in the product and how it works. And I know there's more of an enriching process because they are the gatekeeper as well. So they're trying, it's really difficult to prevent. So there's an element of prevention, there's an element of mitigations, should something should someone get in, you know, behind the gates, they will attempt to mitigate it. And I think the massive advantage is that you get to real time pricing. On this, you get to be able to read things on a second by second basis to try to understand and I think there's that and the unobtrusive pneus means that I think it's a better experience for the customer overall, but if you know what's going on, second by second, you can offer more coverage. You know how to do it.

Shefi
There's also a piece where they're selling through agents, all the cyber risk venture effects that I'm aware of, I think it's 100%. Across the board are selling through agents. This isn't a product that you're picking online with the exception maybe of slides where they have on demand cyber insurance, and you can buy that through integration. So they've basically allowed agents to have a more intelligent conversation about what it is that they're offering, I think coalition mentioned they have 25,000 customers. When they when they announced the funding, I thought it was also interesting when they said that they didn't want to reach a unicorn valuation. So it just kind of a tad bit below that, because they don't want to seem pretentious. Good for them. I think for the most part, there's always a legacy insurer behind that with coalition it's Swiss Re and Argo. So even though there's a lot of data out there, connecting the data and getting to that real time, you know, I have to see it to believe it, what that actually means because you know Prevention tool for out there, but they've packaged it. And that's I kind of always say that, like, if you can package things the right way, you don't necessarily need to reinvent the wheel, which is why I'm against peer to peer or, or things that go a lot deeper in a regulated industry. This is something where it's, you know, coverage, risk mitigation, the right communication, the right marketing, and obviously, execution is key, but before there before execution, you want to have a good product that's worth executing. And that's what we're seeing here with cyber insurance.

Nick
Yeah, and Avi, I think there's going to be huge demand. I think what we're learning from this pandemic, is that anything that could potentially cause business interruption is now up for discussion needs to be considered and I think there's going to be very little patience with boards of directors, for companies that don't close those gaps. So So we've now moved into this digital world where probably most every company, I won't say 100% maybe there are some that still do things by mail. But they're they have exposure. They have to seal it says gonna be huge demand and the way sheffy described it, being able to package all of that up seems very compelling, regardless of who's in the background.

Avi
Yeah, you know, it's interesting. Cyber insurance. My brother in law, he's an attorney, and there was the big case. I don't know if you follow real football, which is soccer in America. But Cristiano Ronaldo, the whole case, that was kind of leaked out to the press where he was accused of, you know, attacking a woman. So that information was accessed through his Lawyer, he, you know, he didn't have someone hacked him, basically. And that case was a very kind of like a defining moment, for a lot of law firms to say, we need to have this. We don't understand it. We may not understand it, but we need to have it because we don't want to risk our sensitive clients data out there. Because the damage, I mean, the damage that it costs to his brand because of this was just incredible.

Nick
So a lot of it was it was the law firm that was hacked.

Avi
Yes, the law firm that was hacked. And that's what they say. At least that's how it got out. Because probably Ronaldo would not because it was settled already was settled out of court. Yeah. So So those documents and it really is like a fear factor. But this is a fear factor that you really don't know. And like when you go on a car, okay, you know, you're a good driver. Of course, something bad could happen but you feel you're somewhat in control with cyber insurance. And of course, if you have again sensitive data, you'll do it. I doubt restaurant owners or everybody is covered with cyber insurance, but a lot of it is education. So I think that's a big part of it. You and Shafi, if I'm not mistaken, you mentioned that Ribbit, capital, that's one of the backers of coalition.

Shefi
Yes. Which is interesting in itself because of the ecosystem that they have with small business players. So they invested in I believe, also now

Avi
it's insurance. And no,

Shefi
but interesting is like Coalition is backed by Swiss Re, Next is backed by Munich Re Right. I mean, but you know, what? Is it? This is something I always want there. I mean, are they really competing at the end of the day, if it's good for back to chat to channel conflict, if they are, but if there are areas these companies can work together? I think that's what we're seeing just these pockets of ecosystems targeting small business, or targeting the urban millennials, and it makes it easier when you're thinking of alternative districts. And not buying or Facebook or, or if your audience isn't listening to watching TV or listening to radio like select cool.

Nick
Yeah. And I think this is it's the hopefully this is the right model to go out because, again, I don't I know property casualty the best. So we'll transition over to property casualty for the same thing. I look, there's a, you know, California is having issues because of two prior years with massive wildfires. And so the lot of carriers are pulling out it's really difficult to get just regular property coverage because of the fire element of it. And I just keep thinking like, when is someone going to build like an external sprinkler system? Like, I know, like the chubs of the world AIG they had the private firefighters at the really nice touch, but those private firefighters can't get to the house. It's it doesn't matter, you almost have to take it into your own hands. And we know what, you know, I can go to Bob Frady from Hazard Hub, he'll tell me which houses are more exposed exposed than others. And some of them there should be, hey, we will help you finance this really important thing to protect your home if you buy insurance from us. I don't want to start a company. Okay. I don't. I would. It's really hard. is really hard. You know, and so, you know, I think of I think FM Global has the longest term model for executing on something like this, and I don't think they provide any specifics like I don't think they do any of the risk mitigation but they did. They have had, they have had so many decades of fire experience that they would go into companies with their engineers and basically say if you do these things, you will qualify to become a member of the family of FM Global. And companies would do it, they would invest 10s of thousands of dollars, maybe hundreds of thousands of dollars and the appropriate sprinkler system, the appropriate firewalls to become part of the FM Global family because the incentives were correct. I just think we can take it one step further. I think the cyber model really gets really embeds that into the insurance. It takes the product and it becomes really a part of the business model of the insurer to prevent mitigate and transfer risk. So

Shefi
yeah, overall, I feel like this has been a really good week. It wasn't so much COVID LED news.

Avi
Wait, wait, there's a there's actually there's one one big news story not in insurance. And I wonder what you guys think about it. So Facebook announced that I believe in five or 10 years 50% of their workforce could be remote. But, but Mark Zuckerberg said that they will adjust the salary of people based on where they live. So technically, if you don't live in an expensive place like San Francisco, you're going to get less money. What do you think about that? Is that fair? Is that legal?

Shefi
Fair is objective legal? It probably is. Because you announced it. I agree. Why not? Yes, I think it's fine. Especially since he's opening up opportunities for people that aren't living close to the jaw, which by the way, if we have to move to Silicon Valley or New York City, we pay in rent or we pay it to others. companies. So are other areas where I don't know it sounds fair to me. Yeah.

Nick
For this probably not the right forum to discuss fairness or how fairness works. But last night, I was on Twitter and noticed a bunch of articles about, hey, it seems like companies are benefiting from this work from home because they're going to have lower real estate costs that should be transferred to the employees. And then I'm thinking, well, the employees also don't have to commute anymore. So there's that benefit. And so I think there's going to be a few cans of worms, that I'm going to be opened up for this, but it kind of makes sense. avi right. Like if you're in if you're a software developer for Facebook, and you work in the San Francisco Bay Area, which is, might be the one of the more expensive places in the world to live and you decide, well, Facebook's going to allow me to work from home. I'm going to Arkansas And, you know, I expect to keep making my quarter of a million dollar salary. I don't know that.

Shefi
I don't know, issues of salary still going to be, you know, it was still currently is debatable, like we're moving going forward because nobody's know what what are the impacts beyond the immediate impacts that we're seeing of this pandemic? Right. So it could be that for the for the certain salaries are bound to go down, just like valuations of certain companies are going down. We've seen that with Lonzo this week.

Unknown Speaker
So I

Shefi
hear but if there is employment, it's a good sign.

Avi
I saw a tweet, to your point where someone was asking, okay, now that people are working from home, what is considered a business expense? So basically, they were saying, What can we expect the company to pay for a new couch, a new desk to work on, you know, some coffee because they get food catered lunch at these offices, and now they want So it was funny because some people, that's what they see. And they demand because if I was a Google employee, I would want to go to the office because I get free food. You know, I would want to do that. And now if I'm home, what am I going to do? It's

Shefi
typically goes to our office. So he, Yes, he does.

Nick
I bet Google has the best hamburgers too

Avi
it's their food is from what we read. Online. It's they say it's just, you know, incredible

Shefi
report on it. On the subject of wellness.

Nick
Well, there's a movie on I know that right? was a

Avi
movie. There's a movie. Wait with the two comedians, right? Yes. Oh, yeah. Yeah. When they go to Google to the campus,

Nick
yeah. Or the Google campus. I can't remember the name of the movie. Oh, give it up after this. And Vince, Vince Vaughn goes to the cafeteria is like okay, I'll have a bagel. Go on. It's like the, you know, the guy behind the camera is like, okay, like, How much is it? That's free? Really? He's like, well, what if I have a bagel and like this pair? It's like it's free with a whole bunch of food because he can't believe it. I'm sure I'm sure it's going to be awesome. Shefi to your point it it does seem like psychology has changed a little bit. For as much as I think there's a population of people who would love nothing better for a flare up of the pandemic to occur just so they can say, See, we told you this was going to happen. People are doing the right stuff, things are opening and people are not being crazy. We will see flare ups, but I think it does seem like we're over on the other side. Most of the statistics I follow show that we haven't been at this position. In terms of new cases, and hospitalizations since like late March, so we've, we've peaked and we're on the other side now and, you know, hopefully we keep doing the right thing.

Shefi
We're hopeful. Okay.

Nick
Well, this is the Memorial Day edition of This Week in Coverager.

Do, do do do, do do do do do....

I was just, if you saw my head down, I was trying to get the music, but for some reason my YouTube app app wouldn't open. So anyways, Shefi, Avi. Thank you.

Avi
Thank you.

Nick
And Happy Happy Memorial Day to everybody.

Avi
Happy Memorial Day.

Nick
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