The oddest invitation I received at the recent InsureTech Connect was from the vice chair of Duck Creek, who suggested I attend a session it sponsored that... barely mentioned Duck Creek. Instead, the session was a celebration of a Duck Creek customer, Hagerty Inc. — and it was a revelation. While I wasn't familiar with Hagerty, it turns out to be a model for what insurance can (and should) be.
Having opened a small agency 40 years ago because they couldn't find insurance for their wooden boats, Frank and Louise Hagerty expanded into classic cars and then kept following their customers until Hagerty Inc. served just about any need a car enthusiast could have. That little agency now carries a market value of nearly $4 billion.
The journey shows how others can also wrap services around their core insurance products and do more for their customers, while turning them into loyal customers, if not fans.
I know, I know, nobody is going to get as excited about directors & officers insurance as many do about classic cars, but it's possible for all sorts of lines of insurance to demonstrate broader understanding of, and care for, customers.
Some agencies and carriers are already doing so — and winning.
Don't you wish your company had videos as cool as Hagerty's "Driveway Find" about the immaculate restoration of a 1964 Chevrolet Impala that two car nuts did for the original owner or this "Redline Rebuild" of a Stovebolt 6 engine from an ancient Chevy pickup truck? (Fair warning: If you click through to either of those videos or to the media section of their website, you may be there a while. I'm not at all a car guy but got sucked in for a good half-hour.)
Hagerty got to this point by moving beyond wooden boats and into insurance for classic cars in 1991, then progressively expanding to take on more of car enthusiasts' needs. The company launched a price guide in 2008 — it had to have the information for insurance purposes, so why not provide it to customers and prospective customers? Information on price is valuable for just about any used item, but especially for a category like old cars where comparables are hard to find. In 2017, Hagerty began offering membership in a drivers club, which offers automotive discounts, roadside service and more. Hagerty has also set up a marketplace where people can buy and sell classic cars online. Hagerty charges no fees; it benefits just from being the center of attention. Last year, it bought a small carrier so it can serve customers directly.
Along the way, the company made some smart marketing moves, too. It launched a magazine in 2000, bought well-known events such as the Greenwich Concours d'Elegance and even worked its way into a presence in the Gran Turismo video game.
While owners of classic cars and motorcycles are a breed apart, perhaps matched in their enthusiasm only by certain groups of boat owners, agencies and carriers can fulfill all sorts of other needs, even if they're far lower on the excitement scale.
I'm enthusiastic, for instance, about Empathy. While life insurers pay the death benefit and agents facilitate the bureaucracy associated with getting the claim, lots of the beneficiaries could use much more, well, empathy. They're facing a daunting series of processes — dealing with a funeral home, perhaps arranging a memorial service, notifying friends and relatives, and on and on and on. Many are going through the unfamiliar, intimidating process for the first time, while dealing with waves of emotion. Why not use Empathy or set up a similar service that goes beyond the insurance piece and helps people navigate the first month following a death? Why not say: "We've been here before. We know what you're going to deal with. Let us help."?
I'm likewise delighted by some of the innovations in P&C, where carriers are telling clients that they'll help protect their homes, not just pay to repair them after a loss. Whisker Labs is my poster child, with its Ting device that plugs into a wall and detects electrical faults that could lead to home fires. Some 34 carriers now provide the device and service free to customers, and I love the message that sends. I'm sure the carriers are finding that customers do, too. Water leak sensors aren't quite as far along in terms of cost-effectiveness, but they're getting there, and I hope carriers will start providing those for free, too, before long.
Workers' comp, where huge progress has been made in preventing injuries, has also demonstrated the benefit of adding service that takes great care of the individual. If an injured worker feels ignored, they may take longer to recover and may even seek legal help. If an advocate calls them shortly after an injury, expresses concern and helps walk them through the whole recovery process, the results have proved to be better for everyone.
There are surely other areas, too, where carriers and agents and brokers are going well beyond their contractual obligations. I just wanted to call attention to Hagerty as an example of how lucrative it can be to expand beyond the basic insurance product and tackle the full needs of a client.
$4 billion is a rather nice market value for a small insurance agency to grow into.
Cheers,
Paul