Tag Archives: Chris Cheatham

7 Things I Learned at Bold Penguin

This is my first week at Bold Penguin… marking the true beginning of my insurtech life.

I’ve followed insurtech for more than three years, writing and speaking on the movement, but my vantage point has always been one of the intrigued outside observer.

And while one week does not make you a qualified insurance technology startup guru, here are my first seven insights after diving headfirst into my new role as chief marketing officer at Bold Penguin.

1) Small Business Insurance Is the Holy Grail

McKinsey & Company has been referring to the SMB market as one of the “few bright spots” in the property/casualty insurance sector for years now.

Why?

Because no one owns the small business insurance space. The marketplace is fragmented, and generally speaking the commonly accepted customer experience is poor at best. Yet, done right, small business insurance is a growing and profitable market segment.

This is by no means breaking news.

That doesn’t diminish the fact that no one has small business insurance figured out, (except maybe…), making the SMB market the holy grail of meaningful organic growth for the foreseeable future.

2) There Is No Road Map

In case you’ve never worked for a startup before, there is no road map for success.

Insurtech startups are creating solutions that haven’t existed before. Look at the work that Chris Cheatham is doing in policy automation at RiskGenius or Mike Albert and Allan Egbert are doing in open APIs at AskKodiak.

Quite literally, they’re making things up as they go along.

…because they have to. The work lives in uncharted waters.

My point is, just as insurtech startups must mature into the greater insurance ecosystem that has existed for more than 400 years, the more traditionally oriented organizations (and individuals) must accept the slightly more haphazard nature of startup companies.

Insurance carriers with open-mindedness to the realities of trailblazing startups will position themselves out front as the partners of choice for insurtechs mapping solutions for our industry’s most challenging obstacles.

See also: An Insurtech Reality Check  

3) There Is a Race to Remove Friction

Research from a McKinsey & Company survey shows a 73% increase in customer satisfaction when customers reported they were pleased with the entire customer journey, not just specific touch points.

Winners and losers of the digital insurance revolution will be determined in the race to remove the most friction from the customer experience.

This doesn’t mean removing human agents or blowing up the traditional insurance carrier model. Rather, we must think of insurance as a service and create flow throughout the customer journey.

I joined Bold Penguin because it’s my belief that their solution will be the foundation upon which many winning agents, brokers and carriers build their unique customer journey.

Whether you partner with Bold Penguin or not, make no mistake, the race to remove friction is real and it’s happening right now.

If your organization is not having serious conversations about the customer journey, you’re already losing.

4) It’s Time to Ask “What if?”

It’s time for everyone to start asking “What if?” when it comes to the future of insurance.

  • What if APIs are the future?
  • What if customer experience is all that matters?
  • What if we can’t build it ourselves?
  • What if half our agency plant retires in the next five years?
  • What if our carrier partners demand digitization?

Whether you believe these scenarios will come true or not isn’t the point. The insurance marketplace is changing rapidly and being prepared for all the “What if?” scenarios possible is the only way to survive…

…because no knows what’s actually going to happen.

5) Disruption Is Dead

From now on, every time you hear the words “disruption” or “disruptor” come out of a startup’s mouth, your insurtech B.S. alarm should leap to life, the blaring sirens and seizure-inducing flashing lights overwhelming your senses while an impenetrable B.S. Protection Barrier envelops your entire body like some scifi force field.

Seriously though, disruption is not the answer.

Instead, insurtechs should focus on collaboration, facilitation and integration with traditional partners, building on the previous foundation as much as possible and alongside where it does not.

6) Culture, Culture, Culture

I’ve seen first-hand the impact a toxic culture can have on organizational success.

We live in a tumultuous time for workplace culture. According to the American Psychology Association, the workplace continues to be a leading cause of stress (with 61% of Americans listing work as a significant stress factor).

We’re under more pressure to spend more time, to get more done every single day. Work-life balance has become a cliche joke.

While I believe in hard work, giving more of yourself than is asked in the job description and just kicking ass in general, organizational culture must be a fit to achieve our goals of world domination.

Here are three aspects of insurtech culture vital to success:

  1. Always put staff satisfaction first. An inspired team believes, an uninspired team blames.
  2. Never blame the customer. Period. Own your outcomes. The customer may not always be right, but the customer is never wrong.
  3. Don’t take yourself too seriously. As an old mentor used to tell me, “Everybody ?s.”

I’m sure there are more. But these were the three most obvious to me after spending time at the Bold Penguin headquarters this week.

7) Your Story Matters

Your story matters as much as your product.

It doesn’t matter how amazing, revolutionary or game-changing your product or solution is, if your story doesn’t make sense, if people can’t connect the dots between your solution and how it benefits them and their organization, your product essentially doesn’t exist.

This is something we need to do better at Bold Penguin.

We’re not amazing at telling our story today.

We’re going to change that.

One of many reasons I joined Bold Penguin was that the whole story had yet to be told.

I feel like I’ve found a gigantic diamond just lying there on the sidewalk.

And while everyone else walks past, oblivious to the treasure they’ve just nonchalantly stepped over, to the trained eye all it takes is a craftsman-like approach to telling the story of what Bold Penguin can do for insurance agents, brokers and carriers to unlock industry defining value.

But Bold Penguin isn’t alone. Wait until you hear about what Joseph D’Souza is doing at ProNavigator, or Jason Keck at Broker Buddha, or Phil Edmundson at Corvus Insurance.

Having a great solution is the barrier to entry. For anyone to care about your company, you must to be able to tell your story.

See also: Innovation: ‘Where Do We Start?’  

The Rub

According to the most recent CIAB Market Study, “Driving organic growth, hiring and recruiting talent and enhancing the customer experience remain top organizational priorities” for the U.S.’s top insurance brokerages.

With 80% of CIAB’s responding agents and brokers listing “driving organic growth” as a top priority for 2018, it’s exciting to be part of a company working to solve organic growth concerns, not through disruption but through collaboration, facilitation and integration.

You can find the article originally published here on LinkedIn.

Click here to learn more about Bold Penguin.

Talking Insurtech With Regulators

Key Points 

  • Recent shifts in insurance regulation are driven by consumer demand.
  • Traps for the unwary mean that insurtech startups should engage with regulators early and often.
  • Brokers need to know how to navigate the complex framework of anti-rebate and anti-inducement laws.

It is no secret: Investors are pouring money into insurtech startups with the goal of transforming the insurance industry. This increased investment is fueling not only growth in the industry, but also growth in the number of conferences, expos and seminars that allow companies to promote their products, build connections and stay abreast of the latest trends. Last month, more than 3,500 startups, insurers, investors, and service providers converged on Las Vegas for the largest and most global of such conferences: InsureTech Connect.

Attendees at this year’s event were treated to a host of presentations, from insightful fireside chats with entrepreneurs, such as Metromile’s Dan Preston and Ring’s Jamie Siminoff, to thought-provoking panels on satellite imagery, telematics, wearables and innovative strategies for insurance companies of the future.

See also: InsureTech Connect 2017: What’s New  

But, as excitement and buzz steadily mount, at least one panel reminded attendees that insurance—while highly ripe for innovation—is also a highly regulated industry. The panel (“Balancing Innovation and Regulation”) featured Michael Consedine (CEO of the National Association of Insurance Commissioners), Ted Nickel (Insurance Commissioner of Wisconsin) and Chris Cheatham (CEO of Risk Genius).

Here are our key takeaways of that panel discussion.

Recent policy shifts are driven by consumer demand.

Over the past 200 years, the insurance industry has gone through periodic changes. But, as Consedine explained, this is the first time that significant changes are being driven by consumer demand. Specifically, consumers are demanding simpler and more intuitive policies; a streamlined and digital application process; faster claims payments; mobile access; and new products, such as peer-to-peer or pay-as-you-go. Insurance regulators nationwide realize that innovation will lead to consumers being better served, and, as a result, they are taking an active role in being a part of the conversation and enabling innovation.

Traps for the unwary mean that insurtech startups should engage with regulators early and often.

Once a company begins to analyze risk or price products, it runs the risk of being considered an insurance company and, more importantly, being subject to a host of often complex regulations that vary from state to state. For instance, while the amount and quality of available data are exploding—opening up the possibility of using new or unconventional data to price risk—state laws prohibit not only unfair discrimination generally, but also specific factors from being considered when pricing risk. In other words, as Mr. Nickel explained, a data set may show that there are more pool deaths in years when a Nicholas Cage movie is released, but whether that correlation is actuarially sound, let alone a fair basis on which to make pricing or rate decisions, is something that companies should discuss with regulators before launching. The same is true with respect to other issues, such as privacy or cybersecurity regulations—companies should understand the regulatory regime in which they operate and ensure that they are in compliance. To that end, Mr. Nickel encouraged companies to engage regulators from the outset to explain how a new algorithm or business model works to ensure that they are not running afoul of state regulations.

If you are a broker, be aware of anti-rebate and anti-inducement laws.

Nearly every state (with the notable exception of California) has some form of anti-rebate or anti-inducement laws on the books. Generally, these laws prevent a broker from providing something of value to a customer to “induce” an insurance purchase. While promotional items, such as golf balls and pens, are often exempt from such laws, a company must be especially careful when it begins to offer—at no charge—more valuable goods or services to its customers. According to Nickel, these laws might be particularly problematic for new entrants into the industry. For example, if a broker provides a wearable device to its customers, might such a gift implicate anti-rebate laws? What about specialized software provided at no charge? New companies in the broker space should ask themselves these sorts of questions sooner rather than later, seeking out counsel when necessary to avoid regulatory issues down the road.

‘Tear Down the Information Silos’

Instead of a short bio, let us know what are your top three books everyone working on digital transformation needs to read and top three tech gadgets one needs to have?

“Zero to One.” This is the best book on tech, and so many entrepreneurs don’t understand the key concept: Your tech better be 10X better if you want to win,

“Moneyball.” I love this book because it helped me see how someone can look at a problem totally different. In the case of “Moneyball,” Billy Beane started looking at baseball stats in a different way.

“The Dip.” This is Seth Godin’s best book, and it’s super short. 10X better technology takes time. You will hit a new dip every single day. Pushing through the dip is key; 99% of people don’t get through the dip in some form or fashion.

iPhone. I hate my phone and love my phone all at once. I saw some crazy stat that it’s still a better deal at $1,000 than most gadgets, based on the number of times you touch it in a day (versus everything else).

Garmin Fenix 5. I was really disappointed with my Fitbit. So I ponied up for a Fenix 5 watch, and I absolutely love it. I love how well it is constructed.

Calendly (or equivalent scheduling app). I would go insane without this app. Seriously.

You are not only the CEO of RiskGenius but also a renowned influencer in the insurance industry. First, tell us more about your company. How far are you with becoming the Google of insurance?

We are getting closer every single day. Users can now use our Google-like search to find and compare policy language instantly. Now we are moving to an analytics based approach — put another way, the computers are going to start showing insurance pros what is and is not important.

See also: Why AI Will Transform Insurance  

When you start a discussion – for example, on LinkedIn – a lot of experts from around the globe participate. What role does social media play in your work as CEO? What would you recommend to C-suites of incumbents who don’t have an interactive presence on the internet?

Social media is our secret sauce. I have more than 100,000 followers on LinkedIn, and most of them are in insurance. That is crazy. I use LinkedIn to share wins, struggles and ideas. Some day, I would love to go back and read through all my crazy LinkedIn posts.

Most corporate social media is so, so boring. I love the personal touch. And, I guess you have to be a bit controversial — although I don’t really think my posts to LinkedIn are that controversial. For example, I recently posted that you can’t fix your front end until you address your legacy software. I don’t see that as controversial; others did.

Life is too short to be boring.

How do you estimate the state of the industry inside and outside the U.S.?

Honestly, we are in the first inning of a nine-inning transformation. There are major insurance corporations that are just now scanning in paper documents. Most insurance professionals can’t really find the digital information they need. We have so far to go.

What do you think are the biggest chances for incumbents to use the digital transformation? What are the biggest hurdles in your opinion?

The biggest opportunity and the biggest hurdle is tearing down information silos. I can’t tell you how difficult it is to get our hands on  an insurance carrier’s forms sometimes. This occurs because (1) the information is not stored in a central location and (2) the information gatekeeper does not want to give up the information to a more efficient system.

Herbert Fromme, maybe Germany’s most famous journalist on insurance topics, said a few weeks ago that insurers can reduce the majority of tasks in the future and, for the rest, need employees with different skill sets. What do you think about this?

Absolutely, and this is no different than most other industries. I used to be a litigation attorney. I attained my billable hours primarily by reviewing large document sets on cases. Two years into my career, I started reading about outsourcing operations that would review litigation documents at a fraction of the cost. Two years after that, I started reading about technology-assisted review, which involved machines reviewing litigation documents.

The same thing is happening in insurance. Insurance companies have just gotten comfortable outsourcing many jobs to other countries where labor is cheap. And now you are starting to see machine learning solutions that can do the outsourcing work (ahem, www.riskgenius.com).

What are your top three do’s and don’t’s for a C-suite that understands the need to act soon?

Do’s:

  1. Spend most of your time on the problem.
  2. Make sure you have buy-in from all employees — not just executives.
  3. Avoid reading traditional tech press — do your own research.

See also: How Technology Breaks Down Silos  

What would you advise young people who are thinking of entering the insurance industry?

Go get a job in insurance and pay attention to all of the crazy, frustrating situations that you see. There will be a lot. It is the nature of the beast. Talk to your peers about the problems you are having. See which problems others focus on. Then figure out how to fix the problem you have selected.

Thank you for your time.

No, Brokers Are Not Going Away

In 1997, the CEO of a Silicon Valley company told me I should give up on being an insurance broker and look for a new job because I was about to be disintermediated. Technology would let carriers and clients connect directly, and nothing I did could stop the movement of history.

Well, I ignored his advice, and the brokerage part of the insurance supply chain has grown by a factor of 25 in the past two decades.

But many people are now warning again of disintermediation. Was my friend just too early in his prediction? Will the doomsayers be right this time?

In a word, no.

First of all, disintermediation rarely happens as rapidly or completely as the technologists tend to think, with their binary, one-zero, on-off approach to the world. There are actually many more bank tellers today than there were when ATMs were introduced decades ago and were supposed to put tellers out of business. Remember when realtors were going to disappear, as buyers and sellers connected directly? Realtors are thriving. Even travel agents are still around despite the spread of sites like Expedia. There are only about 40% as many as there were two decades ago, but they deliver more value now, because they handle more complex problems or have developed specialties, such as exotic fly-fishing vacations that few have the expertise or confidence to plan on their own.

See also: Why Aren’t Brokers Vanishing?  

Insurance is even less likely to face disintermediation than bank tellers, realtors and travel agents because, if you think finding a fishing guide in Alaska is hard, try explaining how a workers’ compensation “experience modification” is factored or how the Affordable Care Act will affect the buying public if the new administration has its way. Even though the rise of comparison sites suggests that policies are easily comparable, they are not. It takes sophistication, based on lengthy experience, to help a client evaluate his or her needs and to sort through all the carriers and policy options to find the right fit. Product, price and relationship all have to fall into the right place at the right time.

Besides, as the founder and chairman of Insurance Thought Leadership, I have a ringside seat on the startups that are providing tools that will make the broker’s role even more important than it is now. In addition to the main site, where nearly 800 thought leaders have published more than 2,500 meaty articles on innovative ideas, we recently launched the Innovator’s Edge, which is tracking the more than 725 insurtech startups. I can say with confidence that the role of the broker will broaden for the foreseeable future.

Here are just some of the companies that will help ensure that all of us brokers have a Happy New Year – and many more to come:

RiskGenius – This startup, run by Chris Cheatham, uses artificial intelligence to instantly compare and contrast policy coverage and produce a report in layman’s terms. That helps clients see what’s going on. It also helps brokers keep track of changes in policies, making back offices much more efficient — serving clients better, at lower cost.

The RiskGenius solution plays into a trend that seems to be generally missed but that will be profound, in insurance and elsewhere. While some entire jobs will be automated — look at what robots are doing to many manufacturing jobs — the broader effect is that pieces of jobs will be automated. It used to be that every senior executive had a secretary, but as typing, some answering of phones, some scheduling and so forth have disappeared from assistant jobs, the span has become one assistant for every two, four or even larger numbers of executives. The same sort of winnowing of functions will happen with brokers, because of solutions like RiskGenius’. Brokers and brokerages will take on more strategic work as they let go of the more mundane tasks that can be taken on by technology.

Refer.com, run by Thomas Gay, likewise makes brokers more efficient as we prospect for business. While social marketing and social selling have attracted so much attention, but haven’t panned out, Refer.com scours the internet 24/7 to find topics of interest to prospects and puts them in an email format. The system prompts the broker about the optimal pace at which to send the emails, providing a high-tech, high-touch approach that can build the sort of referral network that brokers crave.

Agency Revolution, whose CEO is Michael Jans, offers complementary capabilities by automating marketing campaigns — for instance, sending out emails on clients’ birthdays, as policy renewals near, etc.

Pypestream, which has the good fortune to have ITL advisory board member Donna Peeples as its chief customer officer, can greatly improve customer service for larger brokers. Pypestream’s chatbots mean that customers can text queries to brokers — a means of communication that so many prefer these days — rather than call and wait on hold, negotiate a phone tree or face some other indignity. The chatbots filter through the texts, query any and all back-office systems that have anything to contribute and answer routine questions so fast that Pypestream sometimes has to slow the response so the client isn’t tipped off that it’s really dealing with a computer. Clients are happier, and brokers offload routine questions so they can handle more substantive issues.

GAPro, where Chet Gladkowski is chief marketing officer and chief information officer, also can make brokers much more efficient by providing what it calls verification as a service. GAPro addresses the huge time sink that is certificates of insurance. These are important, because they let parties to a deal know that other parties are carrying the requisite insurance — but they’re only as good as the paper they’re printed on (or the PDFS that contain them). Just because someone can show he had insurance a month ago doesn’t mean that certificate is still in force today, when the deal is finally coming together. Brokers spend an inordinate amount of time verifying these certificates — but GAPro automates all that, so it’s possible for everyone to know in real time the insurance status of all relevant parties. Again, this means faster and better service for clients.

GroundSpeed automates loss runs and the processing of claims data, simplifying a complex, painful process and letting clients and brokers see on a dashboard all the claims they’ve made under an insurance policy.

Risk Advisor, whose founder is Peter Blackmore, helps brokers extend risk management services to small businesses. These services had previously been practical only for larger businesses, because of the expense of the work involving in identifying and mitigating an individual business’ risks. But Risk Advisor has automated the process so much that far smaller companies can enjoy the sort of attention and expertise that big clients have traditionally received. That change pushes brokers in the direction that both they and clients would like to move: The brokers will increasingly help prevent losses rather than coordinate payment after losses occur.

WeGoLook, whose founder and CEO is Robin Smith, provides arms and legs (and brains) to brokers for any sort of service. Her 30,000 “Lookers” across the U.S. are currently handling tasks such as taking photos and gathering other information after car accidents, but their work is really limited only by our imaginations, because they give us the sort of inexpensive, free-lance workforce that Uber has brought to transportation. How valuable is the sort of service that WeGoLook can provide? Well, Crawford just announced that it was buying 85% of WeGoLook in a deal that puts a $42 million valuation on this young startup.

See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections

This list of seven companies is just the start, as a visit to the Innovator’s Edge will show you. So, my bet is that if my Silicon Valley friend and I reconvene in 20 years, we’ll see that the role of the broker has become even more strategic and has moved by leaps and bounds beyond where it is today.

Dear Insurtech, It’s Not You, It’s Me

Dear Insurtech,

It was nice getting to know you in 2016. You served your purpose, but now it’s time for RiskGenius to move on. It’s time for me to move on.

There were a series of events that helped me realize that you, insurtech, and me, well, we can’t really be friends anymore.

I can’t be conference guy 

Recently, I was in San Francisco meeting with some insurance professionals who are plugged into the insurtech scene. One of them brought up a recent insurtech conference and commented, “You are everywhere, Chris!”

I shuddered. I have never wanted to be “conference guy,” but I got sucked into being just that this year, and there are way too many insurtech conferences.

Little comes out of insurtech events 

I often attended insurtech events this year and wondered at the end, “What will come out of that?” And very little developed. As the year progressed, it started to dawn on me what was going on. And then, finally, everything crystalized after one phone call on Dec. 13.

A wonderful insurance professional called to let me know he was leaving his firm at the end of the year because he was frustrated by the lack of engagement by his firm with insurtech companies.

See also: The Future of Insurance Is Insurtech   

It hit me: Insurance companies are simply trying to understand what the heck it is we insurtech companies are doing. Often, there are no real plans for insurance companies to actually engage with insurtech companies.

I need to focus on the doing, not the talking 

This year, we have found a tremendous partner in an insurance carrier that I hope to tell you about soon. There are also pockets of people focused on insurance technology innovation — but I need to find these people because they often aren’t at the conferences, or aren’t on Twitter or LinkedIn.

Some of the best events I attended were intimate gatherings. Insurance Thought Leadership invited me to a cyber insurance conference I loved. Marsh invited me to an executive retreat that was incredibly insightful. And an insurance carrier allowed us to participate in an innovation challenge with internal employees that changed the trajectory of our company. But none of these three events focused solely on “insurtech.”

RiskGenius is ready

As I look toward 2017, I am going to remove both myself and RiskGenius from the insurtech scene. Instead, we are going to be actively seeking out those partners that can use our software right now. It’s no longer about tinkering and building algorithms; RiskGenius is weaponized and ready to go.

Two areas have emerged where RiskGenius fits perfectly.

First, RiskGenius is primed for policy automation.

We can take an entire library of policies, show you similarities and differences and then serve up the correct policy based on what the user needs.

See also: 4 Marketing Lessons for Insurtechs  

Second, RiskGenius analytics has people really excited.

We are now able to take an insurance policy that a user provides us and compare it with all the policies we have previously collected and stored. Soon, I will write about how we have evaluated more than 400 cyber insurance policies.

This is awkward, insurtech. But we can’t be a “thing” anymore. I’m sorry — it’s not you, it’s me (and RiskGenius). We want more for our future.

Thanks for the memories,

Chris Cheatham

CEO, RiskGenius