The Ryan Hanley Show - RHS 123 - Alex Bargmann on What It Takes to Innovate the E&S Market

Episode Date: November 4, 2021

Became a Master of the Close: https://masteroftheclose.comPathPoint, the first open digital wholesale brokerage for the Excess & Surplus lines market in the insurance industry. Some people find E&S boring and difficult. In this episode of The Ryan Hanley Show, Ryan Hanley is joined by Alex Bargmann, CEO and co-founder of PathPoint. They discuss why this is no longer the case and why independent agents need to start taking notice of E&S business. Don't miss this episode...Episode Highlights: Alex discusses how he got into the insurance industry. (6:13) Alex mentions how it took him a long time to truly comprehend E&S underwriting and rating, and how the processes are significantly different. (10:51) Alex mentions that they have executive support for putting products or providing capacity to PathPoint in order to digitize the wholesale distribution platform. (17:48) Alex explains what he really likes about PathPoint. (21:54) What were the most glaring challenges Alex knew he had to address, either immediately or later, in establishing PathPoint? (23:21) How difficult was it to get E&S carriers to return digital quotes? (29:17) Alex explains that they are very specific about their appetite and making sure they are not just adding class codes for the sake of adding class codes. (39:17) Alex talks about the first carrier they worked with. (44:25) Alex and Ryan discuss agency billing and direct billing. (47:23)  Key Quotes: “One thing I really liked about PathPoint where we were able to sort of figure out our differentiators, is like we didn't have to deal with this notion of do we go direct? Or do we go through agents?” - Alex Bargman “I think there's some value in being able to digitally quote business” - Alex Bargman “The thing we were able to leverage is that we didn't actually have to convince them to automate underwriting because they had incidentally already done it by writing these binding authority guidelines.” - Alex Bargman Resources Mentioned: Alex Bargmann LinkedIn PathPoint Reach out to Ryan Hanley Learn more about your ad choices. Visit megaphone.fm/adchoices

In a crude laboratory in the basement of his home. Hello everyone and welcome back to the show. Today we have an absolutely tremendous episode for you. A conversation with Alex Barton, the CEO and co-founder of Pathpoint. Pathpoint is changing the game on ENS insurance. When I say changing, I know I say changing the game a lot because I'm a hype man. That's what I do. I have a podcast and I hype shit up.

That's what I do. But honestly, you know, when I say these things, I believe them. Like they're making ENS super easy. Pathpoint is making ENS super easy. Pathpoint is making ENS super easy. And frankly, I was almost kind of pissed when I had halfway through this episode, because I don't really want you guys to know about Pathpoint and some of these other companies, because like, then you're going to start doing the stuff that Rogue is doing. And, you know, whether you can execute it the same way we can or not, don't know but you certainly will know all

our little tricks and secrets and pathpoint is definitely one of them they are making ens easy easy easy like tarmica and um i was just so excited to talk to alex this was our first conversation i'd spent time you know talking to his underwriters and other people on his team um you know because we use pathpoint all the time but uh at rogue but this is the first time i had talked to Alex. And when I asked if he'd be willing to come on the show and just talk a little bit about what they're doing, I was excited when he said yes.

So this is really good. This is tactical, nerdy. You're going to like this one. We talk about different things we're doing. We talk about why some of the innovations they're making in ENS are so important to the industry. And I think you're absolutely going to love this episode. Before we get there, I want to give a big shout out to today's sponsor, Podium.

Podium is what we use for our web chat feature. We also do a lot of texting through Podium, and we're starting to look at some of their other features like campaigns and the strategic review link. They have a deep link that you can use for reviews and reviews not just to Google but to Facebook as well because even though I hate Facebook with a passion outside of a couple groups that I'm part of in there, getting reviews on Facebook can help push your Facebook page in SEO. And again, it's all about capturing the total

breadth of the first page of Google for your name at least, and hopefully for search in your area as well if you're geographically based. And that Facebook page, your Facebook page probably ranks. And if you can get some reviews there too, very good idea. I don't want to get too nerdy about it, but Podium has deep links that allow you to do that. It's super cool. Their web chat feature is like web chat to text. So right now we're getting like a 95 plus response rate on all of messages. So if someone messaged us through the Podium web chat feature, we're getting 95 plus response rate because it then becomes a text message for

them. So now they're texting back and forth us and we all know how powerful text message can be. So, you know, being able to capture more leads, you know, improve our reviews. Like I said, we're working on some of the campaign features. So there's some follow-ups and all that kind of stuff. Podium is a tremendous tool. Love using it. Love the people over there. Super good people. They've been willing to train my people, do one-on-ones. They've been willing to work with us on a couple of feature things that we were thinking about and just in general have had a very good relationship with them and very proud and happy that they've been willing to sponsor the show because I like sharing cool tools with you. I also want to give a big shout out. Oh, before I do that, Podium.com, P-O-D-I-U-M.com, Podium.com, Podium.com. Go check it out. Just get the demo.

Get the demo. Not telling you you have to buy, but get the demo. See what it's all about. See if it fits your agency. And if it does, I recommend. Also want to give a big shout out to Mick Hunt and the team at Premier Strategy Box. Guys, you've heard me talk about Mick. Mick is the best. Just absolutely, we couldn't be where we are today at Rogue if it wasn't for Mick. Just working with him week in, week out, being able to set appointments or set meetings with my people, with his people, so they can talk about detailed and nuanced stuff and work through processes. I just can't recommend mick and premiere strategy box enough and uh if you have some some some strategy issues some process issues some questions around sales around service retention this is what they do they help you work through those things and um like i said mix the

goat mick and the team at premiere strategy box are the G-O-A-T. Premier Strategy Box. Go to mystrategybox.com. That's mystrategybox.com. mystrategybox.com. All right. Let's get on to Alex Bargman. Alex.

Yes. Hey, how are you? Good. What's going on, man? Good. The old quit Zoom and reload it it and it fixes itself type thing. Well, I could be a jerk and just let you think it was your fault, but I had my microphone plugged into the wrong computer, so...

Good. That means I can use my headphones and microphone, which will be better audio then. Yeah. Might have been the factor. I'll try to start our relationship with honesty you know to some extent as as I'm sitting here going you know I wonder what's happening you know because you just never know and then I look down and I see that the so I do my editing you can't see it it's off screen but there's a computer over here where I do like any video

or audio editing or whatever and this morning I was dusting up some episodes that have to go out and I forgot to plug my microphone back into this. That was a hundred percent of me. Um, well, I'm glad it's working now. Can you hear me? Okay. Yeah. Yep. So appreciate you coming on the show, man. Yeah. Yeah. Thanks for having me on and working with us. Yeah. Well, I'm super, you know, I, uh, I'm interested in, and we can kind of get right into it. I, super, you know, I, uh, I'm interested in, and we can kind of get right into it. I, um, you know, I, I was interested in, in how you got to insurance, because if you look like into your background, LinkedIn and some of that kind of stuff, it doesn't look like you have a ton of insurance in your background. And I might just be wrong about that, but I'm interested in, you know, kind of how you got to this space.

Completely by accident. And yeah, I don't think if you asked me 10 years ago at age 22, if I'd be a lot licensed surplus lines broker and, you know, 40 states, I would have one been able to answer the question but once you explain what that meant meant to me yeah you know been on board with that idea um so uh it it was all sort of by happenstance um my background is in software development and product management sort of like technology software companies. And I took a job working at a investment fund that did seed stage technology investing, but also incubated companies. It was called HVF Labs. It's now called Sci-Fi Venture Capital. They're one of our investors, but they had an interesting model that they'd sort of hire a small team to work on a problem that they thought had legs to spin out into a separate business. It was very focused on fintech or sort of adjacent businesses. And almost all of them started with kind of like an initial partner or even customer from the industry. So like a legacy company, for lack of a better word. And the idea was like, and that's sort of how we started exploring what became Pathpoint because a

PNC carrier had a relationship with HPF and they were like, we have a huge wholesale distribution business and we'd love to see more technology and software being deployed into the wholesale channel. It just sort of at large, like no real point to it yet. Right. And they, I think it was in part, that carrier had seen what had happened in the standard lines market, both with like captive and independent agents starting to place business through software and then sort of looking at their wholesale business and being like, huh, commissions are going up, but it's

not getting faster for anyone. Like what's the deal here? And so they kind of brought that prompt to us. And we did, you know, three months of research, like interviewed 120 people and sort of like, got excited by it. And that's kind of how I fell into it. It just had a lot of like patterns that were interesting to me and the people I started working on it with, like from the outside, pretty opaque industry, but huge market from the outside as when you're ignorant about how the market works, you're like, why haven't they digitized, right? Classic Silicon Valley arrogance. Then you like actually learn how the incentive structure works and you're like, wow, this is fascinating. And also definitely ripe with opportunity and just

pragmatically, we decided to get started on building a business here. It took us a couple years to get to building a digital ENS brokerage, but here we are. Yeah. What was one of the first things that you ran into that, obviously, I'm always interested in people who, who, because, I don't know, I find this to be, I know, I know a lot of industries think that they're unique. I feel like insurance is one of the few that actually is for certain reasons. And I'm just interested in like, what were one of the first things or anything that like from the outside seemed like this should be a problem that's solved. And then once you got in,

you're like, Oh, I can see why this hasn't been solved yet. Like I can see where some of the struggles may have been and why this still isn't already a thing. Yeah. Um, that's a good question. There's a lot. Um, I'll give you like an academic one and then a more like cocktail party one um the this is like gonna make me sound like i don't know what i'm doing but it took me a long time to like really appreciate ens underwriting and rating and how those concepts are quite different from like a process perspective in some ways. Obviously, they're deeply related if you're a carrier. But coming from a fintech world, like where it's just like reduce friction to zero, price the risk accordingly, and then just like have some controls in place

to make sure you don't get out of bounds. Like understanding that that's just like not the model in ens and how it's working day to day took me quite a bit to wrap through my like get through my head and was kind of interesting to come to appreciate um you know like we're in a segment of the market where like uh you know like binding authority and mgas and programs and like there's just like 12 different ways to talk about how insurance is distributed. Like you just have to come to appreciate the different models and why they make sense for different strategies or different

products. The second thing, which is more frustration than like like anything like an epiphany is just like there's so much jargon in ens insurance and this is kind of where i feel like the door has been shut to new entrance into the market which is a mistake like you need to be bringing in new and younger people but like the incumbents use the jar they weapon weaponize the jargon. Like I would be in like meetings trying to like learn how an MGA like set up its business. And again, like, yeah, I'm using, I'm taking their time. Like I understand it and that type of thing, but they would like ask me trick questions just by like using like, you know, esoteric insurance concepts. And I don't know if they're not being malicious,

right. But it's just like, they're just testing your knowledge. And obviously, obviously I failed. And, and so it's like, you just got to keep banging your head against the wall to like, get the jargon out. And I don't want to like, accuse the industry of like, I don't think this is some like cabal, right. But I'm sure you've seen this, right. There's so much terminology and insurance. Like, I'm guessing you've come across it too. Yeah. Yeah. Yeah. I was trial by fire that you most likely put through. Um, and you know, it is, it's, um, you know, I, I, uh, I, I tell this story a lot on the show, but I think it's very important, especially when we're having discussions like this. Do you know Sheffy Benhutta from Carverger? Are you familiar with her? Know of.

Do not know personally. Yeah. So Sheffy was on the show. She was probably six months ago now. And I'm a huge fan of hers and have a lot of respect for her viewpoint and we were having discussion around um how insurance in many ways is still done uh in a dark room you know in the back of a dark room over a glass of scotch or whiskey or whatever bourbon depending on where you're from how sophisticated you want to be how big a premium the policy is. Yeah. And she said, her comment was,

I hate that insurance, that the industry is still run that way. And, you know, I pushed back on her and said, you know, I, I hate that oftentimes that I think too often that table is just two fat old white guys. And that part bothers me. But the fact that this industry still runs in some modicum of the old school concept of trust and loyalty to a certain extent, although that's kind of being torn down a little bit. And I think is a good thing, right? Like they're testing you because they want to make sure you're going to be around like this industry, I think more than any other still values. Are you going to be here? Like things are going to go wrong, right? They're going to, we're going to have a hurricane. Shit's going to get super hectic. There's going to be money flying all over the

place. And I need to make sure that you're still going to be here when that happens. And like that testing and prodding and like backroom kind of mafia style relationships. You know, again, I'm, I'm anti any kind of like, you know, someone's not allowed in that room. But I do think that the level, the testing and the requirements and like the prodding and the, you know, kind of punching bag at the at the carny fair kind of test your strength kind of thing. I do think that that's I don't know. I've come to value that I've been in the industry for 16 years now, and I've come to value that aspect of it. I think you're right. I mean, like particularly an agency, a brokerage, a broker, whatever role they're playing, like they're selling trust to the client. And and so and like if you decompose a carrier into like it's absolute like atomic entities it's like price risk underwrite risk take risk and pay claims like build a brand that has the trusting ability to pay claims and so

i think that that and i've seen that too like going back to your question around like what did i have to figure out um this is an industry where you have to like it's capital intensive because to point, you have to prove that you're going to be around. And that's not even as like creating a carrier, right? Like there's these companies, InsurTechs that are on like multi-year long sagas to create carriers. Some are now sort of achieving that. But even for us, it's purely just a distribution platform, we would be trying to work with underwriters at carriers where their boss's boss had already said, I want to digitize this product with a new entrant. And they'd be like, yeah, but you got to show me how the numbers work. Like you can't just disappear in 18 months. And so like, cause it's just, it's, it's too risky for us to put our product onto this and then not understand how it's going to play out. And so we definitely, um, had to figure out how to get around that and, and sort of prove that we weren't, you know, just a bunch of people in a basement basically. Yeah. How did you do that? Um, we, uh, I think ultimately what did it is we uh raised venture capital and including

included in that fundraising round was a few carriers in the sort of ens market or had ens units and so that uh um was important because it was like very top-down buy-in from them and effectively de-risked the supply side of our business. Yeah. Substantively because we had this executive buy-in on putting products or giving capacity to Pathpoint to sort of digitize the wholesale distribution platform. Yeah.

And so that's like an expensive way to deal with it, you know, like, but it's worked. And I think other insurgencies have obviously done this. This is not, you know, a novel idea. I think a lot to like, I don't know HIPPO personally, but I think HIPPO has also done this on the demand side, right? Like they've taken strategic capital from distribution partners, insurance entities, and non-insurance entities. And I think that's also really interesting as a sort of weapon to prove like legitimacy and get sort of buy-in. It's again, very expensive, but seems to work.

The other thing that HIPPO did that was very smart is right from the get-go, they were very accommodating to the independent agency force. Yes. And that, you know, I think we're, I think the day is gone where, you know, there's still some curmudgeon legacy agents that if you have a direct channel, they, you know, won't write with you or whatever. I, you know, it is naive to think that travelers Hartford Liberty, you know, all these big guys that we, you know, that everyone writes with, they all have their own direct channel. So I, you know, I think it's, I think it's a little, you know, talking out of both sides of your mouth to, to, to then knock someone like Hippo.

But from my perspective, I think what they did right is right from the get-go, they were very amicable to, to the independent agency for us. You know, they went through, they were also going direct, which, which, but they were upfront about it. They were clear about it. And they didn't tailor their product direct. They actually tailored the product more for independent agents and just had a direct channel. And that, to me, I think opens a lot of doors, even if the independent channel isn't a huge part of your business. What it does is it says, I have respect for where this industry came from,

and I'm willing to play that game. And obviously I'm going to do other things too, but I'm going to make sure you guys are taken care of. It's kind of like, you're going to the godfather and peeling off his portion of whatever you just acquired, you can say. It's kind of like, here you go, independents. If you want this, you can have it. Here you go. I'm going to make sure you're taken care of. And then I'm going to do these other things over here, but I'm going to make sure that you have, independents. If you want this, you can have it. Here you go. I'm going to make sure you're taken care of. And then I'm going to do these other things over here, but I'm going to make sure that you have access to this. And that just, to me, that brought down so many barriers to them because now people are interested in it. They're like, is this going to be a good product?

And truthfully, there are places where hippos pricing is great. There are other places where their pricing is atrocious, but that's every carrier and everyone's accepting of that because they know that's how the game works because they kind of were upfront about engaging everyone. So I thought that was, that's another way to kind of indoctrinate yourself with lemonade being the polar opposite case study on just, just creating absolute hate fire and roadblocks everywhere you go to distribution because of the way that you handle yourself, you know, and the things you say in the marketplace. Like, I think about a company like Lemonade and, you know, obviously their founders and early employees got paid, right? Absolutely paid. They're all making money. But when you think

about the legacy of that company, it's kind of like whatever. It's like a it's kind of like a dry fart. You know what I mean? Who cares? They had a big, you know, they just they're non, you know, an unprofitable IPO business that isn't really a good investment, but makes splashes every once in a while with a headline. And and that's fine. You know, good for them. But I felt like they missed the ultimate opportunity if they had taken the hippo path

embraced some of the legacy market opened up some of their tools to them still done all the crazy shit that they did direct you know and that's fine um but just been a little more friendly to the industry man i think they i think their legacy could be completely different personally, but. Yeah. I, you know, I don't know Lemonade too well. Obviously they've built a huge business and, and but to back to the independence thing, like one thing I really liked about Pathpoint and where we were able to sort of figure out our differentiators is like, we didn't have to deal with this notion of do we go direct or do we go

through agents? Like the problem we're solving is that there are so many independent agents and they're so frustrated with wholesale insurance. And so we just back out from that and we don't have to deal with any of this like, oh, when are you going to go direct? Like, like that's not that's not our business model at all. And where we sit in the market, because there's a whole other insurance market that has to be intermediated by a whole other type of intermediary and so on and so on, like, we just can really back out from what the independents in particular need. I mean, we don't work with an agency. You know, we have a couple offices at large brokerages that sort of

function like independents, very sort of, you know of fiefdoms and sort of independent in the nature of they operate. But we kind of are bread and butter is working with those smaller, more independent agencies because they just it just sucks to get like a four thousand dollar E&S policy through through typical channels in many cases. Yeah. So when you first started examining this, what was one of the most glaring difficulties when you're doing that? You know, you said you did 120 or 150 interviews, whatever it was, and you're starting to, you know, you got a page full of notes,

you know, this sucks, this is tough, this takes too long, this is frustrating. When you started to like kind of compile those, what was one of the first and most glaring issues that, that you knew you'd have to address either immediately or at some point, um, in putting Pathpoint together? Um, I think, uh, so like the, taking a couple steps back like the the we can we can make this process more efficient if we get the data about the applicant or or the policy or whatever part of the process the coverage is in get it out of a document out of a spreadsheet ideally into a database and that

sounds like really simple, but like is profoundly difficult, because it's either like a deeply technical problem, or it's like a really complicated user interface product problem where you're asking someone to key data into a web form or something like that, right, which is, is asking them to do work, so you better be delivering value on them. And when we were first researching this, like we could not figure out, and we, to this day, I don't know what it is. We could not figure out an incentive structure for wholesale brokers to take on that work, to get it out of spreadsheets and SOVs and accords and into software or a digital database. And so that's kind of in many ways why we then took our research to learning what the agency perspective was on accessing the NS market. And there's definitely a meme, if you will, in InsureTech of like portal fatigue, right?

Like, oh, more portals. Well, like go to an independent agent. Like they use portals all day to place all their business and the successful ones do it. And so I think like there's some value in being able to digitally quote business. And so that the value prop of like, okay, if we can work with the carriers to automate the underwriting and quoting of this coverage, ENS coverage, right? True, non-admitted coverage and give that an interface to agents. Those incentives work basically. The CSRs or the AMs who are just following up on the email for like the 20th time to be like, hey, can you quote?

Like, they're like, wait, hold on a second. In like four minutes, I can at least get some sense of if this is going to quote or not, like, boom, gladly, they'll do that basically. And so figuring out that structure, I'm sure to you, you're like, yeah, if you'd asked me when you were starting, I could have told you that. But, but it told you that. But it took us a little while, if that makes sense. Yeah, no, I get that. I mean, it's one of the reasons that I was searching and ultimately found you guys. And in full disclosure to everyone listening, we write business through Pathpoint and quote it all the time. And the whole thing is agents have stayed away from E and quote it all the time. And, you know, the whole thing is,

agents have stayed away from ENS for a long time. You know, if you're coastal, you know, I got some buddies in New Orleans and Alabama, and they deal with ENS every day. But for a lot of other agents, you know, ENS is something that they really don't want to work with. Yeah, it comes in and yeah, they deal with it that they really don't want to work with. Yeah, it comes in and yeah, they deal with it if they have to, or if it's a client they really want to write, but they try to avoid it at all costs. And, you know, I've always struggled with that because, you know, the way I think about business in general is what is the shitty parts that no one wants to do? That's where the opportunity is, know like there's a reason why you know if i look at so we do we do we're small business we write in small

business right and i look at a lot of like the companies that have just been funded and guys just like it's like they're copying each other verbatim right like if you're a consultant great if you're a startup awesome if you're main street a startup, awesome. If you're main street, great. It's like, okay, so you've taken like the three or four easiest classes to business, easiest classes to write in the world. And now you're super slick at that. Like, congrats, you know, where's the hard stuff? Like that's the easy part. Like let's talk about the hard stuff. And that's, you know, that's why, you know, when we, you know, I made this, our team, we did a lot of talking we have this no cost this is gonna be no customer gets left behind we're gonna we're gonna find a way

well if we got to do accords and handwritten affidavit c's and all this other crap like that's gonna destroy us and then that's when a google search brought me to you guys or no actually it was uh it was greg park Greg Parker, Greg Parker reached out to me. And then I Google searched and I was like, this looks, this looks great. And, and then that's how, obviously how we got hooked up and we started the relationship, but it, to me, this is a problem that had to be solved. Like it just had to be solved. What I didn't know.

And this is what I'm really interested in. This is all this big dong diatribe doesn't have a question is what I, um, what was it like getting, you know, cause you think like Hartford can return a quote that makes sense, right? You're like, you know, their main street, you know, that kind of stuff that makes sense that they could return a quote in real time and that you might be able to compare it against like, like a tarmaca kind of thing or whatever. But the idea that in the ENS market, you can do that because I think a lot of people still think of it as like hand hand underwriting, you know,

someone's got an abacus and one of those little wheel things that no one actually knows how to use. And they're still like coming up with the rates that way, you know how difficult was it, or were there products in the market already to, to get ENS carriers that could return digital quotes that could do that in that format and had that kind of setup? That's an interesting question. So I think when we started first working on Outline, I would guess that a lot of people were like, there's not enough digital product out there. And when I say digital product, I just mean accessible through an API, at least quoting, maybe rating sort of thing.

Obviously, binding and issuance is great too. But I'm kind of in the trenches of insurance over here. So I'll take what I can get. And certainly the rate at which APIs have been leveraged as distribution interfaces in ENS has accelerated over the time. Like we have, we used to have to, you know, turn the backpack upside down and shake it out to find carriers that had APIs. Now we have a list of people that like, we don't, like we're not staffed to actually bring on board because a backlog. Yeah. And and so, you know, like that's a macro thing, like it's just sort of changed. But I think our. I think the thing we got lucky with, like whether this is insight or luck, like you tell me, but we do a lot of small commercial E&S because it's where the pain is the worst, right?

Like it takes so much time to do a small policy. Everyone's losing money. To your point about it, like agents not wanting to do this, like the best analogy I heard from an advisor of ours is that small commercial ENS or even ENS at large is like plaque. Like just by eating, you get plaque, right? Some of your clients, for whatever reason, one of the things they need is going to have to go to the ENS market. It builds up over time. You got to go to the dentist to get the plaque off. You don't really like, no one likes going to the dentist, but you still have to do it because you just want to keep

your teeth. You want to keep eating. Basically you want to keep servicing your clients. And so completely agree with you that this is not something agents want to do. And the point being, as we realized in trying to solve this, that the binding authority segment of the market, even if there weren't APIs already deployed, the nice thing about the binding authority area where you're outsourcing underwriting to an intermediary, right? You have actually built the algorithms for at least the underwriting piece of it. Yes, they're in a 350 page PDF called underwriting guidelines, but those are algorithms and algorithms you can put in computers. Maybe 25% of them are referrals, right? Okay. But that leaves 75% to either immediately decline or immediately say,

we will quote this. Then you just need the pricing. The pricing, that is a much shorter putt for a lot of these carriers to get pricing at an API, basically, particularly for a specific product and easier said than done. I know how complicated these things are, but the thing we were able to leverage is that we didn't actually have to convince them to automate underwriting because they had incidentally already done it by writing these binding authority guidelines. They wouldn't tell you they automated it. They'd be like, oh, we rely on the MGA's underwriting expertise. Well, that's true if it's like an MGA that does massive parking garages or financial lines, but for artisan contractors, it's just rules-based, right? And so we just take the PDF,

put, turn it into software and then give, give the agent interface to run through those rules in an efficient manner. Like dynamic forms only ask what we need to run the logic tree. And that gave us, and again, we're not the only people that do this, like, you know, RT connector, Amwins, they've all automated sort of some of their binding operations and some of their products too. So nothing, you know, that we've only discovered here, but that did give us a leg up in that you don't actually need the full, fully automated API the way you might think of as like, okay, a Hartford BOP. I need to quote it. I need to bind it. I need to issue it.

And I need to do servicing and endorsing and all that. You can, because of the way the binding authority contracts and structure works, like we can kind of cobble together software plus services. And, you know, we have both of those capabilities to give a fully digital experience to the end user, which is typically a CSR at an independent agency. What's up guys. Sorry to take you away from the episode, but as you know, we do not run ads on this show. And in exchange for that, I need your help. If you're loving this episode, if you enjoy this podcast, whether you're watching on YouTube or you're listening on your favorite podcast platform, I would love for you to subscribe, share, comment. If you're on YouTube, leave a rating review. If you're on Spotify or Apple iTunes, et cetera, this helps the show grow. It helps me bring more guests in. We have a tremendous lineup of

people coming in, men and women who've done incredible things, sharing their stories around peak performance, leadership, growth, sales, the things that are going to help you grow as a person and grow your business. But they all check out comments, ratings, reviews. They check out all this information before they come on. So as I reach out to more and more people and want to bring them in and share their stories with you, I need your help. Share the show, subscribe if you're not subscribed. And I'd love for you to leave a comment about the show because I read all the comments. Or if you're on Apple or Spotify, leave a rating review of this show. I love you for listening to this show and I hope you enjoy it

listening as much as I do creating the show for you. All right, I'm out of here. Peace. Let's get back to the episode. Yeah. So, so I, you know, this to me, these are the type of, of, of leaps that I feel like are underestimated in our industry. You know, I spend a lot of time, we're a fully digital agency. I have, I have employees, you know, in other countries and other, in other states that seem like other countries. And depending on how, how difficult it is to get a tax ID in that state. You know, so it's like, you know, it, to me, I'm constantly thinking about every minute that my people that is unnecessary for my people to take, right? Like, I want to make the things that are unnecessarily to take unnecessary amounts of time to be reduced to zero as much as possible, aspirationallyally because that'll never happen but but if we're always thinking about that then you know i've i've had conversations because um you know you know i've i've looked at amlins access rt connector we do we do do some stuff there because you guys have different appetites and um and then we use we use you guys so really really i don't we

don't really use amlins but that's nothing against them we just don't um i kind of ping pong between you guys and and uh an rt connector based on who you know who has the appetite for the thing and um and you know what i've what i've i've seen is we now can write ens business as fast as we can write a main street bop. And to me, you know, when I get a contractor with a loss or that also does excavation or a carpenter that also gets on roofs, it used to be like, Oh God, no, no, throw it on the floor. We don't want that. You know, we're not going to waste our time with that. And now I'm like, are you freaking kidding me? Throw it in path point. We'll have a, we'll have a, now granted, is it going to be as, as you know, the E&S rate

because they're getting on roofs versus standard contractor. They're going to pay more than their buddy who also owns a pickup truck and drives around town because they get on roofs, but they're going to have insurance. And it's only going to take us five minutes, just like it would take us five minutes to quote that, that standard carpenter. And those kinds of leaps in time where my counterpart down the street is, is that's that same account has taken them two hours before they put together a cord forms and supplementals and all this crap. And I've just gone into your platform, quoted it,

gotten a rate and figured out, yeah, maybe do I still have to eventually do in a course something, you know, maybe, maybe still eventually have to fill out a supplemental, but I now have a rate. That guy has said, I accept it. And we're moving on to the next stages before my counterpart is even considered putting the quote in. And that to me is such a huge win for independent agents. And that, you know, I feel like is lost on a lot of people they're just set up with their with whoever their ens person is whoever their wholesaler is i like my underwriter i'm like your underwriter could be the the the you know the the best person in the history of the world they could send you tickets well if my underwriter sent me tickets to the

bills games i probably would do more business with them. But my point being like the time you can't get back that time. If it takes three hours to put a submission together versus 20 minutes to fill out a form and answer, answer a couple of questions and maybe one follow-up email. And you got a quote like that to me, you can't get that time back. And that is the most valuable piece of this is, is how much time are you getting back into your day? Because now instead of doing one quote, you're able to do four quotes. And that just amplifies your business at a level that I think people aren't really considering today. And that's really cool to hear. And because like, if you're positioning yourself,

you're outselling or just meeting people and you're like, I am an expert in small business commercial, like the painter that also goes out on the roof or the carpenter also goes, they don right now. And, and they're going to come to you and you, you're going to be like, ah, crap. Like, and now, you know, it should, it ought to be as easy as the other stuff, certainly, um, particularly for these, for these smaller accounts. I'm curious, like contractors is our, our largest segment, uh, uh, with, with sort of lessers lesser's risk as the second right now. Pretty 1A, 1B. I'm curious, like from your perspective, like the carpenter on the roof, that's like a canonical example. Like we talk about that internally too. The handyman does a little bit of other stuff.

The gardener that does snow plowing in the winter, right? Like all the classics, like what other stuff gets to the cutting room floor that you wish didn't basically. They dig tree work. You know, it's really heights and digging are the big ones. And also multi multi-discipline, you know? So I do plumbing and I do electrical. Well, you're going to get, you're going to get bumped out of a lot of standard markets for doing both. Now, if you're

a big shop, you're a 10 person shop and you do both and you're like, I have specialists. Well, you know, that might be all, but it's like a smaller shop doing multiple things that can get bumped out. Um, any, you know, people who work on vehicles you know uh vehicle stuff um you know the multiple the multiple classifications thing took us a while yeah i think we're still working on adding um you know like we think pretty granularly about our appetite and like making sure that we are uh not just adding class codes where we're just adding some raw number of class codes that we quote, but we're adding class codes that we know are table stakes plus the ones that are inherently going to lead to it going to the ENS because those correlate with each other, right? Exactly what

you're saying. They get used together on the same quote. And so that took us a while to really figure out both at the UI level, like how do we make it easy to do multiple classification, but also at the integration with the carrier product level, because that's to your point that they're either trying to package like property in GL and some feature of the property in the GL is sending it to ENS, or they're trying to do the GL and some feature of the operations, some class code is sending it to the ENS market. And so you have to really solve for those things, both at a, what appetite do you offer?

And also how do you make it easy to do it, which is not easy. I just had a really good one that was janitorial services where they had a proprietary chemical mix to clean gym floors. So they had a proprietary chemical mix that they had created that allowed

them to clean a gym floor to get that nice crisp grippy feel that you want if you're playing on a gym but didn't erode the um layer of and whatever the the epoxy or whatever that you put down on the top of the floor it didn't erode that, but it got it clean. Right. So they had figured out what this chemical. Okay. So the issue was that one that they're mixing, they have their own chemical mix. That was a big, you know, it's kind of a no, no immediately. But the second issue was they have to purchase this chemical in bulk.

So they can't just like get a little bit of it. They have to purchase basically 30 to $50,000 worth of the chemical at a time, store it. And then over time, you know, they may only do three or four orders a year, but they would have to then mix it out of that. And they had this little dilution process they did. And I mean, basically everything I just said, a standard underwriter is like their hair is starting to fall out. So that's a no doubter risk that, you know, you that that's not going to be kicked out. And I think what's interesting is, and you know, one of the things that we always have to and I'm sure you've heard this from a

lot of your advisors and people that you've interviewed, is while and this, again, is an interesting part about the insurance industry. And one of the things that I think makes it unique is while, you know, we all, why I firmly believe that we have to be leaning into as hard as we can, making the process easier and less questions and all this at the same time, we are, we are literally managing the future of these businesses. Like if we make a mistake because something is, because we wanted something to be easy and we skip a step, we could really hose people up. So you were talking about the multi, um, uh, multi-class code, right? So I had a, uh, another guy come in and he, um, did, uh, uh, sports things. Like he would set up like, um, like backyard sports. He'd build like a little

basketball court in the backyard or like a tennis court in your backyard. Like, yeah, he did like, like any kind of like sports feature in a park or something. That's what he did. And he put up jungle gyms or whatever. And like, that's, that's one, essentially one class code. But he also rented some of that equipment, like portable portable hoops like other things that could be portable he would rent them to people who wanted to have like a basketball hoop at an event he would rent them the hoop well what are we gonna it's the same company you can't you're not necessarily that kicks you out of all the standard markets because now you're renting stuff yeah and you know you look at that and you say to yourself, like, okay, he didn't have, and this is how I

got the account, was he didn't have the rental piece on his policy. What the previous agent had said was, oh, if the renting is incidental, then it should be covered. Just if, right there, now we're in trouble to begin with, if it's incidental. So who's determining whether it's incidental or not? And what does that mean? And should be covered is like, you know, you should have like every warning sign off this because this is the guy telling me. So I said, well, I don't know, man, I'll be honest with you. If I, if, if someone gets seriously injured on a hoop that you rented somebody and I see on my policy that you don't have rental coverage, I'm not going to pay that. Why would I pay that? That's crazy. And he's like,

doesn't sound too incidental. Yeah. His exact response was, oh shit, man. I'm in trouble. I, well, I said, not really, you know, and then whatever. So, but it's like those kinds of little things are to me what make, um, ENS interesting. And if you can make it so it doesn't suck the interesting part and the not sucking part come together. And I think that's where the magic happens. Yeah. Yeah. The one carrier we started working with very early on, very, very early on before we knew we even had a bit incorporated was we were talking to them about ENS and like the types of risks that go to ENS. And, you know, at that point, you know, you Google ENS and it's like Marine and mud maps and

shared and layered business and Lloyd's of London. And so, you know, it's like residual aircraft insurance and all that type of stuff. And this carrier is like, forget the aircrafts. Like it's about abattoirs. And of course they use the sophisticated word for slaughterhouse. And they're just like, it's just about the small businesses out there that have something weird about them. And that's who needs this type of product. And if you can figure that out, like you'll make a lot of people pretty happy. I think we don't have appetite for avatars yet. So I'm still trying to figure that out. Yeah. You know, it's it is ENS is such a,S is such a rabbit hole. And, you know, I'd say when I started my career, I was scared of it like anybody else, right?

The policies look different. You got premium financing involved, which is like why, you know, that's different than how you're kind of learning. So everything about it is different and a little, a little just weird, right? You're, you know, it makes sense. You have them sign the Hartford quote and you take their credit card and you stick it in Hartford's portal

and boom, they're all set. They're good, right? That's easy. But then you get this whole other side of it and it's a little nervous. But once you start to dig into it and really get a feel for what it is and what it can be,

again, I would not have wanted it to be part of Rogue if I hadn't started to see what was possible. And with some of the stuff that you guys are doing, I look at an ENS policy today the way I look at a Main Street policy. I'm just like, what's the difference? If I can quote it through you guys or I can quote it through Tarmaca, what's the difference? I mean, seriously. To me, what is the actual difference? Like maybe we got to notate a few more things. Maybe we have to, you know, um, think a little bit about premium finance, but you know, I don't know. Uh, we use ascend, which has made finance so easy. Um, and, uh,

the, uh, that's great to hear. I, I, uh, I've met Andrew and Praveen and they, it seems like they're really onto something with Ascend. So you like it? And they've been awesome to us. You know, I don't know if we're, I know we're way early and we're probably one of their smaller agents, although we do, I mean, we do a decent amount of ENS for our size. Um, you know, I've been trying to give them a lot of feedback and they've been awesome about, about taking that and helping us. And I do think it does feel to me like they're on the right path with, with payments. I mean, I think, you know, I've been saying this for a few years now, there is such an enormous opportunity in payments in general. Do you prefer that the carrier or the whole, like, do you like direct bill as an agent or do you want to be able to offer sort of invisible? My ultimate goal is to be a hundred

percent agency bill. Now today that would be a nightmare if you had to run your agency bill primarily through agency management system, because most agency management systems are terrible. That being said, I think there is an opportunity and whether Ascend is the one that capitalizes on this opportunity or someone else, I think they're on the right path, you know, but I don't necessarily have a dog in the fight other than I like them. You know, there is an opportunity to create a portal where, and any VCs that are listening to this that want to fund this idea, I'm a hundred percent open to working with you. You know, that this, I don't think a lot of VCs listen to our show, but, you know, I think there is an opportunity to create a single point payment structure, portal, right?

So that you as an agency can control the entire experience, whether it's, you know, whether you're sending it to Hartford Travelers Guard employers, or it's going to E&S wholesaler, you know, or E&S broker, wholesaler, bonding company. What, you know, what I looked at our so we uh use a tool called agency zoom and they recently launched this um a part of their tool called uh the the service center and part of their service center is it allows you to track both time touches whatever for certain tasks and when i look at the amount of time that billing takes,

it makes me want to gag. Like it's, it's a choke point in, in, in our agency because Chubb doesn't, you know, we'll take ACH and credit card and they have five payment options, but they'll, they mail you like physical mail, you cancellations and you're like, what? And then Hartford won't take credit card for first year payments. They'll only take it if you pay in full, which is bananas. I mean, I don't even understand the thought process behind that, but they won't. So how do you figure that out? So what do you do if you've forgotten that and taken the credit card from the person, but they want to make payments. Now you need to go back and get their check. I mean, dude, this is like all day long.

You need to have a PhD and understanding all the different payment process for all these carriers. And they all think that their way of doing payments is right. So my thought is, and where I ultimately want to get to, is we take all payments, all payments through one portal, right? Payments come in. We give people

the option to either finance those payments or pay in full or finance them quarterly, whatever, you know, two or three payment options, but financed payments if it's not paying full. And then we just agency bill pay every carrier in full on every policy. Now, here's what that solves. It solves, one, I'm only sending my customers to one place all the time. Two, I now have the ability to know and control messaging. Hey, you're 30 days out from your payment. Hey, you're, you know, if they're quarterly.

Hey, you're seven days out from your payment. Just let you know you're going to, a notice here to make your payment or your recurring payment or whatever. Right. And then if they don't pay, hey, your customer is three days late on their payment. You may want to ping them because what happens now is I don't get a, a non-payment email for seven, sometimes a month later. I mean, I got carriers that still physically mail me cancel for non-pays in the mail. I mean, that is just stupid. And so, so this all being the case, you now control that place. I don't know. I'm solving a problem that has nothing to do with your business. I'm just talking. No, it actually, it actually has quite a lot to do with it. And not a lot.

I mean, we just see this. So we agency bill everything, but our interface is just email to the agents, right? Because we have a payments portal, ACH. You can mail us a check. We'd prefer you didn't. People still do. But we have to send invoices to all our agents. And then sometimes they forward those to the clients

and the clients just click the link and pay it. Sometimes they have to go to another team within their agency. And so it's just not, it's all this spaghetti, right? And there's no structured way for us to make it, like we can automate our follow-ups on did you pay or did you not, right? But there's no way for us to actually get visibility into making the process sort of easier. And like that you ask most agencies about

this, like, Oh, integrate with our agency management system. Well, like, first of all, like, it's going to take me 18 months to convince Vertifor to do anything with me. So, so like see you in 2023, unfortunately, and same for applied. And, and so like, it's kind of frustrating to, I'm kind of with you. Like there's, there's something missing in this part of the back office that, that probably could be a lot easier if it was connected, the value chain was connected through software. Maybe it might be too, like I may be romanticizing it, but I definitely can get the pain. Here's the beauty of it. If I'm, if I'm agency billing everything and paying the, um, uh, paying all my carriers net, I have day one, a hundred percent commission day one in my

agency all the time. So now, you know, time value of money, I'm not getting a year from now, you know, $33 from some stupid policy because they made their payment that month. I've gotten the full commission up front day one. The carrier is paid net in full. So they're happy, right? They're getting their money up front and the customer doesn't know the difference. They're paying a small finance charge to, and to make payments who loses. And we have all the, all the benefit of knowing, I don't have to know how Chubb wants to be paid and know how to navigate their system versus Liberty versus employers versus insert all these different carriers and how they want to be paid. It's all done in one platform.

That to me is a game changing concept. And if I wasn't running an agency right now and was broke because of that idea, I would, this is what I would be doing. Cause I think this is, this is like the next problem that has to be solved in our industry is this problem. It's just, it is, you know, you right now, you can now get multiple commercial lines, quotes, multiple personal lines, quotes, multiple personal lines, quotes, propeller bonds has completely changed the game for how to do bonding. You know, you guys have changed the game for how to get a quote for ENS. Yeah, it still takes us an ungodly amount of time to make payments. It just doesn't make any sense. I can buy crypto from 17 different apps

on my phone with a button click. but it takes me 40 minutes to figure out how to pay my insurance premium. It's like, yeah. Yeah. Uh, it's, uh, uh, it's so true. And the, uh, are, so again, like, I think this is structural, the wholesale, like are the carriers we work with don't have they don't have direct payment relationships with clients or agents right yeah or they have obviously with their wholesale agents but so it's like kind of that opportunity for us like why we think about this because structurally the carriers ens carriers like don't want to deal with this right they're like they want to run we want to want a leaner carrier specialty focused on specific strategies and specialty, and we'll rely on the wholesaler to deal with the process.

And that's sort of how it's been traditionally. And so there's a lot of opportunity for us to actually run kind of in this area. And if you look at our engineering team is approaching 20 people right now and i would guess in 2022 over 50 of their time will be spent on problems around like process and back office and i don't use back office in a pejorative way like this is like um like we still like there's so many subjectivities to bind or to issue an ens right inspections would be like a simple example but affidavits you know other things and those are all those vary by state so like automating those documents is a quite an arduous process to like go through and just riffing on what you're saying about payments is i suspect we'll probably be doing a lot of thinking on the, whether you call it invoicing, payments,

collections, whatever, because there's this gap where you can sort of just reduce friction by deploying some software into it. And like, you know, maybe you pay when you bind on PathQuite or something. I'm not sure how it'll manifest, but we kind of plan. We think that as much of our value prop is about access, like every wholesaler can offer access. We have to make it easier across the whole life cycle to actually win the business. Like we're just an upstart, right? We can't blanket the market with the submission. We just don't have that capability.

So it has to be easier for us to continue to differentiate. Well, dude, I want to be respectful of your time. This has been tremendous. I appreciate you spending this time with us talking about what you're up to. I hope everyone listening will spend, take two seconds, go to, it's pathpoint.com. I just Google Pathpoint and you'll see it come up.

Super easy to get connected, get signed in, get appointed. And man, you know, for contractors, for LROs, you're going to get quotes or at least know whether you have the opportunity to get a quote in seconds or, you know, minutes, if not seconds. And, you know, it's really changing the game for us. I mean, we've rebuilt some workflows in our agency that have really helped us save time and effort. And it's opening up a whole market to us because of that time that, you know, that we kind of avoided, that we all avoided.

You know, we all kind of avoided the ENS market on purpose. So I'm glad you guys are out there. I'm glad you're pushing the envelope. I'm glad we had a chance to connect and just appreciate it. Yeah, I appreciate the conversation. And please reach out whenever you have feedback or stuff we can help you with.

Yeah. Can people get at you on the LinkedIn or what's your, what's your preferred LinkedIn works? Or my email is my first initial and my last name at pathpoint.com. So a bargain of pathpoint.com. Awesome, man. Appreciate it. Cool. Thanks so much.

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