RHS 125 - Kevin Abramson on How Cover Whale is Making a Splash in the Insurance Industry

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Speaker 5 In a crude laboratory in the basement of his home.

Speaker 6 Hello, everyone, and welcome back to the show. Today, we have an absolutely tremendous, tremendous episode for you with Kevin Abramson, the president of Cover Whale.

Speaker 6 Cover Whale is doing some really innovative things right now in the commercial auto space, but as you'll hear from Kevin, they have plans to expand outside of commercial auto.

Speaker 6 I think Cover Whale is one of those companies that we're going to hear more from.

Speaker 6 I think it's early days for them, although they're already doing tremendous things, so I certainly don't want to downplay the success they've already had and they have.

Speaker 6 But I do,

Speaker 6 it feels to me like there's a, they're there. They got a lot of good people in place.

Speaker 6 And it seems like one of those kind of more insurtech oriented companies that is going to be a player as we move into the future here over the next five to 10 years.

Speaker 6 And that's exciting because I think more fresh blood, more fresh ideas.

Speaker 6 just makes the whole marketplace more dynamic and it pushes legacy players to innovate because, you know we love our legacy companies but you know we need them to innovate too and and companies like cover whale and others push them to do so this is an awesome episode you're gonna love this kevin's a good guy and i was excited we've been trying to hook up for a while and glad we finally did

Speaker 6 With that said, I want to give a big shout out to today's sponsor, and that is Code Reinsurance, another InsurTech-oriented company in our space doing absolutely tremendous things, hitting the small business world.

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Speaker 6 very happy to have Donna as a sponsor because we use Donna here at Rogue. So that's cool.
All right, guys, let's get on to Kevin Abramson. You're going to love this episode.
Here we go.

Speaker 5 Hi, how are you?

Speaker 10 Good, man. What's going on?

Speaker 5 Sorry about the connection.

Speaker 10 Yeah, I don't know.

Speaker 10 Got to love the Zoom, you know?

Speaker 5 Yeah, exactly.

Speaker 5 How are you?

Speaker 10 I'm good, dude. Oh, I appreciate appreciate you.
I appreciate you coming on the show.

Speaker 5 Yeah, now I'm looking forward to it. Yeah, excited.
Excited for the little chat.

Speaker 10 Yeah. So,

Speaker 10 so

Speaker 10 let's get right into it, man. Like,

Speaker 10 you know, I feel like a lot of people,

Speaker 10 people who are in

Speaker 10 kind of the, I don't want to, I hate the word insure tech necessarily, but like that are looking into, you know, new companies that are coming up, doing interesting things, or maybe have heard of what you guys are doing, but I'm sure there's a lot of listeners in the show that just aren't even aware of what you guys are up to what you're doing so maybe we just start with uh start with the basics like give us the rundown on you know what is cover whale what do you what problem you guys trying to solve

Speaker 5 i love it um that's a softball of a question so i'd like to start uh but something i could probably talk for an hour about um yeah i mean at the core i mean cover whale is a tech company like we are focused on changing the landscape of insurance um you know broad kind of sweeping statement there but it's pretty plain and simple You know, when I say insurance, I don't just mean like a

Speaker 5 sub-segment of it.

Speaker 5 You know, focused on small fleet right now, but much bigger ambitions. So, and those don't just stop at commercial auto.
I think it's the entire industry as a whole.

Speaker 5 You know, we are bringing a proprietary tech-enabled platform that really, I think, at the core leverages.

Speaker 5 And I'd say more importantly, digests massive amounts of real-time data to, you know, hopefully more accurately price risk.

Speaker 5 And, you know, know i think in the end for any insured tech or a traditional player it's about pricing right

Speaker 5 and who can do it better who can do it faster who can do it more accurately um

Speaker 5 you know i think you know you've been in this business i mean there's a lot of data out there but you know who can digest it in a way that really makes sense and you know quite frankly i think the industry maybe the traditional players have proven an unwillingness to think outside the box to innovate when it comes to pricing risk.

Speaker 5 And that's where a tech company like ours comes in.

Speaker 5 So, you know, I think focused on small fleet right now, but it really is all about data, it's technology. And it's just the changing way of the approach of how we are kind of looking at the business.

Speaker 10 What was the,

Speaker 7 you know,

Speaker 10 where did you get this from? Like, I mean, I obviously wholeheartedly agree with you.

Speaker 10 You've come on a friendly, you're in the friend zone as far as this disposition goes. But, you know, what was the moment when you said, like, this is not being done right?

Speaker 10 and you know i want to be part of making this change i you know taking on this opportunity like when did that hit you was there a specific moment was it just being part of the industry and seeing things or you know what was kind of the impetus to go we're going to change this cover you know cover whale is going to be the thing this is how we're going to do it

Speaker 5 yeah i mean it's another great question and you know look i guess i would say

Speaker 5 you know, we've got a lot of tech people at our company, you know, but at my core, I'm an insurance person that really loves tech and it's not the other way around.

Speaker 5 You know, I've spent time at various corners of the industry, whether it's on the underwriting side as a broker,

Speaker 5 you know, my former kind of role at Tiger Risk, you know, I came across all insured tech,

Speaker 5 was heavily involved in that aspect of the business. I got to see what people were doing and I had the purview to really kind of understand, you know, who maybe had the right kind of recipe.

Speaker 5 I met the folks at CoverWhale. They were a client of mine before joining.

Speaker 5 So I really really got to know the inner workings of what the platform was, you know, how I think the team was going about their approach.

Speaker 5 And, you know, I think there was just so much opportunity that just, you know, told me, I just, I want to be a part of this.

Speaker 5 So I think it was a case of,

Speaker 5 yeah, I mean, this isn't easy. Like, you know, nobody has figured it out, but.
you know, it's about taking a calculated risk to just say, yeah, this is the right time. This is the right company.

Speaker 5 This is the right space this is the right everything

Speaker 5 and it just felt like um like now's the time and you know i think from a cover well standpoint it's uh you know i think dan abrahamson kind of founder ceo

Speaker 5 did a really good job kind of laying out the vision building that proprietary tech platform to really attack the industry and um you know it's just focused on attracting really talented people and that's what kind of gets me excited it's uh

Speaker 5 It's fun to be at a place where you're building. It's fun to be at a place where you're attacking, you know, kind of the traditional players,

Speaker 5 you know, but it's not easy, right? I mean, it's just, it's not easy. And I think, you know, I've said it to the team on, you know, a consistent basis.

Speaker 5 And I say it to myself probably every day on a daily basis. Startups aren't for everyone.
You know, it's hard. And, you know, I think kind of you've got to be ready for it.

Speaker 5 You know, you've got to mentally, I think, be prepared for it. It's not necessary for everyone.

Speaker 5 And, you know, for me personally, it was just, I'd been in the industry a couple of couple decades and, you know, this is a challenge that I just saw, like, you know, I want to go after it.

Speaker 5 So that was my personal kind of view.

Speaker 10 That's awesome. I, I can, uh,

Speaker 10 I can reiterate your statement that a startup is not for everybody. The emotional roller coaster that you have to deal with on a day-to-day basis.

Speaker 10 You know, and the thing that I have grown, I've always had an appreciation for, but now actually being an entrepreneur,

Speaker 10 I've grown even deeper,

Speaker 10 I guess, appreciation for is that

Speaker 10 I feel like it's easy to snipe, and we've all done it, I've done it, at people who are trying to do something, right?

Speaker 10 It's easy to see what, you know, from the outside and question different decisions, but when the buck stops with you,

Speaker 10 when the decisions you make, I think a lot of people,

Speaker 10 most people are used to the fact that if I make a mistake, the worst thing that happens is like, maybe I get fired. Maybe that's like the absolute worst thing that can happen, right?

Speaker 10 But in most cases, if I make a mistake, my boss will figure it out and I'll get yelled at or I'll get taken off the project, but someone will straighten it out and everything will be okay.

Speaker 10 Man, but when you're at the top in leadership, not just the very tippy top, but when you're in the leadership layer of, in particular,

Speaker 10 a non-established startup, you know, someone someone who like a couple of big contracts go away and things fall apart, or if the tech doesn't work, you know, there's no,

Speaker 10 there is a level of consistent and underlying stress in every decision that most people I feel like who haven't lived that just can't relate to. They just don't understand what that is.

Speaker 10 And when you're able to execute despite that, even if I don't agree with your decisions, I've grown a tremendous amount of respect because it is not easy.

Speaker 5 I couldn't couldn't agree more. I mean, I, you know, I'd like to relate it.
You know, I talk about this with my wife. I mean, I feel like, you know, I am playing like a real life chess match.
Yeah.

Speaker 5 You know, where I'm constantly making calculated decisions where you're trying to connect the dots.

Speaker 5 You're trying to absorb and digest every kind of piece of data from your people, but everything's connected. It's whether it's finance, whether it's tech, whether it's data, telematics, underwriting.

Speaker 5 And then you've got to, in the position you are, you're trying to lead this organization to get it to the next level and the next level after that.

Speaker 5 And it's trying to connect the dots as quickly as possible and absorb it. But yeah, I mean, you got to take risk.

Speaker 5 It's going, you're going to be making those decisions with imperfect data in front of you. And that's the stress.
I mean, there is, you know, we've got a lot of people.

Speaker 5 who have bought into what we're trying to build here, but they've given up pretty cushy jobs. They've kind of taken a shot at kind of like they want to get on the rocket ship.

Speaker 5 And I think that's great. That's the type of people we want.

Speaker 5 But, you know, I don't take that lightly, you know, and I think to your point, it's, you know, that's why I do reiterate to people. It's like, look, this is startups aren't for everyone.

Speaker 5 You know, I couldn't agree more with you of the comment. You know, I think it's at different life cycles.
I've worked at large organizations.

Speaker 5 I mean, I started my career at one of the largest kind of reinsurance companies. I went to a big three reinsurance broker.

Speaker 5 You know, now that I went to a kind of a boutique reinsurance broker with Tiger Risk. And I've saw like, you know, how it works at different organizations at different size.
And,

Speaker 5 you know, I think to your point, though, it's the stress level when you are really early stages

Speaker 5 is just that much higher. There's that much more at risk.
Each decision matters the most, which also is quite frankly, I think think what makes it so rewarding.

Speaker 5 You know, I know I'm going to get a lot wrong. There's probably more days that I make wrong decisions than the days where I make right decisions.

Speaker 5 But as long as you got the North Star in front of you and you know where you want to get to, and you know, I think that's the key. You know, it's clear, though.

Speaker 5 I mean, I think my team would say it and my wife would surely support it. But I mean, I screw a lot of stuff up.

Speaker 5 You know, there's no question. And I think as a management team, we're probably, you know, we're, you know, we fix one thing, we break two things.
But I think that's what's important. You know,

Speaker 5 I think that the path that we've taken at Cover Whale,

Speaker 5 we're not about hype. We're not about talk.
We're about results.

Speaker 5 You know, made a decision to bootstrap this from the early days.

Speaker 5 You know, but we didn't go raise money. like most insurtechs do based on a theory.
You know, we had hypotheses that we tested. We had theories that we wanted to test.
We stressed the system.

Speaker 5 You know, we broke a lot of stuff. We had to get on bended knees to say, I'm sorry to our partners.
We screwed it up. Give us a second chance.

Speaker 5 But that will lay the foundation for us to

Speaker 5 take cover well where we're trying to get to.

Speaker 10 Plus, no one's going to remember any of that shit. Like, that's the

Speaker 10 thing that's.

Speaker 10 Well, no, and

Speaker 10 it's true. Like, you know,

Speaker 10 What is absolutely amazing to me is

Speaker 10 when you read, you can, you can read the every once in a while, you see these stories come up of really successful companies and like

Speaker 10 bad decisions they made, right? Like this product that didn't go anywhere, or this logo change that they didn't like immediately reversed on a year later.

Speaker 10 And you're like, you know, if this article was never written, I wouldn't even remember that that happened, you know, because all I think it takes so much,

Speaker 10 we'll use the word guts to be politically correct, I guess,

Speaker 10 to continue to push forward despite of mistakes.

Speaker 10 And I think that's ultimately what people respect and appreciate and admire is that they kept going, they kept pushing, and you get to a certain place and people kind of forget

Speaker 10 any misstep or most of the missteps that it took to get to that place because what they care about is you now have a product that works for them, that makes their life easier or better or whatever.

Speaker 10 And it's just not, I think it's just not easy to get to that point.

Speaker 10 So to me, I look, you know, in the moment, obviously you sometimes have a hard time like, you know, woo sighing and getting back to that, you know, a little, that Zen moment.

Speaker 10 But you get, if you can just remove yourself, even for a few minutes or a day.

Speaker 10 oftentimes it's like, okay, that's behind us. Next, next problem.
Let's go solve the next one. Okay.
You know, we, you know, keep, keep moving forward.

Speaker 10 So my question for you is, you know, I'm interested, like, like what was one of those things like what what was something that even if it's anecdotal like

Speaker 10 you you you had hypothesis you moved forward it you know and and you solved it like like what was one of those big first challenges that maybe you maybe you didn't see coming and you did overcome like what was one of those first things for you

Speaker 5 yeah you know i would say probably um one of the realizations that i think we've had and the the epiphany you know kind of the i don't know like the moment that it really struck me um was

Speaker 5 we are a tech company, like, that's what we are. At our core, we're a tech company.
Um,

Speaker 5 but there is a human aspect to this business. This is a relationship business, and you can't lose sight of that.

Speaker 5 Um, you know, whether it's your partners, whether it's your carrier partners, whether it's your brokers, your agencies, your reinsurers.

Speaker 5 I mean, this is, you know, to be, to do what we're trying to accomplish,

Speaker 5 you know, it's going to take really strong, long-term, sustainable relationships. And I think, you know, I'm not saying that I ever kind of discounted that,

Speaker 5 but there was a side of me maybe that I put more of the chips and all my chips on the tech side. And, you know, I think we realize that, look, look, you're not going to be successful if you do that.

Speaker 5 You know, maybe you're going to hit the double or the triple. I mean, but that's not what we're going for.

Speaker 5 I mean, we're going for like, you know, bottom of the ninth, grand slam, walk off game seven like yeah yeah and you need you need people you need people that buy into you you know like what you're doing you've got to be honest with them you got to be transparent with them you got to you can't over promise um but i think what i you know what i really love about this industry and the relationships that i've been able to build over my time in it is you know being honest is okay.

Speaker 5 Like, you know,

Speaker 5 there's forgiving, you know, people out there. They just want to like kind of know like what you're trying to achieve and they'll support you in it.

Speaker 5 And I think that was a little bit of getting back to the North Star that I mentioned. Yeah, yeah.
You know, that's it. It's like, you know, tech on its own.

Speaker 5 I think you're going to struggle. But, you know, being like a, you know, tech, tech, tech with knowing that relationships matter and the people side of this business matter,

Speaker 5 I think that's really important.

Speaker 10 So we call it, I completely agree with you in everything you just said. We call it human optimized.
It's one of the core, core things, core aspects of our business is that

Speaker 10 I feel like when I look at the landscape that we're competing against in the digital brokerage business,

Speaker 10 they've all lost sight of the humans, at least most of my competitors, right?

Speaker 10 They're all operating off evaluations based on spreadsheet tech numbers and not on the fact that to retain insurance business, you need humans involved.

Speaker 10 I have not seen a case and I've spent, I'm 16 years in, all of which were spent in the digital, in the brokerage side and the agency side.

Speaker 10 I haven't seen a use case yet where someone could present me with numbers where you can retain beyond the 40s without humans involved. And

Speaker 10 that makes it incredibly more difficult because humans are the hardest part of the business, right? Like the tech, if it were just tech, it would actually be really easy.

Speaker 10 The humans make it very difficult. And

Speaker 10 never losing sight of that, i think

Speaker 10 is a big part of how you of how you find success it doesn't mean you know i think there are many aspects of what we do day to day both on the carrier uh vendor uh uh brokerage side where we need to remove humans from some of these processes that the humans don't actually add value in certain aspects of it i mean that's really what the optimized part of of the human optimized piece is but

Speaker 10 the human part is still has to be there.

Speaker 10 If there's not a phone number that I can call to yell at somebody, or I can't drive to your office and yell at you, you know what I mean?

Speaker 10 Like, if I don't feel comfortable in that, I'm not going to stick around. And

Speaker 10 it's really interesting. I just, you know,

Speaker 10 these are the lessons and some of the core concepts that I feel like are so

Speaker 10 they're almost like the baseline, but they also present a major opportunity because so many of our peers in the industry have forgotten them or chosen to ignore them um because they're just harder to do

Speaker 5 yeah no i mean i agree more with everything you just said there i think the the human aspect it's it's not easy right so to your point um you know like yeah the tech side is like it's something where you know it's unemotional it's factual you can kind of you can kind of run with it but

Speaker 5 you know, I think even just from an internal standpoint, it's understanding that, you know, trying to build a culture is hard, right?

Speaker 5 And making sure that, you know, I think people on the team understand where we're trying to get to.

Speaker 5 You know, I think that's something that we've struggled with. I haven't done a good job of that.
Got to continue to get better at it because I think in my mind, it's so clear. It is so, I can see it.

Speaker 5 I know what we're going for. Like, I know where Cover Whale 2.0 is going.
I know where 3.0 is.

Speaker 5 But I think articulating that and making sure that everyone, you know, no matter what their role is in the organization, truly understands that.

Speaker 5 But yeah, I mean, to your point, I mean, that's something we got to work on. And I think externally as well.

Speaker 10 Why start with small fleet commercial auto?

Speaker 5 You know, in a way,

Speaker 5 no-brainer from the sense of, and sometimes maybe it's a little bit better to be lucky than smart, but you know, it is an area that just needed technology.

Speaker 5 You know, needed technology from the standpoint of, you know, look, small fleet, owner-operated demand, number one, commercial trucking insurance is in high demand.

Speaker 5 That's a trend that's not expected to reduce anytime soon, right?

Speaker 5 Number two, I think this insurance that we are selling, you know, it's a need to have. It's not a like to have.
You know, this is required. It is a key component of a trucker's livelihood.

Speaker 5 right this is their second highest cost side you know behind fuel um

Speaker 5 and i think that adds to maybe the number three, it's complexity, right? Commercial trucking insurance line,

Speaker 5 it's complex. It's not an easy line of business.

Speaker 5 People have gotten it wrong for many decades. And I think that's what makes it attractive, you know.

Speaker 5 And I guess I would just add maybe the fourth kind of item: it's expensive. You know, this is

Speaker 5 insurance can be pretty high. These insurers are paying at times 15,000, 20,000 a truck.

Speaker 5 You know,

Speaker 5 from that standpoint, I think that there is a commitment from the insured. There is a willingness to do whatever is humanly possible to lower that cost.
How do they do it? How do they get safer?

Speaker 5 How do they make sure that based on their behavioral driving, they can reduce the cost? And I think that was kind of the key there, you know, where it's

Speaker 5 we've got to find a group of insureds that actually buy into the mission that we have,

Speaker 5 which is we want to lower the cost of insurance, especially for the good drivers. I mean, that's it.
Many of them are overpaying.

Speaker 5 You know, the good drivers are quite frankly, they're paying based on the averages for the bad and the really bad.

Speaker 5 And, you know, I think we are attempting to diversify the charges based on better behavioral models, real-time data, and the technology.

Speaker 10 One of the things that you said early on about,

Speaker 10 you know, what is cover whale, what is it,

Speaker 10 One of the words you used was digesting data faster.

Speaker 10 I think I'm interested in that.

Speaker 10 One, what does faster mean, like in real terms? Like, what does that actually look like? And why does

Speaker 10 digesting the data faster, like, how does that improve the process or add value to the process?

Speaker 5 Yeah, you know, I think from a standpoint of like, look, you know, data and insurance is not, you know, nothing new, right?

Speaker 5 It's been an industry where data has been prevalent, heavy, you know, amounts, lots of data, massive amounts of data.

Speaker 5 But I think the difference maker is, is being able to digest that data, but also, to your point, is digest it faster, right? Real time.

Speaker 5 How do we take that data and how do we make real time decisions based on that, right? So it's not just, you know, if you think about kind of the, you know, the, I guess, traditional insurance model,

Speaker 5 there's a lack of innovation. You know, innovation is not a core tenet of large insurance companies.
It's almost frowned upon.

Speaker 5 You know, and data, in that sense, it's like lack of technologies, lack of collection, the use of data, suboptimal.

Speaker 5 You know, actuarial models are based on historical kind of easy data correlations that infer the likelihood of a claim taking place.

Speaker 5 rather than live data that's predicting on a real-time basis of what events could be happening soon, as well as catching bad behavior in the act. You know, and I think that's, that's the key.

Speaker 5 You know, how do we identify those kind of claims before they take place? And how do we rectify those? And I think that's where digesting the data quicker is important.

Speaker 5 I mean, that's the game changer. That's where we're going to be able to define

Speaker 5 whether we won or lost in this race. And, you know, we are, our mission is, is that, look,

Speaker 5 you know, based on the traditional models, models, risk modeling is based on a portfolio approach where the averages pay, you know, the bad, the good, and the ugly. And

Speaker 5 the good pay for the ugly rather than what it should be, where you attempt to diversify the charges based on better behavioral kind of model

Speaker 5 where it's the individual. You know, some drivers out there should probably be paying a half a million dollars.
for their insurance because they're that bad. They're that risky.

Speaker 5 Other drivers should be paying probably $27.

Speaker 5 unlikely it'll ever get that low but i think that's where it's the digestion of that data to essentially lower the cost and make it as affordable as possible and pass that cost savings on to the insured because you can do it in a very tech efficient manner to reduce the expense ratio which we all agree in this industry is just way too high Now, is that telematics or how do you catch bad behavior in the act?

Speaker 10 Because

Speaker 10 I think everybody philosophically would agree with you. I think that

Speaker 10 as insurance, I think anyone who's sold insurance for any period of time in our space would say, you know, we've heard similar language before, you know, progressive has been trying to stick dongles in cars for 25 years now and nothing has really changed.

Speaker 10 So how do you, how do you start to, how does that start to manifest in a way that that actually does produce real results?

Speaker 10 Because like root can't turn a profit, Metro Mile can't turn a profit, you know, all these

Speaker 10 usage-based, you know, kind of, kind of methodologies haven't seemed to bear fruit yet. Is there a different way? Like, how are you attacking that problem?

Speaker 5 Yeah, no, I mean, it's a great question. And, you know, I'm not to say I'm going to punt on this one, but, you know, probably not going to sit here and just give up the secret sauce.

Speaker 5 I would say, yeah, telematics.

Speaker 10 I mean, if you want to give up the secret sauce on a Rogue Race or on a Ryan Hanley show exclusive, I'm okay with that. No, I'm just kidding.

Speaker 5 You know, mark this down, October 22nd, 2021.

Speaker 5 But yeah, I mean, it is, it's trying to leverage every piece of data you can get your hands on.

Speaker 5 Real-time telematics, real-time, you know, kind of just every aspect of data, I think that's the key. And, but then you got to do something with it.
Like, that's, I think, the big difference.

Speaker 5 You know, you've got to identify what the risky behaviors are. Then you've got to coach.
So you've got to reach out to these drivers before the risky behavior leads to an accident.

Speaker 5 And I think that loop of how do you shorten that loop of collecting the data, historical as well as kind of real time, and then

Speaker 5 try to figure out that your algorithm really is a better predictor of that risk. And from there, then you got a price for that risk.
So, you know, I think that's what's fun about this.

Speaker 5 There's no right answer.

Speaker 5 You know, I just, I got a lot of confidence in the people we have. I've got a lot of confidence in the mousetrap that's been built.

Speaker 5 But we're not, you know, we're not kind of resting on our laurels. I mean, this is, you know, I was up in our New York office, you know, for the last three days and

Speaker 5 it was a lot of, you know, standing in front of a whiteboard and, you know, putting a marker on paper and just, you know, talking 30,000 foot level, 10,000 foot level, 1,000 foot level.

Speaker 5 You know, we're not just, I think we don't have our blinders on.

Speaker 5 We are constantly trying to improve what we are doing here, what we're building. And, you know, I don't know.
I mean, I think that's what, you know, once again, that's what makes it exciting.

Speaker 5 I mean, that's where being at a startup is fun. Yeah.
You know, you got to enjoy that, you got to enjoy the journey of a startup. It's a grind.

Speaker 5 But I think from that standpoint, it's like, look, if you asked, if I was to give you the open and honest, you know, kind of response right now and gave you the secret stuff,

Speaker 5 I can guarantee if you asked me that question six months from now, it'd be a completely different response.

Speaker 7 Yeah.

Speaker 5 You know, it is every day trying to push for more and more and get better.

Speaker 10 I think that's the competitive advantage, in my opinion, that the startups have.

Speaker 10 We had David McFarlane from Coderion.

Speaker 10 I've had Dax Craig from

Speaker 10 Pi Insurance on the show.

Speaker 10 And I think that, I think what a lot of you guys share

Speaker 10 is this ability, unlike the large traditionals who

Speaker 10 you know, I give a hard time to, but

Speaker 10 have done a lot of really good work for a lot of long, for a very long time, right? And they still present the bedrock of our industry for sure. And

Speaker 10 I just, I always like to have respect for where we've been. That being said,

Speaker 10 when I talk to guys like you, people, you know, like you, whatever,

Speaker 10 you know, founders, leaders, people who are really trying to make the decisions, you can turn on a dime. You can test things.

Speaker 10 You can spin off little test cases and test algorithms and data sets and try things that, as you said,

Speaker 10 it it is both their strength and their weakness you know for a traditional carrier change can can really when you think about how large some of these carriers are a travelers a nationwide a harford a liberty like like when you think about how large they are

Speaker 10 really all change can do is hurt them right because even even a good change will be such an incremental will be so incremental to growth for the most part you know unless it's some revolutionary thing it'll be so incremental to growth that the risk isn't worth the reward.

Speaker 10 Where for you,

Speaker 10 finding that,

Speaker 10 you know,

Speaker 10 little piece of the algorithm that you can tweak or that one data point can have such a

Speaker 10 large impact in your business and its trajectory and the change that it's worth it to you to have all these different tests going. And I think that's why.

Speaker 10 While we always need to have respect for where we came from and the history of our of our of our space, because I think that's a big part of success,

Speaker 10 we have to continue to support and appreciate. And it's why I love having

Speaker 10 people from the InsureTech and kind of change makers on the show, because it just, this is how we get to the next level.

Speaker 10 Like we need you to be successful so that everyone over time lagging and you have your success and all that and find your spot and build your market share. But over time, we eventually,

Speaker 10 the change that you've made gets understood and disseminated and the industry as a whole grows and continues to prosper and all that good stuff. Like it's just so important

Speaker 10 that we understand these concepts and we support companies and people are aware. It's why I love getting people, helping people become aware of companies like yours.

Speaker 10 It's an important part of our space.

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Speaker 5 Yeah, you know, I mean, I think from, you know, from our perspective, right, you know, we're obviously clearly, you know, two years in.

Speaker 5 You know, we've got thousands of policies. We've got a lot of premium on the books for where we are.

Speaker 5 But, you know, I think, you know, if we look at where we'll be two years from now, you know, one of the core tenants in it in our business and our mission as a company is we will continue to take risks.

Speaker 5 I mean, and that that is, I think, something different that, you know, the larger players can't do, right? To your point, the risk reward, it's just not there.

Speaker 5 I think for us, I mean, you know, no matter what size we get, we will, failure is okay. Like, you've just got to identify failure very quickly and then rectify, change course.

Speaker 5 Like, and if you can't do that, you know, then to your point, I mean, yeah, it's just, it's not worth it. And I think that's the key of like, you know, where we're starting.

Speaker 5 You know,

Speaker 5 I think that's one of the keys that we try to tell people, you know, when they're kind of joining the company. It's like, look, we're gonna mess some things up.
Failure is okay, though.

Speaker 5 Like, let's have our eyes wide open, let's identify that failure quickly, and then let's change course. You know, let's experiment,

Speaker 5 you know, but let's not do it at the risk of like screwing up a relationship, you know. And I think that's the key thing from our perspective:

Speaker 5 you know, being a startup, it's it is, it allows you, it affords you, you know you're expected to kind of take that risk but i'd like to think you know years from now um no matter what our size is that we'll still have that that'll still be in our dna

Speaker 5 because

Speaker 5 it's just i i just don't think you can continue to push the organization where you're trying to get to that next level or the six levels above if you're not doing that yeah i agree so uh to give you just some more context you sell through brokers right through agents

Speaker 10 And

Speaker 10 like, is it, do you have your own paper? Are you an MGA? Are you going that route? Are you wholesaler?

Speaker 10 Like, what, just maybe give some people, just some more kind of more tactical context to what you guys have going on.

Speaker 5 Yeah, no, great, great question.

Speaker 5 Yeah, so from a perspective of, you know, at Coverwell, right now we are kind of an MGA model.

Speaker 5 But I think different than most MGAs, we have, you know, multiple carrier partners. So right now we have, you know, eight carrier partners that support in the vision of what we're doing.

Speaker 5 We're focused on the commercial auto space. I'd say mainly on the small fleet and mid-fleet size of trucking.

Speaker 5 But, you know, obviously plans and other kind of, you know, relationships outside of just that little niche, I would say.

Speaker 5 But operating an MGA model, we partner with retailers and wholesalers.

Speaker 5 You know, it is a traditional kind of approach from that standpoint, but offer, you know, a chance to allow our distribution partners to get an instantaneous quote or declination within seconds of keying in a pretty painless, I'd like to say, you know, application process.

Speaker 5 And, you know, trying to identify based on the risk characteristics of the insured, you know, does one of our carrier partners have the appetite for that risk?

Speaker 5 And if that case, you know, kind of match the risk with the carrier appetite.

Speaker 5 So it is a, it's traditional, I'd say, in the sense that, you know, MGA model, working with traditional retailers and wholesalers,

Speaker 5 but not traditional from the sense of we haven't just partnered with one carrier. We haven't just partnered with one carrier who has a single kind of appetite.

Speaker 5 It is really trying to be a distributor of risk and match those, you know, be add value add on both sides. Value add to our carrier partners, like you want this particular risk, we can get it for you.

Speaker 5 We'll find it. um it'll fit your box you know we'll find what can fit your box and i think same thing on the on the retail and wholesaler side.

Speaker 5 So, you know, I would say traditional, but not traditional, if that makes sense, yeah, no, that that does, and and you know, in

Speaker 10 that I need to be transparent about this, but uh, we do, you know, Rogue, just for everyone listening, Rogue, you know, we're we're a partner with Cover Whale, and um, we

Speaker 10 we we're we're testing, we'll say, uh, you know, we are testing the waters on truck.

Speaker 10 We get a lot of inbound trucking opportunities, and we are testing on whether or not we want to build a trucking division and really go all the way in. Uh,

Speaker 10 um, And it's a big commitment if you do. It is not my personal expertise, but we have potentially some people in-house who have kind of wanted to take it on and make it theirs.

Speaker 10 And I see what you guys are doing as

Speaker 10 a major, major component of that. Like I just, I couldn't, I couldn't imagine trying to take on trucking and not be partnered with what you're doing.

Speaker 10 Like I just, to be honest, and I don't mean that because you're on the show, I honestly believe that.

Speaker 10 I think the way that you're approaching it is tremendous. That being said,

Speaker 10 that excites me when you say you're not going to start stop with small fleet trucking, because what that tells me is you're going to start to approach other markets and attack other markets.

Speaker 10 And if you do it with the same methodology, that could be really interesting. Is it, you know, where

Speaker 10 you know, do you have the ability to share maybe where some of the places you might be trying to go or look in the future or just maybe at a high level, some of the philosophical beliefs on where things are going and where you're looking?

Speaker 5 Yeah, I mean, I think, you know, the easy answer to that is, I think, and, you know, it's taking what we've learned in kind of that small fleet space and deploying it elsewhere.

Speaker 5 Wheels business across the board is the easy kind of low-hanging fruit of, you know, outside of just kind of that small fleet trucking.

Speaker 5 But, you know, I think what we've kind of learned over the last two years and what we've, you know, continue to learn every day,

Speaker 5 that will lead us to what the next line of business is. There's no question that this, you know, what we do, it might not be perfect for every single line of business out there.

Speaker 5 You know, we're never going to likely get into Fortune 1000 DNO.

Speaker 5 It's not going to be a fit.

Speaker 5 But there is, you know, we are constantly kicking around what that next move is.

Speaker 5 You know, I think we also want to make sure that like, look, we got to get where we're focused on right now. We got to nail this.

Speaker 5 And

Speaker 5 we got to make sure, have confidence that we have nailed it before you move on and you bite more of the apple.

Speaker 5 I think that's as a startup,

Speaker 5 that's the other, kind of the decision-making process, right? There's so many different places you can focus. There's so many different things you could do to test, to experiment.

Speaker 5 But you got to get your core business nailed really, really tight. Take all the lessons you learned

Speaker 5 and then, you know, really kind of try to find where do I now deploy all those lessons we learned and where do we now kind of do it even better in the next line.

Speaker 5 So, you know, I would say, to be honest with you,

Speaker 5 yeah, we've got, you know, we've got a handful of areas that we're really kind of focused on, researching, testing.

Speaker 5 But I think we're also right now, it's at the core.

Speaker 5 Let's get this nailed and let's do this right.

Speaker 5 And, you know, from there, it'll we'll be able to grow into these other lines pretty easily i would say i think that's a a really good point and it's actually um

Speaker 10 an early mistake that that i made um we were primarily focused on workers comp and doing a very good job growing rapidly with comp

Speaker 10 and then um

Speaker 10 started to

Speaker 10 started to expand a little too much into other lines uh as as lead-ins, right?

Speaker 10 Obviously, we write, you know, full spectrum property casualty, but on the commercial side, we don't do a whole lot of personal.

Speaker 10 But, you know, as a lead-in, as being that source where you think comp first and then we cross-hold into other lines, that was working very well, continues to do good.

Speaker 10 But we probably could have pressed that button 10 more times and gone even deeper into that. And, you know, we've kind of come out of the little swell that we had from expanding a little too rapidly.

Speaker 10 So I guess things will work out in the end. But that's definitely when I look back at, say, like spring of 2021, you know, making that move outside of comp, as you just said, and

Speaker 10 starting to expand into other lines first, like cyber first. And like cyber first, in my opinion, is a really, really difficult sale.
It's a, it's a really tough place to go.

Speaker 10 Cyber first, cyber second cross-sell,

Speaker 10 it can almost be like a no-brainer, but cyber first is very difficult. And we kind of learned that lesson by taking taking it right on the nose.
And

Speaker 10 it's just, it's just interesting. You know, I mean, now, now I can agree with you wholeheartedly, you know, but I, but I've made that, made that mistake.

Speaker 10 Dogging, going back to making mistakes, I have, I've made that mistake. You know, I feel you on that.

Speaker 5 Well, so, I mean, give me a little bit more of like the rogue risk story, right? So I, you know, we've chatted before.

Speaker 5 You know, I kind of know, I'd say surface level, did a little homework, kind of listened to some of your podcasts, which I love.

Speaker 5 It was great to kind of hear some of the folks that you had on. And yeah, I don't know, give me a little bit more about like what you guys are trying to achieve.
Yeah.

Speaker 5 You know, it's once again, I mean, it's just, it sounds like your approach is just, you're attacking this from a completely different mindset, which I think we love.

Speaker 5 I mean, that's exactly the type of partners we want. But yeah, give me a little bit more.

Speaker 10 Yeah. So

Speaker 10 my, I came at this from,

Speaker 10 you know, previous 14 years of being both chief marketing officer for for two different insurtechs, both penguin and trustedchoice.com, and then eight years as a broker.

Speaker 10 So, you know, I've hawked home in autos across kitchen tables, and I've sat in the 42nd floor of just about every major carrier in the country and, you know, heard CEOs tell me they can't wait to get rid of agents.

Speaker 10 So,

Speaker 10 you know, I've seen both sides of that. And what I, that's how I got to the human optimized piece first.

Speaker 10 I just said, when I, I'm going to build a digital brokerage, which removes the non-value touch points so that the the humans can spend more time on the real problems that drive retention and relationship.

Speaker 10 One 10-minute call where someone on your team solves somebody's problem could create a 10-year customer and they can never talk to a human ever again in those next nine years.

Speaker 10 But if you can give them 10 minutes of your attention and solve that problem in the moment, they'll just assume that you're always there forever and never leave. So, you know, I think that's a lost.

Speaker 10 concept in the digital brokerage world.

Speaker 10 That being said, the second thing that I I wrote down was no customer left behind. So when I look at the marketplace, everybody's going after the easy stuff.
It's easy, easy, easy.

Speaker 10 Consultants, office risks. You know, you look at a company like Vouch that writes startups, right?

Speaker 10 Well, now they got to expand because surprisingly, you can't get, you can't be profitable just writing simple startups.

Speaker 10 You know, you write, you look at all these companies and they're fighting over the same easy market. And what I said is we're going to do the easy stuff easy, just like everybody else.

Speaker 10 That's the baseline. But we're going to do the hard stuff easy too.
And that's hard. But I don't give a shit because that's how we're going to differentiate ourselves.

Speaker 10 Because I don't believe a small business owner should get shitty service or get ignored because they have to go ENS or their premiums are quote unquote too small, or you can't get an online quote bind rate.

Speaker 10 So, so what? I have to have a human touch that quote. Do I, is that a best case scenario and the most pro and you're on the largest profit margin?

Speaker 6 No.

Speaker 10 But you don't know whose niece that is or nephew that is or whose uncle owns.

Speaker 10 is the biggest lawyer in this city. And you don't know any of that stuff.
So treat everybody like their account actually effing matters. And that way,

Speaker 10 and then do the hard work of streamlining that process. I mean, there's RT Connector, there's PathPoint, there's, you know, Amwins is coming out with a thing.

Speaker 10 there are there's you guys for trucking there's there are digital solutions popping up all over the place to solve these harder to place risks and make the process easier.

Speaker 10 And our goal is to be the universal connector for those people.

Speaker 10 So we plug into channel partners and we help them monetize 90 to 95 plus percent of their B2B customers, where all of our competition is somewhere in the 35 to 55% range.

Speaker 5 I love it. No, it sounds great.
I mean, it's exciting. I mean, you guys made a lot of progress in a short time.
And

Speaker 5 yeah, no, I mean, it's exciting. I can hear the passion, which is great.
Yeah.

Speaker 10 Plus,

Speaker 10 I

Speaker 10 plus, I want to shove it down the throat of every MBA dick who's done a regression analysis in some freaking MBA class and then wants to come in the insurance industry and tell us brokers that we don't know what we're doing, right?

Speaker 10 Like.

Speaker 10 2015, 2016 put a chip on my shoulder when, you know, everybody who'd ever, oh, insurtech seems like an opportunity i'm going to come in and tell all you guys that the last 440 years of your of your you know industry's history is crap and that we're going to do it better well yeah sure sure we need innovation absolutely absolutely we need innovation no doubt without you know there's no questioning that but i i

Speaker 10 i have a problem with people who do not who come into our space I love people who come into our space who want to change things, but I don't like when they do it with with disrespect for how we got here, because if you don't insure something properly, you ruin someone's life, right?

Speaker 10 This isn't like, you know, hey, the new, the new iPhone widget that I built doesn't work and I can't text message my buddies with gifts for three hours.

Speaker 10 It's like, if you don't ensure someone's home right, their home is gone. It doesn't magically reappear.
So we have to have respect for how we got here. That being said, we need to change.

Speaker 10 I I think things can be done better. And those are the people that I love supporting and talking to and learning from.
And, you know, I would be,

Speaker 10 I would be, it would be intellectually dishonest of me not to say that I do have a chip on my shoulder and I can't wait to be on stage with one of these a-holes and just shove it down their throat.

Speaker 10 I love it.

Speaker 10 I love it.

Speaker 10 So,

Speaker 10 yeah.

Speaker 10 Plus, I'm from the InsurTech haven of Troy, New York. So, like coming out of this, you know, there's just so much insurtech happening here.

Speaker 10 Um, no, I'm kidding. I just uh, I don't know, man.
I think, I think what we do is really interesting. I think that, um,

Speaker 10 I think that the lack of sexiness of insurance is what makes it interesting.

Speaker 10 Because if you can find ways to make it cool, engaging, fun, get smart people passionate about this, man, the opportunity is, as you've said, right?

Speaker 10 The people that you've hired and that you work with and the opportunity is endless. It's absolutely endless.
And,

Speaker 10 you know, that's why I've stayed here as long as I have and will not leave.

Speaker 5 Yeah, I mean, I think you touched on something there in just that last comment, right? Of,

Speaker 5 you know, I think

Speaker 5 insurance is, you know, it's viewed by many as just, it's boring. I mean, my wife jokes about it all the time.
I think it's, it's easy to just take shots at insurance. But,

Speaker 5 you know, insurance, I mean, I think in a way, it's, there's a value proposition that is necessary, right?

Speaker 5 And I think from the standpoint of if we can change the way we approach insurance, I think we can.

Speaker 10 I'm not saying we can put sexy back in insurance, but you know, well, sexy would have had to be in insurance for you to bring sexy. That's right.
Fair enough.

Speaker 5 Fair enough.

Speaker 5 But I think there's no question. I mean, it can be fun.
It can be dynamic. It can be interesting.
I mean, there's problems that need to be solved. It can be analytical.
It can be thought-provoking.

Speaker 5 And I think that is what, you know, that's, I guess, maybe the sexiness of insurance, maybe as sexy as it'll get, but that's where, you know, I think we have done a disservice, right?

Speaker 5 We have done a disservice of not,

Speaker 5 you know, broadcasting and making brand awareness of what insurance is and what it means and

Speaker 5 why, you know, young people should be. you know, flocking to this industry.
You know, it's the joke is it's just a bunch of, you know, C-plus students, right?

Speaker 5 And, you know, that's not the truth. That is so far from the truth, right?

Speaker 5 You know, it's the people that are successful in this business are the ones with grit, the ones that are like hungry, the ones that are going to keep digging and keep going and keep going.

Speaker 5 And, you know, I think that's what I think is going to, you know, it makes, you know, it gives you an opportunity to differentiate yourself personally, your company that you work for.

Speaker 5 you know but you know to your point like look we have to do it differently the old model is archaic. It's silly.

Speaker 5 Like, how do you price a risk based on retrospective data and then not touch it for 365 days? Like, that's crazy.

Speaker 10 Yeah.

Speaker 5 Like,

Speaker 5 it's just, you know, you cannot pinpoint down to pennies, like, what the right price of that risk is.

Speaker 5 And I think that's where it's trying to now, to your point, it's like, look, you know, tech was needed, you know, to create the efficiencies, to leverage the data, to digest the data.

Speaker 5 And that's, you know, like, you know, the word insure tech is used a lot, right? It's thrown around way too much, disruption, thrown around a lot.

Speaker 5 But I really do think like that's, that's why, you know, to your point, this isn't just because you studied it, you know, you wrote a thesis in some MBA school.

Speaker 5 You know, it's really about like, look, understanding what's been done in the past and how do we improve the process. Yeah.
How do we tweak this process?

Speaker 5 But yeah, I think that's there's just because we've kind of flown under the radar, I think that's why it is such a great opportunity.

Speaker 10 Yeah, I, dude, I'm with you. I'm with you 100%.
You know, I was thinking about,

Speaker 10 I was thinking about the audit process for general liability policies the other day, right?

Speaker 7 You,

Speaker 10 you know, on day one, you say, how much revenue do you have and how much payroll you have? Okay, here's your price.

Speaker 10 Then you don't think about it again until a year later and you go, hey, was your revenue this much and your payroll this much? Okay. You know what I mean? Like, here's, here's your new premium.

Speaker 10 And I, you know, I think about that and I'm like, I could understand when we had to hard mail documents back and forth or fax documents back and forth.

Speaker 10 Like that's as fast as it got that you would think about,

Speaker 10 you would think about it in those type of, you know, annual terms. But,

Speaker 10 you know, it's just, I feel like there's, there's got to be a, the audit process is such a pain in the ass.

Speaker 10 It is a, it's a, it's a transfer point or or a or a move point for so many for so many insureds that audit process and just filling out the forms and they're giving you crap and then they want to they got a bill they want to charge you and you got to pay it in 30 days and it's you know and it's got to be a lump sum and and they're like ah this is terrible these guys are awful i'm moving to this carrier over here and then it's the same over there and like there's got to be a better way to manage

Speaker 10 you know manage one whether payroll and revenue for a gl policy are simply the best ways to to to price a risk and two that annual audit process of those two numbers and like the just hate that every insured has for that like there's got to be a way to make that better i'm not the guy to figure that out but i can i'm listening to you and i'm going what you guys are doing that people like you who are thinking about the business the way that understand actuarial models better than i do

Speaker 10 Like there's a, there's an, there's a point that could be, that could be easily, I wouldn't say honestly easily there is a point that could be and could has the potential to drastically change the way that we real time price how someone you know what what they're paying for insurance and what their risk actually is and um and and ultimately give them a better experience like have them not hate doing business with an insurance company because they're so nervous about well geez if i accurately report my revenue this year i'm going to have to pay an extra three thousand dollars in a lump sum So they lie and then they price in the lie.

Speaker 10 And now we're all playing this big game where we're all kind of lying to each other. And, you know, it's just, it just, it's terrible.

Speaker 5 I mean, and you're going, I know you're going through a fundraising round right now.

Speaker 5 And, you know, you're putting together budgets and you're putting together models and you're projecting it out three years, five years. And it's just like,

Speaker 5 like, I mean,

Speaker 5 put a hand grenade in it all, like, right?

Speaker 5 You know, all that stuff, you know, and to your point of like trying to identify like what the right metric is to price off of um and is it an accurate metric right you know and are we have we set ourselves up to fail based on what you exactly just kind of said it's like okay now people are incentivized to not give you accurate data yeah which you know makes it even that much harder we you know pricing on an individual risk basis is hard in of itself right and how do we understand the behavioral analytics of that individual insured but now let alone how do we make sure we're getting the right data yeah right because you're making you know, million dollar bets, millions of dollar bets

Speaker 5 on oftentimes imperfect data.

Speaker 5 And I think that is, I mean, that's kind of the side of the business where you just kind of scratch your head and people look at it and say, like, oh my gosh, like, this is crazy.

Speaker 5 Like, this is what these guys are doing, you know?

Speaker 10 Yeah.

Speaker 5 So I don't know. I mean, you know, I do think, I think we, you know, we as an industry, I think we can figure this out.
I think we're getting better.

Speaker 5 I think even the big, the big boys and girls, you know, they're

Speaker 5 aware that it you know i think as you said earlier though it's just hard it's hard to change for them it's hard to take those risks um

Speaker 5 you know and like look i mean to the you know to some of the names you mentioned i mean do they know who cover whale is today probably not i'd say 99.9 chance they definitely don't know um i think at some point they're going to know and it's going to be pretty soon you know and i think that's what does make it fun of where like look

Speaker 5 come about it from a different angle. You know,

Speaker 5 that's what allows us to really, you know, take these big shots.

Speaker 7 Yeah. And

Speaker 5 we'll get a good portion of it wrong along the way, but we're okay with that.

Speaker 5 You know, as long as we know, like, look, our carrier partners, like they are long-term sustainable relationships in this business. I said it early on.
I mean, that's the key.

Speaker 5 You cannot, you know, the roots, I don't want to bash like the, you know, some of the competitors, these insurtechs, but they, they went about it all wrong.

Speaker 5 I mean, like, look, you cannot just burn carriers. You can't burn reinsurers.

Speaker 5 You know, and I think that's like, you know, kind of where our approach has been is like, look, let's build a long-term sustainable company, but like the rocket ship is going.

Speaker 5 Like, we are not like putting this in second gear. Yeah.
So, you know, I think as quick as possible, but also recognize like

Speaker 5 we've got to be, you know, we've got to be realistic in the sense of we need partners to get us to that next level.

Speaker 10 And that, man, is why I think you guys are going to be successful is because you are walking that line between having respect for the industry and what you're doing and how it works with the absolute positive need to innovate and try new things and test things and break things and fix things.

Speaker 10 And

Speaker 10 I.

Speaker 10 I wish you guys nothing but success, man.

Speaker 10 I think that you're going about it the right way. It's exciting to watch companies like yours do new things.

Speaker 10 And man, I hope there's a day that some of those big companies wake up and they're a little nervous.

Speaker 10 That makes me feel good.

Speaker 10 Everyone should be a little nervous every day. And

Speaker 10 I'm rooting for you, man.

Speaker 10 Where can people learn more if someone is doing trucking and small fleet and wants to learn more about you? Where can they go? Where can they connect with you?

Speaker 5 Yeah, I mean, you know, coverwheel.com, you know, website, very kind of simple.

Speaker 5 You know, can reach out to any of our management team um we've got you know great team that's growing you know i think with contractors we're close to 100 people right now i mean the team just continues to multiply um so yeah i welcome it welcome you know look forward to working more with you guys and your team it's a growing team and you know i don't know just excited excited to kind of you know i'm on now a different side of the industry i'm getting to meet folks like you you know i was a layer removed in my kind of former life and this is what's fun it's really kind of chatting with folks like yourself understanding how you're attacking the business, and you know, and some of your peers.

Speaker 5 It's like, how do we kind of collectively figure this out to you know, I don't know, change the industry?

Speaker 10 Yeah, so

Speaker 5 yeah, appreciate the time, yeah. No, glad to be on, and yeah, I wish you guys the best of luck as well.

Speaker 10 Thanks, buddy. Be good, all right, man.
Sounds good.

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