RHS 163 - Tanner Hackett On Scaling a Management Liability Company

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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 Tanner Hackett, the CEO and founder of Counterpart, an insurtech management liability company, which is using AI and ML and third-party data sources to learn about what is ultimately a very specialized liability coverage and particularly focusing this product on small businesses. And we talk why small businesses, why management liability.
We talk about Tanner's origin story. We talk about his strategy to go or to deliver counterpart as a product through wholesalers versus going out to a broader retail market.
And we talk about entrepreneurship and leadership. And this is just a tremendous conversation.
These are the kind of conversations when I'm meeting someone new and connecting with them. This is kind of why I do this podcast.
I love these types of conversations. I mean, I love all the conversations I have on the show, but in particular, when I get to meet someone new and really get this deep on business and in particularly our industry, it's just an absolutely phenomenal experience and I think you're going to love this conversation.
Before we get there, I want to give you, the listeners of this show, a huge shout out. You continue to listen.
You continue to be part of this community. It is always so special to me that you guys take time out of your day and consider this show because I know if you're listening to this podcast, then you're not listening to others or not focusing on other things.
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appreciate you all for listening let's get on to tanner we don't produce the video so you don't have to i don't know if that matters to you don't worry about that oh it's just just the audio audio only yeah i just use the video so that we can you know just uh it's easier to talk to somebody when you can see their facial expression. I actually like that.
Yeah. Let's do that.
Okay. Yeah.
Yeah. So yeah, I only produced the audio, but I use the video just, uh, just for talking purposes.
Okay. Wonderful.
Cool. Well, I put on clothes for you, you know, kind of a color.
You do, uh, you look good. I mean, good's, you know, so that's, that's a good thing.
Well, so, all right, man. Well, Hey, I, like I said, I appreciate you coming on the show.
You know, looking through everything that you're doing. I hadn't heard about you before your team reached out, but once I started digging into what you're doing, I was obviously very interested and would love to get, you know, what, what's the for you? Let's start with you.
What's the origin story? I know it's not every little boy and girl's dream to grow up to be an insurance professional, at least not most of us. However, we all fall into it somehow.
So I'm interested in kind of where you come from and how you got here and we can start there and then dig in. Yeah, well, first of all, thanks for having me.
As I mentioned, I've been following your podcast for a bit. And this is a great recognition that we're doing something right to be here today talking to you.
We've intentionally been pretty quiet about what we've been doing publicly. We operate through the broker channel.
We've been galvanizing that distribution channel about all the good things we're doing. I wouldn't be surprised if you start to hear more and more about us as brokers tout our benefits to small businesses.
For me personally, even that was a learning, just looking at distribution and how that works in insurance. I come from more of an entrepreneurial tech background.
I started a few companies before, one in the e-commerce space in Southeast Asia, a large e-commerce company that was actually bought by Alibaba a few years ago, and also built a large marketing company out in New York, close to you. I was working in Manhattan.
And so this journey into insurance, as you hinted out, You know, it wasn't what I aspired to at a young age.

It was actually something I fell into as I became acquainted with this one product that I kept purchasing as a as a business owner, which was management liability. It's something that was required through the covenants in raising venture money to purchase DNO.
And in New York State, obviously, having EPLIs is super important. And so, but it was this roundabout way where I was counterpart.
Actually, you can tell from the name. It was actually begun as a HR tech company.
So I had to move back to Los Angeles for some family reasons. And I had this idea in the back of my head, which was predicated on some success we had in my previous company, Button, the marketing company, where we really put people first.
And we did so by investing in software systems, compliance, collaboration tools that were just starting to come out. You know, this was early 2000, 2013, 14, 15.
HR software was starting to heat up. You had tools like Lattice and CultureAmp.
You had PEOs that were beginning to take off. We saw how these tools could be applied to, you know, help the employees with everything from finding the right employees.
So hiring, onboarding employees, training, learning and development software, collaboration tools, Slack. Well, it was really taking off.
So we were looking at how this framework could be applied to create these workplaces where people were empowered to operate, where there was more collaboration across the team. And people stayed for a really long time.
We just created this strong culture around this tooling. And so, yeah, I started this company, was very jazzed about bringing software tech, democratizing HR software to small businesses where I saw this need because at a certain size of company, you have compliance teams, you have risk teams, you have heads of finance, you have heads of HR.
If you're 10, 15 people, you don't have that infrastructure, right? What are you going to? Who do you reach out to? And so I saw this as a tool, which is a pretty lightweight way of bringing bringing this infrastructure in. The challenge is that even this is, you know, a second order priority for a small business.
You're thinking about, you know, how are you going to make payroll this month? You're thinking about, you know, your your goals this quarter or just, you know, making the best pie you can make, let alone thinking about compliance and governance and collaboration. So we struggled with this tool.
There wasn't a lot of buy in. Talking to all my entrepreneurial friends, it was the got a little bit of the Heisman where it's, you know, come back to me next quarter and the next six months.
And, you you know, the red alerts go off in your brain when you hear this as an entrepreneur. I'm sure there's a lot of people listening to this podcast that can relate.
It's just, you know, when you hear that, you got to pivot. And in my case, the realization was this thing that I had been purchasing for a while, management liability, was actually had coverages for the externalities that occur when you're not doing these things, when you don't have a good hiring practice, when you don't have compliance, when you're not collaborating.
This is when there's friction in the company could lead to wrongful terminations, could lead to harassment, could lead to discrimination,

could lead to negligence, misrepresentations, the things that, yeah, lead to directors and officers claims, lead to employment practices claims, judiciary claims, crime claims. And yeah, seen an uptick in in in 2015, 16, 17, yeah, became very relevant or

very evident that there was a need for somebody to think about these products holistically,

of how do you attack the risk management piece while at the same time, you know, think about this product and what the needs are for a small business. So here I am, you know, this insurance geek now.
I'm obsessed with insurance. I think this product is so powerful.
I think it's so important for our society. But to be honest, you know, there's, we have a long ways to go with, with the adoption of technology in the same way that I've seen it apply to my previous companies.
Yeah. So there's, I have a whole bunch of questions in there.
You know, first, what, what was, what was your initial kind of feelings when you, so your, your start, starting, you have this HR company that you're working on and testing out in the market and talking about, and you start to pivot into insurance. What was the first kind of this? Because to me, for a long time, I fought the idea.
Let me reposition this question. For a long time, I fought the idea that insurance was different.
We're different. This is different.
We're unique and all these kind of things. And for a long time, I was like, eh, everybody loves to say they're different, but they're not really, right? It's the same set of problems passed through a different set of filters.
Well, I have come to really believe and really just in them. So I've been in the insurance industry for almost 17 years now.
And it wasn't until these last three years that I launched Rogue Risk, my own digital commercial agency, and that I really started to believe that insurance was different, right? There are the state regulatory matters, the technology, the information capture, the disparate nature of the providers, right? The fact that you have all these different manufacturers in terms of insurance carriers that are distributing their product on all these different platforms and all these different ways, right? It's in most other industries, there's a universal connector between all the manufacturers and the distributors. And in insurance, there really isn't.
So when you first started running up against some of these issues, what was the first one that kind of, you went, Oh, wow. Okay.
There's, this is a little different than, than maybe building a marketing tech company or an e-commerce tech company. Man, there are so many.
I, I, I love the way you put this. And by the way like you as an entrepreneur i i just want to celebrate that uh for you to launch your own company and it is not easy um it is a humbling experience in so many different dimensions yeah and and you know that is the backbone of our society that is why we're focused on small businesses because it is hard.
And that bar is getting higher and higher every day to go and pursue your dream. So yeah, we are dedicated to helping people understand what their exposures are, helping them grow.
I think me personally, in this entrepreneurial experience, there's that old saying of history doesn't't repeat itself but it rhymes and you can apply that same lens to just about any entrepreneurial journey of it's kind of pattern matching of the things that are very very similar and those things and then you try and figure out where there's asymmetry and for me that asymmetry asymmetry happened in distribution. Looking at my previous companies, e-commerce and marketing, you have partnerships, you have affiliate, you have performance.
There's lots of different ways in which you can get your product to the market. And what's nuanced about insurance is this is a very complicated product, especially in the case of management liability.
Not many people know what it is. And so there's a great rationale to have a broker involved in this process.
And then there's this wholesale broker

side too, which aggregates the risk for retail agents because retail agents have to understand

this very broad expanse of products. And it's tough to keep these all in their head,

you know, what the difference in exposure is between product liability and employment practices

liability. And so understanding the dimensions, the roles of these different participants in

the product liability and employment practices liability. And so understanding the dimensions, the roles of these different participants in the distribution chain, where they fit, where we should fit as a specialty product, you know, because management liability isn't necessarily required by law.
It's usually contractual or it's, you know, it's highly recommended depending on the industry or state that you're in. It's often seen as a luxury to a lot of startups.
They see purchasing this product as a luxury, as like you hit a certain level of success and then you get this coverage. And I'm like, to me, this is like day one kind of stuff.
You know, you hire the wrong person in the wrong way company your idea is over before you even get out the door for no reason that has to do with your product you know i mean that's the kind of thing i love the way you said that too because um yeah it's it's existential right one of these things go wrong you're human we say things things happen we make a mistake uh so and and that's game over for your company, if you get, you know, hit with one of these claims or, you know, one of these lawsuits. And, and I think that that was the big learning.
It's like, oh my gosh, this thing is so important. There's this distribution chain.
There's the scale of knowledge about these products. Where do we fit? How do we help to communicate our novelty in the market in the way that we're approaching this, the value that we bring to the small business in the most efficient way? And we work with wholesale brokers.
So wholesale brokers are the experts in the space and they help to distribute to retail agents. And obviously the retail agents working directly with the small businesses.
So we're trying to figure out ways to partner with our wholesale brokers to help educate the retail agents who are at the point of sale of small businesses. And, you know, make sure that this message is delivered, why we're different from the 10 other markets that might be providing a competitive service.
Why did you decide to go, and a lot of people do, so this isn't like a judgment, just interested. Why did you decide to go wholesale to retail versus just going right to bringing on retail brokers and working with retailers directly? Yeah, it's kind of the power law.

You know, looking at having tens of thousands of agents and then looking at wholesale brokers

who are already experts in this product line,

you know, is a pretty easy sell to show them

how we thought about this differently, what our unique coverages were, how quickly we could get a product to them, our insured services, our claims management support. It was kind of like you talk to a wholesale broker for three minutes and they get it.
It was a much longer sales process for a retail agent to wrap their heads around, okay, got it. Management liability.
It should be in the toolkit of any small business. And here's where Counterparts stands apart.
So the wholesale agents have been fantastic from giving us leverage with this distribution channel. They're aggregators of this risk.
And we can go to work with one group and we work with the largest wholesale brokers in the world. I think we have about 30, 35 wholesale brokerages that we work with today.
And yeah, they give us volume of submissions, but also our disseminators, they're the shepherds of our product. They're galvanizing adoption with the retail agents and with small businesses.
So it's been a very strong partnership with our wholesale brokers. Have you found that they've been willing to take on the product and distribute it? Because obviously, for them to push your product, they're not pushing, say, a relationship that they previously had with another.
You know, I like to think of carriers as manufacturers. So, you know what I mean? You're obviously moving in on a space where they already had relationships for management liability product.
Have you found that your value propositions, which I'm really interested in, would like you to get to, have you found that they see your value propositions as a competitive advantage and as a differentiator?

Or, you know, have you, has it been just,

you're another one in the mix that they're quoting?

Or like, what has been your experience?

And I'm sure it's different with every single one,

but, you know, kind of in general,

have you found that the uptick has been fast

or has it been, you know, you have to really work for it?

No, it's been remarkably consistent.

And as I mentioned, when we share with them, not only the forms, but, you know, we share a service model as well, which is based on speed, which is based on using third-party data to be smarter about a risk so we can get really aggressive in certain cases. In other cases, we're going to explain why we're not comfortable with the exposures of the small business.
But it's that quick turnaround time brokers need to see in this small business space where they're being flooded with submissions. This is premium values that are pretty low, also pretty low risk.
So this is a very transactional, these are very transactional accounts where in large part, they just need somebody that's going to be there to respond quickly, to pick up the phone, to discuss options with them. And that's through combining technology workflows data with an unbelievable team of, we call them risk engineers, underwriters that are there to support our broker community.
So yeah, it's, it's been, it's, it's been a remarkable just how much support we've received from the wholesale broker channel and how quickly we've been able to grow with them. Yeah.
This is anecdotal, but do you find when you say like risk engineers, people look at you, like you have three heads and you're like, they're like, what the hell are you talking about? I do. And people like, not only do they look at me, but they say to my face.
And I think it goes to kind of the point you mentioned before of like, this, this industry has a certain philosophy and a certain inertia in moving forward. And I want to question certain things.
I think there's too much around this idea of disrupt. That's not what I want to do.
But I want to create transparency. I want to question, you know, should an underwriter be doing underwriting jobs in today's environment where data is so accessible? And it can get you a large part of the way there.
What is the point of an underwriter? An underwriter is actually to help a system learn, to train a system, to create the rating factors so that there's consistency in the system. And it's observing what are the externalities, how is the market shifting, and how does our rating model or our coverage need to evolve? and then for unique risks to be able to jump in and support the broker in the small business and then use this as a data point to retrain them all.
So yeah, I truly do see them as these engineers more so than underwriters. Underwriters, it doesn't capture all the value and all the contributions that they make to the system.
It's too account-based, and that's not our philosophy. Our philosophy is about building a system.
So the reason I ask you that is we call our service team members client success. I started out as client success advocates was what the original when I wrote my business plan and everything, because I wanted the philosophy to be, I want you as a service person to think of yourself as advocating in every way for our client.
You don't work for the carrier. And I'd almost rather you pushed against me in the moments where you think our client needs something that maybe they're not getting.
You are a client success advocate. Well, I will say, and I hope that you don't, this doesn't happen to you because, because I love what you just said.
Cause I, and I, and I agree with your philosophy. I have been worn down by the, you mean account manager, right? Or you mean a CSR, right? And I'm like, Oh yes, yes.
I mean a CSR. Yes.
That's what, yes. But the idea is I want, I don't want them to think of themselves as just CSRs, which have this kind of almost like negative, it almost has like a negative connotation.
I want them to think of themselves as they are the most important person in our company to that client. You are their advocate in our company.
That's, that's what I wanted the philosophy to be and how, and it is how we still train them. But I've just been bludgeoned by people going, you mean account manager, right? Like you're talking about an account manager, right? And I'm like, yes, I'm talking about an account manager, but that's, you know, and so like, even though on their job descriptions, they're still CSAs.
We inevitably refer to them as like account managers and CSR sometimes too. And I, I kind of am hating myself after hearing how you've stuck to your guns, but, uh, it is funny how people just don't want to change.
They just can't, they like, can't do it. That, that, that reversion to the mean is a very, very powerful force.
And it's, it's gonna, it's gonna be, uh, especially as you grow, you know, it's, it's, it becomes even more challenging. You know, you're fighting against, you know, it's like size and gravity, you know, it becomes much more difficult to push against.
And the, the only advice I would give to you is consistency. And, and the way you message the team, you know, this, these constant reminders and having a cadence for, for how you speak about it, you know, so there's things like values in a company or nomenclature.
And it's, it's just repetition. So we go through our values every week as an organization, we, we speak about our values and you know, I think a lot of the team can recite these off the top of their head.
And, you know, it creates stickiness, but old habits just die hard. Yeah.
So in, I completely agree with that. And I will say, and I agree with you, it's like you, to the gravity piece, like, as you grow, you're fighting larger and larger battles, right? The battles become bigger and they're becoming more of them.
And like some of these, it is easy. And again, this is where, you know, I'm, I'm, I'm being transparent in my own failings as a leader.
Like some of these battles that seemingly that feel smaller, like this particular, just naming of, of, of our service professionals, like at a certain point, you're like, oh my God, I am fighting this battle that is taking 90% of my brain cycles over here. I don't have the brain cycles left.
Yes. Account manager, whatever.
Like, you know, I'm trying to like, you know, take this mountain over here and I got this little thing happening over, you know, and it's just, you just, you just run out of brain cycles sometimes to fight these battles. But if you can, I, I, I agree with you.
And we do, I will say the other thing that happens too. And I think it, again, I'm, I think it's incredibly admirable and awesome that you are, you're talking about your values every week.
I try very hard to do that, but it is easy to get lost in the, in the shuffle. And found at certain points in the company's evolution, you hit moments where there's more to more or less.
And when there's less, you can kind of come back to things like, here's why we're here. Here's what we believe.

Here's our philosophical beliefs.

And then things get hectic and you're like, I'm just trying to keep all 10 fingers and

toes, you know, in holes in the dam. You know what I mean? Like, and, you know, those things can get lost.
And I think the leaders that I admire the most are the ones that seemingly can stay consistent and push through that, even though those things are happening or not let it bother them as they push through it. So that's really good advice.
I just appreciate the rawness that you're bringing to this conversation. It is so real.
And as an entrepreneur, to be able to compartmentalize all this and still grow and meet your investor expectations, this is exactly what I'm talking about. And the reason I get out of bed every day is like, I want to support entrepreneurs like you that are challenging things, that are doing things different.
I think there's, you know, you talk about culture and there's so much said about culture and a culture is, you know, in large part, you know, planted by the founder and, you know, people rally around that. And this idea of good culture and bad culture, I don't believe in good culture or bad culture.
I believe that culture is a function of the business and, you know, the mindset of the company, the vision, the principles, and really where the dissonance happens is if there is not alignment between the people working there and the values of the company. That is bad.
But, you know, there's some companies that just want to work 80 hours a week and, you know, they're perfectly successful because they're hiring people that want to work 80 hours a week. And there's other companies that are creatives and, you know, they need the headspace and, you know, people can be perfectly successful working 20 hours a week.
And, you so yeah I think it's it's I I would I love the way you're thinking about things I I think it's the right approach I think it's there's so much knowledge out there um uh about how to run organizations it sounds like you're well versed in this stuff too and um yeah, we want to be advocates for small businesses, for leaders to provide that support.

You know, obviously it benefits us, too, when our policyholders are thinking about governance, business operations, compliance. It's something I've spent a lot of time thinking about.
And, you know, the data also yields that companies obviously are less likely to have claims, but are going to have better outcomes financially when they start to think about culture as well. Yeah.
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I, um, uh, I, I saw a quote. Um, I was listening.
Who knows you, you read so much and I can't remember exactly what it was, but it basically was the gist of it was, um, whether the leader is focused, whether the leader is driving culture or not, they are, you know what I mean? It's like, whether you are focused on growing culture or you're not focused on growing culture, you're growing, like you're, you're impacting culture. Like it's like what you do as a leader is it's, you cannot get away from the fact that if you decided to take a leadership role, even if it's not the tippy top leadership role, even if it's, you know, the executive suite or a managerial role, you are impacting the culture of the company when you decide to, you know, when you decide to take that position, because people watch you and they feed off what you do.
And I think that particularly insurance, because insurance, oftentimes, the individuals who hold leadership roles in our industry tend to be great practitioners, not people who necessarily chose to be and focus on being great leaders. And that doesn't mean they aren't or can't be.
It just means oftentimes the leadership roles tend to get given to great practitioners. So they're not necessarily versed in or love learning about and practicing and cultivating things like culture, things like mission, right? They see those as, and again, and this isn't a knock, it's because they're great practitioners that they haven't taken the time or nor do they value these concepts because their idea is all we need to do is sell more stuff.
If we sell more stuff, we're good. That's our goal.
We sell stuff. I don't care if you hate working here.
I send you a paycheck. Be happy with it.
That's the kind of way that most people operate. What we've really found at Rogue is one, I didn't name it the Hanley Insurance Agency because I didn't want the business to be about me.
I love the fact that I have this amazing team that every day is working to get me out of working in the business, you know, so I can work on it essentially, you know, which is a great thing. Like they're not like upset.
They're not like fighting me. They don't feel, they're operating to get me out of day to day, which is an amazing thing.
So I can work on things like culture. Well, if I was a practitioner, if I was still getting value from doing the thing, I could never step out and focus on these things like culture, which I think is, is what you have to do.
Um, all that being said, I think the point that you just made around whatever you want your business to be, it should be that thing. Whether if it's an 80 hour a week job, if it's a 30 hour a week job, if it's a only nights and week, you know, whatever you, your culture is going to be, but then you have to be hard and fast to marketing it that way and hiring that way.
And, you know, we hire a lot of moms. We just do.

Because. and fast to marketing it that way and hiring that way.
And, you know, we hire a lot of moms.

We just do because a lot of insurance agencies, thankfully, are misogynistic and want people to work 830 to 430 on like a punch in, punch out.

And if you're a mom and there are dads, too, but they tend to be moms who are have kids

that have get sick or have to go into school late or they need to do this or, you know,

whatever.

I don't know. a mom and there are dads too, but they tend to be moms who are, have kids that have to get sick or have to go into school late, or they need to do this or, you know, whatever their, their, their lives tend to need some flexibility, right? And, and we as a company, and I made this our mission from the very beginning, we are completely willing because we're results-based to be flexible around those points, right? Hey, you need to take your kid to the doctor at 3 PM.
No problem. I trust because you're an adult and we're a results-based organization that you will either come in later or come in earlier or work doubly hard the next day to get your numbers and do the things you need to do for your actual job.
And that's the way we work. Well, we made the mistake of hiring.
Again, sometimes you don't know a couple individuals who were slightly on the misogynistic side. And they were just of the opinion that their experience, whatever, that, you know, most of the females in our organization didn't know shit was kind of their general disposition.
And that did not fly. And we punted those sons of bitches like really quick.
Now, they were high performers, seemingly high performers, right? They were hitting their numbers and doing very good work. But you can't have that shit in your business if you're going to be successful if it doesn't match what you're trying to do.
If we were like a locker room mentality company where it was, we all just beat our chests and fight with each other and competitive. And that's who we were like boiler room or, or a Wolf of wall street.
They would have been awesome in that environment. It just wasn't what we were building and you have to get those people out.
And I think, unfortunately, I think, unfortunately, especially early in a company's Genesis, it's very difficult to let high performers go if they don't match culture because you're like, oh my God, who's going to sell this thing or who's going to execute this part? And I mean, since they've been gone, we haven't skipped a beat. Other people have stepped up and everyone is happier.
So I think that's a really, really important point that I wanted to come back to. I love it.
And the thread here is consistency.

And consistency is incredibly important, especially when you have a strong vision,

you know, and you're seeing repeated success.

It is so easy to get off that path.

Yeah, it is.

There's so many turns.

And, you know, it could be a partnership that seems all nice and fun and shiny, could be an employee, you know, it could be an investor. And like, you have to constantly as a business leader, take a step back.
And you also have to create an environment where you're open to that feedback from the team. One of the things we did, we had the entire company down in San Diego last week for a company onsite.
So we're, we're completely remote. We flew everybody in to San Diego and we just had this open discussion.
One of our, one of our values is speak boldly and honestly. And yeah, there were moments where, wow, people spoke very boldly and honestly about our OKR.
So we use the OKR system, objective key results. Highly advise anybody listening to take a look at this if they're looking for structure around goals on a quarterly basis.
Measure What Matters by John Doerr, is it? Doerr. John Doerr.
Yeah, Doerr is the book that really breaks that concept down. Yeah, it's not perfect.
There's no perfect solution. I don't want to pretend that this is just read the book and go apply it.
This is something, again, requires commitment or requires consistency. But yeah, the team gave me great feedback that despite having all the structure, it still felt like we didn't have a clear focus.
And so we walked out of that meeting, we cut our OKRs in half.

And now we're focused on half the OKRs.

And so it's one, that consistency, but everyone, every now and then you just need a speed check

and you need to invite people to be able to speak up and have trust.

I think the other thing that have have you heard of this Project Aristotle from Google? I have not, no. It's a really interesting study by Google, which of course is one of the most respected company of the century over the last hundred years.
And they tried to figure out what is the thing that really makes for really high performing teams and you know off the top of my head i'm like of course you know it's talent it's education uh it's uh you know having certain people and certain groups you bring a product person engineer and there's got to be a great formula and they're like they couldn't figure it out for the longest time until they started to look at more of the psychological elements of the team. And what they found is that when there's psychological safety, trust in a team, those are the highest performing teams.
irrespective of backgrounds, irrespective of the talent of the team, when there's trust,

that is the team that's going to perform better on a more consistent basis. And so, you know, I challenge everybody to bring this into their organization, because what you're going to learn from somebody that's two levels down, what they're seeing in the field is probably going to shock you.
And, you know, it probably doesn't bubble up to the top very much because people might be afraid of communicating this to you. You know, it's you as an entrepreneur having to deal with all these things, you know, naming conventions of certain people, but it's, it's, it's really enlightening and you're not going to change everything.
So, you know, we're not superhuman, but I think creating that environment where at least people feel their opinions are valued or they're heard, it creates a very collaborative spirit. And people are also then more willing to take feedback themselves, right? Yeah.
If they know the CEO is open to it, they're going to be like, okay, you know, he can take a few punches about his philosophy. but yeah, maybe I can be better myself.

Yeah.

I think you're wholly right, especially about the last piece, just to put a pin in that. You can't hold your employees to a standard that you're unwilling to live by by yourself.
yourself. Like that is, that is like, if I've learned anything, uh, in the various leadership

roles that I've had throughout my career, if you are unwilling to do something or live by a standard or work to a standard, you cannot hold your employees to that standard. You just can't.
And again, this is why I'll tell you, this is very selfishly why I have a flexible work environment. Like I'm a divorced single dad.
I have to do shit during the day.

That is. can't.
And again, this is why I'll tell you, this is very selfishly why I have a flexible work environment. Like I'm a divorced single dad.
I have to do shit during the day that is personal. Like I just have to, it's part of my, sometimes my kids have this.
Sometimes I have to do this. I have to go over here sometimes because of the nature of my life.
I haven't been grocery shopping in weeks and I have to run out and grab something so I can eat because I work from home. And it's like, how can I then, if I want to, if I prefer as a leader to be held to a results-based philosophy with a flexible work schedule, how then can I tell my employees, you have to be in your seat 8.30 to 4.30 and punch this card.
And that's how I'm going to judge your performance. Even though I can run out and hit the gym at noon real quick and come back because then I know I'll log in at 8 p.m.
and get work done from 8 to 10 or whatever. Like I then can tell I can't tell my employees that they can do that stuff.
You know what I mean? Or that that there isn't that bit of flexibility in their lives. Like to me, that disconnect is like is the number one way to completely trash your culture is like,

is like, and you see this a lot, right? You're, you're the, you're the producer, you've been there for three or four years, you're sitting in an agency, and you see the agency principal log out at 11am and go play golf every Friday for the entire summer. You know, and the standard philosophy is well, that individual invested time, money, resources, built this business built, They've've earned that right.
Okay, I can buy that certain levels of seniority and certain levels of risk taking do then provide you with certain levels of flexibility. but it can't be you live this way.
I live this way, right? Maybe it's you get one Friday a month

that you can go play golf

or go out on your boat or have a half day on Friday if you want during the summertime. Summers

are a big deal up here because they're so small, right? So that's why I'm focusing on summer.

Other parts of the country every day is summer, so it's different. But like, you know, up here,

that's like a big thing, right? Your summer in the north is very, very important to you.

And I know people that have literally quit jobs because they've watched the owner or the owners

Thank you. And I know people that have literally quit jobs because they've watched the owner or the owners have all this flexibility to enjoy their summers and they get zero.
You know, I don't think that people expect, I think people intrinsically understand the difference between someone who has taken the risk, who has earned the right to have maybe the max benefit of a culture, but to give someone no benefit or to create a completely separate set of rules or guidelines or performance triggers for everyone else versus leadership, that just destroys trust, destroys all the things that you just talked about that make a healthy environment. And it just, you know, you're holding yourself to a different standard.
How can you expect people to want to live up to it? It just doesn't work that way. Yeah.
And you bring in the insurance lens, which I've only been in this industry for about three years. I think there's that element to it, which is just consistent across every company.
But then also there's this big challenge with insurance, which we're going from a digital 1.0 world to a 2.0 world. And you look at a lot of the leadership across some of the big insurance institutions, and you use this word practitioners.
I love this word practitioners. In today's environment, you need to be a strategist.
You need to be technologist. You need to, it's like, you just need to be questioning everything.
Because the way business has been conducted over the past 10, 20, 30 years, clearly is not what it's going to look like 10, 20, 30 years from now.

I think there's been in insurance, even this general attitude of like, you know, let's wait and see. Let's wait and see what happens.
It's a fast follower mentality. Yeah, exactly.
Exactly. Fast follower, which frankly, it's one of the last bastions of, you know, still the email processing and, you know, these workflows and the administrative work in this industry is kind of mind boggling when I come from other industries.
And I think it's safe to say it's going to change pretty quickly. And there's some folks that are leaning into this.
But I also see this general hesitation to be the first. There's no incentive in a large insurance carrier to adopt these new practices because you're not rewarded for doing so.
You know, it's like nobody's going and patting John or Jane on the back and saying, oh, great job with this new digital platform. Because most of the time people are irritated from having to change their behaviors.
Like you're actually, you know, people get their pitchforks out when you come and move their keys. And so, yeah, I find it interesting.
It's really tough to be a leader these days in insurance space and move the industry forward because people are so entrenched in their current workflows, current processes. You know, I spoke at this conference, the Dig In conference, and they really prodded me.
They really prodded me for what I would do if I was in a big insurance carrier. And I tried to caveat as much as possible, but I really challenged some folks.
I was like, what is your value? Just come back to the core principles. How do you contribute value to the company? How is it today? What do you think it should be? And I saw people, people were shaking their heads like, oh yeah, well, this is a bit uncomfortable.
You'd see people shaking their shoulders, looking around. It's like, oh man.
And it's just a testament to, I think people want to like this. There's brilliant people in this industry.
People want to change, you know, we're shining the spotlight on the fact that maybe there's other ways you can contribute value that you should push the needle. We're not saying like, you know, we, we need to go off the, off the, the rails here.
Like there's a, there's much more good than there is bad, but let's have an honest conversation about how we contribute value to these small businesses that need a better product, that need it faster, that need more transparency, that it needs to be more consumable. You're just getting a lot of times a PDF document as a policy form.
What are they supposed to do with this? Yeah. Yeah.
So, so I have so many thoughts on this particular topic. I'm going to start by saying about three weeks ago, I did a just off the cuff video for LinkedIn.
I was walking, I was on a walk. I just got done with a couple carrier calls, two consecutive carrier calls where I questioned the UX of the carrier.
They were, they were peppering me for why aren't we writing more business with them? And I said, because your UX is terrible. It's incredibly difficult to do business with you.
And what I said to them, and then they would push back. That's not what we're hearing.
And I'd say, okay, well, I do a straight behavioral experiment every day where I send a shit total leads to my producers and they choose where the business goes. My producers do.
Do you think they choose because they dislike you? They just don't like you. They hate your brand.
They hate your logo and your colors. Do you think that's why they choose it? Or do they choose it because some variation of your product, your pricing, and your user experience does not match up with what makes their job easy because we're all super selfish.
We all want to do what's easiest. So a producer, 99 out of 100 times, with a bar of quality coverage, right? I'm not going to say anyone is doing anything, you know, improprietary or whatever.
with a bar of quality coverage. After you hit that bar of quality coverage, the next most important trigger for where the business goes is who's the easiest to do business with.
Not price, not schmuggies, not, you know, cyber reports has nothing to do with any of that crap. It's how easy is it to do business with you? That is literally the next one.
And I've watched this over hundreds and hundreds at this point, thousands of opportunities coming into Rogue, watching where the producers put them. And in this case, what I said to them was the vast majority of our small business goes to the Hartford.
And the reason for that is because the Hartford is really, really, really, really, really, really, really easy to do business with considering they also have things like, because people go, well, what about companies like Coterie? Coterie is a great company, except Coterie does not have a contingency or bonus program. So you're only ever getting their standard commission level, which if I could go, if I can get standard commission from Coterie, standard commission and contingencies with Harford, well, I make more money there.
So that's where I go, right? So that's kind of the thought process. So, you know, there, and, and, and my point in the,

in the art and what I said in the video, just to kind of wrap this part up is, is Hartford seems

to, from the people I talk to and the changes they make to their platform seemingly is, is,

is incrementally building efficiencies into where the puck is going, right? Versus other carriers who I know call their biggest broker, who's probably 67 years old, who hasn't logged into the system in 20 years, who has Sally or Tammy or Jimmy or Johnny in the office, who does it, who places the business there because they feel like that's what the owner wants. And they don't give a shit because they're only placing a couple of pieces of business a week anyways.
And, and the owner comes back and goes, yeah, you're fine. I don't get any complaints.
And they go, okay, great check. We're doing awesome because they're, they're playing to where the puck is today, the way the business is done today.
And my point was, if someone asked me on stage, that same question they asked you, it would be like, I would make every decision would be, where is the puck going? We would iterate to where the puck is going, not monumental tear down rebuild changes because the insurance industry isn't broken. That's the big secret that the disruptors of 2015 and 2016 didn't get.
You know, they went in, they went to Silicon Valley. They did some sort of NBA dick regression analysis and said, insurance is an opportunity.
These people are all idiots. We're going to change it, right? What they didn't understand is it wasn't broken.
Insurance is not broken. If your building burns down, if you get into a car accident, if you do something stupid, your insurance company shows up and they hand you a check and they say, here, as much as we can financially, based on what the policy you bought, here's your reimbursement.
And that is how the business is supposed to work. Your town is not rallying to put your house back up if it burns down in a fire.
They're just going to yell at you because you have a shitty smoldering building and now it's making their home value go down. Right.
So like the only entity that's going to rebuild that home for you in this case, personalize being is going to be insurance company. So it's not broken.
That being said, I think the vast difference between the carriers that I see today succeeding and the carriers that I see stagnating has to do with the singular idea of iterations to where the puck is going versus where it is. And I think that startups like you, like Coterie, I love the people at Coterie.
It's not a knock on them. They're new and growing.
I feel like starting their own internal agency and going D to seed, I'm completely fine telling them I think that was a mistake from a brand perspective because everyone knows and it kind of keeps agents who don't like to compete against carriers down.

Although we compete against all our carriers.

We kind of know that. But they just need a contingency program and Cotery will be fine.
But like, you know, I see Cotery. I see Pi.
I see Coverwell and Transportation. Like I see you guys, you group of this next generation, not disruptors, innovators, pushing the carriers that are thinking the right way to match.
Now, the hard part about that is now you're competing against juggernauts. But I think it's worthy work.
And I know many of you are going to end up getting, are going to reap the benefit personally,

but also from a purpose and meaning standpoint, do really important work and really change things, which I think is incredible. Um, I want you to comment on that if you have a thought.
And then I have, I have one more question. I'm gonna be respectful of your time.
I have one more question I want to get into around, um, you know, your, your product is marketed to a certain extent, I'm being built on AI, which no one knows what that means at all. So I would love to, any comments you have on what I just said, and then move that into what is AI and how are you using it and all that kind of stuff.
Yeah. So it's a quick response to what you're saying.
Again, brilliantly said. I would say that moving to where the puck is going to be, I can tell you where the puck is going to be.

Think about this Amazon philosophy of people want better pricing, they want it faster, and they want more options.

Just put that in your head.

Everybody should be thinking about this.

What the Internet of Things is doing is it's creating more transparency.

People are realizing, oh, my gosh, I have more options.

I have more agents I can work with.

I have more wholesalers I can work with.

I'm more options. I have more agents I can work with.
I have more wholesalers I can work with. I have more carriers I can work with.
Options are becoming more evident to them. So you need to be thinking about, okay, how can I elevate? How can I provide better service, better pricing? How can I be smarter about how I underwrite? How can I just create more value? Like that's really what it comes down to.
And it happens at every layer of that stack, every layer of the distribution stack. And as it relates to what we're doing specifically for this, so being a tech entrepreneur several times before, really most technology is grounded in data.
It's how you apply data to solve problems, to be faster, to provide more options, better service. And in our case, it was

understanding what are the exposures of small businesses. So you think of a small business,

and I'm here in Los Angeles, California, there's like, you know, 10 restaurants around me within

a mile radius here.

If I was to get a submission to these restaurants, probably look all the same. Roughly the same number of employees, same zip code, probably a lot of the same practices around wage and hour and employment training, et cetera.
They would come up on a PDF application. But there's lots of nuance between these actual small businesses that you can pick up from knowing where to look.
And this is looking at lawsuit information. Maybe it's not a claim against the company for management liability, but we want to know if this company has been operating compliantly within, you know, maybe it's the state regulation around, you know, accessibility.
Things that wouldn't pop on a PDF application, but it just shows the governance, the compliance of this business. Or, you know, what are employees, customers saying about this company? What's the other financial variables that we can pick up about the business? So this is through public private APIs that were pinging information, which like you as an entrepreneur, I'm sure you've spoken to a lot of tech companies.
They talk about AI. Even to be able to talk about AI, which I'll get to in a bit, there is so much data engineering complexity to be able to find this data, to be able to pull this data into your system structure in such a way.
So then you can build the AI models. The AI models are the application layer on top of massive data infrastructure that needs to be built.
And so the AI layer is really understanding, okay, if this company is compared against similar companies, what's the risk profile of this business on a relative basis? Because if you think of what an underwriter does in a traditional company, if it's a, you know,

and this is an account that's sizable where it's even worth their time to go search for this.

You know, maybe they're going to go to Google

and say, oh, I'm going to query in lawsuits

against the Hyatt in Venice Beach.

And they're going to be like, oh, great.

Nothing there.

Fantastic. I've done my job.
Or maybe they're going to Yelp and it's like, oh, Hyatt, I'm going to scroll through and see if anybody says anything bad about this company. Well, in our case, we're looking at a multitude of different factors.
I think we have like 18 different sources for data that we're going to, and we're able to ingest this information and get a relative score. Because maybe, yeah, you do find something on Google about this company, but it's such a massive company.
Is this normal behavior where you get a few lawsuits for a hotel of that size? Or is this something I should worry about and I

need to modify the account for? So AI is able to ingest this information in such a way that it normalizes it. It normalizes the behavior and response of an individual that's trying to interpret this and tells them how meaningful the signal is and how they should change their behavior, the underwriting of this company.
And then it also allows for this human in the loop to provide a signal back to the model of, okay, you showed me what was important. You kicked this thing out for referral.
Me as a human, I can interpret this information. And then I can tell you whether it's the next time this thing comes up, whether the model should kick it out on a similar basis.
So you're training the model as much as the model telling somebody where to look. It's identifying the signals.
And this is how you get what I call bionic underwriting. It's the system does most of the work, but you still have a human there to interpret the asymmetries of the risk and be able to say, oh, ooh, this is a great account.
Like, you know, our system is pricing here. But yeah, I see that we can probably do much better because I know that manufacturing in Ohio, you know, we've built a really strong book here.
And again, this reinforces the book. Hey, we should continue to mod to change our underwriting for manufacturers in Ohio.
Similarly, California, we know that the exposures are just increasing here. If you underwrite just historically, maybe it looks okay.
But with the litigation trends in California, we need to be continuously modifying the accounts up.

So that's one piece of it, which you think about on the underwriting side. But then think about

this account during the policy term. Now we've written this account.
Now we're on the policy.

And I want to get back to risk mitigation because this is really why I started the company.

You spoke about these employees that you hired. And there was controversy around these employees where it wasn't a good culture fit.
Well, probably what happened was like, you had people that were leaving the business maybe, you know, there's a little bit of turnover. Probably people were a bit disgruntled.
Maybe it impacted your financials. We're monitoring these signals throughout the term of the policy and saying, hey, are there things that we should be thinking about from a risk mitigation standpoint that we can propose to the company and say, hey, talk to our HR experts.
We have HR experts on call. And if you, in the case of these two employees that you needed to fire, not many people know how to fire well.
There's a very clear process, depending upon the state, of how you terminate an employee and do it without them suing you for wrongful termination. There's a very, very fine line that I advise everybody getting counsel about before they do this.
We are saying, hey, before you fire them, come talk to us. We'll give you the playbook to how to run this so you don't have a claim.
Or, you know, somebody says, oh, somebody said this really uncomfortable thing to me that could be construed as harassment. Somebody reported this.
Come talk to us. Come talk to us, and we'll share guidance on how to communicate to the employee, how to communicate to the company about this event.
So you're not, you know, putting this, you're burying this. And that's where things go wrong.
It's not the events because humans say things that might be misinterpreted. It's how the company responds, how leadership responds in these events that lead to the adverse outcomes, the claims, et cetera.
So yeah, we want to be partners to these small businesses. We have a handbook builder for companies.
We have harassment, discrimination training. We have tons of data on this new legislation.
I think there's 60 new pieces of legislation coming out for small businesses just in 2023. On January 1, 2023, 60 new pieces of legislation.
Certainly, I'm not reading up on my municipal and state legislation about how this impacts me and wage and hour laws. So yeah, we want to be advocates for these small businesses.
We want to take this off their plate because we talked about how hard it is to be a small business already and be educating these businesses about what their exposures are, how their risks are changing, and how our product responds to those risks. Because, yeah, it's just things happen in a small business, and we want to be able to respond with great claims management when they do.
Yeah, I want to be respectful of your time. So we'll, we'll wrap this up.
But I just just to finish off that idea, I think I love that. I mean, to me, the advantage of data is not just marketing.
I think a lot of people immediately just think marketing and sales data, you know what I mean? Or maybe they think pricing of products with data, but so much of it can be the communications, the comms, the proactive outreach. You see, you know, you, you can, you know, you're subscribed to certain databases.
You can see increases in payroll, increases in revenue within days of when they happen and send out messages. Hey, your payroll just increased by a hundred thousand dollars.
That means you're hiring people. Are you, you know, what practices you put in place? What's going on? Do you need to tell us something, you know, as your insurance provider? These are all moments that I think are, you know, the disparate nature of how insurance is distributed creates a lot of user experience issues.
a lot of, we'll just say bland user experience, a very bland user experience that I think can be rapidly approved upon as we start to connect. And I love where you're taking it, man.
I'm super excited for you. I'm gonna be following along in the journey.
I'm glad that we had a chance to meet. I'm a huge fan now of what you're doing.
And, you know, so let's, let's take this last moment before we finish here, just where can people learn more? I know you said that, that agents that are listening can get to your products through various wholesalers. I'm sure maybe if they go to your website, they can find those wholesalers and know who to talk to and whatever.
But if they just want to follow you or check people out, where should they go? Where should they learn more about you and what you're doing? Yeah, our website's yourcounterpart.com. Come check out the websites.
We have to our LinkedIn page, to our Twitter page. Yeah, we're here to educate the market about the potential for management liability.
Again, it's not where it is today, but what it should be for them in terms of the service that we can provide and the quality product we can provide for the small business owners. And we need to do this through partnerships.
I think that was one point that I failed to mention that is, yeah, all these insure techs are doing cool stuff, but we're standing upon the shoulders of giants. Like we're standing upon the shoulders of our great wholesale partners, these retail agents, these carriers that are leaning into the future.
And, you know, we're helping to nudge them along and show them what's possible. Yeah, I love it, man.
Well, I'm super glad that we had a chance to connect.

I'm glad we had a chance to share your story

and your expertise with the audience

and wish you nothing but the best.

Thanks for having me, Ryan.

This was really fun.

Awesome. Cheers.
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