Virtual Insurance Brokering

INTRO

On episode 11 of the InsurTech Geek Podcast, talking about Virtual Insurance Brokering with John Warburton from Konsileo.

The InsurTech Geek Podcast powered by JBKnowledge is all about technology that is transforming and disrupting the insurance world. We will be interviewing guests and doing deep dives with our own research and development team in technology that we see changing the industry. We are taking you on a journey through insurance tech, so enjoy the ride and geek out!

INTERVIEW

JAMES: Creating salutations to everybody out there in InsureTech world. I hope you are doing well I hope you had a wonderful Christmas and New Years and enjoy the beginning of the year. Can you believe it is already in February of 2020? I had a unique date the other day, right, it was 2, it was 02/02/2020 February 2nd, 2020. That just happened, that did not happen for the last 900 years so if you date a math nerd you will enjoy the fact that you had a unique date recently. Also, that is the year 2020 and this is supposed to be when all crazy things happen like, flying cars and bionics and all kinds of stuff that we kept on being promised in science fiction movies. And they not quite here yet but we do have a lot of other cool stuff and one of those things that we are going to be talking about is of course out of the cool world of technology is InsureTech. And today we get to talk about it with a cross pond episode we have a Brit. That is right the ladies and gentlemen we have a Brit on the show. His name is John Warburton. John, how are you doing?

JOHN: I am very well thanking you James, and it is lovely to be on your show.

JAMES: Ah, lovely to have you on the show. Always good to have someone from the mother ship, from Queen‘s country.

JOHN: The people who speak the correct English you mean.

JAMES: The Queen’s English, yes, that is the correct English, it is the correct English, yes. My English teacher might senior year of high school was Mrs. Smith. And Mrs. Smith was from England as well and she made it very clear from her first day of teaching with us, that we would be learning the Queen’s English for that year. And this was before, this was back in the 90s right, this was before they before the educational system got so standardized that teachers didn’t have any latitude, and so, she taught us what she wanted for a year, and she thought me, that woman Mrs. Smith that my favorite English teacher “-“

JOHN: I think the problem might have been, the thing that we all do when we go to America, is we all we speak a little more received pronunciation. We all speak a little poseur just to impress you Americans. If you listen to people speaking to each other over here, it is a lot less elegant then Mrs. Smith. She was probably from the east end of London and a real Cockney

JAMES: Exactly

JOHN: She put it on for you and she came over the pond

JAMES: She did. She put on the Queens English and there is a good bit of putting on that is going on with both British and Australians, we have had a lot of Australians on our other podcast, the Contech Crew. We only worked in 2 industries construction and insurance and they have intersections all over the place, so we get to work with Brits and Aussies and all kinds of “-“

JOHN: The key culture inside the Brits is the end of the film “Love Actually” That’s every Brit’s fantasy when they come to America if you know the bit I am referring to.

JAMES: I do and that is hilarious. Go for its man, I tell you what, it is a that is a keen insight into the British mind right there.

JOHN: That is it, that is it, that is why that’s sustaining half the tourist industry that comes to the US, it doesn’t matter how many visa restrictions you put in front of this, they, we think we’ve got accent arbitrage that we are over.

JAMES: Man, no one’s ever said that to me but that is truly hilarious. Aussies put it on too when they come here. I mean, big time.

JOHN: Yeah, but no one can understand what they say so that is fine.

JAMES: Exactly and they constantly confuse them for being British and then, the poor South Africans you know, we have an office in Cape Town and we have a lot of British South Africans and Dutch South Africans and the British South Africans and no one can tell where they are from. They guess Australia, the guess England, but they never guess South Africa. But you are one of the Queen‘s people, so we’re going talk about you first and then we’re going talk about insurance tech and we’re going to kind of dive into bits and pieces behind the technology that’s driving a lot of change in what you call broking and what we call brokering. Yet another difference. It’s like when you all say to go to hospital what happened to the pro, what happened to the article the “The” hospital, you know you going to “the” store you go to hospital can you explain that to me?

JOHN: I cannot and to be honest that is the first time I have considered that we do not put the hospital in front of hospital. That is true, I am going to hospital.

JAMES: You’re going to hospital?

JOHN: The generic, the generic hospital I suppose

JAMES: Like, which hospital it is so confusing. It is almost like you turned hospital into a verb. Anyway, besides the point. Let us go back to this and let us talk about you. Where were you born and raised, where did you go to school, and you had a stop at a school I am not fond of, so we are going to talk about that

JOHN: Yeah, I went, I was lucky I had a stint at the best university in America actually which was great for me. But, before I went to that one, now I am originally from Plymouth in the Southwest which many people on your side of the pond will be familiar with.

JAMES: Yes

JOHN: So my, my father was then in the military, in the Navy and, but then he left and became an insurance broker so I’ve got it in my blood and grew up there and then in just South of London when I was a bit older I went to University, my undergrad I went to a place called “The School of Oriental and African Studies” where I studied middle eastern politics and I was also in the military as well myself. I was going to join the navy & I was going to become James Bond, that was my plan, and so I was learning Arabic and learning where things were in the Middle East and so I would be better prepared to go and do military things, that was what I was doing but we had a lot of defense cuts so I decided not to do that and I ended up in an insurance company in 1993 was when I joined the insurance industry so, I think I’m quite a bit older than you, and then yeah, I went through the normal insurance company stuff, I work for a company called Commercial Union which is now part of the Viva and then when I went when I was 23 I went with them to Hong Kong and then to Beijing so I was in East Asia for the best part of three years which was a formative time for me, and a lot of fun as well, being 23. And I was there looking at British things, I had already left home living in Hong Kong. I was living in up in Beijing, but I was there in Hong Kong on the 30th of June 1997. Do you know what happened then?

JAMES: One of the worst days in Hong Kong history

JOHN: Well, I think that is a matter of opinion. Depending on which side, cyber certainly caused a wrench for me. So, yeah, this, for your listeners‘ benefit this was the day that Hong Kong was handed over from British sovereignty to China

JAMES: So sad.

JOHN: And I was there, that was the last day of the British Empire, the last vestiges of the British Empire, seeing that flag come down, but I will tell you my Hong Kong handover anecdote so we, on that day we’d been out and in a company junk, terrible rain, Prince Charles was there to do the handover and it was a big ceremony. But I went with some friends to a nightclub not far from where the ceremony was, we went you know just typical nightclub type stuff, playing regular dance music and then they had the TV’s on silent in the corner of this club and as it as it was getting towards midnight it was a bit like the sort of the thing you get in, you know New Year’s Eve so you were counting down towards midnight and they had the TV on silent and you could see and they cut across to the TV and they paid like God save our gracious Queen, so you they, they, as the Union Jack was coming down, and as that has come down the Chinese flag was just starting to raise. And the DJ in the club turned off the TV sound and just started playing “Always look on the bright side of the life” by, from the film “The life of Brian”. Always look on the bright side of life, and that was my, that was the end of the British Empire and I was there to witness it.

JAMES: Oh, you were there oh my gosh, you know as tough.

JOHN: Adios amigos, then I just carried on being the insurance guy.

JAMES: As an anglophile you know I am not British, but I pretend to be one sometimes, and I am half English and I love Great Britain and I think, you know it is a pretty good place and I love going to London. Finance and insurance are big business in England.

JOHN: Yes, it is in many ways. It’s the center of let’s say global life bit of insurance industry so Lloyds of London and all that and those, the reinsurers and Munich and Swiss Re have big–big capital but I think it’s more international Insurance market then sort of, bids around Hartford in New York and so, So yeah it’s a pretty interesting place

JAMES: Yeah, it is the fascinating place, and of course the companies that led the expansion of the British Empire, there was a very interesting public–private partnership between the British Empire expansion, between the British government and then all the different development companies. That went well “-“

JOHN: I think this is interesting when you see it, so I worked for this company Commercial Union which was one of those legacy kinds of you know that started in the colonial time‘s companies. And what’s interesting is you go around Asia, Malaysia, you know Hong Kong, Singapore, Australia and then into even the bits where not necessarily colonized by the Brits that’s what influenced under Thailand and you see the same, basically the same policy wordings, the same structure of insurance products and so on, particularly, not so much in consumers business but commercial insurance. It is pretty much the same wherever you go because of the Brits. Because we went around and put these structures in, based on copy–pasting policy terms and policy conditions from the UK practice in the 1920s, 30s 40s, that sort of thing. So yeah, as an insurance person if you learn as I did you will learn your insurance in the UK it’s pretty transportable around most bits of certainly Asia and funny enough even, then later on in life I worked in Germany and even in Germany, Italy, Spain to be honest. There is a lot of commonality in commercial insurance in terms of terminology because it is kind of was exported by the Brits

JAMES: Yeah and I love looking at the history of things. I’m a history nut and listen to lots of history podcasts, I read a lot of history books and I like to know where we came from, so we can understand where we are going, so I’m a futurist technology company owner who’s been writing code for 30 years who is obsessed with historical accounts of things and it’s festinating because you know because the Romans and the Greeks were the originators of insurance. They have done like bottomry contracts that the merchants of Babylonians used 6000 years ago

JOHN: Yes, yeah especially, it all comes out of marine cargo, doesn’t it?

JAMES: Yeah, yeah. It does. And it was all marine cargo and then ancient Roman law recognized bottomry contracts and then the Greeks did the first known actual insurance contracts but it was all about a maritime cargo but of course, you know the great fire of London, 1666 was the that was the big originator for fire insurance and property insurance

JOHN: Exactly, so you get all these fire marks, but it is very tragic actually. We got this a lovely institution called the Chartered Insurance Institute and it is like the professional body awards the certification you get this sort of association or the fellowship which is, you can call yourself a chartered insurance broker. And they have this lovely headquarters, which was not like that old, it was like 100 years old. But it had all these fire marks up the staircase from all these old companies because, after the fire of London, different insurance companies would have their fire brigades. There wasn’t municipal fire safety so they would have a fire mark on the side of a building and they would, these guys had fire engines which was like a horse–drawn thing and they’d have a pump and they’d go pass the way if they were a fire that goes past the ones that had the other people’s fire marks on and they’d go to the one that had their fire marks. So, you basically, and this is kind come full circle, you were buying insurance, but you are also buying a mismanagement service

JAMES: Yeah, I was going to say you are buying loss prevention as well, right?

JOHN: Yes, loss prevention, or loss mitigation at least. And so, you know we have come full circle it’s now a possibility to buy those sorts of things, I mean that sort of goes to the heart of my thesis around insurance broking we are here to manage risk and not to sell insurance.

JAMES: And you are seeing that interesting California there is a lot of companies that sell private part protection services for wildfires and of course there is a lot of public out roar because you know they will like why are you passing their houses? Well, those houses paid for private fire service in addition to paying taxes to pay for the public fire service, but there was a good bit of discussion and argument, but you know no discussion of insurance in England and anybody English incomplete without talking about Lloyd’s, right? 17th century starts at a coffeehouse and it’s just wild to think of it that Edward Lloyd in a coffeehouse would start something so big and so, you decided not to go to the military and I, by the way, I had a similar choice I was in the core of cadets in the day in I was in Navy shipment which means I was a cadet as a college student I had a choice to commission as an officer and I chose not to be because Bill Clinton was president at the time and he wasn’t hiring. They were in the same thing military drawdowns.

JOHN: Well, those were the days of do not ask, do not tell. Wasn’t it? it was the days of do not ask.

JAMES: Yeah, it was a wild different military and it was a very different military and it was a very different hiring policy very different staffing policy so they weren’t hiring and so I, it was a lot harder to get a commission in particular in the areas I was interested in and so I started my software company and you had a similar choice, you chose to deep dive into insurance which let you interestingly to Hong Kong. What happened after Hong Kong and Singapore and all of that?

JOHN: So, I was in Hong Kong Beijing, so I came back in 1998 then I worked for a couple of years in the London head office of Commercial Union. And they went through a couple of merges and I run a personal loans book which was a sort of your affinity motor home and motor insurance

JAMES: It looks like you got caught up in the dot.com boom little bit in 1999?

JOHN: I did yeah. I did a thing for about, well overall about two years but full–time sort of 6 to 8 months, so my dad as I said, he was in insurance so he had a funny little brokerage business that did a bit of this a bit of that but they had a bit of travel insurance that they did, and said let’s go out this week sell travel insurance direct to consumer on this, their inter-web thing, and this was pretty early days to do a transactional. We were the first ones to do a transactional the e-commerce

JAMES: Yeah in 1999

JOHN: Yeah, that was pretty early it was called Gosure.com because you would get good URL’s back then and that was moderately successful and in the end, some other guys came along with a bit more money but interestingly we got, so I then went off to Business School for a couple of years after that like it was just like a filling for six months, but funny my dad sort of took it on and then this guy worked with us, my brother did it for a bit as well, then he went off to college and this guy went and said oh, he was a friend of my brothers and they went off and he said can I do the same thing in Australia and he went off and did it with his technology partners and is now I think second biggest one in Australia

JAMES: Nice

JOHN: So, he is kind of like a couple of 100 million so or at least 100 and something million so yeah, he did well with it. So that was quite fun and then I went to Business School and then as I say it, I went to business London School

JAMES: Hold on, and the great state of Texas?

JOHN: Yes, so I went to the real University in Texas

JAMES: The other one

JOHN: The University of Texas not the one that teaches people how to manage agricultural machinery

JAMES: So, you did learn something over here? You learned how to, you learned how to smack talk like a Texan which I appreciate. So, for the listeners out there “-“

JOHN: So, I was at University Texas in Austin which is the legal Oasis of civilization in your fine state.

JAMES: It is, it is an island. By the way, what brought you to Texas and UT?

JOHN: I just fancied it. There was a list of places that you could go in exchange for six months, I was doing you know my degree was in London, but I just fancied Texas. I just thought it was the nicest American place where you could go

JAMES: It is.

JOHN: So, I had the blast there and I was there in 2000 election, the dimple chad election with George W and Al Gore and it was fascinating

JAMES: Yeah, hanging chads, dimpled chads

JOHN: Dimpled chads, hanging chads exactly

JAMES: That was an exciting time. Everybody felt like a felt like an insurance underwriter specifying endorsement in a binder, right? If it is halfway off but not all of the way off is it still a hanging Chad?

JOHN: I must admit with, being slightly annoyingly British about it for a moment. I was a bit amazed at the time that people did not back off, I was surprised that the response from both sides was to send 300 lawyers each to Florida, it is like the appearance of legitimacy is almost as important as the result you know.

JAMES: No

JOHN: Anyway

JAMES: No

JOHN: Let us just win.

JAMES: That’s not the way it went down

JOHN: No, exactly.

JAMES: You spent afterschool quite a bit of time at Allianz.

JOHN: So, I was at Accenture for a little bit for a few years which is quite good training if you just being to Business School and, you learn how to do PowerPoint basically. And kids were on their way, so I thought right, to get out of consulting it is too much travel, and I got this job as the head of sales and distribution for Allianz it is UK business which was called Allianz Cornell at the time. And I was there on and off for a few different guises from 2004 to 2011 and what was interesting about that time and I had a few different, sort of added marketing to it and product development and sort of undid it a little bit but the, I was on the board of that commercial, so the way it was structured in the UK you had to commercial insurance business into the personal insurance business and what was interesting about that time was, there was a lot of consolidation a lot of rollups going on in the UK at that time amongst brokers.

So, what was happening was we would–we would have these recently stable portfolios of business and we were paid like 17½ commission on average or which was the typical for a commercial combined policy, or 10% for fleet and these sort of levels of commission. And these guys would buy using private equity money would buy up these breaking firms and come and knock on our door and say oh yeah you know these portfolios that have 17½ yeah, it’s not anymore, it’s 30 I’d say what? 30. Not like 20? No-no 30. We are going up to 30. We would like to do some work transfer so we going to add more value to you so let us just call it 35

JAMES: Woah!

JOHN: We were sort of gob smacked. The management team and of course as is it’s a strategic issue and it was interesting from an economic point of view because what was happening was this was between an there was a reasonable concentration, I mean, there’s a lot of personal lines carriers, sorry commercial lines carriers in the UK, but there were five or six dominant companies one of you know I think Allianz was 3rd or 4th biggest at that point, it’s now the second biggest, and so there is that whole prisoner‘s dilemma issue going on so you know if they jump and they go for this thing then we’ll be left behind we’ll lose our volume I did, there’s a fantastic article about insurance called The Journey by McKenzie. I do not know if you have seen it that. Have you ever read that?

JAMES: I have not.

JOHN: It is the Seminole treaties on how to run a good insurance company and what it says is, do not chase the volume chase the profitable business so if you going to give up the volume then do not, don’t-don’t do it. But there is this function of the heart of insurance companies which is we have got a fixed cost base. We don’t want our expense ratio to rise therefore we’ve got to keep the premium up rather than address the cost base and what you should do is just keep your cost base reasonably stable and let the volume fluctuate according to what pricing you can get. That’s a better way to run the insurance company than, be worried about–about the ratio rising slightly, but anyway we got sucked into that vortex and they all were, and what happened was people, it was business dilemma people broke, they said we’ll pay 30 and then before you know it you just have this rising tide of commissions, very scary.

And what I noticed back at that time was that these guys who were going around and buying up those firms firstly you know they were basically using the insurers money to pay back the dept and the private equity were feeding it, it’s kind of Frankenstein’s monster phenonium, but also this is interesting, these guys weren’t adding anything when they did it, they were just literally, it was literally a roll up and it was literally a supplier buying a buyer power type play and the insurers were the only target so the clients weren’t getting any better service in fact they were probably getting worse service and the staff and this was the key thing the staff were getting disenfranchised because they were working in 30 person organizations and they might have one day thought of becoming a partner or a director of that firm and suddenly they’re just assistant branch manager in some provincial bit of a back quarter in this bigger organization but there’s none of the benefits of being in a big organization so that was my key kind of insight, if you’d like in that period was that broking was just fundamentally a flawed model in terms of where the value creation was done.

JAMES: Yeah, basically they held them hostage, they said hey, we are big and bad now, where giant and you are going to pay more percentage because we want it

JOHN: Yeah I mean from my point of view at the time it was like you know they’re screwing the insurers but, I mean insurers had fallen back a bit but so you shouldn’t feel too sorry for the insurers, I mean, it’s their own mistake that they said yes. But what they were also doing, the collateral damage was the client relationships and the staff. They what they were never doing was they were never investing in operational changing technology. So, they were kind of doing the roll–up and then stopping at the level of managing the portfolios, optimizing the portfolio, and the placement strategy and that was it. They were not doing anything to address thank you inefficiency is in the organizations. The operational processes, is the proposition to their staff, the proposition to the clients, etc. So all those things were kind of left where they were or they are worsened because there were few choices, or less choice of insurers or the internal mechanisms in all these firms became largely about to have you made your budgets for placement with insurer A, insurer B insurer C so it became a sort of disenfranchising of the professional whole of market risk advise that these guys, that these broking people, this produces, and these brokers could do

JAMES: In other words, they were not placing the client‘s risk needs as the primary priority?

JOHN: Yeah, are going through the motions of doing that but within a restricted portfolio of the preferred market, and then in addition, they then got even greedier. They wanted to go from 30 say 32 to 37 or 40 percent, so then they said hey, we’ve got this brilliant idea, we going to create a managing general agent and we’re going to consolidate our book into an even smaller number of insurers and they would be pressured internally to use the captive facility that was within these things, so you got this kind of rising tide of commissions which of course, in the long run, is pretty unethical and pretty, it’s against the interest of the client because the clients end up paying away 40, well plus the insurer’s own cost 45 to 50% before any claims are paid

JAMES: Yeah but they, the real issue too, is ultimately risk managers begot wised to all this foolishness of the big ones.

JOHN: The big ones did but the middle ones they didn’t have that much choice but, what you typically found was that and this I wrote this report with the Chartered Insurance Institute a few years ago and we got a bit of data and what was interesting was, about four or five years ago or even then say seven or years ago and onwards, like sort of mushrooms, the smaller firms started to grow market share relative to these consolidated ones because their clients were not happy, staff would leave and they would take the clients with them, etc. So there’s a certain organic nature of the insurance broking market where businesses are fundamentally sticking to individuals, and so these large consolidated place where they got this rather rigid structure, there’s a sort of diseconomy of scale at the end with those and that’s what you are starting to see now, although the game is still being played in the same way, we’re seeing a lot of consolidation going on still, you can market a sort of second wave and third with these guys because it’s a pretty easy way to make money apparently until it comes home, so one of the biggest consolidators had financial difficulty about eight years ago, seven or eight years ago, because you they did just an unsustainable kind of pyramid.

JAMES: True well depends on someone else buying you out eventually

JOHN: That’s the game, that is the thought, yeah.

JAMES: The real game is, acquire the real game is, we are going to get a higher multiple, if we have a bigger book of business then we would if we had a small smaller book of business

JOHN: Exactly

JAMES: And we if we can drive margins up, and if we can drive commissions to our producers down, we can pump our spread, and then take our multiple up three or four points from where it was and make a killing

JOHN: And that’s not wrong, in terms of, there is an economy of scale in broking, the problem is the primary, the only lever of the economy of scale, that brokers these consolidating brokers playing on was, buyer power versus insurers, so they were walking passed economies of scale and technology developments and support a process reengineering, they’re walking past economies of scale, which don’t exist that but heavily in branding, but certainly they were in a proposition or in staff training or staff wellness or any of these other things that might be leveraged you could use to make yourself a better organization that was just focusing on in the buyer power which is the most obvious one, so any way that was kind of an interesting time I spend back then in that period. It was a time of massive change in the UK market

JAMES: Sure in 11 years at Allianz and then you decided to “-“

JOHN: So that was up to 2011. In 2011 I went from them and then from 2014 I was based in Germany I was, I was promoted to this role which was, I worked for the chief marketing officer and this was a time when Allianz was rethinking hard about what does it take to digitize, I mean we would now say InsureTech but back then it wasn’t the word, but it was like what can we do that is digital, what can we do, you know Allianz biggest after the demise of the first, the post–financial crisis AIG kind of collapsed, and then rebirthed, so Allianz I think was the biggest property in casualty insurer. Well biggest insurer full stop. Sorry life and property and casualty, and massive global play and not so big in the US. A few bits and pieces in the US but more you know European, Asian pretty big, etc. So, so how can we digitize, and this was an interesting role and had a lot of prominences. The real board connection my boss reported to the global CEO and there was the operations chief COO which was into it all as well, so we had a big sort of, we got an appetite to invest, they got the way to invest with hundreds of millions as Allianz have done subsequently as well, in this internal change, do we work with startups, how are we going to crack this nut, and what we realized is that Allianz generally realized that we got this massive books of business which are dependent on personal relationships and this was more the consumer businesses in particular in places like Germany, Italy, Spain, France they have these models which aren’t which it’s not broker models.

They have tide agents. If you drove through any of this country you will see, Allianz, Axa, Generali offices because and these are single company face to face selling off the mainstream insurances you know. Home motor and agricultural insurance or whatever for the people in those countries, and of course transitioning back to be something digital without losing the intimacy of that thing of face to face. Connections was a big deal, but what was interesting for me, was so we tried loads of things, you know different forms of how you could digitize these guys and those sort of dragging it from the global perspective, but in each country, they had interesting experiments on how to make this happen. And I think for me, what made me decide to start Konsileo, I had this insight into these problems of commercial insurance broking in the UK, and what I also learned by the way when I was in Germany, was that commercial insurance I knew this kind of anyway, I knew the US market a little bit.

But commercial insurance broking it’s pretty much done the same way where if you go in the world, it’s a producer, somebody back in the office who sorts out the paperwork for them, and they’ll go out and see clients and the clients love them for years and years and years. That is, it. And then they have insurer relationships that they can place the business with, and it‘s the same wherever you go, whereas if you’re going into the consumer market it’s very different wherever you go in the world, so some people buy insurance online, you know like progressive in the US, direct Line in the UK, people in Germany, Italy, France they tend to buy from these tide agents direct. It is emerging. There is sometimes, there are insurance brokers involved in that, in the consumer space, sometimes there are not, but in the commercial insurance, it is pretty much all insurance brokers.

So it had all these learnings from doing the more international stuff and I was in lots of countries in Australia, across the whole of Europe, a little bit in the US, Brazil, you know it’s interesting and so, took this learning about how you can wrap technology around people but with a sort of human in the loop inside. The human was pretty important to the proposition so how do you work technology around them. And then I started thinking okay, there that problem that I saw back in 2004–2011 that this consolidation problem. These guys were vulnerable and I put the two together and said, insurance broking in the UK is fundamentally broken, the issue is that the value creators are not aligned with the organizations they’re working with, so that was my kind of insight then I started thinking about that.

Came back to live in the UK in 2015 and met my cofounder. A few beers and chats about what the issue was and my cofounder was a tech guy and we iterated around on it for the best part of the year but, basically where we ended up was, if you’re going to address this issue of how to align value creators by the producers with the company, we need to have the technology. A different way of doing the processes through technology because the prevailing model of how brokers are organized via, they all bought one or four software providers. So that model is broken. And that model is holding back, so you cannot innovate in the UK, it’s very difficult to innovate on how you do insurance brokerage because the systems are organized in a particular way, which is a kind of 20–30 year away, ago way of organizing, so it’s how to bring modern processes inside into insurance brokering, so we don’t spend a couple of years building the system and then we started trading as a broker about 18 months ago– two years ago

JAMES: And the whole premise behind Konsileo is, a tech–enabled brokerage that is all about serving the client needs and taking care of the producer? I mean it sounds lie I am looking at both sides of the equation, right?

JOHN: The key thing we, so we have three things we believe about broking the first one is, the person is more important than the brand they work for so in commercial insurance broking. I’m talking about the mid-market here, I’m not talking about what next insurance and the simple business in the UK, I’m not talking about one like, like a mobile head dresser or a person with one van, you know I’m not talking about that. That would go directly and they don’t need advice they just need to buy cheap insurance and I’m not talking about like the global Fortune 500 companies, I’m talking about the guys in the middle, in-between those two, which is a lot of companies and a lot of turnovers. And what they typically need, so-so-so those guys, they trust the person that deals with them, they don’t care what is on that person’s business card, not really so you know there’s a lot of loyalty to the producer, so that is the first point.

People are more important than the brand. The second bit is that advice and data are valued by consumers, by business owners, now the advice we know is true, that is the proposition at the moment, that is clear. The trick is to get them to buy into the better data will help them. Now that is a bit of a bit more of a hypothesis, that is a bit more difficult to prove because that is not the prevailing offering, but over time you know you can nibble away. Here is a little bit of extra data that is useful to you, here is a bit of extra data, here is a bit of extra data, so data, advice plus data is valued by clients.

And then the third piece, is that broker data, is superior to insurer data, and that is not a statement of the world as it is, but that is a statement of shoot be, and for the very simple reason that if brokers have data, because there earlier in their risk identification analysis process, they will that–that–that is better for the outcome of the overall underwriting process, and the simple example is, if there is something about that risk for example there was a regulator inspection, we call them the health and safety executive, that’s a thing in the UK, and there’s a regulator inspection into one of your factories two years ago, and this publicly available data about that inspection, if you have that data when you go to see the client and you say, oh I can see you had an inspection here, that they found some health and safety issues that it is reported on the online database from the government, if I can find, your insurer can sure as hell find it, so please tell me everything about that and what happened in the investigation, and you are your blending, 3rd party external data with the insights from the company?

Then you package that together, then you send that to the underwriter that is a lot better than the underwriter coming in later and saying, oh I notice there was anything inspection two years ago by the government regulator. What happened? And you go, oh sorry I forgot to ask them that or Mr. Client, what happened? And then you are going back and forth, and it is at best inefficient at worst. Nobody spots it, the claim happens, they try and repudiated the claim, professional errors in admissions claim against the broker, and everyone is unhappy. So, broker data is better than insurer data, just they are earlier in the chain and they can augment it within augmenting it within sight for the client so there are three things. So, we have got the people that are more important than brand, data, advice plus data is valued by clients and the broker data is superior to underwriters.

And then, with those insights, we then build our proposition which is kind of a freeway story too. The produces are probably a primary one, because they are the people who do the value creation and they get the clients ultimately, so to them, be the happiest, best rewarded, most professional broker you be. And then as to the clients and that’s about the advice, plus this data, and then to the insurers, it’s about being a fair and straightforward trading partner, so we don’t do that please give us 35% game, but it is also about we are adding value to your risk analysis and identification as we go free and we’ve put weight in terms of our business model but also our technology behind each of those three elements of our proposition

JAMES: That’s good stuff and I want to focus in on broker data better than the insurer data

JOHN: Yeah

JAMES: Because we are seeing certainly large sophisticated risk managers going fixed price on their brokerage services, they are doing RPF’s and they are getting a lot of responses. There are a lot of brokers that are willing to come in and work for them at a fixed price and no commission, and we are seeing that quite a bit. I was a City Councilman in my city for six years, we had you know good size city 120,000 people, we spent 380 million US a year, in our budget, so we had a decent risk management budget, and we had fixed price brokerage and TPA services, we unbundled everything, and you’re seeing a good bit of that and there’s a lot of brokers that are in a bit of arms race right now, to try and figure out how to continue to justify, there role in the world. Because let’s be honest, there are a lot of brokers, there’s a lot of good ones out there, but there’s also a lot that you know work hard to get the account, and then email their client a PDF form to fill out every year and then send it to the existing underwriters, and just try and get it renewed. They do not shop the insurance every year they will tell the client oh no you should not shop your insurance every year, it upsets the underwriters, etc.

JOHN: And I think this goes to the heart of the proposition is that, what does an insurance broker exist to do? And the clue is it’s like in the name, it’s broker is such a disreputable word because it just means middleman right, it means, I like if you just knew, and that its very worst you know where, why it’s been eliminated in some of the more commoditized class, and this is why these tide agents in Germany and France if you only sell Allianz policies and Allianz put up a website saying get your insurance here, why would I go to the guy with the mustache called Gunter who’s going to take hours to do it because he’s got a lot of paperwork to fill in and he’s going to charge me more why wouldn’t I just go to Allianz’s website and do it.

JAMES: Yeah

JOHN: So, if there is no value add in the advice, then why would you pay for it, and that is the key thing. So we’re about transitioning insurance brokering and in the commercial space it is more the case, from transaction enablers to risk advisors right, you’ve got to add something to risk advice, now most, more than half of well, the vast majority of the proposition is delivered by the skills and professional expertise of people who know what they’re talking about, said they go into your factory, your business, and I say look around and I say, oh you’ve got this exposure, you’ve got this exposure, you’ve got this exposure, I can see that. Oh, tell me about the machines you use. Oh yeah, okay. And how is your health and safety policy and-and-and-and-and? So, there is a lot about the expertise, but our insight is that, yes that is true, that is what brokers do, and that whole identification risk and then structuring it so that then the insurers can quote against product types. That is a value-added activity, but also, certain tools that can help that business to monitor and manage that risk and giving them data back, in addition is interesting to that client over time. And then, you are getting them into much more value–adding relationship because you are helping them to manage that risk, in a proactive way rather than just being a chain, being a step in the purchase of the coverages from the insurance

JAMES: Now look, I went to the.com boom. I am a few years behind you, but I went to the.com boom as did you, and many predicted 20 years ago, that the broker would go the way the dodo bird, because of the Internet, because of websites, and that did not happen. Okay, let us just say that did not happen.

JOHN: But it did in some certain segments.

JAMES: It did in certain segments, I mean you have, for example, you have home insurance companies, you have auto insurance companies here, for sure in the United States where you can directly write a bind. You have commercial insurance providers, I mean, that you contact on the web, you quote it out on the web, they can quote you in a minute, and bind you instantly, for commercial insurance, I mean, so, it exists. But there is still a massive brokerage business out there, but you are seeing brokers put a lot more of business in technology. Let us talk specifically about the technology, not about the framework you selected to build in and not about the database structure. We are not going to, maybe there is a conversation for Peter. It looks like that is the role he plays in your firm, but so looks like he has a fascinating background, but let us keep it high level. What specifically are you all developing that is changing the game for your clients and your producers?

JOHN: So, the core of it and the heart of it is, mundane if you are from any other industry, but game–changing if you are in our little world in insurance broking. And that is producing a kind of broking platform, so the actual broking process is this same as what applied systems do and we have these other ones called the actress and SSP but doing it properly, and the key thing is to have all of the risk data in the platform. So, the prevailing way, the typical way of, so–so–so most brokerage, you have got to understand a little bit about the history of broking software. So most broking software emerged from basically transaction accounting systems, so the key thing in the 1980s – we’ve got these four platforms in as they say in the UK, has applied in bringing an ethics system across from the US which is a marginal improvement on some of the existing ones but they’ve got a whole challenge of the Americanizing it as they bring it across.

But it is not just dollars to pound signs it is other stuff, so there are two things that traditional broking software has done. One is, it focused in on the transaction and it’s focused on getting the commission calculations correct between the broker and the insurer and logging that there was a transaction, and use various regulated client money calculations you need to do, and yeah there’s complexity there and it’s valid and that’s a good thing to do, and the computers are well organized to do it they’ve been doing it then since the 1970s and 80’s. And that is what, but because they started there, what they did is they build all the process functionality and more importantly the product and risk information logging functionality from that core thing which is, I need to get the right transaction. So, they started in the middle and then build their way out, so what typically happens in the most brokerage or all these brokerage systems is that they have got a hot pot of data. They’ve definitely got the core data you need, to be able to do the calculation about your commission and how much premiums were written and so on, so that will be relatively robust data, but what they won’t have, is the data that is important to make the underwriting decision.

Most of that is not found within the systems. Most of it is found, and as you said before, in PDF’s that are sitting there, separately or word documents that are created as reports for the clients or Excel spreadsheets or whatever, and there may be a subset of data that will be some fields they kind of never use, that could be used but they’re not quite right, so they are basically broking and this is what one of the starting reasons why we build our platform, as we thought the data model for commercial insurance is not fit for, it does not include, it does not allow, you to put the core risk data into it. So, what happens is the, there are–are four to five levels of re-key, so the very foundational step is to have a data model. There’s a key process in broking called the flat find which is when you go and write down what you find in there in your in this client that you know you go around the factory and you write down, how many people are working there, what’s the way to roll of that, what’s the type of construction of the building, what are the business activities, what machines are they using to do that activity, what would happen if one of them exploded, you know all this kind of stuff, and it’s quite complex and the brilliant thing about commercial insurance opposed to personal insurances is that heterogeneous data, so there’s a massive variety of data.

There are so many configurations of it, so to have a good data model of half of what you do is not, is a non–trivial exercise and that’s why most people have shied away from it, so the response that most people in the industry, both insurers and brokers have done, is what they’ve done is they’ve defaulted to the product structure as their data model and then only put a subset of that data into any systems. Because mostly as I say the real value–adding stuff that enables and underwriter to make the decision was sitting outside of these systems. So, they had a product structure, a product orientated data structure, that was non–comprehensive. And so, that’s what the norm has been, and what that means is that there’s massive inefficiency in-in being able to just transact insurance broking because of the weakling issue, what it also means, is that there is no usable data, inside broking systems, the only usable data, is that the insurers later in the process have consolidated themselves, and they only use insurers or send them this great big beautiful Ph.D. thesis, kind of levels of insight into this risks, and the insurers are throwing away 90% of it and just capturing a few key numbers that they need to do their rating and making a few collative adjustments on some other stuff.

And so, you have got all this complete lack of this data and information in systems, so that is the foundation step and that is what enables everything else. If you’ve got all the relevant data, and then you grow that data over time and you augment it over that party insides and so on, then that for us is the foundation stone, and that’s still for us is quite a big differentiator vs everyone else in the market, so that’s our sort of starting point and then everything else we want to do builds on that

JAMES: Are you capturing and storing loss run data? I mean what are we talking about here?

JOHN: Yes some of it is lost run data, but to the extent of the client knows that, so it’s a log of all their claims that they had, they’re are aware of, that’s the key thing, it’s their business process, it’s specifics of the construction of the premises, etc. Etc., so it is all the things that a broker is already asking, that’, and then, adding insights to that from, you know like, so there’s quite good, there are quite a good open data set available in the UK and most European countries, and I think most places in the US, you can see the crime statistics, you can see the use of adjacent premises, you can see how far it is from the fire station you can see the flood zones that the government have articulated and then some insurers use different flat mapping so you’ve got all this kind of layers of different hazards and so on, that you can layer on to this data, but the core of it is always insights about what this business does.

What am I doing? I am a printer; I have got a great big machine. If this machine goes bust, then I cannot do any printing. How much will it cost me to get another machine and will it take a year to get a spare part from Germany? Oh goodness okay, so that is going to be a big claim if that goes wrong etc., so you have got all these layers of information build and that is what a broker does. They go in and they find all this stuff out. And then what the typical broker does is, they write it in a Word document, fire it off in a PDF to, well they get as you said, they get the client to write a word document or a PDF, they fire it off to the underwriter and they don’t care about that information, neither does the underwriter, the underwriter reads it once under reader reads it once and goes yeah, $10,000 or 10,000 pounds 20,000 pounds, but no one’s retained that information in any meaningful way so that’s a big issue.

JAMES: Are you structuring that?

JOHN: Yeah, we are structuring it and we all then, and the key thing, and then the efficiency part, is where they’re massively reusing that, so the big efficiency in our system comes when you come around to do a renewal so when it comes to renewal for us, there is a key thing that the brokers have to do. They have to prep the documents for the next renewal, so you wrote this piece of business January last year, or February last year, you’re like okay, that’s great, we did all that and that was hard work to do all that structuring of information right writing those beautiful reports, consolidating all the pictures, copy–pasting Google maps all that stuff, oh this lovely beautiful Word document, okay great, now I’ve got to do it all again for this year because, yes I can work a little bit from last year but none of it is in the system and-and-and all these changes happened in the year, and I need to consolidate those and my goodness so, you typically got a big risk or largely risk sale. I am paying $30 000/$50 000 dollars or pounds would be, two days’ work for someone to prep, then you go and see the client updated, etc. For us, it is a 10-minute job

JAMES: Yeah sure

JOHN: Because you have kept that up to date all the year. It is a structured data set and dynamic data set that you can that is always up to date.

JAMES: So what we are saying here is, a continued trend that we’ve seen, and we‘re talking about in the podcast for the last then episodes, and that is there are certainly technologists that are building products for traditional firms to implement to try and digitize this firms, and then there are others that are saying, to heck with that, I’m going to go and start my insurance firm so ”-“

JOHN: Yeah, yeah, yeah

JAMES: You could have gotten together and said I am going to compete against Epic

JOHN: Applied systems, yeah, we are good with them

JAMES: Yeah you could say I am going to build a new Ethic and I am going to so sell it to all the brokering companies out there

JOHN: We have done that, and it may have been an easier road because it’s not being smooth obviously, and we are still smaller if perhaps we would’ve haven’t done that, but on the other side, my problem is, I love insurance brokers. I think insurance brokers are cool as individuals, the people who do the broking values, the actual, the producers themselves, the guys who go out there are bloody heroes, they go into these industrial estates, they are people in suits and slip–on shoes, and they go in and they understand what a paper warehouse does or a metal manufacturing business, and then there are in an accountant software office the following week and then advising them about professional indemnity. These are, real deep inside business consulting skills. It is fantastic and then, you know they have got 20 years of apprenticeship learning on all of those fantastic people. Their bosses, however, utter idiots.

So I’m like, do I want to go around and spend the latter half of my career going and selling to a bunch of idiots, or do I want to hang out with cool people who are the ones who do the job and make their lives better, and that was kind of how we ended up doing what we are doing which is to say, we can be a better broking firm, yeah okay it’s a slightly harder road, but and also, from an economic point of view to be honest the margins are with being a broker, not selling this technology to, so well if you sold it to everybody I guess there is a margin in that, but the buying cycles would be painful, it’s just not much fun. So, from my point of view, it was not being about a technology provider to brokerages, it was about being a brokerage by being sort of a full–stack brokerage. And I mean, putting myself into a slightly ground company in terms of money–raising ability but you know the same sort of insights as Lemonade would’ve had, we are not going go and buy whatever the prevailing bit of technology is, we’re going to build our own and but we going to be in the industry, be a distributor in the industry ourselves.

JAMES: Sure. And you are not going to sell your tech to other people it is only available for you.

JOHN: Having said all of that. There is a very friendly firm of us, so we did decide to build our tech first. We read the lean startup and all the other stuff that you read and then we ignored half of it because, just were bloody-minded middle-aged man. So, we built up a core platform and we did that with an existing broking firm, which is very helpful actually, you know, if you’re going to do lean startup type approaches and MVPs and so on, if you’ve got people, you can work with a guinea pig users and so on, that’s obviously far superior so we implement back in 2017 before we got going as a broker because you need to be regulated as a broker. It takes 6-8 months anyway, so back in 2017 we’ve launched our platform with a team of 10 people, and then with anything exiting broking firm, so we just smoothed off the rough edges and we probably didn’t do a very good service for the first six months of that because it was rough around the edges. But they just used our platform exclusively. They put a load of this business through it.

We then learned an iterated and so on, so by the time we started trading in earnest about 18 months ago, well firstly these guys who’d been using it, they expanded and is now at 20 odd guys that they’ve got using it, and then we put through, I don’t know, 15,000,000 or 20,000,000 of premium through which is pretty good for us. That is a good starting point. And then when we had our brokers, we needed something that was a lot more robust, so yeah, it was, so we worked with an existing firm, but it is not our real idea to go and build a sales pipeline.

JAMES: No, but you had a beta client. It is hard to build for an idea; it is much easier to build for a company. Just in general.

JOHN: Yeah, well you know it was we didn’t need to recruit brokers, and what would they have done they use a platform that is not quite ready yet, but I’ve got some clients that want to ride and if we were holding the regulatory risk of noncompliance as well as that sort of technology willing to risk it’s a bit too much, but that was a nice way to get over this initial kind of MNP problem and then we ramped up our broker since then.

JAMES: Now one of the things I have seen brokerages that are tech–centered do, reasonably well is, take all the structured data on their clients, and then they bring it into a common form for each of the markets they are shopping, and they either format in the PDF that market is asking for, or they get even more sophisticated in that. Can you talk to me about, because that’s a big part of this, is normalizing the data input, normalizing the storage, putting it some kind of structured format, having a way of dealing with unstructured format data like photos, videos, and pretext narratives, but then putting that in a way that each market, because each market has a specific application that you have got to modify your data for, right?

JOHN: Yeah that is right. It is not quite as prevalent in the UK as it is in the US, they, what we do not have as well is, we have one regulated market whereas you have got 50 which is fantastic.

JAMES: Isn’t it fantastic?

JOHN: I know, it is like your kind of you take all those economies at scale and then rip them out again by having 50 different jurisdictions, on stuff like insurance. It does not make sense but um the um “– “

JAMES: Let us pause there. I have spent a lot of time thinking about a federalist system versus a group collection of states. And the interesting thing that is driven In America, has been an intense amount of competition, between states for businesses and regulatory infrastructure, because it is so easy to move states. It is so hard to move countries, right?

JOHN: Yeah

You can get an entirely different set of laws, taxes, and infrastructures by moving states, and so you end up with a highly competitive system here, where Texas is constantly competing against California and New York, and Illinois is constantly competing against with West Constant and Indiana and they are competing on tax rates and infrastructure and regulatory rates and it’s fascinating

JOHN: I may be a little old fashioned but I think it’s about what, I mean the tax rate thing I get, because obviously, you’ve got a lot more local taxes than we have, we have everything, call it federal level if you’d like or national level, but apart from business rights which are property tax, but it’s insurance regulatory issues that “-“

JAMES: Oh yeah, I know.

JOHN: My understanding is, if you are a brokerage, you just got to fill in load more forms.

JAMES: You do, you do.

JOHN: And it is just a bit of a pain in the bum. And then as a carrier, you have got to then submit your, so if you are a big carrier, no problem at all. Your file in 50 states for your worker‘s comp policy or whatever, but that is quite big. That is quite big differences in like California will have a particular type of workers comp that they need, specification and some people will not be in that market. Yeah, that’s the, I mean we, at some point will think about coming to the US and certainly be, and the initial research I’ve done suggests that you could pick a couple of the 9 states to start with and try and build from here, so such a business, when they came over and they started and Massachusetts I think, and one other, you know you just need somewhere as a base and then you can work out all this regulatory.

JAMES: Target an economy greater than great Britons? Come to Texas, buddy! Let us do it

JOHN: Let us go. You are only big and B in Austin though.

JAMES: Oh, you are killing me, you are killing me!

JOHN: Not in Aggie Land.

JAMES: Yeah so let us talk about the future. What you have summarized is, this is a modern broking firm, or as we would call it a brokering firm

JOHN: Yeah

JAMES: It is a modern firm driven around, standardizes data collection and storage, customized output around significantly minimizing the amount of rework and manual reentry that your producers have to do and also making it a producer centric business model internally and the client–centric business model externally and making it much less about the firm

JOHN: Yeah

JAMES: That mentality, that methodology duck tales with a movement an organizational model called Teal that you guys ascribe to. Briefly tell listeners out there what Teal all is about

JOHN: Yeah, so there is several publications on this thing, there is a thing called Holacracy and so, but the one that I found compelling was a book by a Belgian guy, normally we do not in Britain, we don’t like things by Belgian people. We think it is about the most boring country on earth

JAMES: Except for Tintin, except for Tintin.

JOHN: Tintin is not bad, and John Claude van Damme, maybe.

JAMES: There you go. And chocolate. And the waffles.

JOHN: They do make chocolates

JAMES: And the waffles.

JOHN: Yeah, I think that are more the Dutch, actually. The stroopwaffle.

JAMES: True. Yeah, okay. I will get that one too.

JOHN: Yeah, I think that is it for Belgium.

JAMES: OK, so, this guy “-“

JOHN: If you ask a Brit, what is the names of famous things from Belgium, they mention a fictional character by Agatha Christie called Hercule Piorot, and that is all they ever come up with it is like he does not exist

JAMES: Hercule Poirot does exist in many peoples head my friend, and I watched “-“

JOHN: But he is the most famous, and then you think he is French

JAMES: And I watched every single episode of Poirot so let us not, let us not leave that one out!

JOHN: Despite all of that, this guy Frederick Laloux is his name is, pretty cool guy, and he wrote this book called Reinventing Organizations, and what’s interesting, is that he is, it’s a different way of looking at the world, and the history world and he is saying, if you look at world history through the lens of organizational structures, you can go, there’s like the caveman thing and they call that the red world, and this is basically like, kind of somewhat capricious autocrat type thing, but at least, there was in innovation there. It was about top–down control and then you went to bureaucracies. They call it there, because the Amber what’s it called Brown sort of thing and that was like the church, like armies, you know where divisions of Labor and so on high rocking and you do what you are told, but you know up through high rocking this and objective standards, and then you got this sort of strive innovation and modern corporatization.

And let us say this sort of you know mad men style general motors for motor companies 1960s multinational maybe into the 90s. The way this sort of, you get, you get–get burn out and all that sort of things, but it introduces some innovation and so on, and then you get the green type of organization. This is sort of reaction to sort of the corporate thing and you still see this you know Ben & Jerry’s ice cream and those sorts of people and it kind of gets a bit mashed up with certain political sensibility or a certain sort of worldview which is a particular ideology, but it was a, they introduced this idea of stake holder management and all this sort of thing, but it got a bit discredited because it’s a bit directionless and it can seem a little bit up its own backside, and so this Teal thing this sort of next evolution in this theory which says there is some good in that hole, that all these previous iterations of life what the state of the art in organizations is has had merit and you need to build on that, but all of them left a lot of value on the table, and the core real value was that the creativity and the energy of the people who work in this organizations was kind of not being optimized, not pretty big being pushed so they talk about this guy that talk about being three imperatives, so the first one is evolutionary purpose which is that what you, or organizations stand for something positive in the world and it’s a big thing, but we talk about it in the context of insurance broking but my view is there’s a massive noble purpose to the insurance brokerage. If you watch Groundhog Day, perhaps you do not, you know he is not that the best advocate for insurance brokers that guy in Groundhog Day

JAMES: Ned? Ned Ryerson?

JOHN: Ned Ryerson, exactly! He is not best because it is all about the selling it is not about the protection

JAMES: So, you just named my number one favorite movie of all times that I watch every year on Groundhog Day, which happened to be Sunday, and I wear my Groundhog Day Punxsutawney Phil t-shirt while I watch it, so, that is, yeah.

JOHN: It is

JAMES: He’s not the best representation, for sure.

JOHN: He is not. It is not just his coat. It is the whole thing. And then our wholeness is the 2nd part which is that when you to work, you bring your whole self, warts and all, you don’t park your Brexit or your Donald Trump opinions at the door completely, but you got to be respectful obviously and you got to get on, you bring your whole self, and then, there’s our support, except you for who you are as well, and you find a kind of way of working together which feels congruent with who you are, and then you, self–management is a third one and self–management is saying look, I’m here, it’s an adult to adult thing, and I’m not waiting for my boss to find out that I haven’t done any work, I’m going to, kind of, get organized and drive things through my agenda. And if you’ve got those three things, evolutionary purpose, how you view your organization feels like it doing the right thing according to your values, a wholeness which is I bring my whole self to work and self-management and if you give those things right and it’s quite a lot of serendipity to get that right and it doesn’t mean that that’s an absence of process and structure.

It is not liked a kindergarten thing where everyone is just sitting around outside of a TP and kind of, singing, kumbaya, or whatever. It is real and you have got to focus on what the organization is about. If you get those things right, you can unlock massive amounts of creativity and productivity. And so my insight was if I think I go back me to my career, and I think back to all those problems of this kind of very Robber Baron type of approach with consolidation and insurance broking that I saw back in noughties, I saw how technologies could be used to support the processes and their way that people are working. But if you overlay that onto insurance broking, it looks like it fits well because the interesting thing about insurance broking is that it is fundamentally done by people in relatively small cells. One or two people cells, client–facing units and there is not massive leverage of, let us say a massive brand or a, or something capabilities which I say industrial capabilities. This is anything artisan job. You go in and you are creating this value when you go and see your client. And what you need is just good tools to do it and with and a good proposition and everything else and you need to feel that you’re supported and you need to feel that you are doing the right thing and you’ve got the flexible way of working and all the rest of it.

So, we’ve sort of evolved this approach into insurance broking. When we do our inductions we take sort of 6 to 8 people on at a time and when we do our inductions we spent a whole day just talking about culture, talking about what is the right thing, and if you talk to anybody in my organization you say what’s Teal, then they’ll tell you what I just told you and they’ll say a Teal organization we buy this, but we are not talking about a bunch of, nerds who were all millennial self-referential people sitting around in a bubble. This is not who my staff are. I have got people from the late 20s. The oldest is 61. I’ve got people from different national backgrounds, I’ve got someone from Nigeria, someone from Japan, someone from Sri Lanka, I’ve got people who are from the grittiest most sort of let’s say, I’m just trying to find a nice word for it in your world. Let us say what we would say sort of, working–class or like gritty-gritty industrial postindustrial backgrounds and all then all things in between and people who’ve you know done it for 30 years and then studied and so on. But the point is, this is not, this is the glue which can work for anyone, as long as what, this is about being that authentic insurance broker that you can be, not about fitting to a template that’s set by a bunch of people who like avocado on toast and sipping lattes in a coastal city in the US

JAMES: I do not know what you are talking about. I do, I do.

JOHN: But you would also feel comfortable if do you love avocado on toast and you like lattes, etc.

JAMES: I do not like lattes, I do not do caffeine, but I do love a good avocado on toast, but I have liked that for 20 years.

JOHN: The fact that you have been an early adopter “-“

JAMES: To be clear, I lived in Mexico in the mid-90s and fell in love with the avocado about 25 years ago

JOHN: Well it is a bit more, having avocado where you live is a bit more authentic than doing it in the middle of London in shortage wearing your skinny jeans with “-“

JAMES: Oh, I know with your beard

JOHN: With your soul patch and “-“

JAMES: Yeah come on do not forget about the oiled beard

JOHN: Exactly

JAMES: I went into Browns, you know Brown‘s hotel, it is near Westminster

JOHN: Yeah

JAMES: And I went into Browns because one of the friends used to always love going to Browns every time we went to London. So, I went there and had tea and the number one thing on the menu – avocado toast. I am like, that is not British, but it is here. Well look this has been an interesting conversation and I am excited about what you guys are up to. I appreciate you spending an hour with us and talking about technology and process and people and you are trying to tackle a big issue and that is what is wrong with the brokerage, and do it by pushing on a few different levers, right, like people process and technology all simultaneously, and not just building a service company for brokers but building a modern brokerage. So how do we all find out more information about your firm and what you doing?

JOHN: Well our website, to be honest, is a bit cramped. It is one of those things you never quite get around to making your website up to date. So, it is a bit outdated. So have a look on there. If you are listening to this in the UK and you are a broker, probably unlikely as you are probably not an industry worker, but if you then get in touch, we are hiring, and we’re hiring wherever you are based in the UK hiring, we are going to look at probably within Europe the next step post–Brix so we probably going to need to set up in new island or Germany 1st and then we would build out from there, but yeah, if you want to talk about, but I think what we’re interested in doing is having a dialogue with people who, even people who got traditional brokerage and are pushing the envelope on how to run a broken culture and the insights around that. That I think is interesting and I’m on the council of a thing called InsureTech UK so it’s about 60-70 companies in the UK that’s getting together to sort of be connecting the insure tech’s and there’s an only few of us that are doing commercial lines, that’s doing commercial insurance in that space, but we would love to connect with US organizations that are doing similar things and yeah, definitely just drop me a line, I’m on LinkedIn and we can pick up a dialogue

JAMES: Awesome. And that’s Konsileo that is konsilio.com You heard it here. He may come to mainland Europe and then if he really wises up, he will come to Texas

JOHN: Well I was like; I was like coming to the states if I need too, if only to buy good shirts.

JAMES: And better at avocados because we do have better good avocados

JOHN: You do have good avocados

JAMES: Well it has been a real pleasure speaking with you, I appreciate your time today and thanks for joining us on the InsurTech Geek Podcast John

JOHN: Thanks James all the best

JAMES: Awesome and that is our discussion from the InsurTech Geek Podcast powered by JBKnowledge. JBKnowledge.com.

It is all about technology that is transforming and disrupting the Insurance world. I have been your host James Benham. My website is jamesbenham.com Big thanks to big daddy Jim Greenlee our Podcast Producer, Kara Dalton-Arro, our Creative Producer, and thank you for joining us today.

I Look forward to talking to you soon or taking you on a journey through Insurance Tech so enjoy the ride and keep geeking out.