Surrounding the Insurance Needs of Gen Z with Kate Terry from Surround Insurance

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From the conversation

Kate: Good. I'm delighted to be here, but you're right about winter. We're getting our first snowstorm tomorrow morning.

James: Ooh. So exciting. It is exciting that first dusting, and then you get the snow and then the lawns are covered, and the kids make snowballs, and they make snowman. And then you're like, ah, okay, I'm tired of it. Let's get back.

Kate: It's really beautiful until the moment you pick up a snow shovel

James: So Rob, you grew up in Michigan. Were you best friends with a snow shovel?

Rob: Hated it. Hated snow. I tell people one of the reasons I'm in Texas is as early as six years old, they would send us out for recess and kids were building igloos and forts and having snowball fights. And I would just sit out there wondering, when is recess over, this sucks.

James: Some people just aren't made for it. And that's all I'll say about that. You just got to go South. And some people love the snow. I have friends in Michigan who cannot wait for the snow to drop because they break out the snowmobiles and the parkas, and it's officially winter sports time and hunting and all the other things that they like to do. It's just funny, the world is bifurcated in so many ways and that is one of them, COVID has exposed some of this Kate where you have people who hate having anything on their face and others don't mind a mask. People who really genuinely don't like others, and have used this as an opportunity to isolate themselves and use COVID as the ultimate introvert's excuse to never be around other people, and others like me, who literally go stir crazy mad when you can't be around others, it's fascinating how you pick a single issue and it'll be a 50/50 response rate on all of them.

Kate: I think the only thing we can all agree on is that today's date is the 700th of March. It's getting old, you know?

James: It is, can someone just come inject me with something that'll fix this so we can move on. I am thankful I'm in Texas, because it's warm most of the year here, even in the winter, it's warm. And so you're not trapped indoors breathing other people's air particles, and I'll be honest, I'm a germaphobe and an extrovert. Wrap your brain around that one. I've always been a bit of a germaphobe. So I've always loved the Howie Mandel fist bump. Who knew that Howie Mandel was a visionary, but he was, and I've always been a fan of the fist bump. I've always been a fan of sneezing and coughing into your elbow, and it always made me really angry when people don't ever cover their mouth when they cough. You know some people do that Kate, they literally will walk up and cough. We had to go through education with 7 billion people on how to wash their hands. Apple rolled out a feature on my Apple watch. When I start washing my hands it times how long I'm washing my hands for, did you know this? You can enable it. It's called the hand washing reminders. It's a new feature.

Kate: Do I want to enable that though? Is it helpful or does it kind of disturb you, how your hand washing technique is off?

James: I found it helpful in the beginning and now it pisses me off because I'm like stop telling me how to wash my hands, they're fine!

Kate: Everything's dinging at you all the time. There's always a notification.

James: Well I'll be honest. I did not enable the exposure notifications in iPhone. I didn't because I think it's going to be so severely misused. CDC just lowered their guidance to 7 to 10 days because people don't want to quarantine for 14 days, turns out it was overkill anyway because 7 to 10 is all you needed. And so people were literally not quarantining because it was too long. And so now they're hoping that it's 7 to 10 days. I tell people all the time, don't call me a Republican or a Democrat. Just call me a capitalist. I'm a capitalist. I am just an unashamed, ardent, militant, capitalist but it's been a weird few weeks, and I'm grateful Christmas is coming. Kate, we're going to deep dive on some fun stuff with you. And we're going to geek out for a little bit before we do. I want to remind all of our listeners that you can subscribe to our podcast by texting GeekOut to 66866. We do a little email newsletter with the show notes and the links we talk about and the interviews and I hope you all have enjoyed it. We've passed several thousand listens now, so we have a lot of people listening now. It's been really fun to grow the listener base here and interact with you out there in listener land. And so we hope that all of you have enjoyed listening to this this year. And I wanted to say it's the first show past Thanksgiving, and Rob and I each took one by ourselves before Thanksgiving. So I haven't got to say this, but I'm saying I'm thankful for Rob for volunteering to be my co-host in this venture, and I have thoroughly enjoyed getting to know you, Rob. I just wanted to thank you on the air for doing this with me.

Rob: You're very kind, James. Likewise. I've had a blast doing it. I appreciate the invite to bring me on board way back in episode 13 or 14. I don't remember the exact first one and you're right, we missed each other in the last two episodes. So, it's actually great to be back together again.

James: So we're going to do a few and then we're going to take off for Christmas and new year's and then we'll be back in 2021. I want to point out that the roaring twenties came right off the heels of a pandemic. And I want to remind everybody of that, someone said to me today, 'if this goes away,' it's going away. First off, the influenza pandemic was way worse than this. If y'all think this is bad in listener land, my great-grandfather died in the infuenza epidemic in 1919, left my grandmother without a father for the rest of her life, and she wrote about it to me. Thankfully, my grandmother wrote me some notes before she passed away about her childhood and her dad. That was far, far worse. You're talking about a fatality rate that was several times higher than this one. It was really bad. It impacted kids and adults and it ended in year and a half. I just want to remind people that this, like all things in the planet, will come to an end. Good and bad. Unfortunately, good things come to an end. So do bad ones. So just stay focused on that. We're going to talk about something really interesting today and in our pre-show conversation I was getting to know the enigma that is Kate Terry. As they would say in Boston, she's wicked smart, she probably parks the car in the yard and, she did some studying back in the day at Harvard, because she went to Harvard, got a BA in history and, get this, Celtic studies.

Kate: It was the medieval Welsh that I studied, that led me to my successful insurance career.

James: I believe that actually, so Kate, I have a really interesting Celtic study story.

Kate: You do? Literally nobody has ever said that to me before.

James: I was going to say, I bet you've never heard that. By the way, she got an MBA at Harvard too. So we're just going to throw that in there. Oh by the way, she went to one of the hardest MBA schools to get in to.

James: So she went to Harvard for MBA. You went to Harvard for undergrad. So Celts. I love history. And Rob has had to listen to me multiple times, unfortunately, pontificate about the history of insurance. Because it started with bottom rate contracts and the Babylonians really invented insurance. And it started with loans and finance agreements, which is why you can kind of confuse FinTech and InsureTech because banking and insurance have always been like this because the first insurance contracts were forgivable loans. I love history. It's just fascinating to me. And what infuriates me when you study history is how many people don't study history and they repeat the same stupid mistakes that if you just read one or two history books, you could be like, Oh wait, We already tried that as a people before and probably shouldn't again. The Celts are an interesting study. I love listening to a guy and I love recommending other podcasts on my podcast. The Dan Carlin Hardcore History.

James: Let me tell you about Dan Carlin. Amazing, amazing, amazing historian. I listened to him talk about how he podcasts, he literally free forms that crap, which is amazing, which means he's got his outline, but the rest just comes out of his head. And you can fact check him all day long. He's accurate. He's not making stuff up because he has a whole team of fact checkers. It's a free podcast, but each episode is literally a full audio book and it's free. And they just ask for a donation of a dollar an episode. And Kate, I give them a buck an episode every time he releases one.

Kate: It is totally worth those things are like four hours long too. They're amazing.

James: Four hours per episode. And he did a whole episode. Did you listen to it on the Celtic Holocaust? So the fascinating thing about the Celts is, what is a Celt? Actually, according to Dan Carlin, which he read a bunch of other definitions, a Celt is anyone who identifies as a Celt,

James: That's the actual definition! Now the Celtic Holocaust, people are thinking that's like when the Romans invaded Ireland and Wales, no no no, this is all the Celts that lived in France and Germany that the Romans came and wiped out. They just wiped them out. It was an amazing show of force. So that's my side note on Celtic studies is that a Celt is anyone who identifies as a Celt. That day, when I found that out, I'm like, okay, I'm just going to identify as a Celt. Then I'm like, you can't tell me that I'm not a Celt because I'm saying I'm a Celt. So you studied Celtic studies. What was your goal when you're sitting there at Harvard and you're eating lunch in Harvard yard and you're having probably, maybe a lobster roll or you're eating some typical clam chowder, and you're 19, 20 years old. What are you thinking you're going to do with a history degree?

Kate: Well, my parents asked me that question and I didn't have a good answer for them, but I will say this, I actually thought my degree would have nothing to do with my future job. So I went to college and I don't come from a super educated family, I'm not second generation Harvard or third generation. My name is on no building there, and so I had this job at a consulting firm In Harvard square, where I did research for them. And I worked 30 hours a week for four years and full-time in the summer. And so I thought I was going to be a consultant and I was a consultant. So I spent four years after college doing the exact same thing I'd done in college, but the cool thing is I actually got hired by a competitor to the firm that I was working for. It was a Spanish company, and they were opening their first US office in Boston. And their real estate deal fell through just before I was supposed to start, it happens, they said to me, either we could delay your start date by a few months, or if you want to come to Barcelona for a little while, we could make that happen, but we don't want to make you do that if you don't want to. I was like, are you kidding me? I'd never been anywhere before; I'm going to Barcelona! I actually worked abroad for the first four years of my career and people sometimes see that on LinkedIn and they're like, how did you get that job? And I say, like every other major career move in my life, I have absolutely no idea. But when somebody asked me if I wanted to do something cool, the answer was yes.

James: Amen to that. My general answer to everything is yes. I disliked saying yes. Remember that Jim Carrey movie called the Yes Man, you never watched that? Oh, your homework this weekend Kate Terry, your homework this weekend, it's a 2008 film by Jim Carrey called Yes Man. I laughed so hard I almost peed my pants at this movie. My wife says I have the world's most severe case of FOMO, and so as a result, I say yes to about everything. I tried to get your gig getting out of Texas A&M business school. And I went to Pricewaterhouse because I did two internships with them and I was like I want to work in your Mexico City office because I was already fluent in Spanish at the time. So I was like, I'm fluent Spanish. I lived in Mexico in '95 and '96, you liked me as an intern, and they literally almost patted me on the head and said, Oh, sweet boy. Just come work here in Dallas, in the suburbs, in a small cubicle for a few years, and then we'll consider your requests, which basically meant that's never going to happen. So evidently, you're like, Oh Barcelona. Sure. Okay. So you went to Barcelona, what'd you learn?

Kate: I learned all kinds of things. I learned how to speak Spanish. I learned how to understand Catalan. I learned how to be a consultant internationally. I learned a lot of things about, this is going to sound really dated now, mobile telecom, because Europe was far ahead of the US with the mobile technology, they had application protocol, like surfing the web on a little Nokia device. The cool thing was everyone thought I was really cool because the internet generally was way ahead in the US versus Europe. So I was the cool American who knew about the internet, which was really laughable

James: Barcelona is the epicenter of mobile. That's why the Mobile World Congress is held there. Of course got canceled this year, which sucked. You have this amazing early life experience in Barcelona, where do you go from there? How do you wind up at Progressive? Because you obviously you had to go to B-School for your MBA and then you're done with your MBA. How do you wind up at Progressive?

Kate: So you mean it's not a reasonable story that I was in Barcelona one day I said, I want to move to the Midwest and work in insurance.

James: Totally unreasonable. No offense to anybody in the Midwest.

Kate: There's nothing wrong with the Midwest. It's just, if you're in Barcelona on the beach… I spent one year in Barcelona, the company I worked for opened a London office, they said to me there is this London office open. Is there any chance you might want to go there? I was like, yes, I do. So I spent three years in London. I got to the point where I had been promoted to an engagement manager, so I was managing projects. And that's the moment in professional services when you either put your head down and grind away a million hours a week until you start to sell projects, or you leave. And I was kind of like, I don't want to be a consultant. Like I literally do not want the partner's job. I'd just sold my first teeny tiny project. And I was like, this sucks. I started thinking to myself, it was just time to come home. My family's all in Boston. I'd spent four years abroad. I wasn't planning on doing that. It was time to go home. And I also realized that given the number of years of experience I had, I was working in a consulting company that was growing so fast, there were lots of opportunities, but nobody was going to hire me into a non-professional services job anywhere near the same level of seniority. At this point I thought I needed to do an MBA. So I applied to some MBA schools, got into Harvard, came back and I had no idea what I wanted to do. I've always done professional services, and I know I don't want this life. I think I want to do a general management kind of job, like a lot of different stuff, and then when I started looking at jobs, one option was product management type jobs focusing on physical products, and I just thought I am not the right person to decide whether the box should be orange shade 12 or orange shade 13, because they all look the same to me. I am not the right person. So you have to know yourself. Don't ask me what color something should be. So I started applying to consumer services companies with kind of the combination of data and people. And it turns out that insurance is exactly that. Lots of data and taking care of people in their moment of need. I interviewed with Progressive. So now I'm going to tell you the embarrassing story, which is that I'd never owned a car before and I had not lived in the US as an adult, and I grew up in Massachusetts and Progressive didn't write Massachusetts at the time. I wasn't actually clear when I walked into the interview that Progressive was an insurance company.

Kate: There was this thing where you had to apply for interviews and then if there was a cancellation, then you could just sign up on the door. I was in an off-campus location that was really annoying, and I already had a suit on, and it was so uncomfortable. So I thought, well I just finished my interview and next door there are slots with this company, maybe I'll talk to them. Ron Davies, who I may or may not have run into, talked me into insurance. So I blame him. It's totally because I thought they were making soup. Insurance is better than soup. I'm sticking with that story. That's how I ended up in insurance.

James: You were a product manager at Progressive, then you were a product manager at Plymouth Rock Assurance, and then you spent six years at Liberty as a director of state operations SVP of commercial markets SVP of commercial insurance. That was a period of 13 years, so you had 13 years to really soak it in. What did you learn about the great things about insurance and where were the big pain points that led you to wanting to start your own?

Kate: We were talking about Louisiana before we started the show, and various visits we've all made to Louisiana. And I have to tell you that Louisiana is the reason I stayed in insurance. So I started at Progressive down in the Southeast in the Richmond, Virginia office in July of 2005. We probably all remember, if we're old enough, that hurricane Katrina happened in August of 2005. I didn't have responsibility for Louisiana at that time, but I was due to inherit it. What happened was utter devastation, for people who aren't familiar, people's lives absolutely destroyed, a lot of people didn't evacuate because there'd been a lot of storm warnings and they weren't sure and whatever else, and everything they own just gone, and Progressive made some decisions really quickly, and ahead of the regulators and ahead of the rest of the industry, where they decided to do things like Glenn Renwick, who is the CEO at the time, decided to crush every car that had been touched by the floodwaters because of the potential for biological contamination, regardless of whether it was repairable or not. We were writing checks to people who were stayed in there with a plastic grocery bag and bare feet in tears in the dust because they had no idea where their pets were. They were separated from their family. They had nowhere to go. They had nothing; they couldn't even locate their car. And we were writing them checks. The Progressive's claims response team got kicked out of the hotel they were in by FEMA, which hadn't made the plans that Progressive did. There was so much rightness in that and taking care of people the right way in their moment of need in a way that also is profitable and good for employees and shareholders and everybody else too. There was just so much goodness in that and I realized that this is where I want to be. So that was really inspiring really early in my insurance career.

James: What's so cool is that you have those watershed moments, and of course COVID is another watershed moment, where people's true colors come out. This is when you actually prove your mettle, are you for real or not? Are you going to do the right thing? There's a lot of movies out there about insurance companies not doing the right thing. And unfortunately, there's not a lot of movies about them doing the right thing. Because they just don't make for good movies. Oh, the CEO stood up and did the right thing and took care of everybody. And they were all housed the next day. Well, there's no drama in that because it's literally, he just did the right thing. It certainly shows the social need for insurance.

Kate: I'm not saying that there are no bad people in insurance. Of course there are, it's a giant industry. There are bad people on occasion everywhere, but your teenage son gets in an accident late at night and is afraid to call you and calls the insurance company because he's got the insurance card. The first question that person who picks up the phone is going to ask is, are you okay? And they're going to send an ambulance if need be, or they're going to tell him what to do next. In that moment, that's what they're going to do. You get in an accident, you're at home. The claims adjuster comes out to look at the car they're kneeling and the snow in the driveway, looking at the front quarter panel, they're doing the best they can to make sure that they're being as fair as possible, and that you're going to be put back together the way you should be. Those stories don't make good television do they, but that's the reality of most of our industry, the vast majority.

James: So what did you learn, and what were the pain points over these 13 years of three different major insurance companies that led you to want to start your own, what we've been calling it, digital MGA.

Kate: Ooh I like that. I think one is just the rigidity of the IT infrastructure. The ecosystems are so complex and so old that it's really really hard to innovate. The second is the rigidity of our culture, and this is something we've done to ourselves as insurance people, you get trained in this narrow little silo, and typically you stay in that for your whole career. I spent the first six years of my career in personal lines and then moved over to commercial lines and it was a completely different business. Even though most of the cars are still Toyota Camrys, but it's was completely, it was an unusual move. So I think that's the second, we can't see when we have these highly matrix organizations and we work in these silos and doing something different would mean stepping in someone else's silo. And then the third piece is just that a lot of insurance products are built on very old court cases. And so you end up with these situations where the products match the court cases of yesteryear and they don't match people's lifestyles. And so there are giant segments of the market that we just miss entirely because of this agedness and rigidity. For example, Inland Marine, did somebody make that up for a reason that makes any sense? No, no. It came out of a court case, we need something that's not ocean Marine, what are we going to call it? Inland Marine. Normal people don't talk like that.

Rob: Amazing background. Thank you so much for sharing your biography with us., and it's so great to have you on. So, before we learn more about Surround, which I'm excited to talk to you about, I'm kind of curious to get your thoughts on the pros and cons of working in corporate insurance. I know you have your CPCU designation, which I have as well. So that's kind of the stamp of a true insurance nerd, and what would you say to anyone out there listening who's thinking about making the leap? I want to tease, we are going to get to the new section later and you had a great article on LinkedIn. I'll talk more about it, I think this is something that's very, very timely, obviously with COVID with 2020 we've got recession, we've got layoffs, the economy's been coming back, but now the numbers are spiking up. And so I know it's been a tumultuous year and people are in different phases either they may have lost their job or they're afraid they're going to lose their job, or they're kind of thinking this isn't a time I feel like I should be changing jobs, but at the same time, maybe I can't wait indefinitely. So I would love to get your thoughts on that.

Kate: These are really really tough times for a lot of people. And so all joking aside, that's something we got to figure out how to handle as a society. I don't think that there are entrepreneurial people and corporate people, there does seem to be this mythology that never the twain did mean, that just doesn't make any sense. That is not a growth mindset, as I would tell my daughter. They do take very very different skill sets though. I'm also going to start out by saying that being an entrepreneur is a privilege. With my massive student loans coming out of my undergrad, this would not have worked for me then, but it does now. I'm acknowledging all of that. A lot of corporate life is about going along to get along, fitting in, figuring out how the system works and then supporting that system and working within it. Or if you're breaking it, you need to understand it well enough to break it in ways that you can accomplish your objective. That is a skill, and some of the greatest things in human civilization have come about because we have been able to coordinate large numbers of people working together on a single project. And that's what a corporation is. So there's nothing wrong with it. I am not critical of corporate life. Generally speaking, you do end up with a lot of slow stuff and old stuff and politics that are a result of all of these people. But those are real skills. On the entrepreneurial side, on the other hand, you eat what you kill, so you need to ship, you need to turn things that you need to have a lot of different kinds of skills. You need to be willing to do things that you don't know how to do very well. You need to do the grinding elements of making sure that everybody has health insurance or buying your own small business insurance is the most complicated thing on the planet, and I'm a licensed insurance producer. I don't even understand these accord forms, so there's a grind to it as much as there's an excitement, and I think that's something that gets overlooked. I also think that InsureTech, if we're going to combine the two, has had a lot of tech people coming in saying, Hey, this industry is broken. We're going to fix it. The industry's not broken. There are pieces of it that are, what's accessible to them is a lot of the front-end distribution stuff or the back-end process stuff. And so that's what got fixed. And then I think now you've got this wave 2.0 of insurance people who are saying, wait, we see ways to change the industry as well. Hopefully we get this melding of the best of technical expertise and the best of insurance expertise and we build something new together.

Rob: I love it, that's a fantastic answer, and I've met more and more people over the past two, three years, like yourself, Kate, that have their roots in insurance, and I think you're absolutely right. I talk a story in my book about meeting somebody from Silicon Valley for the first time in 2015 at a CPCU annual meeting in Indianapolis. And it was like, why are view here? And they said I'm going to learn everything there is to know about your industry in four days, and then when I go back, I'll put you all out of a job

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