Breaking Down Modern Claims Operations with Snapsheet President Andy Cohen

Andy [0:00:00]: The large and best brokers and the agents certainly have cray risk management functions, but really focusing those risk management functions on that on their carriers with their carriers, partnering with claims to get to better outcomes, is not a spot that the industry spent at a ton of time in, and it's a spot where that's where most opportunity.

Callan [0:00:21]: Welcome to the Insurance Growth Lab.

Callan [0:00:22]: Where we go deep on the growth campaigns and strategies driving real results in the insurance Street.

Callan [0:00:28]: I´m Callan Harrington founder of Flashgrowth and in each episode, I sit down with marketing and growth leaders from carriers and Shirt tech and top brokers to break down one specific initiative, whether it's how they marketed a product, skilled channel or solve a specific growth challenge.

Callan [0:00:46]: It's no fluff just tactical insights you can apply in your own company.

Callan [0:00:55]: Alright.

Callan [0:00:55]: Andy.

Callan [0:00:56]: You spend a good amount of your career on the carrier side.

Callan [0:01:00]: Although the interesting thing is I think you're now ec that on the insured tech side.

Callan [0:01:04]: But you spent some real time on the carrier side.

Callan [0:01:06]: What are things that I'd love to get kinda your take on is, tell me about what does change management at insurance carrier look like.

Andy [0:01:15]: Yeah.

Andy [0:01:15]: I mean, I'd I'd say Spent most of my career on the carrier side prior to coming to Snapsheet.

Andy [0:01:20]: And now I have, I guess the luxury you're spending all my time with almost every carrier.

Andy [0:01:25]: So, yeah.

Andy [0:01:26]: I mean, I guess maybe the best way to talk about change managers insurance carrier is sort of what something that senior executive at travelers told me a long time ago, and he probably doesn't remember they said this, but it's...

Andy [0:01:38]: For some reason is stuck with me forever is the once a carrier, once you know exactly what the right thing to do is, whether it's a strategy, whether it's personnel decision, whether it's an org design decision, whether it's a technology decision, it usually takes three years to realize that change.

Andy [0:01:57]: And so three years from idea of being everyone knows what the right thing to do is to execute all the way through.

Andy [0:02:04]: So obviously, it's a risk of our industry, maybe which is interesting because Industry is all around taking risk.

Andy [0:02:11]: And at the same time, change happens really slowly across the industry.

Andy [0:02:15]: And our job is companies like my black sheets is job is to speed that up.

Callan [0:02:22]: You know, I'm curious, And I don't wanna spend too much time on here because I can easily take us down of tangent on this, but I've seen the same quite a bit just in in my years on, and most of my careers but on the insure tech side working with carriers.

Callan [0:02:35]: And

Andy [0:02:37]: one of the

Callan [0:02:37]: things I'm curious about is Ai is moving insanely fast.

Callan [0:02:41]: And I...

Callan [0:02:41]: I'm not necessarily trying to make this a pure conversation on Ai because you could pop up in any podcast and they're gonna have that same conversation.

Callan [0:02:48]: But what happened, do you think that those carriers that are gonna continue to take three years to turn are gonna be in trouble or are they so big that they don't have to pivot at that pace?

Andy [0:03:02]: I mean, I guess it depends on where the carrier starts with.

Andy [0:03:04]: Right?

Andy [0:03:04]: The carriers that are in a position of strength, good distribution, good training partners, good products, good pricing, good brand, good results are probably starting from a position of strength, so I would guess that they have more lead time, they also have more time to invest to get it right.

Andy [0:03:21]: I think if you're in a position of strength, you're gonna be in a position of strength in being maybe a very fast follower or hyper tester can be fine.

Andy [0:03:32]: But I think that Ai is something that is a little bit unique because insurance industry prove the predictive models, whatever you can argue about which ones work and what things don't...

Andy [0:03:43]: Actually does work, and the last year and the better your models are better results you're gonna get.

Andy [0:03:49]: And I think the Ai is kind of that, maybe on steroids in the sense of the opportunities to select better risks, to change the expense burden of the insurance carrier does present unique opportunities or even acquire customers at a at a lower cost point.

Andy [0:04:06]: I think that the people that figure those things out whether it's claims or underwriting pricing.

Andy [0:04:12]: And can operationalize Ai.

Andy [0:04:15]: First should have a significant lead, and that lead should be exponential as the technology evolves because It's like anything else and more you practice the more you do, the better you're gonna get.

Andy [0:04:29]: And so I think being early can't be a disadvantage, but any respect.

Callan [0:04:35]: I think that fast follow point is a good one.

Callan [0:04:37]: And this is...

Callan [0:04:38]: I think...

Callan [0:04:38]: Now, I spent most by career insurance so I'm biased, but this is definitely a fast follow industry.

Callan [0:04:46]: Once that first domino falls, you start to see everybody else jump in pretty quickly.

Andy [0:04:52]: Yeah.

Andy [0:04:52]: I mean, it's maybe he'll, like, Le maybe as the world is, like, who's doing what?

Andy [0:04:55]: Well, I'm gonna do it.

Andy [0:04:56]: But I think where this is unique is that every carrier is unique.

Andy [0:05:01]: How they deploy Ai where they deploy Ai.

Andy [0:05:04]: Most probably how the operationalize Ai.

Andy [0:05:06]: Yeah should be unique to what's the strategic driver for their business.

Andy [0:05:11]: And I don't think what's out there kind of press release atmosphere if you will in terms of Ai application is really even scratching the surface of some of the things that we're seeing that's not only possible, but actionable and operationalize in in existence today, particularly in the claims space.

Andy [0:05:31]: And just as you think about that opportunity, it's just an opportunity cost lost.

Andy [0:05:38]: If you could have better quality and be a hundred percent sure that you're compliant because I've always on quality checking or early notification of claims that maybe not aren't going down the right path.

Andy [0:05:51]: And these types of features that are really discreet.

Andy [0:05:57]: It's not necessarily making a claims decision, for example, or an adjuster decision, but it's certainly finding kind of an issue earlier the needle of the haystack.

Andy [0:06:07]: And escalating it earlier and that can be a huge advantage, not just from a service perspective, but an outcomes perspective.

Callan [0:06:15]: Well, it makes complete sense.

Callan [0:06:16]: Well, and that's what I'm excited to talk about today because you have as much experience on the claims side, probably anybody I haven't I know or have met and Snapsheet, Snapsheet works with over a hundred and eighty.

Callan [0:06:28]: Carriers, TPAs and MGAs, sixteen of the top twenty PnC carriers.

Callan [0:06:33]: That might be the stat that impress me more than anything else.

Callan [0:06:35]: Sixteen of the top twenty.

Callan [0:06:38]: And then have I've also raised over a hundred million dollars in capital.

Callan [0:06:41]: So you've got the background on this.

Callan [0:06:43]: No, here's the thing I'm really curious about.

Callan [0:06:45]: Right?

Callan [0:06:45]: And I've heard...

Callan [0:06:46]: Of course, we hear a lot about straight through processing.

Callan [0:06:48]: If you go to It seat.

Callan [0:06:50]: There's five million...

Callan [0:06:51]: There's claims is everywhere.

Callan [0:06:52]: Right?

Callan [0:06:52]: And I would say claims is really hot right now when it comes to the insured tech space.

Andy [0:06:57]: All todd.

Callan [0:06:57]: But you made a comp

Andy [0:06:59]: what.

Andy [0:06:59]: Yeah.

Andy [0:07:02]: When I we're just started to her up, but I when I joined Snapsheet.

Andy [0:07:06]: I remember, this had to be twenty seventeen, late twenty seventeen went to an event, speaker what up Was talking about all the venture capital money pouring into insurance at the time Insure tech had been coin maybe twelve eighteen months before.

Andy [0:07:21]: And claims was one percent of the total...

Andy [0:07:25]: And I think Snapsheet was probably, like, eighty percent of that one percent that have been invested in Insure tech.

Andy [0:07:32]: And so you're right.

Andy [0:07:33]: I think claims is, hot.

Andy [0:07:35]: I mean, look, it's sixty five, seventy percent of where all the dollars are in the in the ecosystem that's place that is really challenging.

Andy [0:07:45]: So I think people avoid it.

Andy [0:07:46]: And I think now people can't avoid it.

Callan [0:07:48]: Oh, I think you're dead on.

Callan [0:07:49]: I two years ago, at It c's when I really started to see the buzz around claims And then each year...

Callan [0:07:54]: I just say three years ago, then the past two It c's, and I'm saying It Inter tech insights, which you're Tech New All all the same thing.

Callan [0:08:01]: As far as, like, what I've seen, But essentially, that claims tech started.

Callan [0:08:05]: It just felt like it was the hottest one in the market.

Callan [0:08:07]: So I'm not surprised to hear those those numbers.

Andy [0:08:10]: Yeah.

Andy [0:08:10]: I mean, it's overnight success story that's fourteen years old.

Callan [0:08:15]: Well, that's...

Callan [0:08:15]: And correct me Rug but Snapsheet also had a service business that grew to be pretty extensive and then has this big technology company.

Callan [0:08:23]: So, like, it wasn't so much that sheet was just creating something from nothing.

Callan [0:08:27]: It was pretty hard earned.

Callan [0:08:28]: If I...

Callan [0:08:29]: No.

Callan [0:08:29]: The story feel free to plug it...

Andy [0:08:32]: Decided the the sheet is a technology business.

Andy [0:08:35]: We've been a pioneer in bringing, you know, the latest and most modern technology into insurance since the company was founded.

Andy [0:08:42]: We started off.

Andy [0:08:44]: Pioneering and creating the virtual appraisal process.

Andy [0:08:47]: So I think that's really where a majority of the market is right now because it's never made sense to kinda follow the cable repair person model person comes to your house after you got in a car accident kinda looks the car from a couple different angles.

Andy [0:09:01]: And then leaves, writes you an estimate a couple days later after you waited a couple days for that person to get to your house.

Andy [0:09:08]: And then you take it in the body shop, and get a repaired so Snapsheet, digitize that process, and really, we were the first people to bring text messaging into the claims use case.

Andy [0:09:20]: We were first company to do digital payments via mobile experience, in the P and c use case as well.

Andy [0:09:28]: So we we are a tech company that has used technology to build multiple different products.

Andy [0:09:34]: We started on that appraisal side and then about six years ago, five, six years ago, we built out our core claims system, which is an end to end system of record that's built for really the modern world and in the modern way that people should handle claims.

Andy [0:09:54]: So bringing all of these kind of analog processes.

Andy [0:09:58]: I mean that twenty five years ago, and today at many carriers, an adjuster is a switch board operator, and they have a document management system, a text message system and email system, a claims management system, Maybe a separate financial system.

Andy [0:10:12]: They have notes, and it's kind of a mess and they're plugging it together.

Andy [0:10:16]: And we took what we built from the appraisal side and all of our lessons learned.

Andy [0:10:20]: Really working aside alongside all of the carriers and looking at their claim system said, there's really a better way to do this and built a system that brings all of that together and allows for the infrastructure to drive automation, straight through processing, operational artificial intelligence into really discrete use cases for all lines of insurance.

Callan [0:10:45]: You made a comment when we were prepping for this episode.

Callan [0:10:48]: That I thought it was really interesting and I'd love to dive into it.

Callan [0:10:51]: You mentioned that brokers and agents haven't paid enough attention to claims.

Callan [0:10:55]: What does that mean?

Callan [0:10:57]: Can you break that down?

Andy [0:10:59]: Look, We've come out of a very hard market.

Andy [0:11:01]: Right?

Andy [0:11:01]: The last couple of years, pricing been rather robust, across almost every line of insurance.

Andy [0:11:06]: And at the end of the day, all the loss costs, lost adjustment expense.

Andy [0:11:10]: You add those together, like I said, it's seventy cents, eighty cents, sixty five cents.

Andy [0:11:15]: Maybe it depends on the line a little bit.

Andy [0:11:18]: And the reality is the differentiator for the end customer is what happens when they get lost.

Andy [0:11:26]: Sure.

Andy [0:11:26]: Coverage is may mandated in some industries.

Andy [0:11:28]: Certainly personal lines is different the commercial lines.

Andy [0:11:31]: But at the end of the day, what drove this hard market among other things was inflation and loss cost going up.

Andy [0:11:39]: And the way to impact that the most is better claims operations and the best carriers in the world that's, some of the best claims operations in the world in terms of best carrier results.

Andy [0:11:50]: And I think it's a spot where the industry just hasn't looked at.

Andy [0:11:54]: We've looked at how much rates got up across every line each quarter largely across the space loss adjustment expense has still been around nine ten, ten and a half points, even though insurance premium is up probably sixty five, seventy percent over the last three, four years, So if you think about that loss adjustment expense, it's not...

Andy [0:12:15]: We're not getting really any sort of improvement or scale on that.

Andy [0:12:20]: And the ind cost, obviously or through the roof.

Andy [0:12:24]: So impacting claims outcomes is the biggest opportunity, whether that and let the large and best brokers and agents certainly have cray risk management functions, but really focusing those risk management functions on that on their carriers with their carriers partnering with claims to get to better outcomes is not a spot that the industry spent a a ton of time in, and it's a spot where that's where most opportunity is.

Callan [0:12:49]: What's that opportunity?

Callan [0:12:50]: And if I'm an agent, I'm have a broker, what does that look like?

Callan [0:12:53]: How can I impact that?

Andy [0:12:55]: Oh, I mean, like I said before, a lot of the insurance carriers still run a very analog claims process.

Andy [0:13:01]: Maybe first of loss comes into one spot, and then it goes to another spot to set it up.

Andy [0:13:08]: And then it goes to another spot, and then it's finally assigned to an adjuster, and then the adjuster has to reach out and take another first notice of loss.

Andy [0:13:15]: Again, we're still at a very low amount of digital first notice loss, which makes no sense, a lot of it's through email, certainly almost ninety plus percent on the commercial side is through email, and that's just the beginning stages of it.

Andy [0:13:30]: But truly having an experience where when you file a claim, you're immediately identified, who your adjuster is.

Andy [0:13:38]: What are the next steps being able to submit information in an omni channel fashion, text, email, documents, videos, all the same time, being able to then action on that information, not just assign the right work to the right people, but assign it with context.

Andy [0:13:56]: There's missing information, reaching out automatically and requesting it, following the compliance steps every time you if you have to follow send policy language or homeowners bill of rights in a particular state.

Andy [0:14:09]: These things are all rules and data that can be automated.

Andy [0:14:14]: And these are the types of things that Snapsheet system and technology tackle really well, which is let's remove all of this process and multiple organizations.

Andy [0:14:26]: They have huge claims operations teams and dispatch teams.

Andy [0:14:30]: These are humans whose jobs are to do discreet pieces of the process so that other humans can do other parts of the jobs.

Andy [0:14:37]: Well, that can all be automated.

Andy [0:14:39]: I not even just talking Ai, Ai rules workflows, all these work in a s fashion to drive better outcomes and what that ultimately leads to is more time to investigate to understand coverage to give strong customer service, outcomes next steps, direction to the policy holder.

Andy [0:14:59]: And obviously, this differs by line and jurisdiction, it needs to be done in a compliance with, compliant fashion, but at the same time, there's so much that can be done to just improve the outcomes.

Andy [0:15:12]: And no longer there isn't in a delay, the longer the severity could be, regardless of the type of claim, and any sort of mitigation efforts when your weeks behind aren't as good as doing it as fast as possible.

Andy [0:15:25]: Speeds out the story.

Callan [0:15:28]: Longer play devil's advocate little bit.

Callan [0:15:29]: Is that not out of the control of the agent?

Callan [0:15:32]: Or are you making the point that agents need to pay attention?

Andy [0:15:35]: I think the agents can hold the carriers to a higher standard, brokers can hold the carriers to higher standard.

Callan [0:15:41]: Gotcha.

Andy [0:15:42]: Largely around this.

Andy [0:15:43]: And, ultimately, brokers have the agents have the ability to vote with their feet, and where they place business around it.

Andy [0:15:50]: And we've been in a place where...

Andy [0:15:53]: The industry where, like I said, rates increase compounding double digits, multiple years in a row across most lines and frequency has been dropping.

Andy [0:16:03]: So maybe sever severity up a little bit, depends on the line there, but frequency down.

Andy [0:16:08]: And so that should mean much better claims service, higher expectations on the claims result, a lot of the lower dollar claims have been moved out of the system, either because of higher deductibles or changes to terms and conditions, which the agents that sold through.

Andy [0:16:26]: So it's left is more complex claims.

Andy [0:16:29]: There has...

Andy [0:16:30]: The agents and brokers can put a lot more pressure, I think, on the carriers and be stronger trading partners, both sides just to get to better outcomes around it.

Andy [0:16:40]: I...

Andy [0:16:40]: And I just think that the industry hasn't maybe focused enough on improving loss outcomes, They've obviously, every carrier talked about expense, but all the money is in the loss outcomes.

Andy [0:16:55]: And I think that's where whether it's around litigation, which everyone's been yelling about for years and nuclear verdict and social inflation at the end of the day, one way to get around a lot of that is just better claiming.

Callan [0:17:09]: Well, and I think voting with your feet makes a lot of sense.

Callan [0:17:12]: And this is definitely.

Callan [0:17:14]: It's, you know, insurance, and especially insurance with agencies as one of the bigger chicken and the egg problems every.

Callan [0:17:21]: And I think it's always how many agencies are asking this.

Callan [0:17:24]: Well, if you get more agencies ask for it we'll adopt this.

Callan [0:17:26]: Then you...

Callan [0:17:27]: And then you go to the agencies and say, well what carriers adopting us.

Callan [0:17:30]: The carrier adopt this, then, yeah, we're interested in doing this.

Callan [0:17:33]: Now claims is a little bit different than a tool that affects the distribution.

Callan [0:17:37]: But one of the things that I'm I'm curious on that is, Okay.

Callan [0:17:39]: So I'm an agency.

Callan [0:17:40]: I'm a broker.

Callan [0:17:41]: Now the ver...

Callan [0:17:42]: The largest brokers, that's gonna be a little bit different.

Callan [0:17:44]: Right?

Callan [0:17:45]: They have more leverage.

Callan [0:17:47]: They've got more insight into what's going on at a deeper level than the carrier than let's say a mainstream street agency.

Callan [0:17:52]: But let's say agency does wanna vote with their feet.

Callan [0:17:56]: How don't they even know?

Callan [0:17:57]: Are there questions that they should be asking?

Callan [0:17:58]: Are there trigger events that they should be on the lookout for?

Callan [0:18:01]: What does that look like?

Andy [0:18:03]: I mean, like, I think it's a good great question.

Andy [0:18:05]: But if the agents are there selling through all these price increases and the loss results are good.

Andy [0:18:11]: And they're not looking at why they're placing with a specific carrier.

Andy [0:18:16]: Then their customers are gonna put with their feet also.

Andy [0:18:20]: So I think it really starts with truly understanding the claims process.

Andy [0:18:23]: What the carrier is doing to actually return their insurer back to pre claim condition whatever that may be e.

Andy [0:18:32]: Right?

Andy [0:18:33]: Or to make them whole in whatever way they can.

Andy [0:18:36]: And I think just having a better understanding of the process.

Andy [0:18:40]: I mean, the number of agents that just fill out this form or go to this site and fill this out and say their hands off.

Andy [0:18:46]: I think they can take a more active role in the claims process.

Andy [0:18:49]: And I think the best ones do around it.

Andy [0:18:52]: And that's...

Andy [0:18:52]: Some of that is just prepping their the last piece is just prepping their insured with the right information.

Andy [0:18:58]: So if insured has a loss, preparing them with how to submit the claim?

Andy [0:19:03]: What's the right way to do it.

Andy [0:19:04]: How to get the carrier on the phone.

Andy [0:19:06]: But if the carrier is not someone who They should know there's carrier best reached by phone or by email.

Andy [0:19:12]: What's their response time?

Andy [0:19:13]: What's the service level expectation around it.

Andy [0:19:16]: And it should differ depending on the line of insurance and certainly the severity of the of of the claim, but if it's cat prone homeowners insurance, that's wildly different.

Andy [0:19:28]: What is the carrier response, mechanism if I'm in this geography and this geography gets in and every policy holder in this geography gets.

Andy [0:19:36]: And I think this...

Andy [0:19:37]: These are the things that that agents can at least educate themselves on, but then also educate their insurers on.

Callan [0:19:45]: Well, what I'm hearing here you say is become experts on the claims process of these different carriers.

Callan [0:19:49]: For as much as you can with it within your control, and then be able to educate and hand for a better lack of a better term through that claims process with your insured.

Andy [0:20:01]: Well, and they should be able to use it as a way to sell value too.

Andy [0:20:04]: Like, if an agent broker regardless the type of insurance wants to make sure that when things happen that they're not the ones doing all the work associated with it as well.

Andy [0:20:15]: And so I think there's an opportunity to sell ton of value by truly understanding that.

Andy [0:20:20]: And at least outlining the different options.

Andy [0:20:23]: Obviously, they had church and still make which decision that they wanna go what what their true driver of the buying decision is.

Andy [0:20:31]: But, you know, in personal lines, people have a claim what maybe eight years or so.

Andy [0:20:35]: So they don't what to do, and they don't remember their the last experience.

Andy [0:20:39]: The last bad experience is their last experience and that's what they remember.

Andy [0:20:43]: But if they don't have an experience, how do you walk them through that.

Andy [0:20:46]: And coverage has changed a lot too.

Callan [0:20:49]: You made a point earlier and you said the best are already doing this.

Callan [0:20:52]: Do you have any more of those best practices that the best are doing?

Callan [0:20:56]: You mentioned that you made...

Callan [0:20:57]: That was a...

Callan [0:20:58]: I love that example of...

Callan [0:20:59]: It's like, you know the best way to get in touch with this carrier.

Callan [0:21:01]: What are some of those other examples that the best are doing to rate themselves that you've seen.

Andy [0:21:07]: I think that the best carriers have a really strong claims operating model.

Andy [0:21:14]: And that's not a Frankenstein of...

Andy [0:21:17]: Great different tools and widgets and things like that.

Andy [0:21:22]: It's truly an operating model that identifies how claims come in the door.

Andy [0:21:29]: What's the most efficient way to get the right information by line of business?

Andy [0:21:32]: How they assign out the work, how they triage the work, how they understand what information that they need to move to the right, next steps, how they build resolution planning activities, how they do Qa and compliance altogether through the process versus kind of this kind of staged out outdated, people only want know one piece of the process.

Andy [0:21:57]: And how do they really drive different claims through a very complex cli board of how things Each claim is unique.

Andy [0:22:06]: And maybe each just a snowflake of their own, but how it drives claims through as a information evolves and more information comes in.

Andy [0:22:15]: To resolution.

Andy [0:22:16]: And I think the carriers they really spend a lot of time currently from a first principles perspective, and Have really re thought how they want claims to flow through at different levels of severity based on geography, work routing, work assignment, all these different...

Andy [0:22:34]: And and how they develop over time are really building a system, and it is a system to make sure that they're doing yeah.

Andy [0:22:42]: Things can fall through the crack cracks, there could be bad experiences and along the way, but we'll ninety plus percent follow a great experience because they've really wired this out.

Andy [0:22:53]: And many of our customers who are power users of our platform that have a true vision of how for their line of business or their lines of business.

Andy [0:23:02]: And for their policy holders how they wanna handle it, start from a place of not this is the way that we've always done it.

Andy [0:23:09]: But this is the way that we drive these the claims to resolution.

Andy [0:23:14]: And everything is around getting to a resolution, which means it's going to be more efficient, which means they're gonna control the outcomes and provide better service along the way.

Andy [0:23:25]: And then it's amazing to me the number of...

Andy [0:23:27]: Carriers that you ask what do you do today?

Andy [0:23:30]: We don't know?

Andy [0:23:31]: What do you wanna do?

Andy [0:23:32]: We don't know.

Andy [0:23:33]: Why do you do it that way?

Andy [0:23:35]: We've always done it that way.

Andy [0:23:36]: Why do you do it that way?

Andy [0:23:37]: And I think there's so much has changed.

Andy [0:23:40]: And so little focus and change has been put on the claims kind of operating model.

Andy [0:23:46]: And that's really what Snapsheet does when our platform does.

Andy [0:23:50]: It's not just a tool.

Andy [0:23:51]: It's really helping carriers change the way that they handle and manage claims in their organization.

Callan [0:23:59]: What are some specific questions an agent or broker can ask their carrier?

Callan [0:24:03]: To see, are they handling claims in the best way possible?

Andy [0:24:08]: No, I made start.

Andy [0:24:09]: Just what's the with...

Andy [0:24:10]: What's your loss adjustment expense?

Andy [0:24:12]: What's my claim load?

Andy [0:24:13]: Right.

Andy [0:24:13]: I mean, let's say, if you're a self insured...

Andy [0:24:15]: Mean, go to the commercial use case.

Andy [0:24:16]: Let's say you're between a guaranteed cost market or self insured kinda capped type market around it, and and maybe...

Andy [0:24:24]: There's a claims load that's tied to it, and it's maybe, like, four percent a year.

Andy [0:24:29]: And my price is going up, twelve to fifteen percent a year.

Andy [0:24:32]: Well, then my cost of claims is going up, but my frequency is going down and the value equation, seems off.

Andy [0:24:38]: Why am I spending more money for fewer claims that seems out of whack.

Andy [0:24:43]: So, you know, starting with just the loss adjustment expenses associated with it?

Andy [0:24:48]: What are you investing in?

Andy [0:24:49]: To change that.

Andy [0:24:51]: What are the things that you're doing to drive depending on the line of insurance to drive better results on ind.

Andy [0:24:59]: Right?

Andy [0:25:00]: What are you doing to drive quick resolution What percentage of your claims get the first payment and what time frame.

Andy [0:25:06]: Just kind of basic blocking and tackling questions around it, that can kind of lock in towards the source level and then maybe most importantly, How are you using technology to get to a better outcome.

Andy [0:25:19]: Alright?

Andy [0:25:19]: There's so many products and solutions and and features out there and claims has been woe under our invested.

Andy [0:25:27]: I mean, all the money just like I was making a joke earlier.

Andy [0:25:30]: Where all the money in the venture world went into distribution, curious have so much of that's distribution.

Andy [0:25:36]: The alaska leaders rate will form product pricing, all of those types of things, claims has always been kind of the afterthought.

Andy [0:25:42]: In the technology side of the equation.

Andy [0:25:45]: And I think now is the market's softening.

Andy [0:25:47]: Right?

Andy [0:25:48]: And carriers can't get to the target combined ratios they wanna get to on just price increase alone because it's gonna be more competitive.

Andy [0:25:56]: The next step is what are they doing to drive and ban that cost equation and the claims side.

Callan [0:26:03]: So here's one of the things I'm curious about is, Do you have an example of a carrier right now that is crushing it in this regard.

Callan [0:26:09]: So basically, They answer all those questions.

Callan [0:26:11]: This is the one we're, like, they're crushing it.

Callan [0:26:14]: And here's their process.

Andy [0:26:16]: Yeah.

Andy [0:26:16]: I mean, I think that they're a ton of...

Andy [0:26:18]: I I don't wanna give names because then I'm sing someone with this finger.

Callan [0:26:22]: No.

Callan [0:26:22]: Without given the names, I'm just kinda curious, what does that look like?

Callan [0:26:25]: Claim comes in, what does that look like?

Andy [0:26:28]: Give you a couple examples.

Andy [0:26:29]: Claim comes in the door available to report first notice loss in an omni channel fashion.

Andy [0:26:35]: Able to append documents, photos, video, voice recordings, all immediately at kind of first notice of loss.

Andy [0:26:45]: As it comes in, the system scanning for what's not there.

Andy [0:26:48]: It's automatically reaching out via the preferred mechanism of communication text, email.

Andy [0:26:54]: Says, hey.

Andy [0:26:55]: Let's see submitted this claim, and you missed these things.

Andy [0:26:58]: Can you please send me this or do you have pictures of this or can you take a video of this because we know it's kinda down this path?

Andy [0:27:05]: It's a water claim.

Andy [0:27:05]: As example you didn't submit.

Andy [0:27:07]: Into this it's an auto claim, and you didn't submit pictures the damage of the other party.

Andy [0:27:12]: Whatever it is.

Andy [0:27:12]: Automatically identifying that.

Andy [0:27:14]: Immediately, as soon as that comes, identifying, here's your adjuster.

Andy [0:27:18]: Here's the next steps here's their contact information.

Andy [0:27:22]: As the adjuster opens up and looks at it, and maybe their first step is to confirm coverage and understand it, there's information and insight already glean from the report in terms of what are the next steps that they need to do an information that they need to check.

Andy [0:27:37]: Maybe it's make sure that the underwriting companies Right?

Andy [0:27:39]: Maybe it's to review coverage to make sure there's not deductibles right, things like that.

Andy [0:27:44]: Automatically sending it out to a vendor for fulfillment.

Andy [0:27:48]: Think about an a water claim and immediately coming in and immediately getting us assigned out to a vendor to say, hey, let's do a alarm mitigation.

Andy [0:27:55]: Right?

Andy [0:27:55]: Or quick strike in a commercial trucking claim.

Andy [0:27:58]: We have carriers that are doing these things where it's automatic.

Andy [0:28:00]: So as soon as it comes in, there's automatic vendors being assigned to it.

Andy [0:28:05]: So they're starting their scheduling process.

Andy [0:28:07]: Even before the adjusters even picked up the file.

Andy [0:28:10]: So you're again, you're shrinking the elapsed time.

Andy [0:28:13]: Automated letters and whether it's regulatory and compliance letters like I was mentioning, like, sending out, Okay.

Andy [0:28:21]: Here's the policy language that's required in this state immediately around its files.

Andy [0:28:25]: So the adjuster doesn't have to.

Andy [0:28:26]: So it's taking work off the adjuster plate, so that as the adjuster picks up the file and maybe they're making their first contact, it's alerting to the adjuster to the service levels around that.

Andy [0:28:37]: Maybe they say they wanna have first contact within four hours, so the system starts counting down and elevating that claim in their queue, so they're making and getting to that customer immediately or that policy holder immediately, having that conversation.

Andy [0:28:51]: That conversation is fully recorded.

Andy [0:28:52]: All the documents are coming into that.

Andy [0:28:54]: And then even getting into some of the Ai pieces where the system's always checking is their new information.

Andy [0:29:01]: Is there been new communications as has there been new documentation.

Andy [0:29:04]: Do we need to create alert on this?

Andy [0:29:06]: Do we miss as a regulatory or compliance or a time limit that's coming up that we need to be aware of and elevating those things?

Andy [0:29:13]: Even as an invoice or bill or police report comes in?

Andy [0:29:16]: We have carriers, that are...

Andy [0:29:17]: The systems identifying that.

Andy [0:29:19]: And then instead of the adjuster having to look at a document, like a police report and saying, hey, look, there's another party on this police report.

Andy [0:29:26]: I have their name, and their address and what they are.

Andy [0:29:29]: Now as an adjuster instead of going in and typing in all this information, the system can say, hey, there's another party and that's push for.

Andy [0:29:38]: Click a button.

Andy [0:29:39]: Boom.

Andy [0:29:39]: It's immediately added to the claim file.

Andy [0:29:41]: Kicks off those workflows to reach out to that third party.

Andy [0:29:44]: So truly operational, automation workflow, Ai, operational these processes, whether it's communication, whether it's engagement, whether it's investigation activities.

Andy [0:29:56]: Whether it's vendor assignment, vendor engagement activities, vendor follow activities.

Andy [0:30:01]: The best carriers have automated these things.

Andy [0:30:03]: So it's really changing the way and that's what Snapsheet enabling is changing the way the adjusters adjust so that they are really able to spend the time, all the things that matter, whether it's service, whether it's actual decision making, and not on this administrative kinda analog switch forward operator at work.

Andy [0:30:22]: And that that allows them to spend more time making better decisions and then surfacing things that have issues or could have issues down the road because of lack of information or or just adjuster neglect or fatigue.

Callan [0:30:37]: One, that's a great breakdown.

Callan [0:30:39]: I appreciate you doing that.

Callan [0:30:40]: Two, if an agency wants to take a more proactive role within a claims process, where in that process do they insert themselves.

Callan [0:30:47]: Or do they not?

Andy [0:30:49]: I mean, I think it just depends on what their investment is.

Andy [0:30:51]: Right?

Andy [0:30:51]: There's there's there's multiple well...

Andy [0:30:53]: First of all, there's multiple models.

Andy [0:30:54]: Right?

Andy [0:30:55]: Yeah.

Andy [0:30:55]: Around it.

Andy [0:30:56]: So agent broker can set up their own claim handling.

Andy [0:30:59]: Their claim advocacy groups and their own claim organizations.

Andy [0:31:02]: They can take a more active role.

Andy [0:31:05]: In these things.

Andy [0:31:06]: They can take the pressure off the interim policy holder.

Andy [0:31:09]: They can do it for fee.

Andy [0:31:10]: There's a...

Andy [0:31:11]: There's a ton of different models they could follow on it.

Andy [0:31:14]: I think it's figuring out what they believe their role is.

Andy [0:31:17]: I think it's a true stat.

Andy [0:31:18]: Still we still talk talk about it Cna and and travelers when I worked there, you know, I think something like eighty five, ninety percent of all business agencies placed with three carriers.

Andy [0:31:28]: Right?

Andy [0:31:29]: So it's a typically that three markets are handling most of their wrists.

Andy [0:31:33]: I think most of their frequency.

Andy [0:31:34]: What's left maybe you want off or more complex or have some level of hair on it.

Andy [0:31:39]: I think if that's the case, really understanding the claims operating model and how they work and having direct lines into it, help support their policy holders in terms of what those models are.

Andy [0:31:51]: I think it depends on who the markets they work with and the carriers that they work with.

Andy [0:31:55]: And then really looking at what carriers are driving a different claims experience.

Andy [0:32:00]: If that's important to their policy holders.

Andy [0:32:01]: Right?

Andy [0:32:02]: And I think the last couple years, it's been the cost of insurance that focused on.

Andy [0:32:06]: I think that cost is...

Andy [0:32:08]: I'm not gonna say it's gonna become a commodity, but the pricing should become more clean as it's more competitive than a softer market.

Andy [0:32:15]: And if that's the case, I think it puts a lot more pressure on the claims side in service, and if the agent's not helping the insurer and insured it has bad experience.

Andy [0:32:25]: That's a broker of record.

Andy [0:32:27]: Wait.

Andy [0:32:28]: Right?

Andy [0:32:28]: And they don't wanna you are.

Callan [0:32:31]: Yeah.

Callan [0:32:31]: No.

Callan [0:32:31]: I would agree with that The soft market dynamics are gonna change quite a bit here over these next...

Andy [0:32:35]: And I don't think people remember soft market.

Andy [0:32:36]: I mean, it's been long,

Callan [0:32:39]: which it was that long ago, which is the craziest part.

Callan [0:32:42]: But, yeah, It is...

Callan [0:32:43]: It is, you know, it feels like this hard market

Andy [0:32:46]: Which store?

Callan [0:32:48]: Yeah.

Callan [0:32:48]: Percent.

Callan [0:32:49]: So, Andy, last question I have for you here is we're sitting here ten years from now?

Callan [0:32:54]: What does this process look like?

Callan [0:32:57]: What are you doing in this world?

Andy [0:33:00]: I mean, look, the claims environment has not changed in twenty five years by launch.

Andy [0:33:06]: Right?

Andy [0:33:07]: And that's for a lack of, maybe focus for lack of an that's probably not.

Andy [0:33:13]: People spent a lot of money.

Andy [0:33:15]: I don't think they've gotten a lot for.

Andy [0:33:16]: Maybe an example, a good...

Andy [0:33:18]: That chief claims officer is Great chief claims officer.

Andy [0:33:20]: She said this in an about a while back and had stuck with me.

Andy [0:33:23]: Starters careers a field adjuster, and she'd had to drive out, and she would go into a house.

Andy [0:33:30]: She'd have to blueprint and do a kraft paper, all the damage of a homeowners claim by hand and had no technology, and she did four a day.

Andy [0:33:38]: And we have all this technology, and a lot of this stuff is automated today, and a field adjuster still does for a day today.

Andy [0:33:44]: So it's not just the technology.

Andy [0:33:46]: So, you know, what I said earlier is is is the best answer this question is we're gonna go through a huge technological switch.

Andy [0:33:54]: Used to be that the work, the technology we had it work was significantly further advanced than what we have at home.

Andy [0:34:01]: And now we have smart Tvs, smartphones and Ai systems, chatbot bots, and all these things at home, and most people don't have any of this stuff at work, and it's mainframe technology.

Andy [0:34:11]: It's twenty years.

Andy [0:34:13]: It's a five year implementation.

Andy [0:34:15]: It's hundreds of millions and tens and hundreds of millions of dollars.

Andy [0:34:18]: And they get nothing except the same train tracks that they were on, maybe a little bit better Ui and no better data.

Andy [0:34:25]: And that technology has advanced so far.

Andy [0:34:28]: The industry got catch up now.

Andy [0:34:29]: The modern technology platforms like Snapsheet, allow these carriers to jump ahead and really change the way that they adjust.

Andy [0:34:37]: So instead of being the switch board operator and doing all this analog, essentially administrative work where they're in their email box and pasting stuff and downloading files and uploading All this that stuff is going to be done by the system.

Andy [0:34:50]: And so you're gonna have really expert adjusters who are making decisions or supporting their insured policy holders through a really complex loss And they're able to spend more time on that, They're not pushing paper around it.

Andy [0:35:05]: And a lot of this stuff just happens.

Andy [0:35:07]: I mean, just even the concept of setting that initial reserve.

Andy [0:35:11]: That's a manual process and people forget to do it, things like that.

Andy [0:35:15]: The system can set or reserve based on the loss lost time, the apparel line business, all these different factors and that can automatically be done as a starting point, the adjuster can approve it.

Andy [0:35:25]: Right?

Andy [0:35:25]: And so moving from a world where they're keying in information to truly approving it, making decisions of moving to not just an auditor and a Qa role, but truly the knowledge role that a lot of these adjusters want to play and taking all this administrative garbage out of the process because of bad systems is where this...

Andy [0:35:45]: Where the industry is can be.

Andy [0:35:46]: I don't think it's ten years away.

Andy [0:35:47]: We have carriers that are partners ours that are doing this today, and they have roadmap to accelerate it each week, each month, each quarter each year, and that's what the best carriers are doing.

Andy [0:35:57]: Last point on this.

Andy [0:35:59]: All these carriers talk about, oh, we're going through a modernization.

Andy [0:36:03]: It's like, what you went through a transformation seven years ago, and now you're going through a modernization.

Andy [0:36:08]: And that's, like, wait.

Andy [0:36:09]: Just just shifting, like, from on premises to the cloud.

Andy [0:36:13]: That's not like, a modernization, like, by remodel my house?

Andy [0:36:17]: That means I have new stuff?

Andy [0:36:18]: Maybe the closets is bigger.

Andy [0:36:19]: Maybe I'm do...

Andy [0:36:20]: Like, you're not getting any new stuff.

Andy [0:36:22]: So, like, for us, it's truly like, how you get to world this version list.

Andy [0:36:26]: How do get out of these projects How do you get out of this?

Andy [0:36:28]: Oh, It's an implementation?

Andy [0:36:29]: No.

Andy [0:36:30]: It's...

Andy [0:36:30]: If business users, these claims leaders are the technologists.

Andy [0:36:34]: Now they're driving changes to the process.

Andy [0:36:36]: The workflow changes.

Andy [0:36:37]: If you have a cat come in in a place that you weren't expecting.

Andy [0:36:40]: How do you flip a switch and immediately have that operating model just work.

Andy [0:36:45]: And that's what the...

Andy [0:36:46]: Our best carriers, and that's what the best carriers are doing.

Andy [0:36:49]: They're moving from these, like, three or, five year projects to these kind of living operating models that are...

Andy [0:36:55]: Every week month quarter year, getting better and advancing discreet components of the end to end claims life cycle, drive better decision and better outcomes.

Andy [0:37:05]: And I don't think carriers can wait you know, there's dozens of top hundred carriers that are on systems that are ten fifteen years old.

Andy [0:37:16]: We didn't even let our laptops go three years anymore.

Andy [0:37:19]: How can you have a system that's fifteen, twenty years old.

Andy [0:37:22]: And that...

Andy [0:37:23]: That's the big shift that we're gonna go through.

Callan [0:37:25]: And I think it's gonna be interesting and it'll...

Callan [0:37:28]: It's gonna be a lot of pain to get to that point, but

Andy [0:37:31]: it doesn't have to get...

Callan [0:37:32]: Doesn't have to be.

Callan [0:37:33]: But it probably will be.

Andy [0:37:35]: Yeah.

Andy [0:37:35]: I mean, look at...

Andy [0:37:36]: Yeah.

Andy [0:37:36]: Well, change as hard.

Andy [0:37:37]: I said at the beginning.

Andy [0:37:38]: Right??

Andy [0:37:39]: Once you want the right answer, takes three years to get there.

Andy [0:37:41]: Like, I'm not diminishing the change, but it's, like, when is the time.

Callan [0:37:45]: Yeah right?

Andy [0:37:46]: Like, it wasn't the last fifteen years, It wasn't when we're getting twelve fifteen points rate year over year over year.

Andy [0:37:51]: I think the time is now, and that's why you're seeing claim is becoming more of a focus because, ultimately, it has to be, maybe the last story is remember talking to a very senior executive at a very large Tpa, and this was five six years ago and saying, yeah, our business isn't the business of efficiency.

Andy [0:38:11]: And when I said, my at the time, I said, you know, your business that may not be the business of efficiency right now because your competitors aren't focused on being efficient.

Andy [0:38:21]: But there'll be a point in time where the model is about being efficient and really good at at claim handling and then someone's is gonna be on your corner and take a business.

Andy [0:38:31]: And so I think that's kind of the world where shirt starts up front distribution, pricing because that's a pure arms race, But I think that arms race has to come to the back of the house as well.

Andy [0:38:43]: And that's what claims sits.

Callan [0:38:45]: Yeah.

Callan [0:38:45]: No question.

Callan [0:38:46]: And I think it is definitely gonna be competitive advantage to those carriers hundred percent and the brokers to be honest.

Callan [0:38:52]: But Andy this been great, man.

Callan [0:38:54]: I I appreciate you you coming on and walking in us through this.

Callan [0:38:57]: I think it's a super interesting topic and it's gonna be.

Callan [0:39:00]: It's gonna be interesting for the the next couple years at least.

Callan [0:39:02]: That is for sure.

Andy [0:39:03]: It's...

Andy [0:39:03]: Well, it's been interesting last several years, so I have no doubt that'll be interesting going forward.

Callan [0:39:07]: Yeah. Absolutely.