The 3 Moves Separating Elite Insurance Brokers from Everyone Else with Callan Harrington

Callan [0:00:01]: Welcome to The Insurance Growth Lab, where we go deep on the growth campaigns and strategies driving real results in the insurance industry.

Callan [0:00:09]: 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, scale to channel or solve a specific growth challenge.

Callan [0:00:26]: It's no fluff just tactical insights you can apply in your own company.

Callan [0:00:31]: For as long as I can remember, I have been it's obsessed with what the absolute top performers are doing and then stealing those tactics.

Callan [0:00:45]: I remember when I was a new agent in two thousand nine, Northwestern mutual brought in their top cold collar in the country to teach us how he did it.

Callan [0:00:55]: This was way before Wolf Wall Street had came out, but that it was exactly what I thought this guy was going to be.

Callan [0:01:03]: He couldn't have been more of the opposite.

Callan [0:01:05]: He had a long pony tail, and it looked like he was straight out of the nineteen sixties, and his approach couldn't have been further from the movie.

Callan [0:01:15]: He was cold calling CEOs of top companies, like he could care less whether they would meet with him or not.

Callan [0:01:24]: And he would schedule these left and right and that taught me that the elite of the elite do things differently.

Callan [0:01:32]: It's over the past forty episodes of The Insurance Growth Lab, I pulled out the insights into what the elite of the elite brokers are doing differently today.

Callan [0:01:43]: And the interesting thing was three themes rose to the top.

Callan [0:01:47]: One, the elite fine untapped opportunities, then they go all in and what works and they ob assess over one metric that drives their growth.

Callan [0:01:58]: I'm gonna break down each one of those today and give you actual use cases for each one of those themes.

Callan [0:02:05]: To set the stage a little bit, insurance is a huge market, and it's extremely competitive.

Callan [0:02:12]: That competition creates a grind out business and a lot of similarities from broker to broker.

Callan [0:02:19]: The elite create separation from that sea of same, which leads to my first name, and that first theme is the elite find untapped opportunity.

Callan [0:02:32]: Elites see the biggest opportunities in underserved markets.

Callan [0:02:37]: And those markets, they don't have to compete with everyone else.

Callan [0:02:42]: They can go really deep and build unique systems and processes to create a moat around that market.

Callan [0:02:49]: And we all know that's one of the best things you can do is create that competitive moat.

Callan [0:02:53]: And one of my favorite examples of this is mad insurance.

Callan [0:02:56]: For those are not familiar with Matic, Matic is a large digital agency that focuses on the real estate space.

Callan [0:03:04]: Now, many large digital agencies target mortgage origin companies as clients.

Callan [0:03:10]: The challenge with this is that that mortgage origin process is very local.

Callan [0:03:17]: Local agents work with loan officers in their areas to drive insurance referrals for new home buyers in that area, which makes complete sense.

Callan [0:03:26]: New homeowners have to get insurance to secure the loan, so the urgency to get a policy in place is high.

Callan [0:03:33]: For a local agent focused on personal lines, it's a great way to go to market.

Callan [0:03:39]: It's what I probably recommend, probably more than anything else.

Callan [0:03:42]: It's relationship based and there's high intent to buy.

Callan [0:03:46]: Those are two perfect things for that local agency.

Callan [0:03:49]: But for a digital agency, especially a venture backed agency like Matic, There are a couple of challenges with this model.

Callan [0:03:57]: As we said, it's heavily dominated by local agents.

Callan [0:04:02]: The real estate agent, loan officer and local agent are all closely connected and refer business to each other.

Callan [0:04:08]: This is a hard nut to crack if you're looking to build a digital broker.

Callan [0:04:13]: The second challenge is that there are about four to six million new home loans each year.

Callan [0:04:20]: Now That's a huge number for most agencies.

Callan [0:04:25]: But when you're looking to dominate the real estate market as a whole, it's not as big as it seems.

Callan [0:04:31]: Matic saw a really interesting opportunity.

Callan [0:04:35]: Instead of working with the mortgage origin companies work with loan servicing companies.

Callan [0:04:41]: That market is considerably larger with about fifty one million outstanding mortgages.

Callan [0:04:47]: That is ten x the mortgage origin number.

Callan [0:04:51]: Now additionally, loan servicing companies typically don't have local relationships and are looking for ways to add value to the loans they service.

Callan [0:05:01]: Traumatic, this meant integrating with their systems and building custom workflows to add value throughout the life cycle.

Callan [0:05:09]: When you consider that most mortgages are thirty years in length, That's a lot of opportunities to add value and convert them to your brokerage.

Callan [0:05:20]: So what have the results been, Matic is driving seven hundred and fifty thousand new leads a year and is one of the largest brokers in the country.

Callan [0:05:30]: Whether it be that digital or traditional, they're one of the biggest in the country.

Callan [0:05:34]: If you wanna hear that full story, check out my interview with their president, Jeff Snyder, it's One of my favorites to date and he breaks their whole thing down their whole process and how I got there?

Callan [0:05:45]: My second theme.

Callan [0:05:46]: The elite go all in on what works.

Callan [0:05:51]: And so one of my favorite quotes in all of business comes from Charlie Mu, and he said this at the two thousand and ten Berkshire Hathaway annual shareholder meeting.

Callan [0:06:02]: And he said, we've had enough good sense when something is working very well to keep doing it.

Callan [0:06:11]: I'd say we're demonstrating what might be called the fundamental algorithm of life, repeat what works.

Callan [0:06:18]: Obviously, Charlie Mu has a talent for taking the complex and making it simple.

Callan [0:06:24]: That's my favorite one.

Callan [0:06:25]: The elite don't just repeat what works.

Callan [0:06:29]: They bet the farm on it.

Callan [0:06:31]: Now this is way easier said than done.

Callan [0:06:35]: Anyone who's ever built a business knows this.

Callan [0:06:37]: When you first start out, you feel like you need to be everything to everyone.

Callan [0:06:42]: You offer every product, every line of business and your market could pretty much be defined as anyone with a pulse.

Callan [0:06:50]: I know for me, that was absolutely the case when I was starting out.

Callan [0:06:54]: The elite do not do this.

Callan [0:06:57]: When they find something that works, they push all the chips in and they ride that all the way through.

Callan [0:07:03]: And one of my favorite examples of this was on a recent episode, with Scott Tan and how he built Western financial group.

Callan [0:07:11]: Scott first bought a really small agency in High River Alberta.

Callan [0:07:15]: And for context, High River is a town of about fifteen thousand people.

Callan [0:07:20]: So it's a pretty small town Scott quickly realized they understood small town agencies, and they saw a big opportunity to acquire other small town agencies from owners who were looking to retire.

Callan [0:07:33]: And from there, he formed the Western financial group, and they went all in on that model.

Callan [0:07:39]: One of the things I found the most interesting because they grew to a very large scale is they didn't have a location in a major metro until they had over a hundred locations.

Callan [0:07:49]: To this day, The home office still remains in high river Alberta.

Callan [0:07:54]: You can make the argument that this model is still underserved, many of the major platform agencies target other big agencies, and Scott saw the opportunity to build a massive company driven by small local agencies because that's what was working.

Callan [0:08:13]: And hard to argue with the result, Western Financial group sold for seven hundred seventy five million in twenty seventeen.

Callan [0:08:20]: And on top of that, Scott is a Canadian senator and a really interesting guy.

Callan [0:08:25]: Check out Scott's episode if you wanna hear the full story.

Callan [0:08:28]: I really enjoyed it.

Callan [0:08:30]: Which brings me to the third theme, the elite ob obsessed over one metric that drives their growth.

Callan [0:08:39]: They put on their blind, they tune out all the noise, and they focus on just one metric that drives our growth.

Callan [0:08:48]: Now, that's not the same metric for every agent and broker, but the discipline of picking a single metric and ob over it, is found to be the same across all of the elite agencies.

Callan [0:09:00]: And I've got two examples I wanna dive into that demonstrate this.

Callan [0:09:04]: The first example comes from my episode with Chris P.

Callan [0:09:07]: So this was equal parts best practice and probably serves as a wake up call for a lot of agents and brokers.

Callan [0:09:14]: Chris walked us through his relentless focus on policy count for calculating book retention instead of looking at book retention on total premium.

Callan [0:09:24]: The hard market made a lot of books of business look great.

Callan [0:09:28]: As carriers raise rates across the board, it artificially inflated growth rates, if you looked at this from a premium perspective.

Callan [0:09:36]: When looking at it from a policy count perspective, it quickly becomes a different story, especially in a soft market.

Callan [0:09:43]: There is a good chance, a lot of agencies are going to have, as I mentioned earlier, a big wake up call over the next couple of months, especially when Organic growth is at a premium when it comes to its impact on agency valuations right now.

Callan [0:09:59]: Matt Only talked about that in his episode, and I'm seeing this pretty much across the board.

Callan [0:10:04]: That could be small agencies or top one hundreds.

Callan [0:10:07]: Organic growth is at a premium.

Callan [0:10:09]: For many elite agencies, that one metric is policies per customer.

Callan [0:10:14]: Now most agencies track this number, but many elite agencies obsessed over it because it's a highly leveraged KPI.

Callan [0:10:22]: If that number is high, retention pretty much takes care of itself, and your net premium per customer will increase with it.

Callan [0:10:29]: To support that number, the elite have very prescriptive cross sell processes in place.

Callan [0:10:36]: Eric Roberts from my insurance group walked us through his in detail on his episode.

Callan [0:10:43]: All they lead agencies have a process supported by their CRM, lead management system and call scripts, but Eric gave a great example of how any agency can get started just by asking your carriers for a list of all your model customers.

Callan [0:11:00]: He asked for model home and he uses that as an opportunity to reach out and bundle the auto to get a discount.

Callan [0:11:10]: Pretty simple.

Callan [0:11:11]: It's easy to put in into place.

Callan [0:11:13]: And the reality is even though that's simple, even though that doesn't take a lot of time, that can have a really, really big impact on that policies per customer number, and therefore retention and net premium.

Callan [0:11:24]: And so that those wrap up the three of the biggest themes that have really stood out among the lead agencies.

Callan [0:11:32]: They find untapped opportunities, they double down on what works and they ob obsessed over one metric that drives their growth.

Callan [0:11:40]: So for any of the brokers that are out there that want to start taking on some of these practices, my advice is Start with number two.

Callan [0:11:49]: Figure out what is working for you.

Callan [0:11:52]: There's there's guaranteed even if you're a journalist agency something in there is probably working better than something else.

Callan [0:11:59]: Double down on that and absolutely dominate that.

Callan [0:12:02]: Then figure out the one metric that indicates that you're growing in that area.

Callan [0:12:08]: And then may not be the ones that we mentioned, it could be something totally different, but figure out what your one metric is.

Callan [0:12:14]: And then look for untapped opportunities to continue to expand and dominate that market.

Callan [0:12:20]: And so with that, I'm going to wrap this episode up.

Callan [0:12:24]: If you like this episode, you could find me on Linkedin to let me know.

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Callan [0:12:35]: Every time you do, it is very much appreciated.

Callan [0:12:39]: Thank you all for listening today, and I'll see you next week.