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The Mixology of the Modern Insurance Carrier

By Combined Ratio Solutions September 8th, 2021


The old saying “all things in moderation” rings true even when talking about technology’s transformational effects.

In this edition of “The Combined Ratio” we’re talking about how to create a cocktail for success, administering the right parts of transformation and adaptation for our Agency business. Maybe we’ll even give it a distinctive name - “the Tradaption”? So drink up…


In our blog series so far we’ve emphasize the importance of agency relationships. We concede that this has historically been achieved through professional know-how. Those skills that some would describe as intangible. The sales, marketing, and underwriting professionals we have relied upon are moving around as the landscape in insurance changes, perhaps even leaving us and taking their intangible skills with them resulting in something of a vacuum. The race is on to fill this void with technology, as we are encouraged to digitally transform. As we’ve said before, at CRS we promote balance. As a software and services company, clearly, we realize the power of technology, and as insurance veterans we also value the nuances of attending to the relationships in your agency business. It’s about finding the balance between technology and people. We’ve talked before about the facts and fictions of digital transformation, and today we introduce the idea that transformation is both too demanding and too misleading. What we really need to master is the mixology of digital transformation is digital adaptation to ensure we serve up a cocktail of success!


Complicated Cocktails

Digital Transformation is an overused phrase and seems to require constant re-definition. Its meaning appears to evolve at the same bewildering pace as the technologies that enable it. Digital Transformations seems to hijack people’s thoughts driving them to conclude that if answers are not digital and technological, they’re not answers! We don’t want to buck the trend of “constant re-defining,” so here goes; …” It’s the change associated with the application of digital technology in all aspects of human society. The transformation stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods." It's "the creation of new business designs reached by the blurring, or merging, of the digital and physical worlds" according to Gartner, Inc. We might need a drink after that!


What is less appreciated, is it that this phenomenon requires that businesses continuously adapt. Customers are more demanding, the choice is broader, and competition appears from unexpected places (like Pie Insurance selling directly to the consumer). Skilled resources are scarce, and business is living in a constant state of change, meaning adaption must become a way of life. Innovative behavior is now table stakes forcing business leaders to continually adapt, looking forward, sideways and over their shoulders simultaneously. 

In the blog “The Four Levels Of Digital Adaptation: Easy Concept And Guide” the authors make the point that; “Most companies love to think that they are surfing the digital loops. In reality, however, digital is more like a huge stream that changes everything in its way. Moreover, it also forces most of the organizations to rebuild their business models and operations.”


The Long Pour

Adaptation is an approach which does not subscribe to the wholesale “out with the old” and “in with the new.” In other words, by accepting that we need to adapt (on a continual basis) we are accepting the value in what have become apparently less fashionable practices. In the Agency management side of the Carrier business, that means the value we used to (and some of us still do) assign to the know-how of managing those agency relationships. Accepting that we can (and should) use technology to the greatest extent to gather, analyze and then codify the best behaviors of our agency management people, it remains a people business. We therefore need to adapt technology in a way that recognizes this value, better enabling our current and future agency sales, marketing, and underwriting professionals to protect our current business and win our “unfair” share of new business.

Despite changes in the business (for example,  more CRM options)  and even the broader social change we have experienced, our business goals remain consistent. Our mission (and that of your agency producers) is to best serve your customer (both agent and policy holder) by providing them with the best connected, singular, and most consistent insurance experience available. This has not changed.


The “Usual” Please?

Despite the proliferation of technology, it doesn’t change our mission. Most “missions” are generally some variation on a theme around serving our customers and agents with the best insurance experience available. Using technology is part of the “how.” But it’s not ALL of it. There’s still a role for people and relationships. It’s about assessing and combining these technologies (that seems to appear everyday) while retaining a key element in insurance – the mutual trust that emerges from great relationships. We can’t afford to lose our appreciation of the importance of overcoming suspicion, and then building and maintaining trust. Sometimes the rush into technological adoption threatens to dilute and then drown this aspect of the business and that’s where we need to find some balance. In the book “Digital Adaptation” by Paul Boag,  he explores the idea of adaptation as a way of better understanding transformation and a method of introducing digital ideas that is less intimidating. We agree with his thoughts, and insist it’s not that we use “digital” it’s how, more specifically that we don’t allow it to overshadow the intangible aspects of relationship management, but that we look for it to help us improve these.


The Short Pour

That familiar bite from the short pour is the conversation regarding trust, which takes us all the way back to the introduction of this blog, when we used the phrase “my word is my bond.” Relationships are  built on trust, and the opposite of trust is risk – a concept the insurance business is founded on. “Imagine a gap exists between you and something unknown. The gap between the known and the unknown is what we refer to as risk. Indeed, risk can be defined as managing the risk of uncertainty that matters.” (Rachel Botsman – “Who Can You Trust.”)

“The Combined Ratio” - What This Means to You and Your Team

It means (once more) we encourage balance. Don’t see digital as a transformation, but more of an adaptation. This will help us advance ideas in a more digestible fashion, while allowing the space to retain some of the human element – those intangible relationship skills we’ve talked about. It also gives us the space to figure out how to use these technologies to advance, improve, institutionalize, and scale those softer relationship skills through the use of the right technologies, even to the point of helping us overcome suspicion, and then building and maintaining trust - the foundations of any great relationship. We’ll order that one up next time, so until then, drink up and feel free to join the conversation, remembering of course…it’s your round – Cheers! 






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Combined Ratio Solutions Co-Founders Michael Jones, Chief Executive Officer and Luke Magnan, Chief Operating Officer spoke with MetroHartford Alliance Content Manager Nan Price about their experience launching an InsurTech startup and the importance of locating their business in Hartford. NAN PRICE: Give us a little context about when and why you launched the company. MIKE JONES: Luke and I had spent 20 years working in various facets of the insurance industry on the agency and carrier side. We had both segued into the technology side, where we met around 2012 when we were working on similar project at the same organization. As that company was getting acquired, we saw an opportunity for us to build our own company focusing on the insurance industry, which we had been part of our lives for so long. Honestly, we thought we knew what we were going to focus on and we started down that path. As we started to expose our vision to the marketplace, we received positive feedback but we found there was another business problem that really needed solving, where there was a big gap in offerings. So, we pivoted pretty quickly. We’ve been working on that concept for the last couple of years. Then, in January of 2018, we formally started the company. LUKE MAGNAN: Mike and I come from software companies that service the insurance industry. When we started thinking about going out on our own, we made a very conscious decision that we didn’t want to be a different type of software startup. We saw a different path forward and we decided early on that we weren’t going to walk down the investment or accelerator path. We wanted to be a profit-generating company as soon as possible. So, we started the services side of our business to do that and to fund the software side. That approach enabled us to do some things I think other startup companies aren’t able to do, like finding our office space in Hartford and hiring people in Hartford and paying them good salaries. NAN: Mike, you mentioned pivoting. Did the company experience any other pivots as a result of COVID-19? MIKE: Because of what we do as a services practice, we help insurers with a lot of their technology needs. So, we’re well equipped to operate remotely. Even pre-COVID-19, that’s how we communicated with our customers. With the pandemic, we found that our customers needed an added level of help when they were constrained by remote work and the demands that come along with managing people virtually. They’ve leaned on us a lot more because they know we have the capacity and expertise to coach them through managing their teams. So, in one respect we’re thriving through COVID-19 because of the nature of what we do for our customers. However, we have products we were planning to aggressively get out into the marketplace pre-COVID-19 and the pandemic slowed us down. It made it a harder sale. A lot of times in our industry, you can make a big splash when you announce your product and its value and benefits at big conferences and tradeshows. Well, all of that went away, so we did need to pivot our strategy there. And, while we had planned to be in the marketplace in March, the pandemic enabled us to pump the brakes a bit and be a little more introspective about where we were going to position our product and the value it would provide. NAN: We all know Hartford is “The Insurance Capital of The World.” As an InsurTech company, was that part of reason to locate in Hartford? LUKE: We had some time before we needed to have a formal headquarters somewhere. Mike lives in Central Massachusetts and I live outside of Hartford, where I grew up. My first job was downtown at The Hartford. I spent a couple of years of living downtown and then I got my graduate degree at UConn Hartford downtown and I worked for Insurity, which is also in downtown Hartford. So, I had this sense for Hartford and a real desire to set up shop here. MIKE: When we were deciding where we wanted to locate, we contemplated Boston, Worcester, and Hartford. As the non-Hartford resident, I’ve been impressed with the strong network community here. From a leadership perspective, I was impressed by the accessibility to have our voices Heard. We were able to meet with Mayor Bronin to discuss what our business would look like in Hartford. I don’t think we would have that experience if we went to Boston—and probably not in Worcester either. LUKE: When Mike and I had the conversation about where to locate, Hartford won. There were two separate trains of thought. One is, like you said, Hartford is “The Insurance Capital of The World.” This is where big insurance companies are and there’s a history of insurance operations starting and being successful here. It’s something Hartford does and there’s a certain cache to being in Hartford. Mike and I spend a lot of time working with the European market and some big London-based insurers. Hartford is very much a big part of the map for them. So, having a Hartford address was significant. The second thing is there’s also certainly a lot of talent here in Hartford. These big insurers have a lot of employees on both the business and the technology side. That makes it easy to tap into industry expertise. MIKE: We’re excited about being in the community and in the insurance scene. We see that there’s a renaissance happening in Hartford in the insurance industry. Right now, we’re actively recruiting for some more talent and we’ve been impressed with the types of resumes we’re seeing. NAN: Where do you see the benefits of becoming involved with the MetroHartford Alliance and the Hartford Chamber of Commerce? MIKE: It’s given us insight into where to find the networks we should be tied into. Admittedly, we know these networks are accessible. But our involvement with the Alliance and the Hartford Chamber provides opportunities for introductions to people from all types of industries, not just insurance. It’s been a huge help for us to leverage those networks. LUKE: With regard to the Hartford Chamber, at the end of the day, a rising tide lifts all boats. The more businesses that are successful in Hartford, the more talent comes in, the more young people come to live here. All of those things only help our proposition. So, being a member of the Chamber is an easy way to help contribute to that. Learn more about Combined Ratio Solutions www.combinedratio.com | LinkedIn 
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