There are many differences between old-school insurance agents, and the new generation of independents, born in the era of the Internet and taking an entirely new approach to sales, insurance, marketing, and risk.
The new generation of independent insurance agency owners is not afraid to use technology to gain efficiency and gather important information, so they can use the time saved to improve their personal relationships with their clients, and use the information to serve them better.
Hi, I'm Tony Caldwell. Thank you for joining me on another episode of Uncaptive Agency: The Future of Insurance. Today, I'm talking with Ryan Hanley who's the founder of Rogue Risk in upstate New York near Albany. Ryan is one of the new generation of independent insurance agency owners, who is building his agency on technology and building for the future that is rapidly upon us. Welcome, Ryan. Thanks for being with me.
Oh, thanks Tony. It's great to be here. I'm excited to have a conversation.
Good. Ryan, obviously you're an insurance industry veteran. This isn't your first rodeo, and you didn't start this idea to become an agency owner overnight. How did that develop? What was your previous background in insurance? A little bit of history, please.
I've been in the business for 15 years. I got into the business I guess you could say by accident, although it was a very conscious decision. I met a young woman who I wanted to marry, and in order to marry her, her father basically made me a Mafioso-style offer I couldn't refuse. Strangely enough, we were sitting in high leatherback chairs in the office of his house during a family get together, and he essentially said, "I want you to come sell insurance for me," and I accepted. Still my wife today, 14 years later.
It was a good decision. That's how I got started. I worked for my wife's family's agency. I was there for eight years. My wife still works there with her twin sister. At the time, my brother-in-law also worked there. So, there was four members of her family. There were 14 of us total. I was a boots-on-the-ground producer, and kind of cut my teeth... The classic, the cliché story. I was driving from strip mall to strip mall dropping off business cards. I was cold calling. I was doing all that kind of stuff. This was 2007, 08, 09ish.
The Internet really wasn't a big part of marketing strategy. Email, people barely used email. It was just a completely different time. I was really terrible at selling insurance in that world at that time. I hated cold calling. I hated interrupting people. I did not have that... As much as I'd like to consider myself a very hard worker, I didn't have that dog-headed mentality of "I'm just going to plow my way into this account come hell or high water, and get in front of the prospect." I just didn't like that. I was very uncomfortable with it.
I struggled for a long time, probably two solid years, up until the point where my father-in-law actually had to sit me down and have a conversation around "This career might not be for you." Whether it was coincidence or serendipity, or maybe the muse just decided to perch on my shoulder for a few minutes, I walked into a conversation in which two referral partners that I was interested engaging with, I heard them speaking to each other. The one said to the other, "Let's just connect on LinkedIn."
Now this is 2009. People did not say that to each other in 2009, so it was very odd. I didn't even have a LinkedIn at the time. I had heard of LinkedIn, but I didn't really know what it was. It was like this light bulb moment for me because I said, "Geez, if here are two referral partners that I want to get in front of, and they have just chosen," I'm eavesdropping now, "But they've just chosen LinkedIn is the way." Not email. Not "Give me a phone call." Not "Stop by office for coffee," but "Let's connect on LinkedIn," as their method.
I was blown away. I just was like, "Why would they choose this?" All these questions started rushing over me, and I immediately left that business function and went back to my office and spent quite literally the next 12 hours on LinkedIn trying to figure out what was it about this platform that they would do that. So, that's where I kind of learned about digital marketing, digital communication, automation tools. That has been a big part of my philosophy ever since.
I'm kind of just skipping through some of this stuff now. Eight years into that career, I basically had hit a ceiling at my family's agency. My last name wasn't the same as the name on the box, and that was kind of always the way it was going to be for better or for worse. So, I left and became the Chief Marketing Officer of TrustedChoice.com. I built the Agency Nation platform, and ran Elevate 2017 and 2018, if anyone's ever heard of those conferences. I left there and became the Chief Marketing Officer of Bold Penguin, which is a commercial insurance lead generation and comparative rating platform.
Unfortunately, at that point, this was 2019, this is late 2018, my brother-in-law came down with a form of terminal cancer. I was traveling three to four times a week for Bold Penguin, and I just couldn't do that anymore. So, my wife had to step up, take a larger role in her agency, so I put in my two weeks and I left that job to try to find something here in the Albany area. Unfortunately, Albany is not a hot bed for insurance. I wasn't quite ready to become a producer at that point. Going to be a producer felt like a step back, after running 20 person teams and having huge million dollar budgets at different companies as Chief Marketing Officer, Hawkins Home and Autos felt was a tough step to take, at least at that time.
So, I became the CEO of a fitness franchise and ran six locations. We had more than 3,000 clients. I, actually in the nine months that I was there, grew them from 2,000 to 3,000 clients, at which point, and this is probably a much longer answer than you were expecting, but at that point, nine months into that job, I had two new locations that were coming. I had grown our internal team from nine people to 15. We were absolutely destroying it. The founder of the business decided he wanted to step back in and actually run the company again, which meant Ryan had to go.
So, at 8:36 AM on a Monday in October, almost a year ago now, I found out that I was no longer the CEO. On that walk from our office to my truck, now unemployed, I basically said, "I've been mapping out this agency for years. I've had as many or more conversations with a more diverse group of insurance professionals from the CEO of Dow Jones Industrial Average entity, publicly traded companies all the way down to Super Regionals, to every size agency, to every size vendor. I've had all these conversations. It's time for me to put my money where my mouth is and start my own agency." That's where Rogue came from.
That's a great story. As I'm listening to you talk, Ryan, I don't think your story is actually very unusual. Most entrepreneurs get to a point where they realize the only way they're going to control their own future is to control their own future. You've had some great experience, both in the industry and outside of the industry, that's also really typical. What I think is compelling, and I want to explore next just for a minute, is that you really had a chance to grow up and develop your skills in what I'd call a traditional insurance agency.
The traditional insurance agency has to evolve very rapidly right now in order to remain relevant in the future. In fact, they point out that there's been 10 years of progress, additional shopping behavior, all those kinds of things, in the last six months. So, it's radically and rapidly speeding up. With your background and your new decision that you're going to be in charge of your own future, you're obviously building a different kind of agency.
Do you want to tell us just a little about the plans you have for Rogue Risk?
This is one of the most interesting aspects of I would say the first seven months of my career as an agency owner. Coming into Rogue Risk, I had a notebook full of ideas that I had derived and distilled down from literally tens of thousands of conversations. Tony, I'm sure in your position that you have too. I felt like there were certain aspects of building an agency that I could kind of "jump the line" because I knew the people, I knew the tools, I was very digitally savvy, I understood the basics of programming. I understood the basics of connecting certain tools together.
I felt like that would give me a competitive... I still feel like it gives me a competitive advantage, but I thought it would give me more of a competitive advantage earlier. So, I think there's a lot of really interesting things there. I came in, in my... What I pitched the carriers that I am now directly appointed with, that I pitched the vendors that I partnered with, was this idea of a human optimized agency, an agency that injected humans not throughout the entire process, but in the moments where they actually add value.
I think a common misunderstanding and misconception of agencies is that humans need to do the work or they're not adding value. I wholly disagree with that. There are aspects of our business in which we are not maximizing our value because we're still doing manual transactional processing that is of zero value to the insured. The insured does not care who does their car change. They don't care. They care that the car change happens.
Now, our car changes an optimal moment to step in and ask questions in which you could add value, you could cross out, you could find gaps in coverage or areas of excessive or additional risk that you didn't know available. Certainly they are. But if you're processing that transaction, how often has that happened? What's the number one thing in what I just described to you that agency owners say? My CSRs never do that work. They never stop. They never ask. Or they don't do it enough. They're not cross-selling.
I have told them I'll give them an extra week's vacation, however cross-sells the most, and no one does it. Well the reason is, is because they know their real life. Their real life is, if I have 37 car changes I have to do today, I can't ask those questions. It doesn't let me get to the 37 car changes because if there's five car changes at the end of the day that I didn't get to that roll over, you're going to bitch at me as an agency owner that I'm not getting my work done. Okay.
So, if we take that idea, just as a microcosm, and we pump it back and we say, "Who is doing our car changes for us? Does it need to be Sally sitting in my office making $47,000.00 a year? Or could it be Tom who's making $7.50 a year in Puerto Rico or in the Philippines, or wherever, or India? And, can they do the car change so that Sally can simply take those extra five minutes that would have been all the nonsense of doing a car change, and could she say, "Hey, how are the kids doing? What's going on? Oh, you're taking them to your second home up in the Adirondacks. I didn't know that you... When did you buy? How come you didn't call us about that?"
“Well Sally, I didn't even know that you guys did second home insurance.” These are the kinds of things where our customers don't know that we do them. They make assumptions because they're not supposed to be insurance professionals, and if we're not taking the time to ask the questions, we never get to root it out. I just had a buddy of mine who writes motorcycle insurance, and if you had asked him two years ago he would have told you he prides himself on the number of motorcycles that he writes for his clients. He actually started using a program which helps him find additional things that people own.
So, he plugs people's contact information in, and it'll tell them, "Oh, they own this classic car." Something like 10% of his clients had motorcycles that he wasn't insuring. So, he immediately opened his eyes to "We are not asking these questions on phone calls. We're not making sure that you have this." So, again this is just one aspect of what I believe this human optimized agency is, but it's finding technology, automation and tools that allow you to... In my case, it's VAs too, removing the work that doesn't add value so that your people can spend more time in the places where it does.
That is the core concept of what I'm trying to build with Rogue. I am not there, and I would be happy to explain to you why I'm not there. Some of those reasons are me. Some of those reasons are our industry. But that is where I'm trying to go.
I'm really excited to hear that. For at least five years, I've been talking about this very idea, which is that first of all, CSRs as we know it, is dead. The people in the agency that you hire need to be sales people, and then you focus on selling things. That's based on relationship, and that technology takes the drudgery away. It's really interesting. I love your term "human optimized". I'm going to steal that and use it.
No, it's a fabulous way to describe what I think we're headed towards. With that in mind, obviously you're a smart entrepreneur. You're looking at the future and you're saying, "Hey, cost and also what people want, isn't aligned with the way we're doing business today so I've got to build a different kind of agency." You just mentioned that you started with that idea, and it's not 100% today. Who would have thought it would be, right? You've been in business seven months and you're still building.
Let me ask you this, as you think about your agency over the next say three years or so, are you going to get to that place? And what does that place look like?
I think it's going to be really interesting. The realities are the technology is not there. It's not there. The carriers are not there. The carries aren't even close. I know the carriers always get banged for different stuff, but the truth is, some of the carriers that I enjoy working with the most still force me to use Internet Explorer, a piece of technology which is no longer updated by Microsoft is the most vulnerable to cyber and malware attacks, and only works on certain computers.
Yet, the only way to quote their business is through that portal. I had to have a conversation with one of marketing reps who said, "Ryan, your new submissions have really trailed off with us," and I just said, "Your technology is so bad you're losing business from me. If you're losing business from me, you're probably losing business from a lot of agents because it's taking me too much time and effort to quote something with you." So, if you're not thousands of dollars better, I'm just simply not doing it. I'm just literally not doing it.
Just to interject though, what's interesting about that comment is I've just interviewed a Senior Vice President for The Hartford, who in talking about the way they and other carriers are really beginning to look at agencies, are you using technology well or are you making them spend a lot of time and expense to handle your submissions? So, I just immediately am thinking, okay we've got a whole bunch of people here. It's like the Tower of Babel. We're all saying the same things to each other, but nobody's doing anything about it.
There are carriers that are. Hartford is one of the leaders. Hartford is absolutely positively... Hartford is one of the carriers that is getting business from me and is stealing it from this other carrier that is not doing the right things. Chubb's another one. Chubb, not perfect, but man they are making strides, and they're making it easier. I think they're doing a lot of the right things. I know that there's been some negativity towards some of their digital stuff and automation over the last five years, but I really think just in the time that I've been writing with them, which I have been since day one, which has been a blessing, I've seen improvements already.
So, I think we are trending in the right direction, but the truth is, we are not there today. In the northeast, we have a lot of mutuals and really small regionals who may be in two or three states. Some of them, their technology is right on point. Take Plymouth Rock. Plymouth Rock is obliterating some of the traditional carriers simply because they've just completely changed the way that we underwrite business, or at least the way that you quote business.
I can get, we're not talking about some fancy insure tech startup who doesn't know the industry, we're talking about Bill Martin and a group of people who've been around for a long time. They're in nine states. You can now get a homeowner's quote with them with two pieces of information: name and address. That's a bindable homeowner's quote. Bindable, not like now I need 100 pieces of information validated. Two pieces of information, bindable homeowner's quote.
That is changing the game. What I get from traditional carriers is, "Oh, well they're only in nine states. We'll see how it goes." I'm like, "I'll be honest with you, agents don't care how it goes." I don't care how it goes. What's going to happen? I've watched all these legacy carriers. I've watched their rates go up and then they come back down, and then they buy some market share, and then they harden. But then they got the balls to... Sorry, I didn't mean to curse on your podcast.
They had the whatever to question a company like Plymouth Rock? Which maybe their rates will go up. Who knows? But all I know is I can over the phone have a number in front of someone in minutes. Like two minutes. That is what people want. They don't want phone call information, "Okay let me get some more information from you." Follow up email, a couple texts. They don't want that. That's not what they want. They want to call and have their problems solved.
Now again, there are different levels of coverage needs. There are different risk exposures. I'm talking about fairly standard two cars in a home, and you want to put an umbrella on. That's what I'm talking about. That should not take time. When you have something, maybe you're in a flood zone, or maybe you're high net worth, or we're talking about packaging second homes and some toys, okay that's a different conversation. These people who are calling, who just have two cars in a home and you're going to pop an umbrella on the end, that should not be a five email, two phone call, 40 question touch point. It just can't be today.
A couple of things I want to unpack there. The first is, you're really saying something that I say a lot, which is that the agent is competing with Amazon. Not that Amazon's selling insurance, but that's what's setting the standard in a consumer's mind about what service ought to look like, because it's immediate and it's also thoughtful and it's anticipating issues and problems, recommendations are done automatically. But it's [inaudible 00:19:46].
So you're saying that's really important to you as an agent. I get that. The really interesting thing is, just as Hartford is telling me, "Hey, we're going to look at agents in the future about technology adoption." You're saying your pushing back and going, "Well yes, that's also what I'm looking at today."
I'm assuming that, okay you're a new agent, you probably got together as many appointments as you could get, but you're already cutting... You're like the coach of the basketball team, and it's the second week of the season and it's time to cut a few people.
Are you looking to actually getting Rogue carriers based on that?
I have not gotten rid of any yet, but there are at least two that if they come in and have any gripes or want to give me any flack, I'm just going to say, "Go, I don't care." It means nothing to me. What I found is I think I will believe that there was a time when carriers cared about the relationship with agents. I am positive that if you have $5 million in revenue or just some number, they do care. But do they really care? I don't know.
Here's my point in saying that to you. That's not a knock. I don't think they should. I don't need them to care about me. I don't need them to have some deep emotional heartfelt relationship from me. What I really want is for them to make this relationship work is to just do their job, do what they promise. I will do my job for them, which is frontline underwrite, be honest in my submissions, and sell the shit out of their product. Sorry, I keep swearing on your podcast. I swear on mine, so I'm sorry about that.
It's fine. Don't worry about it.
And sell their product. That is what my job is. That's my side of the relationship, is I'm going to do the frontline underwriting, I'm going to be honest in my submissions, and I'm going to sell, sell, sell. If I do that, all I want in return is a system that works, I want honest feedback and an open mind in my underwriting, and I want pricing that is at least reasonable. Give me good reasonable consistent pricing as best as you can. There's always fluctuations.
If we can just uphold those two sides of the bargain, we are all going to make a lot of money. But what happens is, you get "Hey, I want manufacturers." And then you submit a manufacturer, and they go, "Yeah, but not manufacturers who do masonry, built before 1965 who have a building that's two stories tall that happens to be where the moon aligns with the sign of Aquarius in May." And you're just like, "Oh my God, what are you talking about? You told me you wanted a manufacturer. I'm handing you one. Write the account."
This is small agent complaining, but I had a carrier decline, flat out say, "No, we don't want it. We don't write it," and then have a big agency come in behind me and go, "Oh yeah, but we'll write it for you." I was floored that this still happens today, considering all the nonsense that we get from our carrier partners on a consistent basis. We can get off carriers in a second because there are so many who are doing amazing work in different regards. This is general gripes. I'm talking about some of the exceptions to the rules today, but there is now a carrier that I will never write ever again, and anytime I see them I will do everything I can to rewrite their policies.
It will mean nothing to their bottom line, and no one in that care will ever make less money. But they now have an enemy in the marketplace because their underwriter flat out told me no on a first-in submission, and then when a larger agency came behind me they go, "Well, I think we could find a way to get-" and I lost the account. I also look like an idiot because I told the guy, "Yeah, they declined me," and then all of a sudden he gets a side door submission from another agent. Who looks like the schmuck?
Those are the kinds of things we have to get out of our industry for I'll say my generation of agents, because where it used to be that there was no mechanism to talk about these things, you couldn't get access to certain carriers because where you were located, or just the lack of openness and communication between different people, now I can go into IAOA's Facebook group, and with 7,000 agents I can go, "Here's exactly what these guys did. Be very careful of them. Do not take them seriously."
Now, not that I'm going to do that because I'm not using this carrier's name on purpose because I'm not going to put them on blast, but you can do that. That happens. All these actions that used to kind of you could kind of grind an agency down or leverage the fact that they were small. All those things get spread. You can't just can't treat people like that anymore today, because I have 40 agents that are my generation, say 35-50 year old agency owners, I have 40 of them who are all growing like gangbusters, who are all going to be the primetime middle market players in their regions in the next 10 years.
They all know what this carrier did now. I think that ends up being a problem longterm.
That's not really any different than it's ever been. That kind of behavior has been going on for a long time. I think what you're really saying is that the communication capability is so widespread. It's interesting because consumers now don't buy anything by and large without a whole lot of other people saying, "This is okay." In talking to my wife, she never buys anything without looking at reviews.
So, people are looking at your reviews as an agency owner making a decision. And you're really saying, "Hey, you know what, we're finding ways to create a review system for insurance companies," and that's going to impact their ability to generate marginal profit in the future.
That's a change. That's different than what it's been. Thinking about change and difference, and how you're building your agency, you were telling me earlier that you basically got people doing things for you either on a contract basis, or employees. They're obviously not located there in your office. How do you feel about the future of the agency workforce either from a locational point of view, skillset? How are you going to build your agency as you grow with people? What are you looking for? What are you thinking about? What do you think will be different for your agency say than your father-in-law's?
I'm going to use a buddy of mine. His name is Spencer Houldin. He runs one of the most successful high net worth insurance agencies in the entire country, Ericson Partners or Ericson Insurance Advisors. We were having a wonderful conversation about remote work, and how with COVID, he was able to increase the overall productivity of his team by taking them fully remote.
I'm not going to share his secrets, but I will say I think the tools of today, the ability for companies, the API connections, reporting, it feels like some of the agency management systems are starting to adopt, although they're definitely under pressure because there's so many new players in the market today, because their lack of effort for so long. Then you have agencies who have straight moved to Salesforce.
That being said, the cloud computing, the general disposition of employees, work from home, it's now proven effectiveness. I think what it does is it allows you to hire the most talented people, the people who are right for the situation. If you have a personal lines producer and say she lives in Staten Island, which is three and a half hours from where I'm sitting, but she's perfect. She's exactly what I want. She's exactly what I need. I can hire her today, because you know what, none of my personal lines clients care where she lives. They don't. They just simply don't care.
I think they care that they can call her. I think they care that they're talking to a human. I think they care that she's experienced and that she cares about their success, and that she's going to do what she can to make sure they're in a good program. I do not think that they care even a little bit that she is not sitting in the office next door to me. I think having people in your office is wonderful as well, especially if your prime target is 50 miles around you.
I think you can outsource a lot of the tasks that do not add real value to your agency. I think you can outsource the VAs. I use Agency VA, is who I use. I like them because they are insurance industry specific in that they have specific software which manages their VAs so you know there's no... It's far less likely that there's any funny business going on there. The key with VAs, and I think we Americans have to remember this, is that these are just human beings too. They just live in a different country.
Oftentimes, they are way more thankful for their job. All these people have college degrees, and it's just cost of living that makes them cost effective, not their lack of skillset. So, I think the beauty of today is that there is no right or wrong way to do it. You can go fully remote across the country. You can go fully VA. You can go everybody in your office. You can go everybody local, but working from home. You can have some hybrid method. That is the beauty of today.
What solves your client's problems best, and how do you make the people happy who can solve those problems for your clients? Then whatever shape or form that takes, is available to you. That is what I love about where we are at in this moment, is just the pure flexibility and vastness of options that agency owners have at their disposal.
I think you've given a really passionate, not defense, but reason why people ought to think about maybe changing the way they handle employees in terms of distribution. How do you think about that in terms of clients? You're trying to sell commercial insurance primarily. That's what your personal interest is in.
But you have a niche market there in New York. Are you now thinking about, "Hey, I can sell insurance in California, in Nevada, in Massachusetts and Florida?"
Yeah, I already do. I think it depends on the line of business. Again, I want to go back to how I finished the last one. When it comes to how you formulate the clients that you bring in, your marketing strategies, your prospecting strategies, again we have so many options. Every possibility is on the table. You want to only sell insurance through a custom app that you built? You can do that. I don't know if it's the most effective way to do it, I'm not even advocating it. I don't even have one. But what's great is that is a possibility.
Who do want to serve? How do you want to serve them? Having been a Chief Marketing Officer for about five years in total, I made a ton of contacts in the marketing space. I actually write marketing accounts, marketing companies. It's not high volume stuff. It's not like middle market businesses, but I'm serving these clients that I can speak their language, I know all their problems, I have between Hartford and Chubb, I have two great carriers to write their full package. Because of my partnership with a different market access company, but a market access company, although I highly advocate yours as well, I have many friends who use different master agencies, but ultimately the network, I'm able to do that.
That is the beauty of it. My specialty is really worker's comp. I write a lot of contractors. I write a lot of comp for contractors. I've started to work into marketing agencies, and I've also started to work into technology companies. So, startups, tech companies. Again, some of my markets are dictating that, just I have a couple of markets that, particularly Hanover Hartford and Chubb, all just love technology companies. They have great programs. All three are kind of best in the business. So, that gives me options, and that has guided me into the tech space.
Now the beauty of the tech space is, these men and women could care less where you're located. Literally, most of them don't even ask. I will have to tell them where I'm located, and I don't even know why I'm saying it. It's like I just feel obligated to share with them where I'm sitting. They could care less. Another interesting thing, I haven't sold one account on Zoom. Not one. All this talk, Zoom, Zoom, Zoom, Zoom, Zoom, Zoom, everyone's going to want to do Zoom, Zoom this. I'm not saying that's not true because I have buddies who did it. I haven't sold one on Zoom.
It's been email, text and phone. I do do video proposals. I think that's probably a big part of the reason why I don't need to do Zoom, because I do video proposals, but that I haven't had to do Zoom. People just haven't needed it. So, I think again the thing everyone should be excited about, and I want to take this back to if you're a traditional agent, I don't want to say that like it's a bad thing. It's a wonderful thing. You're probably killing the game, and you're certainly making more money than I do, so some part of you should be saying, "This is guy is full of you know what."
If you are sitting there and you're looking into the future, and you're feeling uncomfortable... I know plenty of agencies that would be classified as traditional, but they're loving life because they have a great process, they have zero stress, they know in five years, sometime in the next five years they're going to sell, and they're perfectly happy with where they're at, and it's all good in the hood. You should do nothing. Well, I think there are things you could do to maximize your agency value, but in essence you don't have to do a whole lot. You're in a good spot.
But if you're looking out 10 years and you haven't started to make some changes, you're in big trouble because... On my podcast, I just had a guy, Dax Craig, he's the co-founder of Pie Insurance. I really like Pie Insurance. They're a worker's comp-only carrier. They write in I think 30 something states, 40 something. Actually, I think Alaska and Hawaii are the only two states they're not in. Okay. And Massachusetts, so maybe it's like 47.
I like them a lot. They have a great product. I like the way they handle it. If you were write a worker's, I've written quite a few worker's comp policies with them, and for what it's worth it is similar in many regards to working with say an Amtrust or an employer from a worker's comp only standpoint, like you're getting good service, they're easy to work with, the coverages are all there, the policy forms are there. They also write direct. They also write direct. So, they're also gobbling up some of the small business market, and they're not paying us commission.
That is going to become more the rule than it is the exception, and we have to be... There's nothing we can do about it. I think it's great, the companies that only work with IAs, and I do try to place more business with them if I can. But the truth is, Pie's rating and service right now is on par or better than most companies that will write contractors/worker's comp, which is what I write. If I have office risks, I usually put them in employers. If I'm writing contractors, especially artisans, Pie is just dominating the New York market.
What, I'm supposed to cost my clients more money to put them with a "traditional" carrier? My point in telling you this is, all these different avenues start to eat into our margins. We lose one account here. We lose one account here. One guy who would have been referred to us, now gets picked off before he picks up the phone, and he just goes direct to somebody. Then we have some digital players from outside the space. We have all these people building super niches all over the country.
I got another good buddy in Connecticut who does real estate investor insurance. He writes in 17 states, and almost every week he's adding another state. So, he probably writes property in your state right now, and he lives in Connecticut, and his office is in Connecticut, and all those people are in Connecticut. My point is, everyone can reach out into other markets and add value, and consumers are responding to it.
If you're just a 50 mile man or woman, and you're not doing the things you need to do to build fences around those clients, every day you have more competition and I think you'd be doing your entire team and certainly the valuation of your business a disservice by not trying to update.
Ryan, I'm hearing about four or five really key things that seem to be your philosophy about the future. The first is, distributed workflow, hire people where you get the best quality talent, pick insurance companies based on technology and what they can do for you in terms of saving you costs and speeding delivery to your client, really focusing on the client experience, niche marketing across geography, and then really not being afraid to use market access providers or other people to broaden up the carrier set so that you can solve clients' problems.
It sounds like that's the way you're building your agency. For somebody that is listening to us talk, and is maybe thinking about either changing the way they're operating, or starting from scratch the way you have, any last words of advice you can give them about the agency, like skating to the puck, where you see the agency being in three to five years?
I'm going to take these out of order, and I want to add one caveat to one of the things you said about choosing your carriers by technology and pricing. That said, with the bar of they have great coverage forms, good quality products.
Obviously, that probably goes without saying, but I didn't want people to say, "Disregard that stuff at the expense of-" there are carriers who if two carriers had equal coverage forms, equal quality, A-rated companies, I would lean towards the one who's pushing into technology because they're going to be your partner in the future. The ones that are lagging behind, or acting as if it's not important, or not prioritizing it, it's the cost of time. It's your time, your people's time to do business with them, is a real expense that no agency owners are calculating... I shouldn't say no.
The median agency owner, the standardized agency owner is not thinking about their people's time as a cost to their business, and that is where that carrier starts to lag behind. This is the problem that [Arimba 00:39:34] is solving with Neon, is tracking how much time, effort, how many activities does it take, how many communications back and forth does it take to get a quote out of a carrier. When we start to think at a deeper, richer level, and I'm not saying you need to go this far, he is on the spectrum of nerdiness that is beyond most of us.
What I'm saying is, with all things being equal, the reason that I would suggest you start to lean towards a technology driven carrier is because they are going to reduce the amount of time taken out of your people's day to do business with them, and that is a real cost in 2020. Okay, so where are we going in the next three to five years? I think that I would like to have somewhere between three to five commercial programs built out with program owners for each one of those three to five lines.
Beyond that, that's really where I'm going, is I want to get to these commercial programs. I have ideas for what they're going to be. Marketing will be a huge, branding will be a huge part of our agency, but ultimately I want to run a profitable growing agency like anybody else. I don't sell insurance to sell insurance. I sell insurance so that I can take my kid to baseball games and stuff. I don't want to be a producer. I know that in our industry oftentimes the big ego in the room is the producer, "I sold this account. I sold that account."
I could give two flying whatevers about selling an account. It doesn't mean anything to me. I want to run a successful agency. I want an agency that's set up to grow. I want to run an agency that pays me an amount of money that allows me to live the life that I want to live. I want to make my people happy. I want to make my clients happy. When I'm ready to go, I want that agency to be easy to sell. I'm going to sell it, I'm going to get out, and this to me isn't this big ego-driven thing.
I purposefully didn't put my name on the agency. This isn't the Hanley Agency. I don't need someone stroking my ego because it's the Hanley... There's nothing wrong, I know a lot of you probably have your name on your agency. It's not your fault. It's what everyone did for so long. This is just the way I think, is I want to be replaceable in my agency. That should be my goal, is I am providing an environment for my people to be as successful as they can so that I can go live the life that I want to live.
I want to play golf. I may look young on the screen, but I'm 40 years old, which isn't old, but I'm certainly not 25. I'm certainly not at the very beginning of my career. I'm in the prime years. I have 10 years to get this agency to the point where it is just cooking on gasoline, and if I want to step away for a month and take my kid to spring training games down in Arizona, I can do that and not feel like the thing's going to fall apart. That is what I'm building towards, is a well run agency business. I could care less about producing.
I still cold call, Tony. This afternoon, I have an hour and a half worth of cold calling I'm going to be doing, because you know what, cold calling still works. Cold email works. Networking works. It all works, you just have to put time into it. So, I do some traditional things. I do some digital things, all with an effort to build an agency in which I don't have to be part of for it to work well. That's where we're going.
Here's the very last thing I will say, if you are a producer and you're sitting there and you're going, "Wow, that sounds great. That sounds sexy," it is. It's very sexy and fun. Don't get me wrong. It is also completely awful. If you can find an agency that you can grow into and feel satisfied and feel respected, and have the tools that you need, and possibly down the road when you've earned it, maybe become some sort of equity partner, if you can find that, one, it absolutely exists. I will not be the sole owner of Rogue Risk by the time this thing gets sold. I know that.
Those opportunities exist in the marketplace, and I would look for those opportunities first if you are unhappy. This agency has cost me valuable marriage capital. It's cost me time with my kids. It's cost me stress, anxiety. I've spent a ton of money that I'm not making... I'm technically on a month to month basis profitable today, but as a whole, as an investment, I certainly haven't recouped what I've put into it. There's a lot here. My ENO expense, if I screw something up, I'm the one that gets sued.
These are the things I think as young producers we don't think about when we glamorize becoming an agency owner, all the choices you have to make, all the pressure. I'm not saying don't do it, because obviously I did. That would hypocritical, but I do think that if you can find an agency that you can become a part of that will help you be what you want to be, I think you will be much happier longterm in that scenario than starting from scratch. Starting from scratch is pretty awful.
In my book, Uncaptive Agent, which was published this year, which really talks about the process of starting an insurance agency, one of the things that I did right up front was to make the point you're making, which is here's a gut check for founders. You really got to think through the fact that it's not going to be easy. It's going to be difficult, and there's going to be a sacrifice and whether or not you're really willing to make it.
Thank you for making that point. I think that's true in spades if you're a startup, but also observes that it's also true if you just want to own an agency. Even if you buy the agency, you still have a lot of risk, a lot more work, and it's different. So, not everyone's cut out for that. That's a great point. I think that we're going to have more agencies in the future than we do today in all likelihood. Entrepreneurs who have that fire in their belly can't be stopped, but there're many others who maybe have a banked fire and have to decide do they want to fan that thing into flame, or to your point, go have an easier life.
So, I'm glad you recognized that.
The only reason that I start this agency is because I've been fired three times. That was pretty much case in point, that I don't do well as an employee. In truth, I prefer to have a partner. I would love to have someone who I could bump into every day and run ideas of off, and keep me on track. I would much rather have a team around me. Now, I'm building that team, but a lot of podcasts that I listen to with agency owners who have started their agency in the last three to five years, they talk about all the amazing stuff, and then they kind of joke about the stress.
I just want to let people know who may be sitting in that seat, thinking about starting their own agency. Think about what it would feel like to look at the closest wall and run as fast you can face first into that, and then do it three times a day. That's basically what you're signing up for, is I'm just going to run into this wall three times a day and hope that eventually I just knock the wall down. You don't know when it's going to happen, if it'll ever happen, and you come out with a lot of scars, a lot of black eyes. It's not fun.
But the other side of it can be. So, we'll see. I agree with you. I think there will be more agencies. I think for a while there's going to be a lot more small agencies because the big guys are just... What do we have, 700+ transactions for two years in a row now? There is so much consolidation. I think there's going to be more. I think networks like the SIA, OAA, I think this model is going to be a huge part of our future. I think there will be a lot of different versions of networks, of shared equity environments, of these different types of operations, franchise models like Goose Head. Quantum just entered the marketplace. Brightway.
I think the standalone, I do everything on my own, get my appointments on my own, I don't know that that's actually optimal today. I don't know that that's actually the best way to do it. Two, I don't know that you can. I just simply don't know, unless you are essentially a quasi captive, I don't know that you can do it that way. I think finding a network, partnerships, equity networks, there's a lot of different variations, finding the one that fits right for you is the best play.
This has been a fascinating conversation, and I'm really excited for what's happening in your life, in your agency. You started on March 9th, the week before COVID really just sort of crapped on us, I guess is one way to look at it. You're being successful and you're proving the point that you can be successful even when you have adversities. If you've got the right mindset and you've got a great business plan and, as you say, you're willing to work hard enough to run into the wall three times a day. So, congratulations on where are now and where you're going. Thanks for being with me. I really appreciate it.
Thanks, Tony. I appreciate it. I know I didn't give much of a chance to talk. You caught me too early in the morning on a Monday. No, this is great, and I just appreciate you doing this podcast. These conversations are super important. So, thanks so much.
I'm talking to independent agency owners about this all the time. If you'd like to have a more personalized conversation, click on the button or the link in the description, and we'll make that happen. You can also reach out to me at TonyCaldwell.net/contact.
Always keen on helping others make their dreams come true, Tony and his team have helped independent agents grow into more than 250 independent agencies. This has made OAA the number one ranked Strategic Master Agency of SIAA for the last 5 years, and one of Oklahoma's 25 Best Companies to Work for.
Tony loves to share his knowledge, insight and wisdom through his bestselling books as well as in free mediums including podcasts and blogs.
Tony and his family are members of Crossings Community Church, and he is very active in community initiatives: he’s chairman of It’s My Community Initiative, Inc., a nonprofit working with disadvantaged people in Oklahoma City; and chairman of the Oklahoma Board of Juvenile Affairs., and he has served through many other organizations including the Salvation Army, Last Frontier Council of the Boy Scouts of America, and the Rotary Club.
In his spare time, Tony enjoys time with his family. He’s also an active outdoorsman and instrument-rated commercial pilot.