Season 2 Episode 21
Season 2 Episode 21
Intro/Outro: Welcome to the Insurance Leadership Podcast. The podcast designed to bring you perspectives and principles from leaders in the life and health insurance industry we trust. You'll enjoy today's episode.
Ryan Eaton: Welcome to another episode of the Insurance Leadership Podcast. This episode is gonna be a little bit different because this is kind of our year end wrap up for 2022. Hopefully it's been a great year for you. We know it's been a fun year on the podcast. We've had a ton of good speakers on the show, and so what we wanna do is do about a a minute to two minute clip from each one, kind of make it our highlight reel for 2022. So sit back, relax, and I hope you enjoy the episode.
Ryan Eaton: Let me hit with you on this. What opportunities with some of these changes do you see opening up different doors maybe for brokers in the industry with stuff coming down the pipeline? Maybe it's brokers, maybe it's a carrier perspective or a TPA. What opportunities do you see opening up there?
Eugene Starks: Well, actually, I think that's one of the things that excites me the most. And that is that, you know, we have our fully insured carriers out there. The, the Bupa's, you know, the Uniteds, the Blue Crosses. Exactly. All the big boys. And they serve a valuable role. You know, there are some clients that a fully insured platform is where they need to be.
Ryan Eaton: Mm-hmm.
Eugene Starks: They transfer a hundred percent of that risk by paying that premium, and they let you know. Insurance carriers worry about the cost mitigation piece. You know, it's, you know, they're small enough, they don't have the resource, whatever, but the, the growing use of self-funding in its various iterations that have evolved the level funding with new contract and protections, we can move smaller groups to quote traditional self-funded platform. And when I say traditional self-funding platform, there's really nothing traditional about it anymore.
Ryan Eaton: Mm-hmm.
Eugene Starks: Because of all the tools we can apply now to help expose cost and mitigate cost. So I'm very excited. I think any consultant broker out there needs to be studying self-funded and NHU does a self-funding certification course and an advanced self-funding certification course. I've been through both of them and I've been, you know, a partner and operating a TPA for 20 years and I still learned new things from going through those programs.
Ryan Eaton: Well look, last question I got to wrap it up for you is a little bit more of a personal question, but I think we, it's something we can all relate to and all something that we can, we can learn from. But what have you implemented personally to help with your work and personal life balance so that it doesn't get too complex or too crazy.
Becky Patel: I would say, Ryan, when I saw this question, right that this has probably gotta be the hardest question you throw me, . I'm not so sure I've got anything to, you know, happen off of the way that I've done it. But, you know, I was thinking about that and. I am like you, you know, constantly reading on, on effectiveness, you know, and how to, how to have that balance.
And, and there's so many philosophies and at the end of the day, it is very personal, right? Like how each person views, you know, their- how they balance that. But for me, the only thing that I can really share here, Ryan, is that in my time in my world, I separated it, it, you know, and there's different philosophies on that. And so for me it was sort of like when I work. I work. Right? And when I am family, then I am with- with my family. Right. And, and it was hard to do that, but we laugh about this cause a lot of people like, how come you don't know how to do that? Like, how to ask you how to turn on my voice recorder.
I have not explored and I don't surf the- the internet. Like, and, and so I'm very focused. And so when I'm working, I'm focused. And today I'll see like when we're having a meeting, people have their screens up and I'm like, are you paying attention? And someone say, we're taking notes. I can't do that. I need to look you in the eyes and know that you're listening cause I'm focused, right? Like I want you to know that what you say matters to me and you have my a hundred percent attention. So the only thing that I could say is when I work, I give it my a hundred percent. And then when I'm with my family and my personal life, it's at a hundred percent.
Ryan Eaton: So I probably don't have time for this question, James, but I'd love to get a quick answer from you on blockchain. And I have, this is something new, you know, for me in my, my Mississippi mind, I hear blockchain, I think cryptocurrency, right? And you know, we've, we've heard it coming into the insurance industry, et cetera. How have you seen this happen? What, what are you saying with it? Is this more of a carrier type deal? Is this- where does this fit in to, to our world?
James Benham: Good point. All right. First off, I'm not a fan of crypto and I know that's weird for a technologist to say that. Here's why, cause I'm a recovering politician. I was a city councilman and mayor pro tem of my town here in College Station.
Ryan Eaton: Were you really?
James Benham: Yeah, I was. Yeah, I did two. I term limited. I hit, I hit my two full terms and-
Ryan Eaton: Congrats! I did not know that.
James Benham: Yeah, I had a lot of fun serving in office. I'm currently serving as a- Governor Abbott here in Texas appointed me to the Board of Regents of Texas Southern University. So I'm a, I'm a regent right now as a governor's appointee. I've spent enough years in government service to know this, that the government, if it can't tax it or control it, it ain't gonna allow it to happen much longer.
Ryan Eaton: (laughs) Well said.
James Benham: And that's just the way the world is. Yeah. That's just the way the world is. And so and you're seeing that, you know, crypto took a huge hit. So first, You're, you're absolutely spot on. Disconnect crypto from blockchain. Blockchain is the underlying technology that enables crypto to happen, right? But you know, Bitcoin and Dogecoin all just, okay, put that at aside. I'm not saying don't invest in it. You can invest in it if you want. That's a highly volatile, highly speculative market.
And remember this, a currency's not valuable if people, if you can't buy a hot dog with it on the corner, it ain't that valuable. I agree. Just remember that the value of a currency is for purchase to exchange-
Ryan Eaton: here's your disclaimer-
James Benham: is the, is the ability to buy goods and services, but blockchain's extremely valuable because blockchain is a way to have a public ledger that everyone can see, but nobody can change. It is a, it is using a, a type of encryption that allows you to encrypt things onto the blockchain and read the blockchain. Without changing the blockchain. It is a train where you can add a car. You know, you can add a thousand cabooses and you can't take any of them away. You can't modify any of them, and it's public. What a wonderful place the world would be, the cha- if, if we could actually handle policy data that way. Wouldn't that be great?
Ryan Eaton: Well look Rick, as kinda, I told you the other day, we've had different emails and calls coming in asking about starting your agency from scratch and, and hearing that you started your agency at 24 and obviously it's had some, some different colors and different things you've done over over the years. One of the things I've seen with people starting their own business, you hear a lot of people talking about it, but then I guess that fear of failure kind of creeps in on people. Did you have any, or were you nervous when you first started? Were you, were you married at the time or did you have any kids at the time when you first started? And, and if you did overcome that fear, what did that look like for you?
Rick Holmes: So it's always scary whenever you start your own business. But, you know, one thing just in playing sports and just having other successes throughout my career, whether it be sports, whether it be just other issues, the one thing that kept me going was I'm like, I never felt anything in lot in life, and so I'm going to take a chance, make it happen.
Uh, it panned out and worked out well. But you know, one thing that was a little bit different about us was because of our background with the life and the disability, we had a lot of insurance companies that we did a lot of business with that would give us some seed money.
Ryan Eaton: Yep.
Rick Holmes: And so basically just knowing what they were going to help out with cause they wanted to see us successful. Cause the more success that we had, that means they were successful. So we got seed money there. And then also there was no substitute to having that recurring revenue. And that'll say and spend a whole lot less than what you make. So just cause you make it doesn't mean you gotta spend it. So, you know, we pretty much were very religious about keeping our expenses low so that, you know, no debt just said, Hey, we're just gonna be lean and mean and that way, you know, if things get tight, then you know, cause we spend less than what we make. It's not gonna be an issue.
Ryan Eaton: No, that's all. You just keep that model still to this day, don't you?
Rick Holmes: Oh yeah, absolutely. So we talked about that. I do not like debt. Don't have any debt. Not gonna have any debt. I love it man.
Chris Howard: I, I just view the gig economy as, as just a huge opportunity for everybody.
Ryan Eaton: I agree with you, Chris, and I'm gonna kind of bounce around to my, my thought process here, and I'll jump to technology type question because I agree with you. I think the gig economy, I think- how do we access these people? How do we make it easy for them to purchase, like you said, the Amazon process, the 1, 2, 3, 4, everything's here. Pick what we want, pick what's affordable, and kind of move forward. And I think technology has to be able to do that for people.
You know, insurance is one of those things that people don't necessarily enjoy talking about, you know? Talk about it at a Friday night event, you'll, you'll quickly have people disperse from you. But I think it's something we have to make more, more friendly, more user friendly from a technology stand, from an understanding perspective as well. How do you see technology changing in the insurance market and, and the United States or North America? What do you, how do you see technology playing and having impact on insurance in the future?
Chris Howard: You know, I think it will be part of every facet of the insurance business going forward. Be that enrollment, pricing, claims, operations, servicing, billing collections. I think technology is a part of all of that. You know, in the past six months, you know, we've had conversations about artificial intelligence as it relates to underwriting.
We've had conversations about the ability to pay claims using Venmo. We've had conversations about enrollment engines all digitally. Microsites, easily customizable. Everything being accessible in a mobile environment. That's the conversations I think we all have on a day in and day out basis.
Ryan Eaton: That's right.
Chris Howard: And I, I think if you look at the, the rise of the InsureTech, I think that paints the picture... you know, clearer than anything that we can talk about cause there are a ton of InsureTechs that all have a bunch of really interesting ideas that are out there. You know, we as the insurance company community are probably in last place when it comes to deploying technology. Technology for us still means how do we enhance our internal underwriting systems?
Drew Shockley: As a seller, right? I think I would challenge, you know, if you, if you're out there and you're going through these talks and you know, you're, you're talking to somebody, I would really, really challenge you to, to think about what you want post acquisition and share that with the buyer because Josh and I, you know, we very much loved what we were doing and we wanted to continue growing and building.
And so it's good to be able to celebrate the success That's right and all that stuff. But then, you know, money's in the bank and you know, you. Put your head down, you, you log back in and keep going. And so that's what we've been doing and it's been great to have a ton of resources and some extremely smart people with, you know, our leadership team and you know, be able to take more risk, you know, without laying it all on the line with that.
Ryan Eaton: Is there anything specifically that you wish you would've known? Prior to negotiations or maybe looking kinda in the rear view mirror saying, Hey, I wish I'd known this prior to signing, or wish I'd known this closing the deal, or, Hey, this is one thing we didn't consider. Is there something that you might recommend to people out there who are in the middle of this acquisition right now?
Drew Shockley: I mean, the biggest thing is, you know, kind of wanted shared a moment ago. Just really, really, really ponder what you, what you wanna do. That's post acquisition. That's because some people they just want to kind of be one and done and they want to go do something else. And that's, that's fine if that's what you want to do.
But me personally, you know, I, I felt compelled because I was, you know, I wasn't just selling, you know, my portion of the company I was also bringing 50 people along.
Ryan Eaton: That's right.
Drew Shockley: I was taking them along that journey with me. And then, you know, we've grown to, to about 350 team members now in our agency. And I feel responsible for those people too.
Ryan Eaton: That's right.
Drew Shockley: Cause I, you know, I recruited 'em, I brought 'em on board.
Ryan Eaton: Trained them.
Drew Shockley: And so, You know, and I challenge you if you, you know, if you're out there and you're a seller, really, really ponder, contemplate, write down what it is that you wanna do and share that with your buyer. We all know that not all acquisitions, you know, end up in a, you know, a successful, you know, state. You know, and I think it has to do with you know, lack of understanding between the expectations of the buyer and the seller. Seller post acquisition. You can agree on a price, you can agree on a multiple, you can agree on a number, and, you know, everything can be great and good. But if you don't have a clear picture of what's gonna happen post acquisition, you're setting yourself up for, you know, for disappointment or you know, for worse, you know, just a, a loss.
Ryan Eaton: So talking about filing of products there and, and with Florida, does every department of insurance require you to file a product that's life and health? I mean, do you, if you want to sell in Colorado, obviously you gotta file a product there. Do all 50 states require that?
Cabe Chadick: It, it's gonna be, it depends. Let me go to the, the extremes. There are some exceptions. Like you have some group non-major medical products, that a state like Arizona thinks one of 'em that just trust companies. That are licensed to do in that state, and you can just file it and be exempt and you're off to the races. Now, if they find something after the fact through a complaint or market conduct exam, but you're not in a compliance, then they'll have to go back and reverse that. So there are exceptions we can just file and move along.
And then there's other states that are close to that door. They don't put much into the review. They ask very little questions, but again, these are products that are not, say senior citizen focused, right? They're not ACA or major medical focused. They're not, they don't get a lot of public pressure. Anything happen to do in the senior citizen Med Sup, long-term care, Medicare Advantage, that gets an intense amount of focus.
You're going to get a lot of questions. Anything happen to do with ACA or Major Medical, you're gonna get a lot of questions, but there's a lot of products and your company does a ton of them where you just don't get as much scrutiny.
Ryan Eaton: That’s right. No, that makes sense. I, I've never thought about that before. The senior products, getting that much scrutiny makes perfect sense. Everyone wants to take care of the-
Cabe Chadick: It makes perfect sense. These folks are on a fixed budget. Yeah. It's not like they can go out and make more money or this or that. And they're purchasing products that intended especially long-term care to last for years, they made one big purchasing decision and they need that for the rest of their life. That's a big decision.
Ryan Eaton: That's right.
Cabe Chadick: Med Sup fortunately is an annual decision. You can change carriers, but senior products get a lot of focus and I, I would say rightly so.
Ryan Eaton: Does it also have to do, Cabe, with policies that have short tail risk or, or limited exposure? So, you know, a $10,000 life policy, our final expense policy, it's not huge. It's not gonna sink any company's ship. Does that also have something to do with that as well?
Cabe Chadick: I would definitely say so. Yeah, it is. It it, the amount of the payout, I mean, major medical policies have millions of dollars sometimes and often unlimited payout as opposed to a limited benefit critical illness product that's five grand or some supplemental medical, again, a five grand max payout.
Rick Eaton: It was, and we spent the early years on a weekly basis looking at claims because if things went south, we had to be able to catch it quickly. Yeah, exactly. Or else we would be outta business. And so we had to look for the results that we had every week. How much, how much were the claims, how much was the premium? Because if things started going south, we had to catch it in a hurry.
Ryan Eaton: So this is what's fun about interviewing people you know in the company you work with is cause I knew there was a Christmas tree report that we talked about, which showed green and red based off winnings or losses. And I remember at one point, It looked like it was on fire and it was not a pretty report.
Rick Eaton: You remember that one?
Ryan Eaton: I do! Tell the story. I think it's fun just to give the audience perspective, the story of how our number one product now, the premium saver, what it was like at one point, probably nine months in, and that that report was on fire and it got three times in a drive from- from Jackson to Oxford. I'd love to hear that story.
David White: No, no. We were driving Jay, Jay Brooks and I, who was a sales manager at that point, were driving from Jackson to Birmingham to meet with Delta Dental. I remember that very well. And, and so sea grid. Wells had generated this Christmas tree report, and basically if it was green, those particular groups were making money. And if it was red, that particular employer was losing money.
And, and on this particular trip, I mean, it all looked red to me. There was very little green on the report. And I said, "Well, Jay, if we, if we lose this much money, we're, we're gonna, the company's gonna be outta business. I said, "Tell 'em to stop writing new business. Stop writing new business." And he said, okay. And he called back to Ed and said, don't write anymore new business. And then we talked a little more and we said, "Well, maybe we could make it another 30 days and try it out." And so between the four hour drive from Birmingham to, I mean from Jackson to Birmingham, we stopped and started three times and finally we got to Birmingham and we said, "Okay, what we're gonna do is we're gonna go another 60 days, we're gonna see what happens. And if it doesn't get any better, we're just gonna shut it down. We're not gonna keep writing this product."
Well, what we didn't know was the large a plus rated carrier, they'd probably be happier if I don't mention their name. Uh, we thought surely their actuaries could have done a great job pricing this product. What we didn't know we were losing about $200,000 on 2 million. Well, they lost $9 million on $24 million of premium. Right after we made this decision, they raised their rates 45%, we raised our rates 42%, and since then we had never had to raise 'em again.
Rick Eaton: (laughs) That's right.
David White: So that just goes to show you, if you're a small company and you see a large company doing something, don't necessarily believe that theirs is the right formula.
Ryan Eaton: Well, it's funny you say that. Cabe Chadick was on the show and he said the exact same thing and, and coming from the actuarial side, it yeah, well he had the same advice.
David White: It's, it's probably a little easier from the actuarial side to the living side.
Ryan Eaton: (laughs) That's right.
Ryan Eaton: So, let me ask you this. I butchered this one a few weeks ago. Someone brought something they thought was an issue to me, and I did an awful job at listening and doing something about it. I just didn't see it as an issue, so I just kinda let the ball drop. So I, you know, completely missed it. But what do you do when someone brings you an issue maybe. You don't really see it as an issue, but you're still trying to listen to them and letting them know they're being heard, but at the same time you may see it differently. And how do you kinda handle those type situations?
Greg Rudisil: yeah. First I want to try to listen to them. That's critical in building the relationship. Not just listen to them, but really hear from their perspective. What do you mean by that? Why is this a big concern to you? Tell me what are you thinking about this? So I'm trying to get into. Looking at things from their perspective first.
And then, like I said just a minute ago, I want to know what kind of solutions they've thought about because first of all, they've been thinking about the problem longer than I have . So I wanna know what are, what are you thinking? What? What are you thinking about the way to get out of this problem? Have you talked to others about it?
What are their suggestions? And I don't really want to give them my opinion unless they first. For my opinion. So first I wanna listen, get their perspective, hear what they think they can do to resolve it, or what other people have, what other advice they've come across. And if they invite me to give my perspective, I will be more than happy to do so.
And then, Lastly, I try to keep everything confidential and let them know that this is gonna be confidential unless they give me the permission to share with me.
Ryan Eaton: Well, that wraps up another episode of the Insurance Leadership Podcast. We wish you and your family a merry Christmas and a Happy New Year, and here's to making 2023 the best year we can. Thank you.
Intro/Outro: Thanks for listening to today's episode of the Insurance Leadership Podcast. Make sure you subscribe on your favorite podcast app, so you'll be notified of future episodes or stream online at insuranceleadershippodcast.com.