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Transcript

Adapting To Change

Ryan Eaton: Welcome back to the Insurance Leadership Podcast. In today's episode, we have Brendan McLaughlin, who is the president of E 123. They come with so much experience from administration and distribution and how to make things simple for their partners. You do not want to miss what these guys are doing in the marketplace. So with that, let's go ahead and jump in the show.

Brendan, thank you so much for being on the show today, man. I greatly appreciate you coming.

Brendan McLoughlin: It's my pleasure, Ryan. I'm happy to be here.

Ryan Eaton: Why don't we give our audience a little bit, overview about you, what brought you into the industry and what your company does today.

Brendan McLoughlin: Terrific, so I have been in healthcare on the product sales and marketing side for about 30 years now. And I've really run the gamut from prescription drugs, OTC drugs, medical devices, medical education and software systems, mobile apps and things that health systems use to train their doctors, to deliver care, to run their businesses.

I'm a bit of a jack of all trades when it comes to a very specific trade, which is healthcare. And about three years ago, I got involved in e123. I am part of an investor group got that brought some capital, but also some expertise and some vision to a really wonderful company. It's remarkable that e123 existed, frankly. And it's a testament to the company evolved from David and Stephen Jaeger, listening to clients. And their clients were FMOs and to some degree carriers listening to their needs for technology to support distribution. And over the course of about 20 years, e123 grew up just solving those problems. I got involved about three years ago and, my expertise, or I don't even know if you'd call it expertise, but the stuff that I do is building the business. But my very initial training was technology. I was a data scientist back in the eighties. I went to Virginia Tech undergrad because Virginia Tech. I went because I could get in, nowadays I don't think I could get in. It's not the way they are. Got it under the old standards.

Ryan Eaton: Exactly.

Brendan McLoughlin: I got in under the old public school standards, but the reason why I was drawn to Virginia Tech is it was the only place in the country that let undergraduates work on a craze supercomputer back in the years.

Ryan Eaton: I didn't know that. Okay.

Brendan McLoughlin: Very cool. And I've always been just a fan and really in love with technology. But I also love marketing and I love sales and I love product, I love building things. I love building things that solve people's needs, that relieve their pain, that make them better.

Ryan Eaton: I like it.

Brendan McLoughlin: And so E 123 is this amazing ability to do both. To a large degree, technology companies have not focused on the distribution part of health care. They focus on the provision, they focus on the claims, they focus on benefits, that's great. That stuff needs to be focused on, but to a large degree, the distribution piece has been neglected. And there's a lot of inefficiency, there's a lot of pain, there's a lot of unnecessary manual effort and reconciliation and data integrity issues that really don't need to be there. And if we get rid of them, we make it a whole lot easier for an agent to connect a person with the right product. And at the end of the day, Agents connecting people with the products that they need is it's a win for everybody.

Ryan Eaton: Great.

Brendan McLoughlin: Right? It increases persistency, it increases a lifetime value, it lowers your cost, for of acquisition It makes happy customers. Right? When someone goes to use insurance and they are happy because of that.

Ryan Eaton: That's what you want.

Brendan McLoughlin: That is a massive win.

Ryan Eaton: That's right.

Brendan McLoughlin: And it starts with connecting them with the right product. So you want to three really is about, we are a distribution management system for life and health. There are DMS's, lots of them out there that primarily focus on PNC. And frankly, our world is really different. The layers of complexity in the distribution value chain for life and health insurance, is nothing like the rest of the industry, the rest of the insurance industry or really any other industry.

Ryan Eaton: I would agree with you on that. Definitely agree.

Brendan McLoughlin: And those layers of complexity can be harnessed by technology and used as a tool for growth. Or they can be a stumbling block. And far too often, in our observation, they're a stumbling block.

So e123 as a very big vision. Wants to make carriers easy to do business with. From the carrier to the kitchen table agent or to the call center agent. Let's make this process easy. The flow of data, the decision making, the sharing of information, all of that really can be a lot smoother and a lot easier. And the carrier that gets it right is going to be able to attract the best agents. They're going to be able to get the best product fit with the members that they're bringing on board. They're going to be able to really impact their growth, not just save money. So to me that's the key when we so distribution management impacts everything on the distribution side, enrollment, billing, agent onboarding, hierarchy management and commissions. We're here at ITMG, previewing our commissions for carrier functionality. It's going to be a launch this spring, and it is the biggest product launch that we've done as a company. We have decided that commissions are a massive pain point. The number one complaint that agencies have, and it's not the amount, it's paying them on time.

Ryan Eaton: That's right.

Brendan McLoughlin: Paying in a way that the agent can understand what they're getting. Letting the agent understand what the commission is before they make the choice of what they're going to sell, right? Easily reconciling all of that, right?

Ryan Eaton: Simplifying the process. I like it.

Brendan McLoughlin: Exactly, adding transparency, we say.

Ryan Eaton: Yeah, that's good.

Brendan McLoughlin: I don't ever double check my paycheck, because it goes from my company to my direct deposit account. And I know it's there and every once in a while I'll go in and I'll see that same number, two and a half weeks apart or whatever it is.

Ryan Eaton: It is like that with commissions.

Brendan McLoughlin: It's not like that with commissions, no sir. So commission for carriers and the idea is the carrier that figures it out and becomes really easy to do business with agencies and agents will prioritize your product. If they know they're getting paid on Friday for something they're selling on Tuesday. They've told us that loud and clear.

Ryan Eaton: So you can't really do it with a whole bunch of people cutting up excel files and emailing them around it doesn't work, you need a technology.

Brendan McLoughlin: No, that's exactly right.

Ryan Eaton: So I love what your company's doing, and I love the automation. I love kind of technology, you guys are huge sponsors here at ICMG doing a lot of things down here, I've run into you guys through several of our different partners talking about how much you guys were doing for them, helping automate some of their processes. And when it comes to systems and quoting and all these different things and commissions and it was great. I was like, I got to get these guys on the show. I want to hear a little bit more about what they're doing. So let's get a little breakdown into your company. How many employees do y'all have? Where are you headquartered? Basic stuff like that.

Brendan McLoughlin: Excellent, so we are technically headquartered in Laguna Hills, California. But we are a work from anywhere company by design. I got involved with the one, two, three, three years ago right as COVID was hitting. And by necessity, we became a work from anywhere. But pretty quickly, I realized that there are some incredible advantages to not being worked from anywhere by default, being forced into it, but by owning it, by saying, we're going to be a company where people can not work from home, but literally work from anywhere. How do we do that? How do we make that an amazing experience for our clients? And how do we make that like the greatest job? That's what I've ever had.

Ryan Eaton: People want that.

Brendan McLoughlin: That's right. And there are pluses and minuses about it, so we have roughly 40 full time employees. And they are all work from anywhere, they have permission to set up their lives and their job, the way that fits them the best. There are guidelines. You have to be able to devote two words to it you can't but for the most part if for example, one of our employees needed to go to Scotland for a personal reason, decided he would like to work from Scotland for a while. And it was not only doable, it was fun and exciting, the rest of the team took great joy from his adventures and his productivity was as good if not better than when he was here in the States and not all of our employees can work from overseas, we have a lot of regulatory requirements there, but certainly from, a parent's house, from a vacation home, and so those 40 folks are augmented by about 20 consultants and outsource folks who do very specific things for us, so there's about 60 of us all focused on the technology of insurance distribution.

Ryan Eaton: Yeah. I like you said, working from anywhere and you did it by design. There was a guy who several years ago during COVID kind of the same thing. He was probably a little more forward thinking than the average person, he moved to Hawaii, didn't tell anybody because no one was able to see anybody, everything was by zoom, everything. He went to Hawaii, worked there for six months and no one knew if, and then at six months later he had to go fly to somewhere so he flew there, didn't tell anybody. Nine months in, he tells them, Hey guys, just so y'all know, I've been living in Hawaii for the past nine months. And he said, I'm going to stay down here. And no one knew his work was fine, he'd get up at four o'clock in the morning, Hawaii time and work till two in the afternoon, he'd go surf and do whatever, but he was the same block of time as everybody else. So I do, I love that side of it.

So one of the things that I've heard people brag on you guys about is your ability to be able to streamline some of your processes. And one of the things we were even talking about earlier, right before the show, that I loved hearing you say, we're talking about AI and some of the different things that we can do to be able to automate, but you were talking about how you try to get everyone on your team thinking about, Hey, How can this process be better? How can we streamline this customer service call? How can we streamline this billing process? How can we do this? And I thought that was really good and I wasn't planning on talking with you about AI today at all but I think that's a great thought, I think that's quality leadership too because you're trying to get everyone trying to figure out, Hey, how can we make this task better, quicker, more efficient for the consumer, for the broker, for whoever's involved. What was yours and the other leadership in your organization? How do you promote that down to the people on your team to be able to get them being proactively thinking?

Brendan McLoughlin: Yeah, that's a terrific question and that is, to me the difference between management and leadership. Leadership instills a common vision and understanding that when I'm not in the room, people still make the decisions that I would have them make. With e123 our company lives and dies. Our DNA is about our clients focusing on health insurance distribution, by definition. So many of our clients are involved in individual.

Ryan Eaton: And Individual ACA, Medicare, or both?

Brendan McLoughlin: Across the board.

Ryan Eaton: Across the board.

Brendan McLoughlin: Medicare, ACA, under 65, short term life final expense, right? Things that an individual person has to purchase. Not something they're getting through their company, through a group setting. And that purchase, if you think about it is vital for that family. When a family goes out into the open market to buy life insurance, health insurance, it's mission critical for them. This is their lives and their health and the health of their life and their family. And our clients make that happen, our clients are the trusted advisor that those families depend on to be well. That is an incredible responsibility and e123, every single person that works for the company feels that to the bone. If we do our job well, if our technology works, people are getting what they need to keep their families safe and healthy. And that's something that we actually take really seriously.

Ryan Eaton: That's good.

Brendan McLoughlin: So if the phones ring at nine o'clock at night, I don't ask anybody to work if they're not on call, if it's not their job, but everybody in the company would take anybody in the company would.

Ryan Eaton: That's good.

Brendan McLoughlin: Right? If a client needs help at nine o'clock at night, our folks step up and they answer that call and we celebrate that. So from a leadership standpoint, something like AI to me is no different then something like a customer service mindset. You got to understand why we matter, why do we get out of bed in the morning? Cause when you went to three, when we do our job it actually helps people's lives. And if we don't, and they get set up with the wrong product or something that's not going to take care of their family in a time of need. It's a real detriment. So understanding that and having that kind of part of your DNA, when we recruit people, we talk about that. As a work from anywhere company, we are constantly doing group zooms, all employee zooms, company parties and things like that.

Ryan Eaton: So I want to ask you that, how are you maximizing with the work from home? Everyone's got different strategy, but how are you maximizing that efficiency and big, still keeping that culture at the same time?

Brendan McLoughlin: Yep, so it's a lot of we are not a meeting culture, but we are a video call culture, right? So our water cooler is a zoom meeting. And we conscious first of all, we have a work from anywhere committee that is made up of leaders of the company, directors and VPs and managers of people who have committed to own the culture of work from anywhere. This isn't Brendan saying this is the way we are gonna do things.

Ryan Eaton: So they're constantly trying to figure out how to make sure they keep everyone engaged, the relationships stay there.

Brendan McLoughlin: Exactly. And so they have taken that as their responsibility, their job to make sure they keep that, so it keeps everyone on.

Ryan Eaton: Oh, that's good.

Brendan McLoughlin: Yeah, that we meet people's social needs because work is an incredibly important social outlet, communication in both directions. So employees know what's going on, but they also know that they can raise their hand at any time. Everybody in the company is empowered to make things better for our clients, for their co workers, for our investors. Everybody's empowered to raise their hand and say, Hey, it could be better if we do X, Y, Z. That needs to be, it can't be something that you do once a quarter, we're going to now promote culture. It's every day, it's every meeting. I think every employee in our company knows the phrase from carrier to kitchen table agent. And they know what it means and they know that's our vision going forward.

Ryan Eaton: So I liked it, I liked that carrier to the kitchen table. When you're thinking about from a relationship standpoint and having people all over the country, having the number of partners that you have, How do you build the relationships, not inside the company, but how do you keep those relationships strong with your different partners? Because you may be in Los Angeles, someone else may be in Miami. And how do y'all try to do that? Do you do you handle a lot of travel by plane to get to different people? Or do you have certain people in regions who Hey, you're responsible for these partnerships because they're in your area and you make sure you take them out to dinner and you do that. How do you work on that side of it?

Brendan McLoughlin: So that is all of the above. Relationships with our clients is absolutely paramount key. We are way more than a software vendor, for the clients that have worked with us for a while they view us as a trusted advisor. And we take that pretty seriously.

Ryan Eaton: 100%.

Brendan McLoughlin: So with every relationship, we'll have a team that's devoted to that client. And generally it's not by geography or by product type, you would think it would be, but what we try to do is we try to get people within our organization to understand like kinds of clients. There are certain things that a worksite or a small group FMO is going to face that's entirely different than an M. A. call center.

Ryan Eaton: That's right.

Brendan McLoughlin: And so we try to keep the expertise from our solution engineers, our client engagement managers, our customer success managers, our customer service folks. We try to keep them in worlds where they can learn and where they can become more and more knowledgeable about the industry. We tremendously value, insurance experience. We have folks working on really every side of the business, the sales marketing side, customer service and client success, the technology side, we recruit them out of the industry. We have folks working with us who worked at carriers for 20, 30 years. We have folks working with us who've worked for FMOs, TPAs, who have been clients who used E 123 and they know the good, the bad, and the ugly and how they can make it better.

Ryan Eaton: That's exactly right. That's good.

Brendan McLoughlin: And more often than not, when someone at E 123 says I understand, they mean it because they've done it. They've been there. And so those folks, we expect that they're and frankly, the reason that they love their jobs, their number one priority is their clients. We do things like we set up Slack communities for our clients. If you want to talk to someone at nine in the morning, if you want to talk to someone at nine at night, but you don't want to make a phone call, you can post something on Slack and who's ever around, as I work from anywhere company, I've got folks in upstate New York. I've got folks in Southern California.

Ryan Eaton: This guy has not even had dinner yet. That's right.

Brendan McLoughlin: Exactly, and so that, Slack is a great tool to let us have that sort of instant communication. We do structured meetings and things, but we also travel. There we are, e123 is the number one represented company here at ICMG. And it's not because,

Ryan Eaton: I can agree with that. Y'all are everywhere. Signs everywhere. Golf course, everything.

Brendan McLoughlin: There are 17 of us. And here at this conference right now,

Ryan Eaton: Holy cow, wow.

Brendan McLoughlin: We have a room down the hall or downstairs. Where we have five people from our tech team who are meeting with clients about this new carrier for commissions for carrier product that we're developing, they're actually sitting down with prospective clients for commissions for carriers, showing them where we are, getting their feedback and then,

Ryan Eaton: Help improve the system.

Brendan McLoughlin: Yeah. And actually writing the code.

Ryan Eaton: That's right. As we speak,

Brendan McLoughlin: As you're hearing the information, they're writing code to work into the final product.

Ryan Eaton: So you guys did a lot of what we did here today with the Insurance Leadership Podcast, we said, Hey, look, we're going to have all these different insurance leaders and add the thing let's get here, let's do it all face to face. Instead of doing by zoom while we've got everyone here in the area. You do the same thing with your programmers, bringing them in that you get here the feedback and be able to make changes and show and take all of the information. So how obviously taking in information, I love you said it even at the beginning to one of the thing you listened to the different things people suggest, or bring up to you, how can we take action on them are the president of our company, Morgan White Group David White always has said that our best ideas have come from the agents we partner with, he says, and it's our job to make sure we listen to them, and when they say an idea, we may not think it's the best idea at the beginning, just because we might be running down one train of thought when you take it back, think about it, pick it apart and see what it makes sense. Our number one product to this day and now we're the largest carrier in the country with this one product is because we listened to an agent.

Brendan McLoughlin: That's outstanding.

Ryan Eaton: And it's one of those things for us, it's huge. You're doing the same exact thing and have the same motto it sounds so we do and I'd love to talk a little bit about that. It may be in a way that might be a little unexpected commissions might be your best vehicle for listening to agents. That does not sound like that makes a whole lot of sense.

Brendan McLoughlin: Yeah. I was like, come on, give me some more information on that. So when we look at a problem like commissions, we know carriers struggle with paying commissions on time, they struggle with paying them with transparency and with accuracy. The commission data flow encompasses every aspect of distribution. In order to pay commissions, you need to know that there was an application submitted. That it was accepted or that it was rejected, that a bill was rendered, that an invoice was paid.

Ryan Eaton: And it came in before the cutoff time, commission.

Brendan McLoughlin: Commission cutoff time. That maybe a policy was disenrolled. You need to know that this agent works for that FMO or MGA or this agency, or maybe they've moved. You need to know what their specific commission plan is. You need to know when, you need to know where, you need to know so much data about, that deal.

Ryan Eaton: And keep it simple at the same time, right?

Brendan McLoughlin: So the technology has two great opportunities. One is to keep it simple, right? Make all of that automated there's no reason any human being should ever have to touch any of that. Except on an exception basis, when the system says, Hey, this looks weird. That's the first thing is make it smooth, make it easy to do business, right? But the second thing is now you have a treasure to trove of data here. You have data that describes the work that agent is doing and ultimately how it results in lifetime value to you as a carrier. So we should point AI at that data. Let's take a look at what's going on in that data. Are there certain agents and agencies that sell products and they have a propensity a couple of months later to disenroll. Are there certain agents within an agency that are doing a great job selling a new product of yours? Maybe not so much that you would see it in the aggregate numbers, but that suddenly agent X, Y, and Z are selling this new product of yours at a rate that is greatly, unexpected what it allows you to do as a carrier and as a leader to say, let's talk to those three agents. Let's find out what they're hearing and why they're having success.

Ryan Eaton: I wrote that down on my paper, just as you said that, because it's oh, that's a good thought.

Brendan McLoughlin: It might take you six, eight, ten months to see that in the aggregate data, but you could see it in just the first couple of weeks of open enrollment. Now imagine, you get on the phone with those three agents, you find out that there is a certain combination or a certain customer that this product really resonates with, and now you can tell all of your MGAs. When you're in the situation, let's focus on this.

Ryan Eaton: So using AI it's not about making earth shattering decisions. It's about,

Brendan McLoughlin: Yes, absolutely making things more efficient, replacing humans where humans don't do things well. Like giant sets of numbers, but it's also about finding those little things that a human wouldn't be able to do or really don't have the time to do. And maybe a hundred of those insights aren't worth following up on, but the one that could grow your revenue 10 percent during open enrollment.

Ryan Eaton: Now, I like that. Let me ask you this what do you see? What are you most excited? Obviously y'all's new commission system. You're super excited about that and I don't blame you a bit. What do you see from an industry standpoint as maybe the biggest opportunities coming out in 2024 or the biggest things that you guys see outside of the commission side of it that you see as future opportunities, AI may be one of them, but future opportunities, what do you see being the biggest things coming up?

Brendan McLoughlin: e123 really focuses on individual, small group, worksite, right? Insurance sales that aren't happening through some kind of an employment system. And the pace of regulation hitting this part of the industry. It certainly is not unprecedented. We've been through worse.

Ryan Eaton: That's right.

Brendan McLoughlin: That's we've through more. But it's the most, it's been in a while. And one of the things that I love about this industry is that we are a group of very creative problem solvers. And generally when new challenges hit this industry, we figure out ways to meet. At the end of the day the needs of the people that need insurance. And I think we're in that kind of a phase right now, so I think we're seeing trends around things like bundling of products, and bundling of products that up until now have been siloed, so selling a medicare supplement product and selling a final expense product at the same time makes brilliant sense.

Ryan Eaton: Yep. And I agree.

Brendan McLoughlin: And the data that we have suggests that you can increase your revenue per client two and a half times when you bundle products like that. But in most carriers, a Medicare supplement product would be in the health side and a final expense would be in the life side and never the twain shall meet. So finding ways to break down those silos, I think is absolutely, we have a lot of carrier clients talking about that. Eliminating swivel chair applications where, an agent has to create two applications to bring someone on board to do separate products.

Ryan Eaton: And I'll tell you, our friends on the PNC side of the business see this loud and clear. What is the number one ad that you see when you watch football, is about State Farm bundling.

Brendan McLoughlin: Yes, it is. Bundling, home and auto.

Ryan Eaton: No I couldn't agree more with you on the bundling side. Why wouldn't you bundle life and health?

Brendan McLoughlin: I agree. It absolutely makes perfect sense.

Ryan Eaton: Yeah. The PNC side got ahead of us on that. I say ahead of us, ahead of the life and health sector. I feel like from that standpoint, we'll look as we're getting closer to the end of the show today, thinking of leadership, what's something that you, or maybe even someone else on your team and the leadership committee, what are you really focused on this year to help develop and build out your team? And I'm putting you on the spot.

Brendan McLoughlin: That is a terrific question.

Ryan Eaton: I'm putting you on the spot.

Brendan McLoughlin: Got to be honest that is not one that I've prepared to answer. Certainly hope my team is listening, I've been trying to really immerse myself in advanced technologies and in AI and the way that we can use them in life and health and that's wonderful, it appeals to the geek side of me. But along the way, I've actually seen some pretty amazing leaders talk about leadership and the role of technology, and the role of leadership in technology and something that I heard that I thought was really powerful was somebody say that as artificial intelligence becomes more and more a part of our lives, emotional intelligence has to become more and more a part of leadership.

Ryan Eaton: That's good.

Brendan McLoughlin: And I thought that was fantastic.

Ryan Eaton: That's a great quote actually.

Brendan McLoughlin: Because we could very easily think about productivity tools like AI as a way to replace people.

Ryan Eaton: Oh, 100%.

Brendan McLoughlin: And I don't think the leaders of the future are going to be successful if they think about it that way.

Ryan Eaton: I agree.

Brendan McLoughlin: I think AI is a way to make jobs better. To make people able to do more, to leverage the folks that we've got, to be more productive for every,

Ryan Eaton: Leverage strength and supplemental weaknesses, right?

Brendan McLoughlin: Absolutely, and to bolster their ability to succeed.

Ryan Eaton: That's right.

Brendan McLoughlin: And maybe backstop them a little bit when they fail. And to me, if we can spend a year where folks feel like their job is better. And they're doing a better job.

Ryan Eaton: 100%.

Brendan McLoughlin: Then sign me up. That is going to be a win for us, it's a win for our clients. It's a win for those lives that depend on us, to provide them the insurance that their family needs. When all of those things click, it is a win win for everyone from carrier to kitchen table.

Ryan Eaton: A lot of the stuff you were just saying, we had someone else, come speak on the show and they were talking about some of the different stuff with AI and they said the same exact thing with you that, Hey, you can't look at as replacing people this is, maybe it's moved people around to different positions to help supplement some of the things that are mundane that no one's really excited about, so they can do stuff that really empowers them and lets them use some of that creative thinking and it's exactly what you were saying the same thing. So look, last question I got for you now, hitting on leadership. What is either your favorite leadership quote? Or the leadership lesson you've learned throughout your career.

Brendan McLoughlin: I think the biggest leadership lesson I learned is the difference between management and leadership. I simply cannot do everything, and I simply cannot make every decision. If e123 is going to realize the potential that it's got, if we're going to seize this vision, it cannot be me sitting there telling people what to do. I heard this quote once when I was at Johnson and going through, they had a very disciplined system of management training is different than leadership training. And management training is teaching your team to climb the ladder. Leadership is making sure the ladder is leaning up against the right wall. And that's how I think about my job.

Ryan Eaton: That's so good.

Brendan McLoughlin: No, I like that. That's a great point for all of us to remember.

Ryan Eaton: I can't tell you how much I appreciate you being on the show today.

Brendan McLoughlin: I thought this was great and just running through everything. And it's nice to finally meet you as well, I've talked to a few people on y'all's team and have been hearing your name over and over for the past few months. And then seen it on every sign here around the conference.

Ryan Eaton: Look guys, thank y'all for listening in. Remember here at the insurance leadership podcast that a good plan today is better than a great plan months from now. Thank you so much for tuning in.

Brendan McLoughlin: Thank you.

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. Have a great day, everyone.