It all starts much sooner than you think and with more value than expected.
That's what can happen when you relentlessly advocate and do everything you can to make your clients a better risk.
All you have to do is provide them with a process that empowers better decision making.
That happens by giving them more information about their total risk than anyone ever has.
Ryan Shinkle, Executive Vice President at Insgroup, breaks down everything they do to change that relationship and win new business.
Full Episode Transcript
Joey Giangola: Mr. Ryan Shinkle, how are you doing today, sir?
Ryan Shinkle: I'm doing well, Joey, how are you?
Joey Giangola: I'm doing good. I want to know something before we really get into it. What is your most unlikely source of information? A place that you go to learn something that people would be maybe surprised to find out.
Ryan Shinkle: That's interesting. I will tell you that I like to run. You wouldn't know it to look at me, but I put in a fair number of miles on a regular basis. I really enjoy it. And I get a lot of information while I'm running. Right? And not necessarily from the run itself, but podcasts, I'll listen to audio books, sometimes I listen to some guided runs in the Nike Run app that has some built in coaching. And it's really interesting to me how sometimes what you can learn about from some of the coaching and some of those built in runs, as far as perseverance and making adaptations and learning from what you're doing, can apply to the business of selling insurance as well.
Joey Giangola: Yeah, it's that chain reaction that sort of is spurred when you're kind of in a different head space.
All right, so you can give me one of two things then. One, what's your best podcast recommendation, and/or what is the most relevatory thing that has come to you in one of those runs?
Ryan Shinkle: So I'll go with the latter. And this is something I've talked about a lot with my team of advisors. This is from one of these audio guided runs about struggling, and it's that struggling is not failure. Struggling is successfully not giving up. And I was in the, I think, the fourth or fifth mile of one of these longer audio runs I was listening to, that the coach said that through the Nike Run club app, and I thought, "Boy, that's so right." And it's so relevant to the pursuit of almost anything, that if it's worth doing, it's probably going to be a struggle, and recognizing you're struggling and overcoming it is a huge win.
So I talk a lot with my team about, "Embrace that struggle. Let me know that you're struggling. Let's talk about it, so it's a victory that we can find there."
Joey Giangola: That's a good point. So let's talk about that struggle then. What are you kind of struggling with currently on the insurance side of things? What are you digging into? What's worth doing? What's the thing that's got you going right now?
Ryan Shinkle: For me personally, there's kind of been an evolution. I've been in the insurance business since 2007. And when I got into it, I think I started, like many agents, I went right into a production role at Liberty Mutual, and very quickly fell into the, you know, make 200 cold calls a week until I find someone who's willing to get a quote from me and then go out and hope that we can quote and bind and win. Right?
And over time, I've come to the realization, especially after I moved to the retail side, the retail broker, the agent world, that process is largely broken, and that feedback is mostly from clients and prospective clients who have expressed frustration in the way they go about securing insurance for their business, right?
Someone calls on them and says, "Hey, I can save you 15% in 15 minutes", or some other variation of that, some sort of value approach on how we can save you money. And they come out and they gather information, they do a bunch of applications. Both agents, two or three or four agents, sprint out to the marketplace, both to the ENS channel and the admitted paper channel, and it's all about who gets there first. And then they do their work and they come back to the buyer of insurance, the executive or the business owner, and they give them their very best pitch at about 5:00 PM, the day the insurance expires is when they show up, and the buyer is sitting there trying to decide between these multiple proposals, something that is mostly a foreign language. These are very smart business people. That's fine. But they're not full time risk managers. So they look at these multiple proposals and what we've learned over time is, they make their buying decision really on one of two factors.
And one is, "This all looks pretty similar to me. I'll just stay with the guy that I know. I've known Joey for a while. I'm sure it's fine." And two is, "This one's significantly less expensive. I don't really have any time to dig into it, but it's probably okay. So I'm going to make a move and go buy the cheaper product." And of course, what we know is that neither of those approaches is the right way to purchase a risk management program for your business or to consider your risk transfer options.
So what we're struggling with is, we've heard this from a great number of clients and prospects, that this is the wrong way to do it. We've come up with our own way. We've got a proprietary approach, we call it Insight Plus, that flips the script on that. We do the work on the front end, we show them what our game plan is, we become their broker of record and we do all of the placement for them.
The struggle is, sometimes changing hundreds and hundreds of years of buying insurance the old way, of trying to get that business owner executive to see, "This is why we do it this way. And this is how it ultimately benefits you." So changing what they've been conditioned to do through the fault of our industry, is something of a struggle day to day.
Joey Giangola: Yeah. I love that you guys call it Insight Plus. I feel like it gives the clients something to sort of hold on to and just identify with.
Walk me through that process of kind of adopting that approach. I'm assuming that there was a transition period at some point where you kind of said, "Let's maybe to do this", and it was step by step, and then to the point where you did formalize it, give it a name. What did each step along in that process look like?
Ryan Shinkle: Thanks for asking. That's a good question. So, as I mentioned, I started in the business at Liberty Mutual. I was there for a couple of years, until they went to the broker distribution model and laid off all their salespeople. And then I joined Insgroup in Houston, I was at Insgroup for four years as a producer. And then I got a really cool opportunity to go join Gallagher. I spent five years at Gallagher, and learned a lot along the way. Left Insgroup on very good terms, reconnected with them about moving into a sales leadership position, and we put together what that might look like and why that need exists at Insgroup.
And it was job one for me, Joey, when I walked in the door at Insgroup. When you are a smaller firm ... I mean, we're the largest closely held firm in Texas now, but relative to Marsh, Aon, Gallagher, with the big name brands, I thought, "We've really got to have a model to differentiate, to lead with value and to approach this differently than our competition." Nobody wants to be an also ran. And I thought to really be a sales leader, yes, I can talk about, "Are you making enough attempts? And do you have the prospects and the meetings?" But to really be a sales leader, I think it's incumbent upon you to enable your team to go out and be successful. And that means tools, resources, and processes. So it was day one for me on the job.
The first thing that I did was set out to develop this model, and it took several months, but it was really developed through feedback that I had received throughout my career from clients and prospects, like I said, expressing that frustration. So I sat down and said, "What would make this make a little bit more sense?"
And I think what we do that's very different and leaves some people scratching their heads is, when we engage with a prospective new client and they entrust us with their policy data, we tell them, "Look, give us your policy data. If you've got some loss history, even if it's dated, that's okay. What we want to take you through is an educational process. We're going to boil down your whole program, the coverages you currently have, the exposures you're not currently insuring, the losses that you've had, all of the costs that go into your program."
And again, most business owners and executives, Joey, they don't know what goes into cost of risk. Most of them have an idea of what they're paying for their premium right off the top of their head, but you start talking about cost of risk and you start explaining it's premiums paid, it's the retentions, it's your risk management departmental costs ... And we include uninsured exposures, right? Just because you don't buy cyber liability doesn't mean you don't have exposure to cyber liability. You're just self-insuring that risk.
So they give us that information. We boil their whole program down to, "This is what your cost of risk is right now. This is where we believe we can take it through our tools, resources, broadening of coverage, closing gaps." And what's real different is, we tell them exactly how we'll do it. We lay out the whole game plan. They get a 25 page document from on us that shows all the gaps in coverage they have, how we would set about fixing them, what we project it will cost based on benchmarking and industry knowledge. And we give them that report and it's theirs to do what they will with it.
We believe that if we are doing a little bit differently and we lead with value and we're having this conversation 90 to 120 days out, we now have an educated consumer who, at a bare minimum, is in a better position to make a decision about the financing of their risk. A fair number of those clients move over and proceed with us. Some don't. Some take our report, give it to their current agent and say, "Hey, fix these problems." Some file it away as due diligence. Undoubtedly, some throw it in the trashcan. That's fine. But what we tell them at the outset is, "The worst case scenario of this is you'll know more about your business's risks and your cost of risk than you do right now." And we empower and enable them to make decisions about their business.
Joey Giangola: There's so much stuff that I love about that process, Ryan, that I'm going to try to contain myself. I'm going to take a deep breath and we're going to work through it together.
So first, I love the fact ... I had an agent tell me this one time, talking about that value first approach. And he referred to it as spilling your candy in the lobby. And I love that you're not afraid to spill the candy in the lobby. I mean, it's always stuck with me for whatever reason.
Ryan Shinkle: Mm-hmm (affirmative).
Joey Giangola: Two, I would imagine that whether the losses are up to date or not, you're almost making the number at the end irrelevant for them in some ways, right? Tell me what that's kind of been like in terms of that response that you get, because yeah, you want to get them to an accurate number, but you've got them to a place to where they're not even thinking about that. That's sort of the last conversation you're going to have.
Ryan Shinkle: So that's exactly right. When we show the number now versus where it will go, that's really the beginning of the conversation, not an end. And it's what makes our approach so different, as we say, "Look, this is kind of where you are, and what we would recommend, we believe would get you here ... But we want the next couple of months to be a conversation. We want to empower you to make the decisions. So based on what your program is now, you can do these things. But you're telling me that you're in a good cash position and you're telling me you want to take on risk, and then I look at your program and I see you have a thousand dollar deductible on your autos, right? Is there some room in there for you to take on a little more risk and to lower your premium?"
It's the opening salvo of that conversation. And just as a side, it cracks me up how often I see people carrying low excess limits. They're like, "Oh, we're not really afraid of the risk. Our business isn't that risk [inaudible 00:12:13]."
"So okay, you're taking the top side risk. You're taking from 5 million to infinity, right? But then I look at your auto program and you're carrying full coverage with a thousand dollar deductible. Like I'm all for taking risk. Let's do that. But let's reevaluate this bit. If I took full coverage off on everything and gave you some money back, would you go a little higher on excess? Or would you pick up cyber liability? Or would you beef up your DNO? Let's move those dollars around."
So to your point, there's a client for whom we did this report. And of course, we're in a very hard market now, and so when I go in and when our advisors go in for meetings, we're not beating around the bush, like, "Oh yeah, we're going to bring your premiums down." We usually are not. "Now, I'm trying to bring down your cost of risk relative to your top line revenue. That's what we track year in and year out." And you can see what changed in there. "Well, we had a huge loss or we started manufacturing dynamite and it spiked up." Right? That can have an impact.
But at the end of the day, once we've got a final insurance proposal in front of the insured, they're not thinking about the number that we told them that we could bring them down, or in some cases up to. I've done these where the cost of risk was going to increase as well, because what they had was completely inappropriate for their business, right? But they're not thinking about that number at the end of the day. They're looking at the proposal we have for them and what they're seeing is a product that they had a hand in crafting because we made them a part of the conversation.
And this is very foreign to many of the new clients with whom we interact. They're used to someone comes in the door, they want to make photocopies of their insurance policies. And what do we do? They take it out to market, "Oh, same as expiring, just same as expiring." And now you get an insurance proposal that is actually based on information from one or two or three or more years ago, where you just did, "Just same as expiring", to try and get a lower number.
So the conversation at the end of the day is very, very different when you set the client's expectations to not just be a lower premium, but to be a more appropriate risk management program for them, a more efficient way of transferring and financing that risk.
Joey Giangola: I have to know what the reaction was, maybe the first couple of times you did it, or even still, because like you said, it's a new concept of giving them that total risk number, right? Like, "Yeah, we're not just telling you what the insurance costs, we're talking about the number that if that thing that you're not insuring happens." What was that response from the people? Because I'm assuming they've never ever thought to consider it like that.
Ryan Shinkle: So what you just said is what we usually hear, and I'm talking about very well educated CFOs, and in a couple of cases a risk manager, that have said, "Well, I haven't really considered that approach. We look at these things, but we have never added them all together."
So we're a middle market firm, right? We're not dealing in the fortune 500 space. We're dealing primarily with clients that are paying between a couple hundred thousand dollars in their annual premium and a few million. That's where we are. So we're dealing with business owners and CFOs most of the time on the commercial PNC side. And what we usually hear is, "I'd never thought of it like that. I'd never seen it boil down to a number." And sometimes we get deep into the weeds and I explain to them, I say, "Look, it's part science and it's part art, right? We have to look at your firm and say, okay, you manufacturer widgets, you have 125 people. What's the average cyber claim for a client like you?" And we get that information from carrier partners and other benchmarking sources.
And then, "What's the likelihood that it happens in any given year?" Right? Kind of like a 500 year storm. Although now, those are annual. And you put that percentage in there and kind of hedge that number down. You can't say all bad things are going to happen in every year or everybody's cost of risk would be seven figures, but it does exactly what I want it to do.
So what we do is we walk them through all the gaps or issues or inefficiencies in their policies, at the policy level, and then we bring it all home by talking about the cost of risk. And what I wanted to do is create a conversation about what really keeps them up at night, not just preach to them about, "This is the coverage you should have because we say so." But when you start having that conversation about whether they're retaining or transferring risk and what their comfort level is, that's when you start to bring down the walls and get away from a sales approach and get to being a consultant and get to being an advisor. "Well, tell me what your concern is about that." Or, "Tell me why you think that number is too high." And then we can dig into it and decide what the best path forward is for the business.
At that point, getting the exclusive broker of record letter and proceeding as an advisor versus someone bidding to try and get their insurance. It fundamentally changes not only that process, but your relationship going forward.
Joey Giangola: It's hard to argue when you put a percentage next to a dollar amount and relate it to a type of incident, right? I mean, it's hard to run away from that when you're saying, "Oh, 43% chance of a cyber attack and it's going to cost me maybe a hundred million dollars", whatever the number is. That's probably a little high.
Ryan Shinkle: It's a little high.
Joey Giangola: [crosstalk 00:00:17:38].
Ryan Shinkle: Depends on the business.
Joey Giangola: I'm getting excited. But I mean, it's hard to run away from that, right?
Ryan Shinkle: Sure.
Joey Giangola: And I'm assuming that that makes them face the things, like you said, as opposed to preaching.
But I'm more curious about the BOR process, because that's something that may be not be as explored as possible in terms of, you're competing off cycle, if you will. You're putting yourself in a position to, like you said, just take over what's there and then manage it accordingly until you have the ability to do something else that you might see fit. What has that been like?
Ryan Shinkle: So as far as off cycle, and we might have a different definition of it, where we are positioning ourselves is from six months in to the next renewal. That's our prime time to engage. And we tell people 120 days out is the right time to go through an Insight Plus review, because that gives us time to make changes, to understand and to improve your risk profile before we get to the renewal. If you engage with a couple of agents to get you a quote 30 days out, you don't have any time. The die is already cast, right? But between four and six months out, there's time to look at the loss runs, there's time to work with the incumbent carrier and try to close some of those or reduce reserves.
Now we're very fortunate. We have a great number of resources. I have in house risk control, I have a huge in house claims advocacy team. So it makes my job very easy when a client says, "Yeah, we want to make some changes." I've got the people to roll out and say, "Let's look at your hiring program. Let's look at your safety program. What are you doing as far as driver qualifications?" And make changes early enough that when we build our narrative and our submission for underwriters, we can say, "They became a client of ours two months ago, in such time they've committed to these changes or are making these changes", and we present them as best in class at whatever they do.
And that's what we do, is we make our clients better risk. I tell clients this all the time. I say, "Hey, it's actually really easy, Joey, to sell you insurance, right? You have to have it. You've got a bunch of contracts and MSAs that require you to have it. You have to buy insurance. The insurance companies don't have to buy you. And that's where who represents you makes such a difference."
So when you name us as your exclusive broker of record, with that statement tells the insurance marketplace is, "Ryan controls this business, Insgroup is going to write this account." And it fundamentally changes the conversation with underwriters. Underwriters are just people with too much to do, too many files on their desk and not enough time. And when faced with, "Well, I've got a submission here from Insgroup where they're the broker of record. I've got this nice written narrative about where the subject company, the client, came from, is now, where they're going, why they're best in class, and Ryan's telling me that if I get to these coverage terms and this rate that I'm going to write the account", that underwriter is going to pour his time into that account.
But if you take that same underwriter and you say, "Hey, I got this client here, Joey. I got some halfway filled out applications and some expiring data. I've got three of the five years of loss runs. And we're competing on it. I'm not the incumbent, but man, if you get me a good price, we might be able to win", why would an underwriter put his or her resources into that opportunity?
So we explain to the insured that by selecting a broker and having that person go to work for you, or that team, that company, go to work for you, even off cycle, we have time to make the change before we go and interact with the insurance marketplace.
Now, if it's six months out and we find significant coverage shortfalls, significant issues, which unfortunately happens pretty regularly, sometimes then you'll do the broker of record letter and actually just do a cancel and rewrite if the coverage can't be saved. If the placement is inappropriate and they don't have the appropriate endorsements to right size the coverage, then sometimes we'll do the cancel and rewrite the coverage right away.
Joey Giangola: Yeah. That's definitely interesting. And I'm sure that there's many agents that are possibly weeping silently to themselves thinking, "Yeah, well, that's 90% of the way that I submit my business" or, "That's a large percentage of how business is submitted across the industry." For somebody that might not be in such an established position with maybe the resources behind them, how would you maybe suggest for that producer that is maybe starting out, may have been in business five years, how could they start to shape their process to kind of take on some of these characteristics?
Ryan Shinkle: They should join us.
Joey Giangola: All right. Fair enough, Ryan.
Ryan Shinkle: No, I mean, in all seriousness, look, we're blessed with a ton of resources and it makes a big difference. But when I was at Insgroup in 2009, it wasn't the case. I mean, Insgroup's a high growth, high organic growth firm. We grow at a clip of 17 to 20% every year organically. When I was there in 2009, we used to brag about being the fifth largest firm in Houston. And now we're the largest closely held in the state, primarily through organic growth. So the point is, even when I was there, when we were much smaller and didn't have the same resources that we do now, you can still take a more consultative approach to your client. I think you can still change the conversation from, "Here's why we don't do the quote and pray method."
Here's the hardest thing about making the transition, is you have to learn a word that's really tough for salespeople, for insurance producers. And that word is no. You have to be willing to walk into the room, have the conviction that your process, we have Insight Plus, people have other things, that your process of taking the account to market, even if it's just as simple as, "We BOR it, and that's it, and we BOR it between 90 and 120 days or we don't work business", you have to have the courage of your convictions to go in and have a willing buyer on the other side and say ... And this happens all the time, and Joey says, "Hey, yeah, go ahead. There's a copy room over there. Here are the policies. I've got them ready for you", this has happened to me, "Here are the policies. Just go ahead and make a copy over there and then bring back your quotes."
Now, you can't blame the buyers. The industry has conditioned purchases of insurance to transact business this way for as long ... I mean, since those guys sat down in London and put together the first insurance policies. Just buy cheap, right? And so it's an uphill climb to explain to them why we want to do it the other way, but you have to be willing to walk away from that opportunity.
And I'll tell you, this is what I really love. I get to work with young advisors new to the business, like someone you're talking about. And I don't make all the cold calls anymore. I've got a team of great hunters. And so one of these young guys, I say young, he's younger than me, but newer to the business, he set up this meeting through a lot of cold calls and email outreach and everything else, and of course, very excited about the meeting. We show up and the lady on the other side of the desk, literally that was that scenario, "Here are the policies, go ahead and make copies and come back with your quotes." I said, "Well, let me introduce the firm and how we operate. It's a little bit different." And I ran through it, and she goes, "Oh, well, normally they just make the quotes." I said, "And that's okay. If that's the process that works best for your business, I respect that. It's just not what we do. We do too much to engage in that type of a process." She goes, "Oh, well, I've never let any of the other agents take the policies out before." I said, "That's fine. If you'd like to, we will."
So ultimately, she acquiesced. She gave us the policies. We came back with our Insight Plus report. And for the first time in her life, she gave a broker of record letter, we picked up the business, because we were leading with value.
Something that we do, which is extraordinarily rare, Joey, if you're the client, we sit down and we tell you the whole pitch I gave you, right? "At the end of the day, you'll know more about your program than you do." And I say, "Give me your stuff. And in return, I'll give you this report. No obligation." Right? And then a few days later, we come back, and we actually come back with the report. It's revolutionary. We tell you we'll do something and then we do it. And it's alarmingly rare, but we educated her on her business and her risk in a way that had never been done before. And so she gave us a broker of record letter when we were the fourth agent in the door for that renewal. The fourth. I mean, the market gets so chopped up, she can't possibly be the beneficiary of a process like that.
Joey Giangola: Fourth is definitely far enough in mind to get slaughtered on the way through, that's for sure. So that's pretty impressive.
Ryan, I got two more questions for you. We've gone over quite a bit in changing that conversation to being a more value based. But if you had to pinpoint one area of value that is maybe the most important to kind of shift to getting yourself in the right frame of mind, where is that, to start? And how important was it to you once you kind of realized it?
Ryan Shinkle: So I think that the mindset that we walk into the room with, when you say you're bringing the value, what does that really mean? I think that one of the hallmarks about Insgroup and the way we approach every opportunity is, we relentlessly advocate on behalf of our client, even before they're our client. And if you take an approach of advocacy and really putting service before self and doing the right thing for the parties with whom you interact, and that's clients, carrier partners, colleagues, wholesale broker partners, one of the most important parts of the puzzle is a good wholesale broker, if you put yourself in that position when you walk in the room, it's not an act than to say, "We're going to educate you. We're going to enable you to make good decisions about your business. Whether those decisions ultimately result in your moving your business to us or not." We're already advocating on their behalf before we've even won the business.
And if you look at advocacy as value that you can bring to a client, and it's one of our core values at our firm, is relentless advocacy, if you look at that as a way that, "I'm always going to be advocating on your behalf to bring good information and actionable data to you", then you position yourself where you really can never go wrong, if you're always trying to be the advocate for someone else and put yourself second.
And look, we want to write a lot of business. We have big organic growth goals and new business goals, but we think that if you take that approach of putting your client before yourself, you'll write longer term business and you'll build a book of the types of clients you want to work with. The one who just says, "Well, just go quote this for me", you're going to get them this year and lose him the next.
I'm afraid that I didn't answer your question.
Joey Giangola: I'll accept it, Ryan.
Ryan Shinkle: Okay.
Joey Giangola: That's fine. There are no rules here.
All right. Last question for you. I'm going to hand you a mythical magic wand of sorts to kind of change or do something that you can't do in the industry right now, maybe just a little bit better. What's that thing that you feel like is just around the corner that you can't quite get your hands on, that you really wish could impact a business in a significant way?
Ryan Shinkle: That's a really good question for which you gave me no preparation.
Joey Giangola: [crosstalk 00:00:29:43].
Ryan Shinkle: You know, you can call it a magic wand, but I think that this will happen, and I'm surprised that it hasn't happened yet. What I would like to see is the industry as a whole to get better, faster, smarter with data. We have such an incredible amount of data about our clients and about what makes up a good risk and a bad risk and exposures. I feel like we're, in many ways, behind a lot of other industries in really tapping into using data to underwrite more efficiently and to deliver more appropriate and cost effective programs to insureds.
Almost every review that we ended up doing, we find some program inefficiencies where they've got gaps in coverage, or they're over insured or whatever else the case may be. But if you look at our classification systems, they're very rigid as far as the SIC codes, and even the NAICS codes, they're very rigid. They're very old, haven't been updated in quite some time. And business, especially fueled by technology, has changed so much more rapidly than the insurance industry, I believe, has evolved to keep up with it. And if I had a magic wand where I could say, "Let's use all of this giant data pool to create a product that is actually more efficient for the purchaser of insurance", then that's a win win. But we're a slow moving industry.
Now, where you're seeing this start to happen is in the personal insurance space, right? Where you're getting a much more usage based insurance, if you will, like, "Okay, you're going on a ski trip. Let's just ensure your skis for the time that you're traveling, not all the time that they're here." Or life insurance is starting to do this; buy the amount of life insurance you need, when you need it, in kind of a scalable system. We are seeing more of that usage based approach in commercial auto. Now, it's really started, not surprisingly with the Uber's and Lyfts, and those types of things, but even some of the parcel delivery, you're going to see more of the usage based pricing model. And I think that, with technology and with accurate data, we can move into a way where insurance programs are more flexible for insurers, more adaptive to change.
Look at the way that we do things very traditionally. I mean, I have some expertise in oil field service contractors, and say you have 15 MSAs and they all require a $10 million of liability, and then you want to get one more job and you have to have 20, most of the time you have to go out and increase your access up to 20 million. Now, you can do one offs and 20 just for that [inaudible] and that type of thing, but say you go and you've got a few of those contracts, "Now I'm going to go up and buy $20 million of liability insurance when it's really more coverage than I want, or that I think is appropriate for my business, but I'm doing it to satisfy a contract", is that the most efficient way to finance that risk, where you have to pay additional premiums for now for the rest of the policy year?
So magic wand, I'd like to see us, as an industry, get better on the data and technology front to better serve clients and make our products more flexible and adaptive to their needs.
Joey Giangola :Ryan, this is fantastic. I'm going to leave it right there. I appreciate the time, sir.
Ryan Shinkle: I enjoyed it very much. Thanks for having me on, Joey.