Knowledge Center

Knowledge Center Items Podcast Episode 27

Why the Best Insurance Programs Lead You to Your Passion

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If you're serious about finding a niche for your agency, it's a good idea to have a strong program behind it.

That way everyone involved in the process spends every day obsessing over one type of insurance.

Creating that type of experience almost goes beyond just being an "expert" and into the uncharted territory of awesomeness.

The best part about that whole niche/program combination is it has the ability to bring you closers to the things you care about most.

Chris Leisz, RPS President of Programs, talks about all the ways you can customize a more specialized insurance experience.

For more Change Insurance episodes, click here.

Full Episode Transcript

Joey Giangola: Mr. Chris Leisz, how are you doing today, sir?

Chris Leisz: Very good, Joey. How are you?

Joey Giangola: I'm doing all right. I'm going to throw this out to you before I really jump into it, and you could either take it in one of two directions. Is there something currently in your house that you have programmed, maybe with some new technology that you're really impressed with yourself about, or let's maybe throw it back to the old vintage, is there something that you miss being able to program in the analog world of things that you just long for?

Chris Leisz: For me, the thing that I'm most proud about right now in the digital world was Wi-Fi coverage in the house was absolutely terrible, and really just getting these Netgear Wi-Fi extenders that even allowed us to get into the backyard. When I'm escaping the chaos of the house for a meeting, I can actually sit on my back deck and still keep a call like this going on. I was really proud of myself, because I'd gone through five of those that didn't work, and the last one hit the mark.

In an analog world, the thing that I'm probably least proud of, and it'll probably come up as an example trying to explain program business, was trying to fix my back door lock two weekends ago. Three locksmiths later, it's finally fixed. That's much more analog.

Joey Giangola: You really can't underestimate good internet coverages in the house. I think it goes under the radar, maybe more so than it should.

Chris Leisz: Yeah, my nine and seven-year old have a better understanding of Wi-Fi coverage than I do. It was a good father/son project of them being thoroughly disappointed in my lack of technical acumen and trying to help me understand tri-band versus dual-band receivers, which God bless with the public school systems teaching today.

Joey Giangola: Right. The sooner you can put them to work, the better.

Chris Leisz: Exactly.

Joey Giangola: Personally, Chris, I long for the days of programming a VCR, to be honest with you, when you used to say it like a thing. That was a term at one point. You say it now and it sounds strange, but you used to program a VCR to record.

Chris Leisz: Oh, my God. I was the house expert. When the power went out, I was the resident technician and went around and programed, not just programed the clock, but you had to make sure that you reset all the preset programming times on the VCR. My mom didn't want to miss her story, so you had to make sure that you programed those times in as well. Then of course, daylight savings time change, and I was always useful at least twice of the year, even if the power didn't go out. You're right. VCR programming, it's a lost art.

Joey Giangola: It certainly is, especially because that daylight savings time, that didn't update like it does now, it doesn't automatically happen. You had to actually pay attention to things.

More seriously, Chris, speaking about insurance and I guess, to a certain extent programming in a way, what is going on in your world? What are you seeing happening? Is there something in that maybe? We're moving into the new wave of digital and technology that enhances it, or even throwing it back, this is what's happening across the board.

Chris Leisz: I appreciate it. One of the interesting things about program business or program administrators that I find fascinating is still how little awareness there is the size we are of the PNC market. If you would have just asked me 10 years ago, program administrators accounted for about 17 billion of premium, so very small size of the market. Advance to 10 years now, we've grown at 131% of the PNC market. We're over 40 billion.

What surprises me is that we're still relatively unknown. As we continue to refine our capabilities and our niches... Sorry, I'm getting a little error here, sorry. As we continue to refine our niches and really focus on a specialist approach either by product or industry, a lot of times we're just relatively unknown to the broader PNC market, despite the fact that we've been growing leaps and bounds within it.

When you talk about technology and its important, even just two years ago, if you would have asked program administrators how they were thinking about that intersection of analog to digital, like your opening question, it still was more of on the side of the conversations. In our meetings with our leaders, it was something we talked about towards the end of the day. It's very much front and center now as to particularly us, as a large program administrator, not how is it going to disrupt us, but how's it going to enable us in really finding partners that'll help enable what we already do very well.

I guess I'm not sure if I fully answered your question, but those are just two things that, when I think about the marketplace, how fast it's growing, how vibrant, how diverse it is, but the fact that now we, like carriers, we, like brokerages, have to reevaluate our value add in making sure that digital is a component of it. That's definitely something that we want to make sure enables our continued growth as we move forward.

Joey Giangola: That's an interesting point. Just on the awareness front from an agent looking at a program versus a traditional route of acquiring the business, do you think maybe it's a hesitation on the agent's part that I don't know if I'm going to do this enough to really dive in to having a full-on program, like that feels like too much of a commitment maybe? Is there some of that hesitation? What do you think kind is holding it back right now?

Chris Leisz: It's a great question. I think it's because of the specialism in the niche area. An agent may cross paths with us two or three times a year and not your regular main street business that they're focusing on 24/7. They may have a portfolio of businesses and commercial pieces of business I don't have a program for, but then they belong to their country club and they sit on the board of their country club and they want to help place the insurance for that club.

That's maybe a once in a year event for them, but they need a program or a specialist in that space, like we are at Bolinger, to place that appropriately. It may be the connectivity. There are agents out there that do specialize in the areas that we, ourselves, specialize in is underwriters. They have a greater awareness of us, but again, it's specific to those transactions, so that could lend to it.

I could also say program administrators, particularly the group that I'm associated with, we really have had to upgrade our marketing communications in really how we go to market. We have to go beyond the original sitting at an industry association event with a little table and making sure we're handing out our tchotchkes. We really had to leapfrog into the digital age to push our product, really doing search engine optimization, doing things like working with you and your team on how do we get the message out more effectively, because we are so focused on what we work on.

I think digital actually, in that regard, will have the amazing enabling effect for us because we will not be cookie cutting approach to the market, but actually really using data on the marketing side to enable how we get our message out to the right agents at the right time. I'm very optimistic, actually, and thankful to be part of a company that's making those investments.

Joey Giangola: Yeah, if you had to maybe boil it down in terms of what that maybe biggest advantage is to really taking the time to dive in and find a good program that's going to really take care of the business in a way that you maybe not have been accustomed to before, what's that thing that maybe is going overlooked just in terms of, like you said, from the underwriting standpoint. They're just doing that 24/7 around the golf courses and things like that. What's the thing that, I think, really stands out to you that that gives that agent an advantage with the program?

Chris Leisz: I'm not sure if this is going to work in terms of a description, but I'm just going to bring in something that I went through myself. My back door, for whatever reason, the person who had the house before me put a mortise lock in the back door, which I think is Latin for most complicated lock you could ever find. When you look at the door, you don't know it's a mortise lock.

You sit there and you go, "Wow, that's just a regular locking kit." Well, I called three different locksmiths, all highly regarded locksmiths and not one of them had any success with that lock, because when you got into the underlying of it, you found out that it's very different from the standard locks that you would get at a Lowe's or a Home Depot. I tried to do research.

I had to actually go to someone who is an expert in that very type of lock. In fact, when I called the company and they said, "Oh, you need a locksmith." I said, "Actually, no, I need John." Immediately, when I called and said I need John, they said, "Oh, you have a mortise lock." The locksmiths themselves knew exactly why I was calling. That gentleman, although he costs a little bit more money than the other locksmiths, he was able to identify my problem quickly, effectively and deliver a solution specific to my need.

That's a lot like programs. We are specialists in what we do from our underwriting to our policy administration systems to our product to our rating. Everything we do is that customized approach to a very specific niche. For us, my underwriters are that John. They don't do property and GL insurance. They don't do DNO and professional liability insurance. They do something of a subset.

They'll just focus on lawyers. They'll just focus on podiatrists. They'll just focus on country clubs. They'll just focus on a public entity. That focus and commitment is built over decades of them continually underwriting it, understanding it. They're not just part of associations like Target Markets or WSAA or Plus, which are very valuable insurance associations. There'll be members of the association that actually supports the industry that they've become experts in.

In fact, many times when you're talking to that underwriter, you're not going to know they're an underwriter. You're actually going to think that my crane and rigging underwriters actually drove cranes in their past and operated cranes. My golf club underwriters, it's not just a matter of saying the buzz words of like, "Well, you need tee to green and you have these properties." They're talking about the bag room and how it's associated to the rest of the building and how you look at the values specific to the bag room versus the entire property or the T degree. They're not just talking about it. They're talking about the landscaping, the sand reclamation and everything that could go wrong with that, that's very unique to golf courses.

They do that because they've spent decades refining their craft and skill specific to that discipline. That's why our carrier partners come to us because their fixed cost model would be too difficult to manage to be that specialist. We can do it on a variable cost to them solution and give them better outcomes and better results. Then our distribution partners come to us again, because when they get that very specific thing, that mortise lock, they're like, "Oh, I just can't call anyone with this. I have to call someone that does that day in and day out." That's why they come to us.

I don't know, Joey, if that example worked, but because I just struggled with it on my house, and usually I'm the type of guy who gets his tool bag on, going at it and trying to fix it himself. Well, I screwed it up and then I called in three other guys who came in and said, "Well, yeah, we don't know what we're doing." Two took a run at it and made it worse.

When I finally called John and got him in, he was able to fix it. He knew exactly what the problem was. Yes, it cost a few extra dollars, but quite honestly, in the long run, he just did an amazing job. That's the best example I can have to explain to anyone who doesn't know program business. A lot of people come to us for our program solutions.

Joey Giangola: I think it definitely answered the question. I think, on my end, I'm guessing the mortise lock is just harder to break into maybe?

Chris Leisz: Again, think it's [crosstalk] I think it's just people trying [crosstalk 00:13:20]. It has a lot of capabilities, supposedly, that... It's a very complicated lock. If I took it out and showed it to you, you and I would scratch our heads like why would it be so complicated.

I see guitars behind you, though. The funny thing is is that guy, John, not only does he do mortise locks, he builds guitars for a living, so truly a craftsman, somebody who just likes to have a specialism, likes to focus on it. Really, that's what I love about what I do. I work with craftsmen. I work with people that really appreciate their craft, dedicate an exorbitant amount of time just to performing that craft, and it's really exciting.

Joey Giangola: Well, we've got to have at least a mystery or two that remains unsolved here during this whole thing, Chris, so we can check mortise lock under that. I think the other interesting thing that comes out of that for me is the idea around programs is also maybe an interchangeable term with the word niche, right? A lot of the rage over the last, maybe we'll say five years, within the industry is getting away from that idea that you have to be this generalist to really coming into more of a specialist role. That's where program businesses may be positioned to help agents flourish a little bit better in that.

I think maybe the other thing, too, and I don't know if there's necessarily a question here, but just because you are really good at a certain thing doesn't mean that you can't sell other things, too. What would you say to an agent that is looking to maybe pick up a major, if you will, but yet they're still going to have their other products that they're going to sell? Is there maybe a program that you see a lot of potential in for an agent to maybe jump into or does it really just depend on the agency?

Chris Leisz: Well, it depends on what the agency wants to commit themselves to. Quite honestly, I'll use another example, my insurance past. I used to work for a company. Hitchcock Insurance. Robert Hitchcock got into art and private client because he really enjoyed going into his friends' houses and seeing what they had on their walls. He was like, "Well, my family's in the insurance game. I'm going to insure that." He had a passion for it. He actually wanted to go in and understand the art world, and has an amazing collection himself.

It's not too dissimilar as an agent sitting there trying to figure out how are they going to be better than the other agents in their area going for the same group of business. It's a very competitive space. An agent could do themselves well. Agents we partner with, the ones that commit to an expertise that they find passionate, that they enjoy, and then figure out the insurance angle to that and then just be a preeminent expert in that.

At the same time, to your point, you could be some things to some people, but you could also take that model and be all things to some people. You can start to count round. Maybe you just do the PL, but then you can start adding on the general liability, the premise that you could add things onto that. You can remain being some things to all people, so try and broaden out your product offering to more that look like your core customer.

In programs, basically our business model is some things to some people, but independent agents that we partner with, we do find that they are either that John in the office that just does one thing and there's enough of that one thing to keep them happy and provide for their family, provide for their office. There are those that, as they get bigger, they start expanding into the all things to some people. That's just adding more lines onto their specific expertise that may not be in the program, or they'll to the some things to all people and they try and take that professional liability solution and broaden out to maybe new professions.

I'll just give an example. I'm a lawyer by trade. My wife's a lawyer by trade. I just really enjoy the fact that we have a lawyers professional liability book more because I understand not just the insurance associated with it, but I understand what it is to run a law firm. In the law firm space, if you were a generalist, you really had to go main street and it was a lot of singles. There was a lot of singles that you had to hit in order to maintain hour business as a generalist.

I enjoyed becoming a specialist in litigation and in my craft and focusing on a very specific niche. To me, that's how I added value in the legal space. As data, technology, online solutions become more prevalent, the generalists in that law firm space is going to struggle. If I can do a will online, why do I go to a generalist to do the will for me? There's things that technology is going to disrupt, if you're not doing something special.

Now that connectivity, that main street connectivity, is still important but you're going to see that a lot of things that can be sucked up into a technology enabled solution, it's just delivered cheaper, quicker, more efficiently. Those generalists have to switch their model.

To me, a specialist model, even as an agent, I think there's value in it. Again, I go back to pick your passion. What do you like to do aside from insurance, and then start building your passion there. You'll find that you're not only more interested in the subject matter, you become more genuine to the insured and the client, and you just enjoy what you're doing more. Again, I'm sorry, Joey, I feel like I probably answered three questions you didn't ask, trying to address one statement.

Joey Giangola: Chris, less work for me. Not a problem. I'll gladly hand it over to you. I think you said the word that I think is most interesting in this whole thing, and that is passion, aligning yourself with something that really was maybe your first love outside of insurance, because most of us got here by accident anyways. It is an opportunity to put yourself closer to the people that you maybe feel more connected to.

That also opens the door for looking to create maybe your own program. Now is this something that maybe there isn't one on the shelf right now that fits the business that you're going after, but this is something that agents could possibly look to say, "Listen, I'm really interested in doing this, this and this" and bringing this to somebody, maybe such as yourself that would say, "Listen, I'm looking to create a program around this. What do you think we can do?" Is that something that is actually a realistic possibility?

Chris Leisz: Absolutely. Target Markets is the association that program administrators are associated with. They do a survey annually and one of the nice things to see is where carriers and program administrators alike saw their future growth. We're very optimistic about growth, but a lot of that optimism wasn't just around their existing programs and the economy building behind those focuses.

It's a macroeconomic play in many respects. If you dedicate yourself to one area and you start to develop market share there, it's just as much about the economy of the area you picked growing and raising the tide of the boat you're in versus your efforts. New programs was an area that both carrier and program administrators alike highlighted as another way that they see continuing to grow their revenue as we move into the years ahead.

There's many reasons for that. I don't want to bore you guys with it, but on the carrier side, I used to be on the carrier side, our program business, hands down, returned some of the greatest underwriting income for a variety of business reasons. I can just tell you the carriers are very much focused on this form of a variable cost solution as they look across what they do and what they add value and see this is a way to partner and to continue to raise both their top, but also their bottom line.

Program administrators, we want to stay some things to some people, but that's some. We can expand it by not going outside our core. We do a lot of public entity business on an excess basis. This year, with a great partner, we released a brand new primary public entity business program. It really dovetailed with what we did. We didn't go too far from our core. We just released a new capability that would be a new program we brought up because we had a gap in our offering and we were able to find a great partner. The two of us went at it and built a solution to fill that gap.

We did the same thing in law. We had a gap on how we spoke to small law firms. Our solution was built for more mid-size law firms. We saw a gap for solo practitioners to small attorney firms, and we have an e-commerce solution at RPS. We decided we can put something on it, so we released a new program there as well.

Agents, same thing. As they look at their customer base and they start to see I have a lot of customers in this space and I personally really like this space, they should know that there are program administrators that will work with them to develop a proprietary solution to help that customer base. There's program administrators and carriers alike that are very interested in getting into that.

Joey Giangola: All right, Chris, I've got three more questions for you.

Chris Leisz: Shoot.

Joey Giangola: This one's simple. What's one thing that you hope you never forget.

Chris Leisz: Wow. It's a great question, Joey. Wow. I wish you'd sent these beforehand. I guess it's something that I always teach my kids. The business we're in is evolving and growing and there's different challenges all the time. 2020 is a perfect year to say new challenges that we've never expected. The thing I always tell my kids, remind them of, and it's something I think is embedded in our company's culture as well, is don't forget your values. You can always learn new technical skills. You can always have and apply those technical skills to bill business challenges and obstacles as you grow.

If you go forward without your values, if you forget your values, when you do that, it just doesn't really matter what solution you come up with. I coach my kid's baseball teams, basketball teams. I used to coach hockey until they got too good. You could always progress your technical skills, but if you forget how to be a good sport, how to win the right way, how to enjoy winning the right way, if you leave your values at the door, that's just something that I hope I never forget.

Joey Giangola: All right, Chris. Now on the other side, what's something you still have yet to learn?

Chris Leisz: Oh, my God, that's the beauty of program business. Every day, I am learning something brand new, seriously, whether it's continuing to expand. I'm fortunate but if you think about our company, I'm the generalist in our company. I'm the general leader because we have nine separate offices, 36 unique programs, all with all unique characters, and I'm never going to become the expert in any one of those programs, even the lawyers one.

I give far greater credit to our lawyer underwriters than myself, but I'm always learning every day about how we can continue to bring value in each and every one of those programs as the economy evolves, as the distribution paths evolve, as everything evolves around them, how do we just continue to bring value to our customers in those models? I find myself, every day, just learning in that regard, and in fact, also learning how to be a better program administrator, just trying to make sure that I'm as learned as possible on all the mechanisms necessary to effectively run a large program administration.

Joey Giangola: All right, Chris. Last question, maybe the most unfair of them all, but, hey, we're going to give it a shot. If I were to give you, we'll say, a magic wand of sorts to basically reshape change, do something just a little bit different in the insurance industry, program or not program related, what's that thing, where's it going and what are you doing?

Chris Leisz: Joey, you're really good at this. That's another excellent question. For me, it's really this understanding on how to embrace this digital wave, this technological wave. We get approached many times by not just brokers or agents or carriers, but we are getting approached by a whole new group of companies looking to get into insurance, whether it be through program administration, agent distribution, or the carrier side.

As an industry, it will be to our benefit to understand this wave of technology coming in and figuring out how best to partner with it, as opposed to putting up walls and trying to block it out or trying to just think it's not going to change what I do. There's a whole ton of unemployed taxi drivers out there that never thought that the taxi limousine industry would be disrupted, but it was.

There's industry after industry that has been changed because of the advent of technological solutions that have come their way. There were those that embraced it and then there were those that just said, "Not in my house." We have to, just as an industry, do a better job of understanding it and partnering.

You see a lot of this InsureTech coming up. I actually think it's very positive because you're seeing industry experts, or insurance industry experts, partnering with technology experts and trying to develop new solutions. I think that's actually very positive, but we need to be part of that progress. We need to be part of that solution.

I also see many that continue to work on 30, 40-year-old policy administration systems, language that was created before I was even born, and then telling me that they're innovative and they're technologically astute and they're doing everything they need to stay on the front end of that wave. The reality is that we're not. We're still, let's say, behind the technology wave that's coming.

Joey Giangola: Chris, this has been fantastic, so I'm going to leave it right there.

Chris Leisz: Joey, thank you very much, sir. This was great.

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