You don't need to be the smoothest salesman to win the most accounts.
Because sometimes it just comes down to who can solve the problem the best.
That's ultimately the measurement that will go the furthest with the business you're trying to write.
Closing a sale without solving the problem is a temporary solution that's just waiting to get infected.
Matt Cooper, CEO of Inner-City Group and Community Insurance, talks about how his lack of sales skills improves his problem-solving ability.
Joey Giangola: Mr. Matt Cooper. How are you doing today, sir?
Matt Cooper: Doing well. How about yourself?
Joey Giangola: I can't complain. I cannot complain. I want to know this before really jumping into anything too serious, but what is one simple instruction that you find very easy to ignore? You just ignore out of principle.
Matt Cooper: You can't understand that. And I say that because so much of in today's world, there's so many new things that are coming out and the level of complexity on the top layer seems impossible for you to understand. And then when you start drilling down, you'll find that you have a good basis for understanding even the most complex topics.
Joey Giangola: I like that, man. It's a lot deeper than I was anticipating. Mine was a little more domestic. Mine is simply just dishwasher safe. I just have no capacity to acknowledge that rule because I feel like if you're not making something dishwasher safe, we're not trying today. And I'm going to try it anyways.
Matt Cooper: You are talking about the guy who had to wash dishes by hand growing up because my big sister used to pay me, she used to supplement my allowance, because she wanted me to help. I'd do the dishes for her. So I never trust dishwashers as far as getting it clean.
Joey Giangola: All right. So you have a trust issue with dishwashers. That's an interesting angle to take. I mean, fair enough. I just feel like I'm going to give it a shot anyways. And if it gets ruined, I'm going to just, I mean, let's go. Let's make it see if this thing works. I don't know. I guess we're on other sides of the fence on that one.
Matt Cooper: Now do you rinse your dishes off before you put them in the dishwasher?
Joey Giangola: Yeah, they're pretty much clean before they go in there. So, I mean, I don't give it much to do. But I just like that extra layer of, it's just a safety, I guess if you will. But let's move this over to the world of insurance. What, I'm curious, is there a traditional rule of thumb, traditional wisdom that you've maybe ignored throughout your career that you've found maybe that has helped get you to where you are?
Matt Cooper: Again, it falls along the line about not understanding something or the risk is too complex for you to get insured. I'm one of the strange people in the world, I actually have a degree in insurance. And yeah, I know it's great. It's not as exciting when you go to a party and say, "Yeah, I got my degree in insurance." A guy says, "I got my degree in engineering." Got lawyers, doctors, and my insurance major. But I got mine in insurance and what I found out was because insurance involved everybody, every aspect of our economy needs insurance in some way, shape or form. And it has allowed me to learn a lot about a lot of different industries, a lot of different processes, because you had to learn about it in order to do insurance.
I can't, I'm terrible at a hammer and nail but I know a lot about construction because we've have this security bond program that we do. And so I really have to fully understand the construction process as I go to an underwriter to explain what my clients want to do and how well. And I also needed to grill my clients to understand their level of competence. And so if they can't explain it to me better than I can explain it to them, then I answer questions about how good they're going to be.
Joey Giangola: I can definitely agree on the hammer and nail thing, Matt. So that's interesting. You knew from an early age that you wanted to get into insurance? So I guess what was that moment where you said I'm actually going into this thing and getting a degree where most people just fall backwards into it?
Matt Cooper: That moment was the moment that a company by the name of Johnson & Higgins sent me a letter and said that we're going to give you a full scholarship to school. It's going to be a work-study program. So we're going to cover all your books. We're going to cover your tuition. We're going to cover your costs to get to and from school. And it's a work-study program. So every four months, you come back and we'll pay you for four months. And then when you graduate, you've already got a job. So when that moment came and I came home and shared that with my father and told him why I really would rather go to Howard University where the girls are pretty and everything else, but they're only offering me $5,000 a year and he had to pay the rest. He convinced me that it made much more sense that I accept that full scholarship with the work-study scholarship.
Joey Giangola: That's interesting. So obviously he won that conversation. Was there any, I guess at what point in time did you come around to the industry? Because it seems like you, again, in a way, I don't want to say fell in to it, you were introduced to it from somebody else, but was there a moment where it finally made sense to you? After you got into it and said, "Yeah, I think I could find a home here."
Matt Cooper: It made sense to me when I went for my first interview at Johnson & Higgins at the ripe age of 17 years old. I go downtown and if you're familiar with Philadelphia, I'm from north Philly and while I'd been downtown, I can't tell you that I spent a lot of time inside the office buildings downtown. I'm a son of a Baptist minister, so I know everything there is about church, but I didn't know anything about corporate America. And so as you go downtown and you get into the elevator and you get up to the 16th floor of a building that overlooks the city and you're interviewing for a job and you say, this is kind of nice. You didn't know that you can do this in insurance. And I say, "I think I can deal with this." You wear a suit and tie. In the summertime, it's air conditioning and the wintertime it's warm. Beats construction work. But then again, they're a lot guys I know in construction that would hate to be in a suit and tie inside the office. I'm just not one of those guys.
Joey Giangola: Yeah, no, it definitely makes sense. And I wanted to go back to, again, that idea that you have said of there isn't really anything that's too complex. You can basically figure anything else out if you really try. How has that helped you throughout your career as you dive deeper into that and just the different types of areas of insurance that you have dabbled with? Because again, I'm sure you've come across people in the industry where, "Oh, you do that type of insurance? That's too complicated." Or there's certain areas of the business that are just, we don't want to touch. What has that been like for you weaving in and out of different areas?
Matt Cooper: Shortly after I got started while I was still in college, freshman year or so like that, long before Excel and all the computers, somebody told me that we had to do a net present value calculation to compare alternative insurance quotes. And back in the day, there were companies that gave you a three year pre-pay versus an annual and you had to use a net present value calculation to do the comparisons. And that wasn't math that we really covered in high school. And it wasn't math that we really had got to yet in the college area. And so I was given an assignment by somebody who thought that it would be over my head and they'd come back and say, "Oh, see. He doesn't know what he's talking about."
And so I had a weekend to learn everything there was about the net present value calculations and how it worked. I spent my weekend mastering the net present value calculations, came back, did it. Found out that the person who assigned it to me really didn't understand it either, didn't understand it. And so then, so I figured if I get a weekend, I'll figure out something. I'll learn it and then go back and do it.
Joey Giangola: Yeah, there's definitely a little bit of that lacking depending on who you come across in the industry. I don't know if you have an answer for this, but I'm very curious to ask. What's one thing that has stayed the same that I guess you're grateful for? And maybe on the other side of that, what's one thing that's wildly different that you maybe could have never anticipated?
Matt Cooper: The core concepts of insurance have really not changed. I can't tell you, I mean in my job now, I'm more in business development than I am in actually doing day to day work on accounts. But because I have a good, strong understanding of principles of insurance and the core concepts, the foundations upon which all the forms, all the stuff that we do are built on, I'm still pretty good in talking with people in areas when I haven't really done a lot of deep research on it. So I can get through the initial conversation strictly on how core principles apply. And then if I have to drill down to how we've changed, because they've changed the forms a lot. I mean when I came around, boy, from when I started in the business to now, they've changed the language of the forms. They still do the same. In a lot of ways though, they're not as broad as they used to be. Now you've got to do endorsements for stuff that was automatically included in the old days.
Joey Giangola: Yeah, we never met an exclusion we didn't like from time to time, I would imagine.
Matt Cooper: Insurance companies, yeah.
Joey Giangola: So I guess the one thing from that, you're talking about being in business development now more than anything, what was that process like? Because sometimes agents find it challenging to not be the guy out there pounding the pavement sort of thing anymore. For the people that are in that position now looking to maybe get to where you are, what were some of the things that you had to do to make sure that was a smooth transition?
Matt Cooper: You've got to make sure your organization is ready for that. You've got to make sure that you've got people that you can trust and depend on to actually get the work done for you. And that they know when to bring you in and when to keep you out. But it takes a while for you to develop [inaudible] like this. And when you start out, when I started out, we started our company with just two people. And then as we grew to a couple of more people, I organized my office so that I was right in the center of it. So we always kept an open office and that's because if somebody is on the phone and they're telling something incorrect to a client, I could actually hear it and make that correction and do training in real time. Because in our organization, we bring you in, we sit you at the desk and you start working and you survived by your ability to learn as quickly as you can.
Joey Giangola: Yeah. That training aspect of it is something, again, we're not guilty of being great at. I mean, have you put an emphasis on that? In terms of how have you maybe been intentional about that process versus when you got in? Or do you think there is something to that? Just throw them in the deep end and let's see if they can swim. Because I mean, it does turn out some decent successful agents if you can make it.
Matt Cooper: I mean it depends on what area of the business you're going to be in. If you're in the sales part, just throw them out there and see if they can sell. People who are really good at sales are, that's more natural than it is trained. I know they've got all these courses out there, tell people they can train you to be sales and they can do all that kind of stuff. But at the end of the day, the sales training programs basically identify whether or not you've got a talent for selling or not. They're not training somebody who isn't good at sales or is not naturally talented at it versus not. Because personally, I think that I'm a terrible salesman. I am terrible at it. I'm probably not a really good businessman. Because at the end of the day, you buy insurance from us because we're really good at what we do.
We have, our clients, we look at our clients. Most of the clients we have came to us because they had a problem that their current insurance agent did not have a clue about how to handle it or solve it. Or they came to us because they thought they're going to offer an opportunity to a minority-owned firm. They said we did it and didn't think we could accomplish it. And we got it resolved. And so that's how we sell. And I'm not knocking on their doors of buy more, whatever. You come, you've got a problem. We solve that problem and then they appreciate it. Most our client relationships now go, we've been in business 25 years. I can point to our largest clients, 20-year relationships.
Joey Giangola: Believe it or not, man, I've heard that from a lot of different agents of, I'm not a great salesman. What is it about insurance that I guess lets us get away with that? Is it maybe the fact that in a lot of cases I've heard people say insurance isn't sold, it's bought, or maybe I got that wrong. But is there something to just this product that allows us to be mediocre salespeople, but really again, focused on solving that problem?
Matt Cooper: Early on in my career, I was training with a guy who tells me that he felt he had job security because the level of talent in the industry was so bad that he felt he could always get a job. Quite frankly, I have to say that I agreed with him because I didn't think he was that talented. And so there's a lot of people in insurance that fell into it because they got fired from another job or they were unsuccessful with something else. Somebody will say, "Well, sell insurance." Real estate, insurance are probably the two areas where you find more people in that are not true professionals in it than anything else. And then people get in it, for the most part if you can sell, you can sell somebody because it's relationship driven. But at the end of the day, you really do got to solve some problems for somebody. And when those problems come up and they can't solve it, then they've got to come to somebody who really knows what they're talking about.
Joey Giangola: All right, Matt, I got three more questions for you, sir. And the first one, very simply, what's one thing that you hope you never forget?
Matt Cooper: That I have a position of trust with clients and I have a fiduciary duty to make sure I've done everything I can to make sure the insurance companies that I connected them with live up to the promises they make in the insurance policies that they purchase from me. I take that to heart. It worries me if somebody, there's some clients that I'll walk away from because they don't want to buy certain coverage. For example, our personal line side, you won't buy, we won't sell you an automobile policy without rental car reimbursement. I just don't want that hassle. You're going to have a claim. You're going to forget that you didn't want to buy a rental car reimbursement. Or you're on the homeowner side, you didn't buy water backup because it costs too much. And if it costs too much, then let's not, I may not sell it to you.
Or a church that's not going to insure for the full value of their building for replacement costs. And then I'm stuck with the bad feeling of them not being able to repair their building. So that's the big fear that we have that something happens, we don't... We've been fortunate, thank you Lord, that 25 years we actually have no E & Os. And for the most part, I can't say it's because we haven't made any mistakes. We've just been blessed. I mean, I'm not going to sit here and tell anybody that I've operated for 25 years made no mistakes and perfect. I would have no need to go to church if that was true.
Joey Giangola: Well, I'll knock on the wood there for you, Matt, just for that one. Give you a little extra. But now on the other side of that, what's one thing that you still have yet to learn?
Matt Cooper: How to be a real good businessman. Really. I mean, I made a lot of decisions in this business that weren't really dealing with profit and loss. I made some decisions about, I've walked away from some business that would have been quite lucrative, but it just didn't fit what I wanted to do. I've come to an age where I've realized that I did not get in business because I wanted to make a lot of money. I got in business because I did not like working for other people. And I joke with a couple of my competitors that are turning over their business to their sons and stuff. So when I see them, I say, "Look, I'm okay to deal with right now. But my daughter is going to take over one day and she's not like me. She's going to come in. And when she gets here, everybody needs to look out for it. Okay." And so that's what I tell people, you've got to worry about the next generation. Because when she takes it over, she's going to worry about bottom line and that's going to be the situation."
Joey Giangola: Well, at least they've been warned, Matt, at least they've been warned.
Matt Cooper: I'm warning everybody. And I told her that, she said, "You're right. Tell them."
Joey Giangola: All right, Matt, last question to you, sir. If I were to hand you a magic wand of sorts and you could basically reshape, change, speed up really any part of insurance that you saw fit, what is that thing? Where is it going? And what is it doing?
Matt Cooper: I would change how we do the rating of our insurance policies right now and get out of this basis by which we're predictive underwriting as opposed to results underwriting. The predictive model where you use credit scoring, all that other stuff, where they're trying to predict who's going to have losses. It goes against really the core concept. The core concept of insurance is that we all contribute. Based on our own individual loss experience, we then those of us who've had losses need to contribute a little bit more to repay the pot back for taking money out for our losses.
And this whole predictive thing about who we're guessing is going to be more likely to have a loss is unfair because there's always some bias in there either implicit, real, whatever. It's just going to be that way. I mean our firm, right now the company's called Community Insurance Center because we did an acquisition with [inaudible] transition, but we started out as Inner-City Underwriting. So we were writing in the urban areas. We started out because of red lining. And we proved that risks in the city were no more hazardous or loss frequency than anywhere else. And so the difference in underwriting and approaches and the rate differences that exist are just inequitable. Automobile insurance, it's got to be based on how often you drive and how many losses you have, not the zip code where you park your car at night.
So if I had the wand, I would make the underwriting more equitable and eliminate that. I mean we've got a loss ratio. Clearly, we write some of the stuff on the surety bond side, we do bonds for people that don't qualify for bonds. Yet we've done special programs for the last 10 years with no losses. Rewrite affordable housing, rewrite a lot of stuff in urban areas that's supposed to have bad loss ratios, yet I have insurance companies cutting me checks for contingencies every year.
Joey Giangola: Matt, this has been fantastic, sir. I'm going to leave it right there.
Matt Cooper: Okay. Thanks.