Brokerage Ops Technosavvy the September 2018 issue

Blockchain Ecosystem

Q&A with Derek Lovrenich, Founder and CEO, and Phil Duncan, COO, of InsureEco System
By Michael Fitzpatrick Posted on August 30, 2018
Q
Tell us about InsurEco System.
A
PHIL: We’ve created a system that connects insurance companies with independent agents and provides all the different products that agents are seeking—everything from personal lines to commercial lines.

DEREK: We’re an aggregator of insurance agencies, we’re an aggregator of insurance products, and we’re an aggregator of insurance technology. We’re no longer a platform. We’re no longer a software company. We’re truly this environment—this ecosystem—in which commerce exists.

PHIL: Our entry into the system comes from the technology piece we built called the InsureBio. It’s an app and a tool the insurance agent can use to create the insurance profile of the customer. The insured creates a profile that answers all the questions that are needed to purchase the type of insurance they’re acquiring. That information is connected to an agent that’s in our ecosystem, whether it’s their current trusted agent that they do business with or they’re just looking to find an agent to access the products that are in the insurance marketplace. And if their current agent isn’t already part of the ecosystem, we bring them on and give them permission to access the information that their insured has given them access to.

DEREK: We’re getting the data from the insured and passing it into our intelligence appetite engine. The carrier comes into our system, they program what their appetite is, and we match that up. We’re that last mile between your management system and your actual sale.

Q
How does blockchain come in?
A
DEREK: If you look at any public blockchain system, it’s about recording value and putting the truth back into the participants’ hands. In insurance, data is that asset. Blockchain technology enables us to create a true, immutable ledger of exactly what’s going on; who’s got permission to what data points and who has access; who is the carrier on the contract. Our main objective is to enable the broker/agent distribution channel to communicate easily with reinsurers and carriers regarding production and quoting in real-time.
Q
How will this ecosystem help agents?
A
DEREK: We focus on how insurance agents can market their products better, how they can know clients’ appetites better. We coach them on how to do appetite-based marketing so they build [for example] a microsite for a plumber that’s in Texas because we know through the analytics in our system that they sell a lot of them and those are good money propositions for them. We coach them to try to get down those roads.
Q
How do blockchain and your technology help people control data?
A
DEREK: One, knowing is half the battle. You have to know where your data is going. We’ve proposed to the regulatory bodies that, just like insurance agents get licensed, insurtechs should be licensed. The second side of it is giving customers the mechanism to be able to say no. We’ve created that in a smart contract where the insured says, “I’m going to share these data points with my broker of record for this amount of time,” and they can revoke that. We’re just trying to create the new path for essentially changing the mindset of the insured to not go to the Google machine and get into that lead gen tax. Don’t go that way. Just go raise your hand and say I need insurance or say that you got married. From that life event, we know you need insurance, and we’ll connect you to your agent. Your agent will configure data points that he needs based on you getting married or having a baby. We’ll funnel that through and ask permission for every data pull, and you’ll have the ability to say no. You’ll know where all your data is going, what’s being used on it, and then you’ll have the ability to request it. That’s the two-headed approach we take.
Q
Where is blockchain going in insurance?
A
PHIL: We are trying to help customers create an insurance profile, similar to a credit report, that stays with us. Keeping accurate risk data will help clean up the industry. If an opportunity comes to you [as a broker] and you’re not the right fit, let’s just say a captive agent at State Farm is a better solution for them, it will connect them to the right carrier that actually wants that risk. That should be the value that an insurance agent wants. They’re not trying to take a customer away from someone’s who’s doing a good job; they’re just trying to pick up business when the person isn’t being serviced properly. That will also clean up the marketplace.

DEREK: The consumer is losing trust in the insurance economy. That’s why they’re going to all of this other, the peer-to-peer, because what’s happened in the health industry has made everybody think it’s a scam and it’s not right.

Q
How did InsurEco System evolve?
A
DEREK: We were born as a submission management tool for a wholesaler with premium finance baked right in. We moved into building custom raters for carriers and risk retention groups. Dealing with smaller outfits we could work on the workflows which were inefficient and focus on maximizing output while keeping overhead low. Once we started moving down that road, we realized the real magic— the thing nobody wanted to do—was deal with servicing and payments for smaller priced accounts. We took contractors general liability, and we took small trucking owner operators, and we focused on creating a real end-to-end environment to where the quote was brought to the system from the retail agent. We ran it through our rating algorithm. We delivered the policy through our policy issuance system. We gave the insured a mobile app, called the policySpot. We created a selfservice certificate option, and it allowed agents to deliver policies and ID cards. About the end of last year, our R&D department developed policyBlockchain, and we started seeing the value that came from being a third-party entity for everyone to report their transactions to. No one was providing the big picture. That was the turning point for us, when we said, “We could just wrap this whole thing and just make it visible to everybody and just be good, honest custodians of the data, follow all the regulations.”
Q
What’s ahead?
A
DEREK: Short term we are working with about 10 different insurtech innovators from property data to cyber security. We are having some great successes with a joint project with Maxxsure, where we’re creating a cyber scoring and security platform. We’ve partnered with a wholesaler who has a commercial product for trucking, and we’ve built a complete blockchain solution for reporting production, cargo and claims. There are a lot of neat ways we’re going to start dipping into other industries closely related to insurance and supply chain.

PHIL: We’ve added on a partnership with a company that has imaging, and we’re working on this proof of concept that, if you take a picture of an item of value, it will produce an insurance quote kind of real-time and connect them to our agents, who can actually offer that product.

DEREK: We’re also working with an AI company that has a proprietary algorithm to detect and predict customer engagement, and we’re putting a scoring in that to allow us to tell agents and brokers how engaged the actual consumer is within the process. That’s going to be really key.

Michael Fitzpatrick Technology Editor Read More

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