Insurance’s Human Connection
AI notwithstanding, strong relationships will always be crucial for success in the insurance industry.
In conversation with Al Sica, Geof McKernan, CEO of Ignyte Insurance (formerly NSM Insurance Group), considers how his focus on going deep on specialty niches and building relationships with clients and insurers helped develop the specialty insurance platform into what it is today.
As Al Sica, managing partner of Sica | Fletcher, puts it in the podcast: “You [Ignyte] became not only a retail business, but one of the premier MGA wholesalers. I always viewed you as the poster child for that. You were ahead of your time, I thought, as far as the niches. The riches are in the niches, as they say. And you really perfected that.”
McKernan also discusses what he believes AI will disrupt and what it won’t, and how it will affect the insurance marketplace in coming years.
Q
Why don’t you kick off? People love to hear the history of NSM and the things that you’ve done, the things you’re doing, and where you’re going.
A
When I got out of college, I went to work for PMA Insurance Co. as a CSR to one of the two sales guys. When I left PMA, I went to become a broker with a small insurance broker. I had really good mentors there and I started doing niches there. I started doing wholesalers. I started doing apartment buildings. I started doing municipalities.
What I realized, there’s a lot of leverage when you do a lot of the same things over and over and over. You get to have expertise in that. The community in which you’re insuring that niche is going to refer you to leads if you do a good job.
Between ’99 and 2001, we started becoming an MGA, and people [were] saying, “What are you going to do that for?” I said, “Because I like the niches. I think we can accumulate and acquire good premium, profitable premium in different niches.”
You’ve heard me say this: go 3 miles wide, 10 miles deep. What we did is, we built a business with a portfolio of niches, and that was the real thing, and we had expertise in those niches.
You develop relationships. Because if they trust you, they’re going to give you the opportunity to do more, and that’s what it comes down to. I was traveling 120 to 150 days a year to see agents, to see insurance carriers. And one of the things that I had our guys accountable for, the guys who are running our programs, was go see the agents and go make relationships with the carriers.
And you know what? Retention’s good, profitability’s good, and that’s what happens.
Q
You just said it’s all about the relationship and the network. How do you see AI playing into it, and how do you think it's going to affect the marketplace?
A
What does AI do? You have to remember what it is. It’s a tool. It’s a resource. Is it going to eliminate jobs? If you’re a coder, if your daily job is inputting submissions, I’d go look for another job.
Is it going to take away that producer who’s sitting down with Al and going over his portfolio? Is it going to take away the guy who has 20 apartment buildings and 400 units? He might use [AI] to analyze his own business, and we might analyze it so we can show him where the risks are. But is he going to buy that $200,000 premium online? I don’t think so.
Our pet insurance, that was 95% online. But guess what? They [clients] wanted to talk to somebody. Our collector car business, we can do online, but they want to talk to somebody about that ’67 Chevy or that ’82 Porsche or the ’87 Mazda RX. The human connection is still important.
Will AI make us more efficient and make it quicker to get results? Absolutely. Don’t be afraid of it. Embrace it and figure out how you’re going to use it.
To listen to Al Sica’s full conversation with Geof McKernan, click here.
