InsurTech Ohio Interview with Brent Hammer of Grange Insurance
Brent Hammer is the Innovation Officer at Grange Insurance, a leading insurance carrier based in Columbus, Ohio. As both a licensed CPA and P&C insurance agent, Brent brings a unique suite of talents to Grange and the insurance industry at-large. Brent was interviewed by Michael Fiedel, a Community Leader at InsurTech Ohio and Partner at PolicyFly, Inc.
Brent, how does an insurance carrier as big as Grange get started tackling a broad concept like “innovation”?
“It can be a challenge for larger organizations because, naturally, the leaders that are the decision makers have a great deal of experience. It’s often all too easy to see what you’ve done to get here and think the right approach is to keep doing it.
I like to use alchemy as a mechanism to mix intrapreneurs who have deep business acumen and entrepreneurs who have deep technical acumen. And when possible, bring in outsiders like a student who has no insurance knowledge to ask the very fundamental questions that can turn an entire conversation on its head and really challenge the recency bias that some organizations have.
It’s the blend of different thought processes and thinkers, and you need to orchestrate that type of chemistry. I boil it down to a concept that focuses on finding the ‘synthesizers’ within an organization. These are the unique people inside of a corporate culture who are able to instinctively move well between functional areas. This empowers these individuals to identify new ideas and effectively share them with different groups that might not otherwise connect to build momentum around a cohesive concept.”
Who has the responsibility to promote ideas around innovation?
“At Grange, these synthesizers (or innovation coordinators) are intentionally not officers of the company. We’re looking for associates, middle managers to be our synthesizers. They’re working vertically in-depth to fully understand where future problems may stem from, but also communicating horizontally, which gives them an incredibly unique perspective.
The effort to orchestrate this and guide this approach falls on the innovation team. At Grange we’ve kept our core team very small in order to be great at facilitating the dialogue between innovation coordinators within each area of the business. I see the core innovation team as a hub and each innovation coordinator is on the periphery staying in close touch with the operation of each area so that when we meet on a regular cadence we can learn from their unique experience.”
Once the workflow is in place to allow good ideas to flow, how do you approach deciding where to invest both time and money?
“Insurance by its nature is risk averse and so we need data, we need facts to plan and improve any ideas before we execute. But even when we find a great new idea, as a corporation we can’t always act right away because we first have to meet the needs of the core business. Otherwise, “organ rejection” is likely to occur. That’s when it’s crucial to find an entrepreneur that can bring that spark and work together with the core business to drive the execution forward.
And you can’t treat startups like vendors. I think about this a lot. We can’t treat a two-person bootstrapped company the same way that we negotiate with Microsoft when we’re buying something off the shelf. That approach will stifle good conversation.
The investment in everyone’s time also has to be equitable. We realize that you can’t get all of the right people in the same room at the same time, it’s almost impossible. So instead of having the same startups come back three times to give the same demo, we pick who’s critical and follow the ‘one pizza rule’. Five or six people can share a pizza so that’s the max for these types of meetings and we don’t have that meeting unless everyone on that critical list can be present together to review and discuss. Otherwise you’re right away wasting time and potentially money trying to execute.”
Innovation demands an opportunity for failure, to test ideas out, how does Grange approach this challenge?
“A good corporate innovation team needs to start at the periphery and slowly eat away at the edges, the corners of the box if you will. And you need to know where the crown jewels are in your organization so that when you deliver on a simple, but high-value or at least high-potential result, you can promote the heck out of that win.
I like the Lion King reference where we imagine standing on the mountain top and we’re holding up these wins and celebrating them together. It softens up the interior core of the business and allows team members to feel encouraged to push for innovation because they feel like they’re participating in it.
Inevitably you have to carve out time to take measured chances that will create valuable learnings. I like to frame it in a way that destigmatizes the effort to test new workflows or technology by saying ‘look, 95% of your projects are going to run through the regular formula or plan, prove and execute, but can you give us 5% to try this alternative with the intent to exclusively test and learn? Let’s try and see what happens.’ This significantly lowers the risk by starting small.”
What advice are you giving insurtech startups looking to make waves in the insurance industry?
“I think the pitfall that a lot of innovators and entrepreneurs fall into is creators like to create. So the result is they spend all of their time building the highest quality solution they can, but what they end up with is more interesting than practical. And interesting doesn’t cut it.
My background is actually in finance, so I gravitate towards ratios and formulas — they really get me going! The formula that I preach at Grange is success equals the quality of the solution times the level of adoption. You have to put just as much thought into how you are going to market and scale your solution before you take the extra time to develop every bell and whistle for it.
Another thing I’ve noticed is that as recently as two years ago, most entrepreneurs were really focused on their single point in the value stream and what the problem they alone were trying to solve. Now I’ve seen a number of startups look to their left and look to their right to see who else is trying to address tangential pain points before me or after me in the value stream. Together they’re linking arms and forming an alliance. I think the winners in the insurtech space going forward will be those that are able to work with each other to deliver far greater value through interoperability. To me that will be key for an insurtech to thrive, let alone just survive.”
The industry is shifting towards digitization, how do you see the landscape changing for carriers and agents?
“I think the future is going to be about aggregation of everything. You’ll have a white label solution handle administration for carriers, another digging through data for insights. Agency management systems will talk to each other and claims will be linked throughout this ecosystem.
All of this automation is going to help the agent focus less on needless administration and focus exclusively on the value add. Generate the best new business, being the best partner and advisor for their clients and spend more time educating themselves to build their expertise as a consultant.”