Dan Keough is Chairman & CEO of Holmes Murphy and the Co-CEO of BrokerTech Ventures, the first broker-led insurtech convening platform and accelerator focused on delivering innovation to the insurance broker industry.Dan was interviewed by Michael Fiedel, a Managing Director at InsurTech Ohio and Co-Founder at PolicyFly, Inc.
Dan, what are some of the unique challenges facing brokers as the insurance industry strives to evolve?
“At a high-level of understanding, considering all the various opportunities that technology affords us as brokers and how we can connect those technologies to the client. I think everybody's trying to move into a digital world and trying to think about how they can improve and impact the overall client experience. There's an unlimited amount of technology approaching the industry right now, and discerning all of those opportunities is a big challenge.”
Do brokers feel like there's been a concerted effort to build technology with their perspective in mind, or has technology been more dictated to them?
“I think there's both. There are legacy technology enablers in the industry that operate a certain way, and I'd almost liken to a closed-source system. I think there was a wave one generation of insurtech that focused on disruption. Now, there’s a second wave generation that is more open-source and collaborative in connecting technologies that enrich broker capabilities. Brokers have played a big role in shaping the narrative around how we can do that together. Certainly, our carrier partners have been a big part of that as well. Some of the traditional legacy technology platforms are evolving to that place, but it's harder to take the business model and go from A to B versus starting anew and going from B to C.”
How has BrokerTech Ventures helped develop strategies for product innovation that are broker centric?
“We think competition and collaboration with competitors is healthy. We talk a lot about ‘co-opetition’ at BrokerTech Ventures. When you think about it, we all have an ideal client. That client has needs that they know, and they have needs that they don't know. Our job is to help them think about what they don't know and work backward to what solutions can be shaped for that unique opportunity. From a broker perspective, we're not technologists, and technologists aren’t brokers. What we know and what they know is shaping into an ideal fit for the client and advancing to the right insurtech solutions faster.”
What are some of the general areas of improvement that brokers are most excited to see technology take hold?
“If you think about the broker's role, it’s to be an advocate for clients, helping them identify their risk sooner and drive down costs faster. In doing that, we always look for opportunities where insurtechs can help us do that. I'll give you a couple of examples. One would be a company called Broker Buddha, where it’s trying to digitize all of the application process and make it easier for our clients. We all know that insurance is not easily understood. We know that companies and clients don't want to pay more for premiums, and they want a simpler, smoother experience. Broker Buddha enables that. TrustLayer is another example where its technology brings speed and efficiency to the certificate issuance and verification process, of which has historically been dreadfully slow. Many clients need that proof of insurance in order to get work done in an expedited manner, and there should be a faster and easier way to do that. TrustLayer is doing just that. This is where we are now, leaning into some of these technologies and founding teams we have conviction around, to help propel capabilities forward faster.”
What are brokers hoping to be able to do in terms of their focus and value in the next 10 years?
“This is a narrative that's already played out in other financial services industries. Think about the 401k business or even wealth management where you used to have to go into the office to transact business, or look at banks where you used to physically walk in for a transaction or to obtain money. Now you've got wire transfers and other kinds of digital currencies. There's an evolution that occurs, and certainly, there's going to be an evolution that occurs in our industry. What is coming back around is the role of the broker and how important that is because we are viewed as the trusted advisor, with a hold on the client relationship. Technologies realize that the way to the client is through the broker and our trusted advice and understanding of the client. At the end of the day, the reason why clients trust us is that we understand their company and unique needs.
We understand their needs, and we've solved their problems for years. To the extent where we’re able to get aligned with the technologies that we believe can help our clients have a better experience, lower cost or better risk management. We certainly want to be an advocate for those solutions. Over the next 10 years, you're going to see technology, relationships and trusted advisors working together hand in glove. If you look at the industry, you see brokers buying and starting technology companies. Holmes Murphy has certainly stood up and scaled many different technology companies over the last several years. The convergence is there. If you look at the Newfront and ABD merger, it's really the first time a technology company has acquired a broker to get that trusted advice. So, one was not known in the industry, while the other one was known as a trusted broker, and now those two things are coming together.”
Is there a consistent profile for the types of incoming new startups that BrokerTech Ventures is looking for?
“We're looking for broker centric technologies that the founders believe BrokerTech Ventures could be helpful by supporting intellectual capital access to clients, proof of concepts, relationships with carriers, financial capital, etc. Our five-tower BTV model supports this. When you look at an ideal profile, we're moving to our third cohort, so if you look at year one and year two, I think we've kind of hit it out of the park. The first year we had 50 applications with 60 proof of concepts, and the second year we had 100 applications with more than 100 proof of concepts.
Throughout the BTV process, all of them are being refined in a specific area where they're acknowledging they need a broker to move their capability forward. I think that they've been pleasantly surprised with our ability and our effectiveness to give them client access, distribution, intellectual capital relationships, introductions to carriers, financial capital, and all of a sudden, they're having a 10 times type return in a 12-week period. They're our greatest advocates and stewards for other technologists to know about the power of what our distribution and our collaboration can do for the insurance community.”