Placing You First Insurance Podcast by CRC Group
The Placing You First Podcast spans a diverse spectrum of insurance industry issues to keep you and your clients informed.
Placing You First Insurance Podcast by CRC Group
Embedded Insurance, Tech Partnerships and the Sharing Economy
The sharing economy is booming, and its growth isn’t expected to slow down any time soon. Listen in as SVP & Casualty Broker Andrea Ward and Apollo ibott President Chris Moore discuss where they’re seeing growth, some of the more widespread obstacles the sector faces, and what insureds can expect to encounter in the marketplace when putting their insurance programs together. They also dive into what kind of information or risk management elements insurers want to see when considering sharing economy business and provide insight for navigating today’s insurance landscape.
Visit REDYIndex.com for critical pricing analysis and a snapshot of the marketplace.
Do you want to take your career to the next level? Join #TeamCRC to get access to best-in-class tools, data, exclusive programs, and more! Send your resume to resumes@crcgroup.com today!
Hello everyone. Today, scott and I are joined by Andrea Ward, a Senior Vice President and Casualty Broker with our San Francisco office, as well as Chris Moore, president of iBot. This is the Placing you First podcast from CRC Group.
Scott Gordon:This podcast features news and insights from a vast knowledge base of over 5,100 associates.
Amanda Knight:Who write more than $35 billion in premium annually. Plus, we give you the latest information on what's happening at CRC this.
Chris Moore:This.
Amanda Knight:This is the Placing you First podcast and now the hosts of the podcast, Amanda Knight and Scott Gordon. Welcome to the podcast. It's good to have you with us today to talk about the sharing economy. Thanks for having us. Yes, thank you All right.
Scott Gordon:Well, I'm really interested in this topic because I feel like we see the sharing economy everywhere and it's constantly growing. According to Statista, in 2023, the total value of the global sharing economy was worth about $150 billion, but it's predicted to hit almost $800 billion by 2031, which that's just mind-boggling.
Andrea Ward:So where are you seeing the most growth in 2024? So, within the wholesale space, we're seeing a ton of growth within the car share space, as well as TNCs. Basically, the way I view the sharing economy space is anything that can be done via an app that connects people is something that's in this space. So a couple of examples would be dog walking. If you can trigger an app and have someone come walk your dog courtesy of that app, then that would be in the sharing economy space. Similar we've seen gym clothes sharing. We've basically seen anything in addition to the ones that you would think about, which would be the car sharing, the TNCs, as well as the food delivery.
Chris Moore:Yeah, I suppose. For me, I think of the sharing economy as the start of the evolution of businesses within tech. I don't really use the phrase sharing economy that often anymore. It tended to be the companies that dominated that space needed to to give themselves a tagline that got people to understand their business model, and their their business model was one of. I don't need to own assets and I don't need to necessarily employ every person that touches my product and service. I can create an ecosystem or a marketplace that just facilitates people to to have things when they want it, how they want it or whatever they want.
Chris Moore:So that's evolved from the big home sharing companies, the big ride sharing companies now to some of the most traditional businesses saying, well, if that works for them, that could work for me. So in some of the huge amounts of growth you might not even think of it as a tech company or a share in the economy company, but it's some of the huge amounts of growth. You might not even think of it as a tech company or a sharing economy company, but it's some of the biggest Fortune 500 companies saying maybe I can utilize an independent contracting network or maybe I can look at a subscription model where people don't buy my product, they lease it and they share it. So for me, the growth is the sharing economy is actually morphing slowly but surely into just the economy, and it's just a new way that people interact with brands that they love.
Scott Gordon:We know the sharing economy is booming, but it's still a fairly new business model in the grand scheme of things. So what are some of the more widespread obstacles that it's facing?
Chris Moore:It presents some unique challenges, certainly from the insurance side, and there's some challenges that we're starting to see evolve from a regulatory and a legal landscape perspective. Initially, some of the early sharing economy companies if we use that phrase probably operated with light touch regulation because they were small and those models became so popular. You know, ride sharing exploded, accommodation sharing exploded, and the regulators will probably be playing a bit of catch up to say, okay, this is now a huge part of the way that the citizens in my state or country, town, city, operate, get around, you know, travel, that we need to probably create something that's fit for purpose here, and I don't necessarily think they got that right at the start and unfortunately, some I don't still believe are right, even though we're 10 years on from the launch of that business model. And so we're seeing that change in legislative environment, and a lot of that can be linked to insurance. Right, if you don't own a vehicle or if you don't own a home. Right if, if you don't own a vehicle or if you don't own a home or if you don't employ a certain person, then all of a sudden, the insurance or the liability exposure is no longer a direct one, it becomes a contingent one. And what are you responsible for as an ecosystem, a platform, a marketplace in providing insurance for, and what do the people that utilize your product service have to be responsible for from an insurance perspective?
Chris Moore:So there's some of the challenges that we work with people like Andrew at CRC to create these solutions that provide not just coverage for the corporate entity which is the platform there that enables this product and service, but also creates insurance solutions to actually enable that business to create trust amongst the users of it.
Chris Moore:So nobody wants to go on their travels and stay in a home that they don't think is adequately covered. And if there's an issue that's all of a sudden going to hit your personal bank account, that's a really horrible situation. You'd never lean in and trust that model. You wouldn't get into a vehicle unless you knew the person had a valid driving license and they had insurance to protect them all these sort of things. So you're seeing regulators start to demand certain levels of insurance, but you're also seeing the businesses evolve saying it's such a strategic part of my business that I need insurance and that insurance is, whilst it's available today amongst certain markets, I wouldn't say it's an abundance of capacity within it, and I think a lot of that is probably from a misunderstanding of exactly how this new economy is trying to operate.
Andrea Ward:And exactly to that point, you know the legislators are trying to catch up, right exactly to what Chris said is they can't figure out exactly this should be structured. Different states have different rules with regards to this and so, to that point, to have a retailer and a wholesaler and a market partner, a carrier really know the nuances in this space and knowing that it's ever evolving and changing. But when we're allowed to work with Chris and his teammates, we're able to come up with solutions and there's a lot of discussions on how would this apply, how would this loss be triggered? This is contingent auto. Is it primary? Is it excess of state limits? It's constantly having those conversations amongst these members.
Andrea Ward:I mean, chris thinks of me as an extension of his marketing arm. I think of him as a constant resource. We have calls with insureds hey, what are you thinking of doing in the future If this doesn't work? How are we going to apply the insurance to your next steps? Or to what Chris said these companies are growing. They either didn't have the funding, they didn't have the thought process, they didn't have the business model, the towns and cities that they thought they were able to grow in non-starter. They either didn't want the exposure, or they weren't sure how to approach it from a legislative perspective.
Chris Moore:And what I actually love about that to add on to your point is how much we've seen the sophisticated and successful companies within this space really lean into that insurance side. Sophisticated and successful companies within this space really lean into that insurance side. They've realized that it's so strategic for me as a business to to buy a sustainable insurance program that is completely fit for purpose, like I said, to enable my business and to help me grow to, to help me be compliant, to help me do the right thing, that there is so much of a demand on our time, both on the on the broking side and the underlying side, which is, which, actually a joy because you learn so much and you get to really create innovative solutions. But when I was working in a previous life in more of a traditional market from an insurance perspective, I would be lucky if I see my client more than once a year for an hour conversation, and the conversation was very Check the box. I think you once knew what my insurance company would ask a couple of questions and then we'll say hello next year in 12 months time, ready for the renewal.
Chris Moore:This is an evolving process where we're very accustomed to speaking to our clients every week, every month and when a new topic comes up, we get on a call and it's not. This is how we need to solve this problem, it's right. What does everyone think? What's going to be the collective approach? Do we need to bring the regulator into the conversation? It's really being a lot more proactive than what insurance has been really guilty of, is being just super reactive.
Andrea Ward:And it's something for both Chris and I, which is why we've developed this friendship. It challenges us and it makes us think. So, to Chris's point, I was an underwriter as well. It was very much in the box Check the list, did they have lost funds, et cetera. You really have to take a risk, especially from Chris's perspective on some of these insureds and that they fully baked their ideas. And, to my point earlier, a lot of these insureds didn't make it a handful of years ago and the ones that are and are established are doing really well and really they're changing the forefront of what it means to be app-based and technology. And you know where the future is going. Most kids in their 20s and 30s don't want to own a house, they don't want to own a car, but they want it available at their fingertips. And that's the difference between, you know, my generation and Chris's, and certainly our parents and then the kids that are coming after us.
Amanda Knight:Well, and you know, as a sort of a follow-up, you talked about how important it is that you stay connected, that you have a plan in place, that we aren't just checking boxes. With that in mind, I imagine that comes in handy, especially, or is vitally important, when you think about the kind of obstacles that they're coming to when it's time to put that insurance program together. It's time to put that insurance program together. It's time to think about renewal. What kinds of obstacles are out there?
Andrea Ward:right now. Well, I was just thinking from a retail, wholesale view or vantage point. It's absolutely the market. There are a finite amount of insurance companies, apollo being one of our biggest partners, just within this space.
Andrea Ward:There's not a lot of people who hey back to our point understand what the coverage is, know how to underwrite it, know how to price for it, know how to have engaging conversation with insureds.
Andrea Ward:That let the insureds know that we really know what we're talking about, and to bring an underwriter to the table for them to hear from Chris's you know senior underwriters as well as himself, as well as his actuary people to literally give confidence to these insureds, because on the onset, we're not talking about $5,000 policies here. The very first thing I say to people is how are you different from some of the larger you know insureds in your space as well as? Can you afford these minimums? Because we're starting at a level, because the risk is inherently there, and so for Chris's team to go on, the risk it's the cost of capital. How much is it going to cost for him to underwrite it and put terms in front of an insured? But there's a very finite space within domestic as well as European carriers that will contemplate these type of insureds, and that's a major struggle for us.
Chris Moore:I would say that when we look at a new opportunity within this space, we have to really assess where they are in their own evolution and we have to tailor our output, our product, to what they're trying to achieve. So you may have a new startup, a new entrant, or it was just one of the big guys that we talk about and we see and everyone knows the names, but in their early stages it was about establishing the business model, proving the concept worked, and in that phase it was about I need to find a carrier that can grow with me, that is going to allow me real volume, is going to allow me to be maybe a little bit more lenient on who I allow on my platform, someone that's going to allow me to take on some real heavy risk exposures but know over time that we can work on rating and get to a state that we're all happy. That's a difficult process to go through, but there's absolutely companies that we insure in that process today and when we're insuring them, we're almost providing an element of consultancy as well as giving an insurance product. We tell them that this is what best in class looks like. This is what a typical company within your space buys from a limit perspective or has as a retention, and these are the key coverages, and so we go through that consultancy process.
Chris Moore:Then you see this evolution where somebody grows and then they've already proved the concept no-transcript shifts somewhat to say right, let's look at the data you have, let's look at your claims data, your exposure data. Where are the really tough areas of your exposure and can we focus our efforts in controlling that element of the risk or restructuring that or even eliminating that part from your business, because that's really inhibiting. You forget that profitability. Then the relationship between the insurer, the broker and their client is one of real strategic value. You're always sharing opinions to, like I say, optimize exactly what that looks like and ultimately make a safer, more sustainable operation.
Chris Moore:But it's an evolution. You don't get there from day one and that's why I think the relationship is so interesting and there's barriers for both sides about how much can I control it and how much can I optimize this, versus if you're in a real startup mode. Some of the minimum premiums or some of the limits and retentions can be really, really expensive when you're running a really really lean business. But that's some of the fun you really never know what new opportunity is going to hit your desk in this space from one day to the other?
Andrea Ward:And from an insured perspective, they have to have the insurance in place to launch the business right. So as you grow over time, obviously the Chris's and whoever else in the world are willing to work with it. But really the concept has to be vetted out in the marketplace for it to reach a point where those minimums don't seem. It's going to be expensive. But as you work to develop these relationships with the carrier and brokers then as time goes on it'll be a more palatable purchase. But in the beginning, absolutely, insurance is people's biggest spend, so you have to find a partner that's going to work with you on that.
Scott Gordon:Well, and this next question might be a little redundant. I know we touched on this earlier, but maybe we could take a little deeper dive into what kind of information or risk management elements do insurers want when considering sharing economy business?
Chris Moore:So some of the information is about what does. How do I protect my business? Right? So as insurers, we get completely focused and obsessed with risk transfer? Obviously we do, because that's where our premium comes from. Our premium is really what we're charging for our product. But risk management is much more than just risk transfer. There's risk control, there's risk avoidance and there's risk acceptance. So a lot of the information is right.
Chris Moore:Okay, let's start with that risk avoidance, because if I can avoid risk altogether, that's got to be a great thing. All right, what are the ways you can see to avoid risks? And then it's about what are the best fraud controls in the market? What are the best background check and screening so I can get these bad actors and awful drivers and people who aren't who they say they are, off my platform? Can I get telematics to make sure that people are, you know if it's an auto-based exposure? Can I make sure that I can give coaching and training and make sure that I'm eliminating people before they have an accident rather than only eliminating them after the fact? So there's all that sort of risk avoidant risk control. And then, with the risk transfer, we're obviously telling them about insurance and how we're rating it. We'll be very transparent with our actuarial assumptions and then they can utilize that information to help record the right information internally, to present that to me so that we can try and get to the most accurate possible number that works for all parties.
Chris Moore:But there's also this piece of risk acceptance, which is a lot of these platforms have historically, because there's not been ample amount of insurance capacity available, decided to retain large elements of risk. Now that can be a great strategy if done well, but it can also be a really, really difficult one if not done so well. And we've seen some of the big ride-sharing companies build humongous captives and you cannot go a quarterly earnings with a CFO talking about what's happening with their reserves and if there's been deterioration in back years reserving and how that impacts you. And obviously a lot of companies have said, hey, I don't want to expose my CFO to be talking about insurance every single quarter. I'd like to focus on some other things and it's a real drain on my valuation and how the market views me. So having a really clear strategy and working with a broker that can give you real great consultancy on this is an element of risk that we think is perfect for a captive because it's super stable business. We think we can actuarially model it very accurately and you shouldn't face that deterioration in reserves in future years versus.
Chris Moore:This is a super volatile layer. There's a lot of uncertainty here. Yes, it sounds like an expensive third part. You know, outside purchase from an insurer, but at the same time, accepting that into a captive and hoping that it runs to a pick that is quite subjective is also comes with a different form of risk. But I promise you it is very risky, so that a lot of that information is about more than just what my insurance product is made up of. It's okay. Well, how do I control risk If I am retaining risk? Can you help me look, make an assessment of what that looks like? And yes, I'm going to buy risk for you. But if I do, I really want to understand how you get to the numbers and how you structure the coverage et cetera, because it's a super important purchase for me.
Scott Gordon:You just mentioned the importance of relationships, so how does partnering with a CRC group producer make sense for retail agents with sharing economy clients?
Chris Moore:For me, a partnership with CRC makes a ton of sense if you're entering this business, right, and you want true industry experts across different coverage lines, right. So andrew and I talk about general liability and auto liability and excess umbrella insurance weekly, right? But there are, within that network of the crc group, you can look at cyber and you can look at dno and certain professional coverages and and you can get access to some of the captive management, all that sort of thing. So there's a huge, wide array of resource. Crc employ real specialists in all those areas and that specialism is is so important I it's unrealistic to think that any retailer can build that amount of specialism within every single different line of business. I think that's's okay.
Chris Moore:The way that this works is you know everyone calls it the sharing economy.
Chris Moore:You know we're sharing experience across this and CRC bring a ton of it, and what I think they do a great job of is they find carriers that also share in that really strong specialism, and so it's not about finding capacity that is going to write this at the lowest possible price when they don't really have the experience to deliver a product that's so meaningful.
Chris Moore:They try to find people and say, look, I'm going to present you with multiple options, but I'm going to find true specialists because, ultimately, if you're a platform that is built on trust, the worst thing that I can possibly give to you is an insurance policy that doesn't deliver on that promise and breaks that trust. Well, that's one way that you'll definitely not make it as a business. If your users are not having this first class claims experience, then it's very tough to think that you'll operate for a long, long time. So I think that's what they bring is that specialism. They work tirelessly for their clients, and just the amount of experience they've had in this space already just shows why so many clients choose to work with them.
Andrea Ward:Thank you, chris. We appreciate that. But just to Chris's point, we absolutely have specialists in each area, so I am not trying to be everything to everyone. I focus on the auto, I focus on the GL, I focus on the access. We have different people for cyber across the board, and that's something that CRC brings to the table. Right, I'm not trying to play in a sport that I don't know how to play. We are absolutely utilizing the resources of CRC and we work so well as a team. We're not out to get each other. We're out to work with Chris, in conjunction with the retailers. And again, when retailers come to us unless this is really their space we understand that we're going to have to educate them and explain a lot of things, and absolutely that is our joy to do, because we want long-term partners with the retailers. We want long-term partners with Chris and his team, and just even Chris and I being on this call today. It shows you the depth of relationship we have.
Scott Gordon:We always talk about CRC's deep bench on this podcast and I think of it as the Venn diagram, where all the different circles overlap and CRC has all the circles. So it's nice to have that communication and cross pollination, I guess. But we're done with the insurance part of our show. Thank you so much, guys, but before you go, we'd like to do a little something that Amanda and I like to call rapid fire. So we're going to ask questions and you just give us the first thing off the top of your head, and it's just to get to know you, round Robin. First question what is the best advice you ever received and I'll add a little postscript to that and who did it come from? That's what I want to know.
Chris Moore:One of my insurance mentors always said you have to be brave. You can be educated, you have to be brave. The best possible risk on paper can still go wrong, and that's fine, and also the worst possible risk can run loss-free and generate huge amounts of profit. But ultimately you just got to be brave and stick by the underwriting decision and why you made it, and it's served me pretty well, I think.
Andrea Ward:So I was an underwriter for years and this definitely didn't come from the underwriting side. It came from, I don't know, at some point becoming a wholesaler. Someone said to me don't ask for permission, ask for forgiveness. After the fact and I think that's kind of perfect for being a wholesaler, especially in this space, even if it's the middle of the night, I have a gut feeling of what Chris is going to say and what he's not going to say, and what he's going to approve and what he's not going to approve. So I tend to lob it out there, as this is what I'm pretty sure is going to happen and I'll have the conversation tomorrow. So no, I mean and I don't know who that came from, but it's kind of been a decent rule of thumb for me to live by, because I have an underwriting background I feel like I have a pretty strong feeling of what people will approve and what they won't, and I'm certainly not doing anything particularly crazy.
Chris Moore:And the way you operate often reminds me of one of those, one of the Nike's sort of original sort of philosophies or one of their pillars, and it says there's no such thing as a perfect process, but there is such thing as a perfect outcome. And I always think with you, like you're always striving to get like an absolutely perfect outcome. It might be absolutely convoluted and we're doing calls, calls at 1am, where you've come up with some wacky idea to how to get this deal done. By the end of the day, you get the deal done. Nobody remembers the process. Everyone remembers well, we've just done an amazing deal for our client.
Andrea Ward:And in the process keeping that high moral confidence, moral bar right, very very important.
Scott Gordon:Next question is not nearly as profound, but what if you had to eat one meal for the rest of your life? What would it be?
Andrea Ward:this is easy for me chips and salsa. Yeah, chips and salsa. Without a margarita on the side would be great, but chips and salsa oh, I'd be the size of a house, but, um, I hate.
Chris Moore:Everyone asks me what my death row meal and I always want to say something like amazing, like refined, or something that shows off my palate and how cultured I am. I, I just love a burger. I don't think you could. If you have a good burger, then I just think it hands down.
Scott Gordon:That's for me yeah, who you trying to impress on your last day on.
Chris Moore:Yeah, no, that's it.
Andrea Ward:I just just get me a burger, come on chips and salsa is about as basic, so at least we're not talking steak, okay.
Scott Gordon:Now, what's the best TV show or movie you've seen recently? Or, if you're not a movie or TV person, the best book you've read.
Andrea Ward:I'm sure I've read a book, but I haven't watched TV in a long time because, like Chris, we have between the two of us we have five kids under the age of what? Eight? There's not a lot, I would say. I would say I've watched a lot of blippy and bluey recently bluey right, uh, blippy and bluey, but uh, unfortunately I don't get, I don't get a lot of chance to do uh, much of the other two I'm not ashamed to say that I did cry in the new episode of bluey it is.
Chris Moore:if you haven't watched it, it will get you. I promise you it will get you. The new episode is when they move houses is tough, it's a tough one.
Andrea Ward:See, this is why we're so perfectly aligned.
Chris Moore:I wouldn't say it was my favorite thing to watch. The Gentleman on Netflix is very good if you want to watch something. It does not reflect British culture, culture in any way, shape or form. I could probably see that, but it is very good.
Andrea Ward:That was um a lot of binge watching if I have to give a big girl answer, it'd be griselda with uh sofia vagaro. She was scary as anything in that, and that's about as much binge watching as I do that, or Indian matchmaker.
Scott Gordon:Andrea and Chris, thank you so much for being here. Thank you.
Chris Moore:Thank you so much.
Scott Gordon:Providing current insights into the marketplace is just one more way CRC Group is placing you first. Don't forget to subscribe and share.
