How is Insurance Going to Change in 2025?
EPISODE 32: AGENT INSIDER PODCAST
Dan joins Andy Jewell, Farmers Insurance Agent in Lynden, WA & Host of the Agent Insider Podcast. They address some of the biggest questions and worries facing the insurance industry in 2025.
In This Episode:
What is changing in the insurance industry in 2025
Self Driving Vehicles- Who is liable?
Insurance & AI what does it mean for the insured
Fires and Premium Increases
Will we see a decrease in Premium?
Podcast Episode Transcription
Intro:
Andy Jewell:
Hi. Welcome back to Agent Insider. I'm your host, Andy Jewell. Today we have our guest, Dan from Manna Insurance. Dan, thanks for taking some time out of your busy schedule to join us to just chat about insurance and business.
Dan Vander Kooi:
Yeah. You bet, Andy. I'm glad to be here.
Andy Jewell:
Yeah. So one of the things I wanted to have you come on and talk with us about... Because we talk about insurance a lot, talk about coverages, we talk about different industries. But a lot of times I get people that have a lot of misconceptions about insurance. When I'm sitting down with them and I'm talking about insurance, it's almost like they don't necessarily believe me. They're like, "You're a sales guy. You're trying to sell me something." So I thought maybe it would be a good spot to start. What is it... And this isn't us creating some sort of union behind the scenes of insurance guys. But what are some of the misconceptions you see oftentimes when you're dealing with customers when it comes to insurance that people just don't quite get it?
Dan Vander Kooi:
Yeah, I think a lot of times, typically on our end of things, as a broker and with you too, we're there to help the client. We're there to represent them and help them understand what the coverages mean, what they might be missing out on. And so, when we bring things up, it's not always like, "Hey, we're trying to get you to buy this extra coverage," or things like that.
I mean, I had one the other day, something happened, a tree fell on someone's car, and it was one of those deals where, "Hey, it's an extra $5 a month to have rental car coverage," or something like that. And sure enough, their vehicle's gone, they don't have an extra vehicle because the husband has it, and they're stuck. And they didn't want to buy the rental car coverage, and so it's a hard conversation to have and just say, "Hey, these were the notes that we have in the file. This is what was said."
And that's why we bring it up. Because in that situation, it's our job to think of all those situations and make sure they're protected. I always tell people, "We don't need to know what's in your bank account, but we got to have an idea where your net worth is, what your assets are like, because our job to help protect those in case there's a lawsuit filed against you from an accident or something like that." And so I feel like a lot of times, the misconception is, "Oh, they're just out to get you to sell you something. It's something that I always have to pay for and I never use." How many times have we heard that line, right?
Andy Jewell:
Oh, all the time. They're like, "This is such... Insurance is a ripoff. It's a scam."
Dan Vander Kooi:
Until you need it. And I think I've had two or three house fires in my career, and when you're sitting there and the fire department's there and they're putting it out and they've lost everything, it becomes very real to you. I went through and... Before I got insurance, I was in a car accident in 2009. I was still a youth pastor at the time. And I got sued from it, and that lawsuit carried on for seven years because there was a minor involved. And they finally settled at the policy limits. But it was one of those deals where I went to bed every night, I was like, "They going to come after my house? They going to come after... What are they going to come after?" And so, until you actually need it and use it, it's one of those deals. Yeah, I can understand where they're coming from in that.
Andy Jewell:
Yeah, I think that is a misconception that people have a lot is they think it's just a ripoff. And I will say this, just to be kind of, I don't know, fair, edgy. It is a ripoff If you never have a claim. If you think about it, if I pay into insurance my entire life and I never have something happen, it was a waste of money. I got nothing out of return.
Dan Vander Kooi:
I wish I could self insure. Right?
Andy Jewell:
Right. At that point, you're like, "I should have just kept it." But kind of like what you just described, you had a car accident, you were at fault. It was weighed on you probably for that whole seven years.
Dan Vander Kooi:
Oh, it was brutal. It was real because at that time, we were renting a house from my in-laws. We had remodeled it. And then we were going to basically, after the remodel, we were going to buy it from them. And we were like, "Well, we don't want to show any assets yet." So we waited to do that until all that got tied up. But yeah, you kind of just live in limbo a little bit. And you don't know what, are they going to come and my wages? Are they... And you can sit here and you can sit across from someone and you can talk about all the worst case scenarios too. And there's got to be a middle ground on some of that. And it also depends on people's risk tolerance, what they're comfortable doing and what they want to spend money on.
Andy Jewell:
Right. It is risk tolerance, because insurance at its definition is a transfer of risk. I had a customer that had something similar. They were turning left, and I think I've told this story before, but they were turning left in downtown Bellingham. It was in the fall, this time of a year, the sun's low in the sky, and the sun was in her eyes as she turned and she hit an old lady in a crosswalk. Thankfully, the lady did not die. But she was injured, had a broken hip, spent time in the hospital, time in rehab. When that customer called me, she was a friend of mine, and she called me, she didn't ask me, "Hey, how much am I paying per month for my auto insurance?"
She said, "Am I going to lose our farm?" Right? Because that's the real concern, the peace of mind that you're buying, the risk that you're transferring from herself, of having to figure this out, hire a lawyer, pay for the claim. She instead transfers that to the insurance company. And obviously there's a cost to it. And so, the more risk you transfer, the more expensive it is, but the more peace of mind you have. And I think people forget that. They think we're selling them something. Really, we're just transferring risk and giving you peace of mind.
Dan Vander Kooi:
Yeah, it was interesting. I was at the Big Eye conference down in Bothell, gosh, late August, early September, and they had a bunch of CEOs of some of the top carriers in the state, and they were going through lawsuits. And it was interesting, there was a couple, both the people running for the insurance commissioner at the time spoke at the event. And there's just a lot of conversations around that and change because we've had Kridler for so long in that department, that there's going to be change one way or another.
And what the CEOs were saying, they said over 40% of the lawsuits in the state of Washington are actually financed by premium finance companies now, not insurance premium financing, but attorneys. So what happens is they come in, and you get an ambulance chaser attorney, or you get something like that, and they will come in and basically fund a certain amount of the payout upfront for that client who is hit. They'll take 30%. Once it settles, the attorney takes 30%, and then the client walks away with 40%.
And part of me just sits there and says, "Man, if there was actually trust between that client and their agent, and realizing the agent is actually an advocate for the client and will walk them through this, and get what they deserve, and help them in that claims process." And then if you get to the end of it and you're like, "I'm still coming up short on these bills and things like that," then maybe consult an attorney. But instead of just going to the attorney right away, you're losing so much money up front.
And I think that's where, even our industry's gone, there's been such a lack of trust. And I think you see that because people in a lot of these bigger shops and these private equity firms, shops that have been bought and things like that, people just become a number. And I think that's the cool thing about us being a brokerage, you being the farmers guy here, and just the awesome relationship that we've had and the friendship we've been able to build of sending business back and forth.
If it doesn't fit in what we're doing or we feel like someone's paying too much within ours, "Hey, go talk to Andy," or, "Hey, come talk to Dan and his team." And so that's where having that local agent that still knows you, runs into you at school, or church, or Bender Fields, or whatever it might be, there's a lot of, I think, wisdom in having that person opposed to just going online. Over 70%, 70, 80% of people still shop online for insurance, but it's something like around 60, 65% say they still want someone to be able to pick up the phone and call and say, "What do I do?"
Andy Jewell:
Yeah, yeah. No, that's a really good point. Because I think oftentimes people are looking for the cheapest, right? That's what you think when I talk to someone about insurance, like, "What is your goal here? What are you wanting to accomplish?" And they're just like, "Well, I want to save money."
Dan Vander Kooi:
15% in 15 minutes from the Geico.
Andy Jewell:
Right, exactly. Geico has spent a lot of money preaching that, right?
Dan Vander Kooi:
Well, it's like $2 to $3 billion a year they spend on advertising.
Andy Jewell:
They spend more money... It's funny, because they're like, "We cut out the middle man. What happened to the middle man?" It's like, well, you just paid the TV. The middle man is the TV. But they spend a lot of money to just pound price. And they're not the only ones. There's a lot of companies out there that are just talking about price savings. And there's value to like, "Hey, you got to make a budget." I get that.
But to your point, when something goes wrong, who are you going to talk to? Are you dealing with a call center that, "Say whatever I have to say to get you off the phone because I'm never going to have to talk to you again. I don't see you at Safeway when I'm shopping." You're in the community. I'm in the community. Small business owners that are in the community and are part of the community care about reputation. We care about doing the right things for the right reasons. And so, I think that it matters when something goes wrong.
And again, it's just kind of the same concept. If nothing ever happens, sure, it doesn't matter. But eventually, you're going to have a major insurance incident. And when you do, being able to call an agent to walk through that process night and day versus an 800 number, who now you do have to hire a lawyer, because you don't know how to navigate that claims process, and then you do lose a lot of money. Because I tell my customers the same thing.
I'm like, "If you feel, at the end of the day, after the dust settles, and you get offered a settlement, if you feel like we're cutting you out by more than 10%," because I mean, there's always going to be a disagreeance. I'm always going to want more than what I'm getting.
Dan Vander Kooi:
There's that, as a client, and I've been through it too, there's that emotional attachment to something, whether it's a house, a vehicle, something. You're like, "I deserve a little more than this." Right?
Andy Jewell:
So if I have that... If I'm within 10%, I'm probably not going to get anything more by hiring a lawyer, because they're going to take 30 at least. So if you feel like someone's low balling you, you're getting half of what you should get, then absolutely hire a lawyer. And there's some companies that, unfortunately, you will have to hire a lawyer because their whole goal is to not pay.
Dan Vander Kooi:
I can think of two or three right off the top of my head.
Andy Jewell:
We won't name them for obvious reasons. And typically, most of them are companies that you're not dealing with local agents.
Dan Vander Kooi:
Exactly. No, it's a lot of online stuff.
Andy Jewell:
Because they don't care. They don't care about your community, they don't care about you. They're trying to make money. And to some degree, you get what you pay for. If the only thing you're concerned about is the cheapest insurance possible, don't be surprised when you have a claim that you have problems.
Dan Vander Kooi:
And I think too, the other thing is when you make decisions... It's interesting. I have three kids, and they're all getting older, and they can watch themselves now if we go out for dinner or something like that, my wife and I. But when you're younger, you're pretty selective, especially with that first kid. You're like, "Who's watching my kid?" I still remember walking into church, "Did you put hand sanitizer on?" By the third, by Blake, we're just like, "Ah, whatever. You hold the kid."
But you're really selective in who watches your kids, right? Because that's your responsibility, that's your pride and joy. And I think it should be that way in the relationships that we have with the vendors that we use on the personal side. So my grandpa always said to me, he was in business for a long time, he owned a Carquest store in Illinois. And when I first got into business, he said, "Daniel, you have three things that are critical," he goes, "in your life."
He goes, "And this isn't just in business, but this is just all around." He said, "Number one, you got to have a really good attorney." He goes, "Number two, you need to have a good accountant. And number three, you surround yourself with people with extremely high integrity that will have your back." And also he goes, "And here's another kicker, find people that are smarter than you, and don't be threatened by them." And I feel like that has gone a long way just in life.
And so, I take that now and I say, "Okay, who's the person that I want to have a relationship with?" So who's the person that I'm going to buy vehicles from? Who's the person that's going to do my contracting work? All of those things down the road, and I want to work with people that I can look in the eye and shake their hand, and to me, their word and their handshake still means something. And even if something goes wrong, we're going to make it right. And you just don't get that as much anymore.
Andy Jewell:
No, you don't. You get a lot of blame shifting and finger pointing. I think that's a really valid thing to think about in general. Your word is your bond, and you do something because you said you would. There is an older agent that I know, he's not in this state, but he said, "When we make a promise, we follow through on it." And he said, "I had to have a really hard conversation with my wife one day."
He said, "Because somebody called in and they'd asked about coverage on a renter's insurance policy, and my staff person shot me a Google chat, or whatever, and I, off the cuff, replied. And so they told the customer this was how it would work." And as you would, lo and behold, something happens, there's a claim, and that's not how the policy was written. He said, "But I had told them that was." He said, "So I wrote him a check for $20,000 because that was the right thing to do because I told him it was covered and it wasn't. That's on me."
Dan Vander Kooi:
And, "Honey, we're not taking the kids on vacation this year."
Andy Jewell:
Yeah. "We're canceling some plans this year." And that's difficult. I had something similar happen. It wasn't to that tune. But we had a bond that we were trying to do for somebody on a performance bond for a contractor. And I was like, "We'll get this for you by this day. No problem." Well, it turned out that it was a problem because the bond form that the city was requiring, nobody wanted to give us the bond. And I called everybody. And this was fairly early on.
And so at the end of the day, I posted the bond for the customer. I was like, "We will get this bond posted for you because it's the right thing to do." If you give your word, you got to follow through. And I think that that's really important in general.
And I think that's something that people... I guess when we talk about misconceptions, I think that's something people feel like insurance agents are all slimy. We're all used car salesmen, and not all used car salesmen are slimy either, but that's what we get. And they forget that you can trust... If you build a trusted relationship with somebody, they will save you money and help you through a claims process better than anybody else can.
Dan Vander Kooi:
And educate you on what's going on in the marketplace.
Andy Jewell:
Yeah.
Dan Vander Kooi:
Because right now, I mean, I got someone in my office who's been in insurance for 39 years. She's never seen anything like the market that we're in. And it's interesting too, on the brokerage side. I don't know about on the captive side. But I'm just seeing so many people that are getting closer to retirement age. They're like, "I'm out. I'll just sell it for the top dollar to private equity." Well, then all of a sudden, you go there, the culture changes in the office, how they're going to interact with people. It all becomes about mitigating and minimizing your E&O exposure.
And so we're not going to call clients when it downloads in the system for a late payment because, or they're pending cancel for non-pay, because E&O insurance says if we do that, we have to do that with everyone. I'm just like, "Can't we just set up at least an automation so it syncs, so it pings them with a text message or something, just to remind them because it's the right thing to do?" How many times have we had probably where it gets tied to a debit or a credit card, and the card expires, and you're going through, "Okay, what automatic payments did I have set up on that card?"
Andy Jewell:
That's the bad part about automatic, right?
Dan Vander Kooi:
Yeah. And so most of the time, it's something like that, where it's just simple and we want to help them. But then there's all these restrictions put on agencies by our insurance. And so, where's that balance between the right thing? And when you go to the big corporate firms, they're just going to be... You're just going to be, "No, this is how it's done because we're covering our backside from the legal side of things." And so, I don't know, it's interesting. I love the industry because I feel like you get to really try to serve people well in something that feels like a different language sometimes. And it's an opportunity to also help in a time of need for people, in a time of crisis too.
Andy Jewell:
Yeah, I think you're definitely providing a huge service. You don't need insurance until something goes wrong. So there's always... Anytime that someone calls us to use their insurance, it's something bad. You either have a major fire, you have a car accident, you have a lawsuit, you have somebody died, right? Something bad happened. So it's never... That's the hard... I think that's one of the hard things about insurance is it's not a feel good thing.
I was talking to a realtor and they're like, "I love helping people into their first home." I'm like, "That's so awesome. You get to experience something that's fun." I saved you some money, or I got you some better coverage. And then, that's not super exciting. And then, when something bad happens, I feel like that's when we shine. We rebuild your house that burned down. We wrote a check for $1 million after a guy passed away to take care of his family. Those sort of things, you feel rewarding, but it was a crappy day.
You mentioned something I wanted to circle back to you. You mentioned something that you're seeing happen now. Because this last year to two years has been unprecedented, but it really has in the insurance industry. There's been a lot of changes for underwriting guidelines, for what companies are willing to do, for pricing, everything. Carriers are shrinking their footprint. Typically, everyone wants business. This last year, nobody wanted business.
But you mentioned that you're seeing people who've been in the business for a long time getting out of the business. And that was one of the other things I wanted to ask you about is, what kind of trends do you see in the insurance industry that have become like, "Hey, we're seeing this happening, and we're seeing this moving forward as being a bigger issue."
Dan Vander Kooi:
Yeah, I think one of the things that makes me a little nervous, I see it on the independent broker side. I also see it in the carrier side, is just a ton of consolidation. And so, when you start to consolidate and these insurance carriers start buying up these smaller regional ones, it's supply and demand. And so, it's really interesting. I was listening to a podcast too, and they were talking about the banking industry, and it's very similar right now. But all these insurance carriers are starting to buy out these smaller ones. These smaller ones have to have a certain amount of capital and liquidity on hand for their financial ratings. And these regionals are just getting hit by claims, and the inflation is just crushing them.
So I mean, shoot, back when I was in high school, late '90s, I graduated '01, a buddy's bumper got hit, or backed into a tree or a light pole, or something like that. You could go to the junkyard, pick up a bumper for $500, $700, put it on with your buddies. It was easy. My wife got hit, I don't know, a year ago, and we got a newer Suburban, and there's like five sensors in the bumper, there's a camera, there's all this, and it was $6,000 to replace the bumper, and then it was another four months that we were in a rental car at $100 a day for another Suburban because there was a labor shortage and they have the bumpers in stock.
So all of a sudden, something that 20 years ago costs $700 bucks maybe to $1,000 is costing just around probably, I don't know, $8-9,000 after you put rental car and stuff in there. So the inflation is just hitting it because they collected all this, the actuaries always run a couple years behind. And so, as they set rates for policies, they're playing catch up now. And from pre-COVID to now, and labor shortage, and parts being more expensive, and manufacturing being more expensive, everything that plays into that, they didn't collect the proper amount of premium at that time to catch up with the inflation that we've had. And so you just start to see them paying out more and more.
And so, all of a sudden, if you're like, "Hey, I want to switch companies," and there's fewer companies to switch to, you get locked into that and it makes it more difficult. And then I think the other piece of that too is all the independent brokers. And you can probably speak more to the captive side a little bit. But our side, what we're seeing is that, I mean, we had 1, 2, 3, four to five brokers in Whatcom County in the last three years have sold, and some long-term, legacy, multi-generational, family-owned ones. And we got people walking in our door saying, "I walked into the other place and I asked for an ID card, and the person there said they couldn't help me, but that their person who's working from home will try to get a hold of them later today."
And people calling, leaving voicemails not getting a call back. And it's crazy. Just people don't show up anymore. And I feel like that's our job. And so that's where it seems like the market's trending that way, where there's fewer and fewer community driven, focused, owned agencies, whether it's on the captive or our side. And to me, it comes down to serving people well. And so, I don't feel like that big side of things is going to do that, because I feel like when you go that route, even though there's good people that work there, there's certain things that they put in place for protocols and operating procedures that they're just not going to do certain things anymore.
Andy Jewell:
Right. No, it is difficult. And we do see that in general. There's a shrinking of footprints. There's a consolidation on the big companies, like you said, because there's something about economy of scale. And so, if the big company goes, "Hey, we could take over the small company, and we can make it more efficient, and we can do it cheaper because we're buying in bulk, we're doing this right?" And then you see the brokerages and independents too, or the captive agencies, there's not as many as there used to be.
And that is because it's more cost-effective. If I'm getting out of the business, more cost-effective for me to sell to somebody who's already in the business than if I'm trying to bring somebody in to take over. I can get more money out of it. And I tell people, when the big corporates buy a small brokerage, they do leave everything the same relatively at first.
Dan Vander Kooi:
Two years.
Andy Jewell:
Yeah. For a couple of years.
Dan Vander Kooi:
And then you see massive changes. It's like, to the day.
Andy Jewell:
Because they have to let everyone ruminate. But they're not going to leave everything the same indefinitely. They're not going to pay as much as they pay for a book of business and then not build in some cost savings long term. So it's like you said, there's great people that still work in those places, but the reality is the companies that bought them have to show a return on that investment, so they have to cut cost.
Dan Vander Kooi:
Yeah. And they're beholding to their stock price or their investors. There is one recently we picked up probably close to 15 accounts on our group medical book because they were under 20 lives on the account, and so it didn't create enough revenue for that firm that purchased them. So we're in Whatcom County, most of these clients, Whatcom, Skagit County, and they ended up at a call center in Florida. We had another one on small business stuff. They ended up in a call center down in Arizona. At least Arizona, the time change isn't as big. But a three hour... You're dealing with someone on the East Coast constantly as your agent, that's difficult.
Andy Jewell:
Yeah. Noon, 1:00, and that's the end of the day for them. Yeah.
Dan Vander Kooi:
So you see that, and so you just get pushed to call centers. And personal lines, you're seeing the same thing too. We had someone come in the other day, they said, "Hey, I had a question or I needed to add a vehicle." And they were through Safeco, who we have too. They came and signed all the policies over to us because the current agent said, "Oh, you need to call Safeco directly to do that," because they're on a deal with them and there's a whole E&O thing there, and so they send all that business to there so they don't have to service it in-house because of the efficiency factor. And so it's like someone walks into you and wants to add a vehicle, it's a pretty simple thing. "What's your VIN number? And here we go."
Andy Jewell:
Yeah, it's not complicated.
Dan Vander Kooi:
No.
Andy Jewell:
Yeah. That's interesting. So you are seeing that side of it. You mentioned something else though, that I think is a trend that people don't always think about. You were talking about your wife's bumper and all the sensors. We had a customer that they have a moon roof, and it was like a Ford. It wasn't like, this isn't like a Mercedes, or a Lexus, or a Jaguar, nothing like that. It was just like a Ford, I forget what it was. And they have a moon roof.
They got a rock chip on it because of the way the glass melds with the windshield. They had to replace the moon roof and the windshield. It was a $10,000 glass repair. And the customer was frustrated. They're like, "Why is this taking so long?" I was like, "Well, because normally when they write checks for glass, we're talking $1,000, $2,000. This is $10,000." People don't realize how expensive all of this technology is. Because a lot of the moon roofs have auto dim and things like that. And then, by the time you get the parts replaced, all the calibrations done, there's a huge expense to all of those things.
Dan Vander Kooi:
It's technology.
Andy Jewell:
Yeah, it's crazy.
Dan Vander Kooi:
Yes, you have an engine, but it's a bunch of computers in your car.
Andy Jewell:
Yeah.
Dan Vander Kooi:
That's what it is.
Andy Jewell:
Yeah. You're buying a smart car now.
Dan Vander Kooi:
Whether it's a Tesla or not.
Andy Jewell:
Right.
Dan Vander Kooi:
Which is a whole nother thing because there's more and more companies that don't want to insure Teslas because something little, this big, happens to it, and they're totaled. And same thing with Kias and Hyundais. If they're a certain year, because the theft on them is through the roof, and if you live in King County, good luck insuring a Kia or a Hyundai. So just all those types of things that play into it, right? Because it is. It's technology in the vehicle that's driving the price of it.
Andy Jewell:
Yep. All of the things that you love about your new car, which are great, but all of those sensors, all of that, it all costs something. And whenever there's a repair done now... And you think about the safety factors, the lane assist, so it beeps at you when you're crossing the fog line, and it'll steer you back, it'll auto-stop you, not only is that a concern for all your calibrations, but the liability standpoint of the insurance company, if we do a repair and that's not done right, and then there's an accident, and that didn't work the way it was supposed to work, now we're getting sued too. So you got to pay to have it done right, and that drives up the cost. So the trends are definitely just skyrocketing.
Dan Vander Kooi:
Well, it's crazy, but think about where you're going. They're saying that there's going to be Ubers in 2025 now that are driving people around without a person in the vehicle. Who's liable for that, right? Steve Jostens, who owns Hinton's over here, was telling me in the new Silverado, you can just press the button, it'll drive you home from Ellensburg. Go. I mean, it's not just in the Teslas or the electric, the EV vehicles now. It's in a lot of the other vehicles now too, the stuff coming out. So yeah, and like you said, the calibration, if you go into a mechanic and they do something wrong and they don't calibrate it right, then all of a sudden, we're talking about everyone's insurance is involved on that claim.
Andy Jewell:
Yeah, there's a lot of... And there's a lot of penalties and whatnot.
Dan Vander Kooi:
Yeah.
Andy Jewell:
Yeah. It's a challenging industry. Because I always tell people, as things change, insurance, we build homes, we pay for cars to be repaired, we pay medical bills. Basically that's what we do. So as you see things change in those industries, that has a direct impact on the insurance, and how it's going to work, and how much it's going to cost, which I think is another thing. What do you think... We talked briefly about this. But what do you think the future of insurance, what do you see in 5, 10, 20 years from now? What do you think insurance looks like? And how different does it operate?
Dan Vander Kooi:
I think it's really hard to tell. I had someone in the last year tell me, "Just sell your personal lines book." And I'm just like, "Nah, I'm not doing that." But it seems like the personal side is going to continue to be more and more streamlined. What's interesting is, so for us, on the personal insurance side, we probably have 10 to 15 companies at any time that we quote. And so, the software that we use to use that, because insurance carriers, again, this doesn't sound right, insurance carriers did not want business in the last two, three years.
So they took themselves off the software for us to be able to put all the information in. So we put in your date of birth, your driver's license number, your VIN number for all your vehicles, your address, all that stuff. Click rate, and it spits out the rate. And for the most part, they're fairly accurate. And you take the top two or three of them, and then you would bridge them over into that company's website on the agent side, and you'd make your tweaks and get the final rate and proposal. They completely pulled off all the software. So that software that existed when I got in the industry in 2010, it doesn't work anymore.
And so what you're starting to see now is there's some different companies coming out with AI. So from a small business standpoint, as a small business owner on that, I now had something that my team could do, one of my people could do in the course of, I don't know, take them 10 minutes, 5-10 minutes if they have the information to do that and get quotes from every company. Now they have to go into every company, put in that same information in 10 to 15 different companies if we're doing what we claim as our job as a broker to do, shop the market, and it just takes forever.
And then you get all these kickbacks because during this... We have a company right now, if the roof on a house or a commercial building is 15 years or older, they don't want it. Now, back up, I talked to Axiom Roofing who just did my roof at home and my roof on my commercial building. I go talk to Jeremy and Juan and say, "What the heck? Isn't there a 30 or 40 year warranty on these?" They're like, "Yep." What's the problem, then? It doesn't make sense.
Andy Jewell:
But that's what they chose.
Dan Vander Kooi:
So we're running into all those objections. They'll find any way to not write the business. And so that's what's been interesting. And so I think you're going to see AI, a lot of AI tools for agencies to come and play, not to replace the people. And we've talked about this a lot internally at our office too, is you got to look at the AI side as a way to help serve our clients better.
And so, are there automations that we can create that are internally focused, not replacing our relationship with the client, but that can help us do our job more efficient and serve our clients better, so we can get them a response on certain things quicker? And so you'll maybe start to see that, where the AI can go directly into those sites and do that.
But again, it's all being built out. The insurance industry, technology-wise, is like 20, 25 years behind on everything. And then there's segments of the insurance industry, like the medical side of things is even probably farther behind. And so they don't even sync to any software.
Andy Jewell:
Yeah. No, it is interesting. AI, I think, is revolutionizing every industry. And I think, to your point, it doesn't have to be done in a way to try to replace people, but to augment them and make us more efficient and better at what we do.
Dan Vander Kooi:
Exactly.
Andy Jewell:
Something that I've seen farmers do, one of the companies we use, our main company, is they're using AI now for information. So from the agency standpoint, when we go in and we go, "Hey, we want to know how is this covered? What's the eligibility on this? What about this scenario?" And there's multiple policy languages over the years, depending if you're in a grandfather policy, or a new policy, or what state you're in. And so now they're using that AI to be able to help get you an answer quickly and link you to the right information, which is really what ChatGPT does. It gets you an quick answer and then gives you the link so you can go back and verify it.
So I think AI can be used in a great way to make you faster and more efficient. I think AI could be a false sense of security if you try to replace people with AI. Because AI is a program and it will not... It's kind of a misnomer. Me and my wife went round and round in circles discussing this the other day. I don't think AI, it says artificial intelligence, it doesn't really think. It's using a program based on information available to it. There's no original thought for AI.
Dan Vander Kooi:
No. You can train it.
Andy Jewell:
You can train it.
Dan Vander Kooi:
You can start to train it so it thinks the way that you do.
Andy Jewell:
Yeah, responds the way...
Dan Vander Kooi:
Yeah, it responds the way. But it's doing it by how you're guiding it.
Andy Jewell:
Right. And based on the program and parameters that were put into it. It doesn't actually think through a problem. It's not going to problem solve for you. If you give it an input, it's going to use parameters that it has, information that's available, and apply the most reasonable answer to it. So I don't think you can... You can't replace people with AI, but you can replace a lot of tasks with AI to make it work faster.
The other thing I think was interesting, we talked briefly about this before, is blockchain technology when it comes to insurance. And I was researching it a little bit, which I thought was interesting, and I was like, "I'm not sure how this is going to play into personal, auto, and home insurance, or even regular small businesses." But it was interesting, they were talking about smart contracts, so that you can place on the blockchain. Because one of the interesting parts about blockchain is you can't change it. Once it's on the block, you can't alter it. So it's there, anyone can see it, it's fully transparent.
So if you have an insurance policy and you bought it and put it on the blockchain, there's no discussion now about what kind of coverage you have. It's there. You don't have to try to keep 180 page policy that you got sent 20 years ago when you first took out your policy. And then they were saying with those smart contracts, it can trigger... They were using the example of crop insurance. If you have a hail event in a certain area, the system would automatically see that it hits certain parameters and would automatically be able to settle a claim to you based on all of the data that it has because it's on the internet, it's on the blockchain, and it's pulling that information.
Dan Vander Kooi:
And then if there's another circumstance that happens to come into play, that's where you get an adjuster involved or something like that. But it streamlines it so you get that, this is very cut and dry, black and white, boom, this happens, boom, there's a deposit in your account the next morning.
Andy Jewell:
Exactly.
Dan Vander Kooi:
Because those are the things for technology that can help the process. Like anything, I mean, with humans right now, nothing's perfect, right? People make mistakes. But if that can help automate some of that and make it quicker, those are positive things. But people are scared of what they don't know. And so, until they start to dive in and understand it... And even the blockchain stuff, I'm still educating myself on it. I'm still wrapping my head around some of the... The AI stuff, I got good.
I remember my cousin a long time ago, I always joke, I always go to him for stock tips or whatever because he bought Tesla stock way back at the beginning. He had Bitcoin, all that stuff. He's always just been self-educated in figuring that stuff out. And he's a sound engineer down in Santa Monica. And he, at one point, interviewed for a job. I don't know if it was with YouTube, or Google, or something like that. This is back probably 2012, 2013 maybe.
And he's like, "Yeah, TV as you know it is going to change over the next 10 years." I was like, "Ah, whatever. I got my DirectTV sports package, or whatever, and I watch my Mariner games." And he goes, "No. At some point, you're going to have an a la carte option that you can just choose what you..." And look where we're at today. I mean, that's kind of what it is. And so, it's interesting. Things just continue to change and shift. And how do you adapt? And how do the people...
The other thing I was going to say is you were talking about that too is one of the things that's happened in our industry too is when people go to buy online, the online systems are using AI and all this kind of stuff significantly. My question is, how do they know you? Because you can maybe answer a few questions, but if you go on to Progressive.com's website, their direct site, we sell Progressive, but it's the broker side, and then they have the direct side.
If you go to Geico, you go to whatever these carriers are, The General, whatever, most of the time when they say, "Hey, we're going to save you 15% or more in 15 minutes," you're going in there and you're putting in information, the first quote you're getting is state minimum limits. I sat with a guy in the last year, net worth is over $20 million. He was through an online carrier. He had $25,000 worth of liability coverage if he or his family... Three teenage drivers.
Andy Jewell:
Oh, man.
Dan Vander Kooi:
And actually, we came in, and I think we were like $1,000 more a year, but we had $500,000 in coverage for that. We had a $3 million umbrella. We added all these different things to it. And it was just because they just always kind of did it. And what's really interesting too, and I'll say this about myself too, I'm only 41, but the older I get, I start to get like that grumpy old man. I'm annoyed with technology. I just don't want to figure this out.
And business owners and entrepreneurs are that way a lot too. They like the chase and they're the big idea guy and things like that. I've surrounded with myself with a lot of people who are very detail oriented. That is not me. I'm like, "How do we figure this out? Relationally, does this make sense? How do we take care of people? How do we want people to feel when they're done with us? How do we expand here or do this?"
And what happens though, is we kind of forget about all those little details security type things. And so what happens is a lot of people say, "I want this off my plate. I'm going to go online, I'm going to look at this." There's no one advising them, and yet they have an attorney, they have an accountant. Who's your insurance agent that's going to have your back? And I think it should be Andy Jewell at Farmers or Manna Insurance Group. One of those two are the people that are going to have your back and are actually going to sit down and have a conversation with you and make sure you're covered properly.
Andy Jewell:
No, I think that's huge. I think that's exactly the point, is you need to have a person. I kind of joke sometimes. You want to have someone that you can come sit at my desk or throw a brick through my window if something goes wrong.
Dan Vander Kooi:
I always use the terms, "I want a guy for that. I want a gal for that. That's my guy. That's my girl. That's who I go to." Right?
Andy Jewell:
Yep. It's really important to have that relationship, to have a person that you can work with. So hey, I want to thank you for taking the time. We're going to wrap this part of the episode. But if you guys want to stick around, next week, we're going to chat just a little bit more about the behind the scenes, if you will, just of why you're in insurance and all that kind of stuff. It's our after show chat. So thank you guys. Thanks for joining us. If you have any questions, feel free to send me an email at theagentinsider@gmail.com. Otherwise, we will chat next time. Thanks so much. Have a good day.
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