Kim Reheiser is the Head of Product Management at Central Insurance, a leading property and casualty insurance carrier providing premium coverage for businesses and individuals across the country. Kim was interviewed by Michael Fiedel, a Managing Director at InsurTech Ohio and Co-Founder at PolicyFly, Inc.
Kim, coming from outside of the industry, what has been the hardest thing to get used to about insurance?
“There are two things: One, it takes time, specifically with terminology. Insurance has plenty of niche terminology, and then specific companies have their own as well. It takes time to truly learn the terms needed to succeed.
The other thing, which permeates a lot of areas, is when you're in the software industry and think about growth rates, you think about the CAGR in a certain market you're going after or growth just in your top line or revenue. All growth is good growth in most respects in a software company. You want to go after markets that are growing, but you don't think about it as profitability and losses customer by customer.
In other sectors, you think about it from a P&L statement and want to be profitable, but that level of rigor around each piece of business is a pretty unique thing to the insurance industry. How long it takes for losses to develop is another thing to get used to. You might not even know in the first year if that's a great piece of business for you to take on or not. That's a big mental shift you have to make when you move over to insurance.”
What would you do differently in your product journey, and what are some of the lessons that you've learned?
“Coming into Central, the product mindset is a different mindset. We've spent a lot of time in the last 18 months growing the team, the individuals in the team as well as the mindset around product. If I did it differently, I would probably grow a little bit slower. We're now a good-sized team of 43 people, and it's been a tremendous effort getting the whole organization to understand what product is.
It's not just about telling people what it is, that feels very academic, it's about having smaller proof points along the way. It’s giving people examples of what it means to shift to that product mindset. Taking the time to build up a handful of case studies to bring to the rest of the organization is critical. This helps teams better understand what it will feel like when we have actual projects working through them.”
How have you organized your department at Central Insurance?
“We're lucky with the size of the company. We don't have to have a digital product team that sits in one area and then an insurance product team that sits in another area. We're small enough that we can actually bring those two teams together. I own both the insurance product side and the digital product side, and the teams basically sit side by side. We're still growing out some parts of our insurance side of the house, the commercial side specifically, but they sit side by side. I've got product managers that are insurance product managers, and then I've got a group of product managers that are digital product managers.
I also have product owners on the digital side. These are people who have to break down stuff from a technical perspective and hand it off to the development team who's doing the engineering side of things. On the insurance product side, we have operations people who are working through rate reform change type of stuff, but very parallel structures. What it's allowed us to do is to have those synergy conversations very quickly and to pick up things rapidly where we have to react to regulatory changes. We're able to see those things faster than others would because we're smaller and can bring the teams together.”
What’s one problem that you particularly think about that still needs to be solved in our industry, and what in particular makes it so challenging?
“The communication dynamic between the agents and carriers, specifically on the technology side of things, is not as open in insurance as it is in some other industries. The challenge with it is partly the software landscape. You have a couple of very large players in the agency-technology space with relatively closed-down systems, so they're not open to a whole lot of integration back and forth. They control what's going to show up in their systems and how data is going to be transmitted back and forth between carriers and agencies. It's an area that would be great to see more alternatives and open standards. With the way we exchange data, the carriers get disintermediated, and there's value that could be added if they could be a little bit closer to the end policyholder. But, the way communications is set up in the agency systems, it makes it not so easy right now.”
What do you think this space is going to look like in five years?
“Five years isn't a tremendous amount of time, so I think it probably won't look dramatically different than it looks right now. But, I come from a commerce space, so this will be a slightly biased answer toward commerce because of that. When I look at operator technology and at what's happening with appetite and how it’s checked, it makes me feel like in a handful of years there will be an evolution in commerce.
You look at something like Ask Kodiak, and it looks very much like an early marketplace. It's a catalog, and there's so much more you can do to optimize how you're getting metrics and feedback from the different front ends that people are looking at. Once we have that, we can get to a point where we can start doing intelligent things with the data sets to figure out where there's market demand or where we could have stronger content. That's one of the areas that is probably going to evolve in a relatively short amount of time."
To what degree is the industry properly balancing the push to automate binding and accessibility to activate business with the underlying risk of speeding those choices up?
“That's a good question. I don't know about the balancing side of it. There's still so long to go. If I think about it, I could get to a point where I'm quoting something. I only know so much, and as a carrier, I want to know more, especially if I get into the larger risk. But, there's also that idea of people just shopping around, so do we want to invest in going out and grabbing all of the additional information so that we can actually produce a quote that we feel confident is a bindable quote and go the rest of the way in it? It's a good question. There's an evolution there, starting with Public Liability (PL), which we're doing right now. Of course, you start with PL and then figure out how far you can go from a co-perspective too. I mean, some of the PL risk is relatively straightforward stuff, but not so much on the commercial side.”
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