Robert Smith is the Founder and CEO of Fideles Advisors, a premier partner for insurance-centric organizations aiming to grow their market presence, amplify profitability and achieve scalability within the industry. Robert was interviewed by Michael Fiedel, Co-Founder at InsurTech Ohio and Co-Founder at PolicyFly, Inc.
Robert, what sort of self-assessment is required before brokers entertain opportunities to innovate?
“The first thing to consider is what problem are you trying to solve? What objectives are you trying to satisfy? What are the conditions necessary to be able to proceed down that path of innovation toward those outcomes and objectives? What’s the prioritization, and what are the constraints as you begin to work your way through those considerations? Ultimately, you’re establishing that forward mindset by establishing a notion of what you'd like to solve, what objectives you have and what that purpose statement is. Then you're working your way back through into a set of steps, creating an actionable roadmap to achieve those outcomes.”
In terms of targeted outcomes, what are some of the key metrics that brokers must use in evaluating the technology investments to get them there?
“You need to know your client retention, financial rollover metrics and policies enforced in year one versus prior years. All three of those are different ways to understand retention, which is a large contributing item to your overall organic growth in conjunction with sales or new business velocity. If you want the business to grow, it implies emphasis on data and understanding of its purposes. You're going to want to not only make better business decisions on behalf of your enterprise, but you're also going to want to include others. If that business information contains real insight, you can empower important participants in your environment to be successful in generating new business and organic growth.
Those are going to be your constituent pieces of organic growth and are usually measured in terms of relative rate of change. It's commonly reflected as a percentage when you're thinking about the productivity and profitability of your business. What people are looking at is an accounting number for earnings. You'll hear people refer to it as Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). That's going to be expressed as some kind of earnings number. Usually it's understood as being a percentage of total revenue. You can begin to see that trend in one direction or another relative to some of the investments you're making. It’s certainly a good idea to be thinking about all of those objectives before you go do something with technology.”
How does the pre-sale evaluation of these metrics differ from their ongoing evaluation as the implementation plays out?
“Technology is going to have its own set of beliefs and product attributes, and it’s going to try to impress upon a business owner how this is going to make your environment better. It will point to things like user experience, but if it's not driving to a business outcome, I'm not sure that case is really made. It falls to the business owner to map out what their priorities are, how they understand performance and what their expectations of the impact of the technology would be. Explain the condition of the business as it is today.
Here's where I want my aspirations for the business to be realizable within ‘x’ amount of months. Today, it looks like this. Tomorrow, I want it to look like that. I want to understand very clearly what the impact statement of your product is expressed in the terms of which I understand my agency's performance. What I'm asking you as the provider of the technology is to put yourself in my world. The only frame of reference that matters at this point is this one, right? I'm a million dollar revenue agency. I believe I can be a million and a quarter within two years if I get the following information in the hands of the people that need it.
I don't need to guess what the impacts of your technology are on my business. You're selling me on its attributes. I need to understand its outcomes and the applied implications of internalizing the technology you've created in the language of my business, which is my financial performance. If you can help me understand impact through that lens, now I can understand what you're offering me and can make a value-based decision about whether or not I think it's a fit. Don't frame it in the issue of technology; frame it in the metrics that define business performance for one of the brokerages or agencies. Then explain where the impact is going to show up, when and how.”
How do you monitor the process of choosing innovative partners and measure their impact on your business? What are some tangible ways you monitor improvement and try to course correct results?
“Identify one, five or even 10 valid indicators that will verify that the intended impact is in fact being realized or not. For example, there’s a business offering placement optimization and yield management SaaS solutions that can be brought into an ecosystem to try to help you figure out how to trade more effectively. Wouldn't evidence of the validity of that offering be that? In fact, your commission yield as a business is not only lifting up, but it's lifting up in an amount that justifies your original investment in the solution. Is this a mutually beneficial set of outcomes? You can come to the conclusion relatively quickly if you look at and are able to analyze your yield with various insurers.
Data and business information are always going to be your friend because it's going to give you an opportunity to see what's true and make educated assessments in terms of what you can do next to refine your approach between the supportive solution that you thought would make a favorable impact for your business and the fact that it's not occurring. It's a great observation that these things are very seldom buy it, sell it, forget it and will take care of themselves.
By building in those critical look-in points, you're allowing yourself to iterate without reaching a point where you’re frustrated with no results. Well, perhaps it didn't work, but were there opportunities along that progression to see this and readjust? It’s that calibration process throughout not only internalizing some external technology or solution, but it's also recognizing and appreciating the fact that the business as a whole will continue to iterate and evolve."
What particular technology do you think is having a noticeably positive impact for brokers?
“In the course of implementation, the technologies giving visibility into business information are requiring an opportunity to create data standardization. I would even take one step further back before approaching this and say, ‘My notion in terms of what’s most valuable to a broker or agent is the business information and data that will permit you to become smarter about how, what, to whom and when you're trying to sell all of those considerations that would support organic growth. If it makes a difference, gives you a momentary competitive advantage and becomes noticeable, then the market is going to react. Having good business insight and business information in the hands of those that are driving the business is critical. You have the ability to make better business decisions in terms of where you put investment. Where are parts of your portfolio degrading? You need to have some kind of response to that, but to understand these things, you need the data. So, what's the data standard?
What’s the methodology for storage and distribution? There are a number of the analytics providers that want to give you access to business insights by claiming to be able to engineer on your behalf. It falls to each of the business leaders to determine how well those informational customizations fit their business or don't. The process alone to get the data, cleanse the data, integrate the data and then orient it toward its optimal use cases is itself very valuable. They're trying to sell you on how they purpose the data and how that benefits you. It's great, right? I mean, in a lot of cases they're right. I'm not trying to be cynical about that. I'm simply saying there are a couple of different ways to think about it, and you'll hear a variety of different ideas about what's most impactful.
The greatest thing about it is once you begin that work, you're getting control of your own first party data set in ways that match your vision for how to use information to empower and support the business. It's taking you through a process with a guide that's in the business of doing that kind of work with data. It's going to leave you in a much better position because you'll be able to see the things you need to see, react to the things you need to react to, do it in a timely way and simply govern a smarter business. The fact that that’s an output of those projects that are precedent to using their products is beneficial in its own respect.”
InsurTech Ohio Thanks Its Presenting Partner
And Our Premier Partners
 |  |  |
 |  |  |
 |  |  |
 |  |  |