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Chip Bacciocco: Hello everyone. And welcome to another edition of the IA Advantage. My name is Chip Bacciocco and if you’re joining us today, you are likely one of the tens of thousands of independent agency channel insurance professionals working all across America, doing the noble work of protecting the futures of millions of families and businesses.
Some housekeeping before we get started. This program is made possible through the support of TrustedChoice.com and the Independent Insurance Agents and Brokers of America, the Big “I”. Today’s broadcast will be made available to over 300,000 IA professionals across north America via the Trusted Choice independent agency network.
And as always, before we start, I want to urge you to make sure that your agency’s digital profile on TrustedChoice.com is complete and up to date. We crossed a major milestone last month. Over 1 million referrals and leads delivered to independent agents across the U.S. And of course, Google continues to crawl our agency directory every hour. Having a complete and professional agency profile on TrustedChoice.com ensures that your agency is being properly recognized and showcased on the nation’s most important online agency directory.
I am excited today to be with Marcus Daley, co-founder of NeuralMetrics. Welcome, Marcus.
Marcus: Yeah it’s great to be here. Thank you.
Chip: You are absolutely welcome. We were sort of co-introduced a few weeks ago by a mutual acquaintance. So we haven’t met prior today, but I’m glad to meet you today. They thought you’d be a very interesting guest and when I did a little research and saw that your company was involved in AI, I was quite intrigued.
A few weeks ago, in fact, I was honored to serve as the host and moderator at the Big “I” InsureTech Summit in Savannah. And there was quite a bit of talk at that summit about ChatGPT and AI. So I thought, you know what? It would be great to have my next podcast guest be an insurtech leader in that space leveraging the power of AI to help the insurance industry innovate.
So I hope you’re the right guy for that.
Marcus: Well, I know that’s a hot topic, for sure, so it’s good timing. We spent quite a bit of time looking at that technology, and of course we’ve been in AI for a very long time, so, yeah. Good time to talk about it.
Yeah, keeping it simple, we take a business name and address. We then are able to, within a matter of seconds taking live information off the web, determine the classification for that business and the risks associated with that business in order for an insurer to be able to then provide them with a quote.
So that, that’s what we do and it’s unique in that we, in particular, focus on small businesses. This is a very hard problem where there’s not a lot of information, but a great deal of need for proper ensuring. So that’s what we do.
Chip: Cool. When was it founded?
Marcus: You know, I, I sometimes say 2017. It was actually founded in 2018, but it was a journey that started way back in 20 actually, but it officially founded in 2018.
Chip: And who are your co-founders?
Marcus: I’ve got Prakash Vasant and Dharmendra Vasant. They’re both brothers. And to be honest with you, when we talk about founders, there’s several members of the team that have worked together on other projects. with me, you know, over the last many, many years. We’ve been working together 10- 15 years, different companies, different products. And so this was just kind of the next stage in our, in our professional journey.
Chip: All right. So a, so a, a similar group is collaborating, it sounds like, on multiple projects and but can you share a little of the backstory about the foundation story of NeuralMetrics? Why did you guys decide that this was one of those projects?
Marcus: Yeah. You know, and it’s, it actually is because of the shared history that we started this. So we a few of us have been working at S&P Global. And S&P Global, which is headquartered out of New York, has a division that focuses on providing information about public businesses and one of the areas that they’ve wanted to really do a good job of providing information in, but have struggled with, is in the small business space. In large part because it’s just not, there’s no public reporting, especially in the United States, depending upon which country you’re in there may be some mandated, but in the US it’s, it’s poorly, poorly reported.
But yet we felt like there was a way to provide some, perhaps not all, but some of that information and fill that, that great need for, for all different types of industries, all types, all different types of use cases. And so we, you know, started going down that path back in 2017, thought we could solve the problem with AI.
And one of the things that we wanted to solve for was, okay, what data sets can we acquire using AI off of public records? And is there a way for us to be able to make sure that when somebody sees answers from us, that they can go back to the source and see and validate for themselves that we’re correct? And can we solve for also, not just information about the business, but their risks, their financial records. You know, things that you would need if you were to do an investment. Now we eventually found that it was a little bit hard to get the financial records and some other things for, for an investment, but we found we could do a very good job of finding information about the needs for underwriters in the insurance space. So we pivoted away from the more traditional fintech space over into insurtech and focused on the insurance industry. But that was, that was the genesis.
Chip: That’s a great story. And I agree with a lot of, you know, the conditions you put into that. You’re right, the information is hard to come by. And it’s obviously something that’s very valuable and needed. And right now we handled it kind of inefficiently. So I checked out, I checked out your website and there’s a lot on there, so I certainly encourage anyone else that’s interested to go check it out. And it looks like you have sort of two product suites. I know it’s more complicated than that, but I’m just going to simplify it to that and ask you to share what each of them does. So, so the first one is called SmartRatio. What, what is SmartRatio?
Marcus: So that elevator pitch was really SmartRatio. It’s industry classification and risk insights. So in other words, getting that down to the six digit NAICS code, the classification for the business, and then on the risk insight side, being able to come back with what are the risks necessary for you to be able to underwrite that business?
We do have a dashboard. We’ve got a UI. We have a bunch of things that allow you to be able to do that visually within a browser, but we also provide an API, which to be honest with you, is the most common way that people integrate with our product. And they can then incorporate that into their in-house systems to be able to have a deep integration versus just going through the UI.
Chip: That was actually gonna be one of my follow up questions. And in fact in a lot of the recent work that we’ve done, a lot of recent podcasts and industry presentations I’ve given…it feels like we are in the the sub- era of massive cross-integration and that open APIs is just, it’s, it’s a given now that all of our platforms have to have an open API. And I’m certainly glad to hear that yours does as well. And it’s exciting that we’re all able to start, you know, somebody comes up with one solution that does one specific thing really well, and the possibility to then stack that with other solutions and come up with a greater whole. I think is one of the exciting things that’s happening in our space. So I’m, I’m glad to hear that.
Marcus: It’s all about composability at the end of the day, so I agree.
Chip: Absolutely. So the the other product suite that I saw on there that I also found very interesting was called MarketEdge. Tell me a little bit about MarketEdge and how that’s different from SmartRatio.
Marcus: Yeah, it’s the, the reason why I don’t include that in the elevator pitch is that it’s, it is a little bit different. It uses a lot of the same technology, but what we do is we go out and, for a large number of the states, get the workers’ compensation information, those who are are about ready to be up for renewal. And then we use our SmartRatio engine to say, okay, so these, these are up for renewal here in the next few months. Do they match your risk appetites? We ask the same questions that you would ask about risk in classification. And then if they do match the risk appetite, it provides you an opportunity for some, potentially some, some fantastic leads that you otherwise may have missed if you’re a carrier. So that it’s, it’s kinda a lead generation engine, if you will. That’s, at least that’s the way we, we often talk about it.
Chip: Okay. And does it have some …I saw a really cool inverted pyramid. I like a good diagram, by the way. And so it implied that there was sort of smart filtering as it went. Is that, is that part of the solution?
Marcus: Yeah, so it does have, I will, I’ll just mention this. It does have a UI similar to SmartRatio, but it also is API driven. And, and it is, it basically is a filtering engine, right? You basically go out screen you know, well first of all, pull in all of those who are gonna have their policies up for renewal, screen out those that are obvious, and then you know, further refine that with our engines. Prequalification may be just using our engine to pre-qualify. There may be other things that the carrier chooses to do. And then there’ll be a final list available to them, to then do whatever they do, which may be working through an agent network, it may be direct connect. It could be a lot of different things, but that final list will then be provided to them.
Chip: Gotcha. And that, that part interests me a lot in terms of possible collaborations in the future with what we do at TrustedChoice.com. I’ll get, probably get into that in a few minutes. Maybe toward the end we can talk about, brainstorm a little bit here on an open mic about how things might plug together.
But I think I think both solutions, SmartRatio and MarketEdge, are definitely interesting and needed solutions in our space.
Marcus: Yeah, yeah, that’d be great.
Chip: So, our audience is independent agents…well, not all, I’m pleased to hear we, we get feedback from people that are not independent agents too, which is great, but largely we’re trying to help agents to be informed about the insurtech space and what’s going on. And so talk a little bit about, if you don’t mind, how NeuralMetrics could improve the agent experience.
Marcus: Yeah. Well it’s a great question and ideally, and, and there’s maybe some easy answers and some some more elaborate answers, but the easy answer is help agents be able to grow their business. We want them to feel like t hey can grow their business more rapidly and comfortably, not with introducing a bunch of risk into, you know, whatever they’re proposing, being rejected, being able to grow their business more rapidly. And we also wanna make it—and I guess this is part of growing a rapidly, right— I mean the, the process of, of in, of taking a prospect and giving them a quote, if we can make that so simple that there’s almost no work, then that makes their job easy so that they can focus on other areas of value add. Like even just growing that relationship or upselling other types of services or anything else for that matter. So the idea of business name and address is about as simple as you can get.
We actually have an engine that allows you to even input just the email address as well. But the idea here is that instead of having to ask them questions that the small business owner may not even have the right answer to, but that might frustrate them, that the agents would then have to enter in if we can just get it down to a, a very small set of questions, return back to the agent the answers that we think fit based on what the small business says about themselves to their customers, to government agencies, to other types of things that they may have to attest to that are publicly available. Then we can automatically basically fill in all those answers that they’re seeking as an agent.
They may have a conversation with a small business, you know, to, to validate that they may choose to make some adjustments if they think that those adjustments are are merited. But that means that the amount of discussion necessary with the small business owner is significantly reduced and can convert it from a, a, a very clinical conversation to one that’s more friendly and can focus more on their needs, who they are, what they here for, what can I do for you versus just trying to extract information from them directly. So at minimum, and the easy answer that, right? Just making that so it’s an enjoyable experience for the agent and for the small business.
Chip: Yeah, I’m, I’m impressed at how much we’ve gotten better at not walking or not trying to force every customer through a 50 question survey. And the agents right there with it, right. And typing it all in and all that stuff. And so I think any advancements you can make in that regard will be welcome. So that’s great.
Marcus: Yeah. Well, I mean, and just to add to that, if you don’t mind. I do, I do think it’s important that when those answers given to them and they’re like, “well, no, I don’t think so,” it’s powerful to then be able to turn around and show them, “well look, this is where we got the information from and this is why we’re saying it.”
“Oh yeah, that’s right. We actually do do that.”
So for many of these small business owners, they do so many different things that, completely unintentionally, they may forget that there’s a error, not realize that it has that implication. And if we can help with closing those gaps, then it helps ensure that the small business owner is getting the right kind of policy.
Chip: Right, absolutely. So there’s a lot of value added there.
So, I think I saw somewhere “the small data problem.” Could you share with the audience what you guys mean by that?
Marcus: Yeah, we talk about that a lot because, yeah, there’s a lot of competitors have come into the space and they, they have, most of them have a tendency to leave the space. And, and they come in because they think that they can apply these horizontal technologies, these big data technologies to these problems and then return back the same kind of results that we do. They think that they can, this is an easy problem to solve, not realizing the ice cream shop down the street that needs insurance or the hobby shop or whatever it may be, their presence online may only be Facebook. It may be a social media site of some kind. They may have a website, but the website is very, not very detailed. In other words, their presence online, that footprint online is very small, very bespoke. It’s a snowflake. I mean, all of them are different. There’s not a way to be able to create an easy pattern between these and a way they describe themselves. In fact, can even vary state by state, city by city. And so the going out and getting that information and then processing it when you are working with such a small set of data means that finding patterns, in the traditional way that would allow you to be able to then accurately classify and then identify risks, is hard. So think about it, right? We started back in 2018. It’s taken us several years to perfect being able to extrapolate off of the information that they provide, the answers to the questions that are being asked by the carriers. And do so in a way that still allows us to be able to point back to the source and say, “Hey, look, we recognize that they didn’t spell out precisely this particular risk here,” but even if it’s just one word, tells you and, and oftentimes as humans we’ll do a lot of that extrapolation like, “oh yeah, of course they do have a small pool,” but they may be describing it a little bit differently and it may be buried very deeply. But when you then find that in there as a risk, like, “ah, yeah, that’s right, they do have that, and we wouldn’t have caught that.” But that’s the small data problem.
If you were talking about a large business, they would elaborate the dimensions and where they’re located and all types of things that are special features about the swimming pools and you know, et cetera, et cetera. But in a small business, it just may be a, something that’s an afterthought. So that’s the small business, sorry, the small data problem that we solve for and, and it requires a lot of different types of AI techniques to do that. You can’t just take off the shelf big data AI techniques. You have to actually use technology that often is ignored, at least in the mainstream, but is definitely still being developed. It’s just not what typically comes up when people talk about solving data problems.
Chip: So, and this has been, I really enjoyed that answer because it’s, it’s really front of mind for me in a lot of ways because it’s related to what we do on TrustedChoice.com. So as you’re talking, I’m thinking about some of the ways that, in the future, our platforms could potentially be integrated to improve both our core product, as you probably know is I, guess, I would call it a realtime independent agent recommendation and connection solution. You know, we’re trying to identify for any given insurance buyer situation in a matter of seconds, can we intelligently identify those local independent agents that are both skilled, suitable for the risk, appointed with the right carriers that have an appetite to write it… the carriers that is, have their appetite to write it… and then most importantly, this is the most important thing we’ve added recently, is that agent available right now to help the customer?
Because “right now” is the way people shop today. Regardless of what they buy. They need, they expect, they don’t wanna wait two days to hear back. They’re moving on, they’re on to the next, you know, they move on to the next agent or insurance company or whatever. And so if we can provide, sort of, in real time and say, hey, for that pizza shop in Cincinnati with four employees looking for work comp, we can actually recommend local independent agents that have the appointments to write a pizza shop, have experience in writing pizza shops, and most importantly have indicated they’re available to talk right now. And so we’re sort of becoming like the, I’m loosely using this phrase, sort of the Uber of insurance. And, and API accessible as well as you mentioned.
And I’m just wondering, I’m thinking, I’m trying to think since we, we deal with trying to, in order to make that recommendation, pull those agents, figure out which one’s available to talk right now, we kind of have to look at the risk profile. And we have to consider appetite and so forth. So somehow that makes me think maybe we could be calling, I don’t know, know if it’s SmartRatio or MarketEdge, but whatever we could be calling your system to possibly help us figure out some of that stuff a little faster.
Marcus: Mm-hmm. Yeah. No, I completely agree with you. I, I think so. I mean, look, we’ve. I know this is not an exact match to what you’re saying, but I do think it helps align, show that they’re aligned culturally. And certainly philosophically, you know, we agree on exactly what you’re saying, which is people don’t want to wait. If they wait, they will leave and go somewhere else. That’s, that’s true for the agents and it’s true for the small business owner who’s trying to get insurance. Small business owner doesn’t wanna have to worry about this. I mean, this is just a, they know they need to offset their risk, but they’ve got other things to do. They’ve got a business to run. And so for us it’s been, how can we, within a matter of seconds, provide this information so that we become an integral part of the process, including the process you just described. Where we’re not a friction point, but rather we are at a minimum of data point. Even better if there’s a way for us to be able to automate some of, of what needs to be done.
So for example, if an agent knows that a particular small business is coming in there’s an opportunity to be able to then pre-screen them using our tool so that they can have then a meaningful conversation. There’s a opportunity to be able to look at their current book of business and be able to go back through that and see maybe that there’s better policies that would be available to them because the agent didn’t realize that there were these risks or that they fell into a different classification.
There’s also ways to go back and say, “hey, you’re paying too much for that policy” because we didn’t realize that in fact you don’t have the risks we thought. And you know, that premium they’re paying could actually be reduced or that it should be increased to make sure that you’re actually gonna get the coverage you need if you do have something catastrophic happen.
But I think all of those are things that can happen before meeting, while meeting, looking at a current book of business… So, so in other words, not even actually involving the small business owner, but I think all parts of the lifecycle, there’s an opportunity to be able to have this at least augment the work that the agent does at a minimum, perhaps even automates some of it.
Chip: Yeah, absolutely. You, you just rattled off a really good list of value -ads that I think every agent needs and for that matter, every IA insurance company as well. So, sounds like you guys are working on a lot of very interesting and very important stuff.
I wanna make sure before we leave that you get to have the last word and talk about anything we forgot to talk about. Is there anything else you wanna share?
Marcus: Yeah, first of all, just thank you for bringing me on. I think it’s great to always talk about these things.
I, I had an interesting conversation the other day that I might share, and I, it’s just a maybe a thought exercise that I might share with folks. I, I think it’s easy, and I’m sure you’ve experienced this too over many years, to get caught up— in fact, you and I were talking about this before we even started the podcast— it’s easy to get caught up in seeing, you know, ChatGPT, which is the thing of the day or some other AI that’s out there. And, and I kind of feel like we’re living through this new wave of AI. It’s kinda having its moment and that’s a good thing. I do, I think it’s a, I think it’s a good thing, but I get, I wanna go back to what I was describing earlier between verticalization, horizontalization. Systems like ChatGPT are, while very I think they’re gonna add a lot of value and I think they will probably even add a lot of value in the insurance space, there’s a difference between something that’s a horizontal sweeping view of the world and there’s something very different from that, that is very vertical and goes deep, right? And answers some very specific questions and does so accurately. I think that accuracy is key and when you get into these small businesses, they’re no different than a large business. They rely upon making sure that what they are paying for is gonna cover them in their time of need. Horizontalization is typically not the best way to go. So you know, we as an AI company are always sweeping out and looking out, okay, what are the new technologies? Can we incorporate them? Can we can they be used to improve our accuracy, improve our timeliness, improve our relevancy? So, and then when they do, we incorporate them. And so I think the value of working with a partner like you, partner like us, is that as long as we are forward thinking, then when these leaps in technology like ChatGPT occur, and we are absolutely open to incorporating them into what we do, then you’re guaranteed to not only benefit from that technology as it comes online, but benefit in a way that doesn’t put you, your business if you’re an agent, or your business if you’re a small business owner, at risk.
And so anyway, we, that is how we approach things. We always prioritize quality first and make sure that the output of what we’re doing is something that you can rely upon. So anyway, just thought I’d share that, especially in light of all the hype around ChatGPT these days.
Chip: Well the hype around ChatGPT you’re right, is it’s fun and as you said, it’s having its moment. I think it’s, if nothing else, it’s giving a lot of agents a reason to think about it, a reason to talk about it. A reason to inquire. With any new technology, you know, there’s fear, lots of fear about what, what all implies. Maybe we’ll do that on another podcast, but yeah. But yeah, this has been fun.
I forgot to ask you where you are located. I totally forgot.
Marcus: Yeah. You know, it’s funny. My whole career, I’ve traveled all over the world. I still do just for, for, for business. But my home is in just south of Salt Lake City, Utah. Love the outdoors. I used to snowboard a lot, but these days I’m out camping and hiking and those types of things with my family.
So it’s great. If you love the outdoors there’s no place better than Utah, that’s for sure.
Chip: I do. I like, I like fly fishing. I gotta come out and meet you in person. We gotta go and enjoy some of the great outdoors. That would be great.
Marcus: Well, the rivers are gonna be full of water this year, man, so if you wanna do that this spring will probably be one of the best springs you’ll have.
Chip: All right, we’ll have to think about how we do that. But I wanna thank you. Did you have fun today?
Marcus: Yeah. Thanks for inviting me. I really appreciate it.
As always, I want to remind everyone listening, take a few minutes each week and look around. We are living in the golden age of Insurance innovation. I think we just heard that from Marcus, so please enjoy it. I want to thank all the folks that make this program possible, including Central Insurance, Encova, Main Street America, Safeco, Selective, State Auto, Travelers, Westfield and the Big “I”. And one more reminder, please check out your agency profile or your independent agency company profile on TrustedChoice.com. Your digital footprint matters now more than ever. This has been the IA Advantage and I am Chip Bacciocco signing off. Have a safe and prosperous week everybody.
