The Hidden Crisis Inside Insurance Renewals — And How AI May Change the Economics of the Independent Agency

Hi, this is Michael Jans with the Society of Inture Paneurs. AI is moving faster than anything this industry has ever seen. Not theory, not someday. Welcome to AI for the IA. This is a 10 minute advantage for independent insurance agency. Leaders and principals I talk with top thought leaders, AI builders, agency owners who are actually using this stuff to grow, to protect margins and defend valuation. No hype, no fluff, just the signals you need before they become obvious. Each one about 10 minutes only, talk to you soon. Kobe Turk, thank you so much for joining us. Are you in San Diego? I am. You're dialing in from. Okay, very good. So let's hit the ground running. First, I'll allow you to introduce yourself to the audience. And then I want to dig into what your tool does for the independent insurance agency. Of course, let's do it. So yeah, your background, how did you get into this? I thought I'd do it. I like a lot of people. Okay, what did you follow from? What did you follow from? I was in the defense industry doing some consulting to a job in the state of California. I just wanted to change one and move from private to public sector and end up joining the California Earthquake Authority, which is the second largest single land natural disaster fee insurance company in the world. And I didn't realize until my first day that I was driving into a insurance company. And it was an amazing experience and fell in love. And many years later, here we are. Okay, got it. Here we are. And so you so, boom, you saw a problem, describe the problem. And then let's talk about how you provide a solution. Sure. So I will say it was a problem that was staring us in the face for a long time. And we just at the time, and I'll be honest, we thought it was maybe not the right problem to solve. And I said that wasn't the case and absolutely is the problem that we see in the industry is right now it takes about $135 an hour and a half to service a renewal. And insurance is one of the few industries, especially in the agent and broker channel where we play that you have to re-earn everything you've ever sold every year. Right? I mean, there's really no other industry where your entire revenue source as a 12 month expiration date theoretically. And so that's the problem we help solve. We help insurance agents who want to spend more time being a risk advisor, insurance agent, brokers want to spend more time being a risk advisor, a value add, a trusted relationship. Get away from the back end, servicing work data entry that binds them to their computers all day. Yeah. And get them down to about $15 and 20 minutes. So that's the problem we help solve. Okay. So let me see if I got the math on this, right? So I think you said like $135 did I get that right? And you get a third about $15. About, yeah, $20. Yeah. $20 and 15 minutes. Okay. Boom. All right. So that's fairly significant in these time. What was the time? An hour and a half. An hour and a half down to 15 minutes. Okay. That's pretty substantial. So yeah, that's like one six if I'm doing the math right on that. So yeah. So that's substantial. So what is it that you compress? What, what, walk us through maybe a, a use case or an example? Sure. And an hour and a half is the average we see across the industry. Complex commercial is going to be a lot more. Modern line auto is going to be less, right? But as an average, out of that hour and a half, what I think matters is only about 15 to 20 minutes of that today is actually spent talking with the insured. The rest of that is spent on what we call the know your customer process, researching the risk, researching them, making sure there's been no changes to the account. And then doing the actual quoting work, whether that's going into a radar, going into carrier portals, filling out a cord forms. So the bulk of the work we do today, the customer doesn't see, therefore can appreciate, and also doesn't help us deepen the relationship with them. Got it. Okay. So let's take an example. Okay. So let's say you're in San Diego. So let's pretend I'm a medium sized contractor in San Diego, right? So my 12 months are up. And, and you, the agents, you have been emailing me saying it's time for renewal. Let's have an annual review, I guess, right? So here we are, and I'm going like, oh, man, what's happening in the industry? My prices have been going up or what have you? And so you want to satisfy me. And you, and, and, and, and the old Colby is thinking, oh my God, this is going to take an hour and a half and the new Colby is thinking, oh, this is going to take 15 minutes. This is great. Tell me like, what's the difference? What are you eliminating for me? Yeah. So, and to be clear, we're playing the personal aid space today, but I'm happy to use a commercial example. Okay, guys. So, you come up for renewal. First of all, as an agent, account executive, a CSR, you have to figure out, I'm not going to touch this person at all. And the truth is, even if we want to, and this is probably what you do within agency revolution, right? You made it easier to have closer, more automated contact with your customer. And the dirty secret is we can't touch 100% of our book every year. We just, we can't. It's not possible. Math doesn't matter. So, first you have to figure out who you're going to touch and that takes a while, let's say, five minutes out of the hour and a half. And then once you've decided you are going to touch someone on average, we're spending 10 to 15 minutes researching the account. It can be more. It can be less depending on the lines of business that they have. And then we're going to spend 45 minutes to an hour actually going to different carriers to get quotes back. And only at that point, are we then able to have a productive conversation with the insurer, which is why they choose to work with an independent agent. So if we can compress all of that to almost nothing, then we end up with a lot more time back to spend as a trusted risqué visor. Got it. All right. So a few kind of fundamental questions. It's not called me. How long has your business been alive and been around? Yeah. Yeah. I joke that when we started the company back in 2020, AI meant something which is why it's refocus AI. And it was really pointing at the machine learning we were doing to identify who needed to be serviced. Uh-huh. Now we just go by refocus publicly because every company in the last year has AI on the thing. Right. Okay. So again, the year you've been around for how long? 2020. 2020. Okay. So you actually, I mean, that's, you're no longer a startup. All right. You're always a startup of the right mentality. Yeah. Okay. Got it. And so, yeah, I'm also curious if you're, if you're willing to talk about this, like funding, are you bootstrapping? Are you recruited outside funding? Yeah. So we bootstrapped for the first three and a half years. Uh-huh. Uh-huh. I was working 120 hour weeks between two jobs. Uh-huh. Right. Right. That's the glamorous side is one of our advisors says, you know, I still to this day, I mean, in ramen without the flavor, you know, keep, keep the budget, right? We raised our first outside funding at the end of 2023. Uh-huh. Did a seed round VC cap, but all in 2024, uh, raised a bunch more money since then. So we are now venture backed. Uh-huh. But we were not for the first, you know, three and a half years. And so that was a really fun and stressful and uniquely enjoyable time. And I can totally relate to that as a former startup founder. Um, and so, uh, if people want to find out more, like, how should they, how can they explore this? How do they set up a demo? What's next for customers? Sure. Uh, right now, we actually get most of our customers to the word of mouth of our other customers, which I think is a really amazing. Yeah. Good. It's amazing validation, right? Uh, people can reach out to me and LinkedIn. Uh, we have a website like I think most companies do. There's a link to books and time with me there. Uh, they can send me a carrier pigeon. We're really agnostic. Yeah. Okay. And so your, your website is, let's see you are. Refocus AI dot com. Refocus AI dot com. And so they can go there and they can book a demo, presumably, on site. All right. So before we're done here, because I do keep these to 10 minutes. Um, I, I'm curious like what kind of feedback are your customers giving you? What, you know, what, what, what are the real world anecdotes that you're hearing? Yeah. Well, so we're, we're seeing two things. So number one, um, we're seeing retention rates go up. Uh, policy, forced retention rates increasing. Obviously, depends where you start at it depends what your process is around renewals and servicing, but, uh, measurable increase in policy and force for tension. And as we get into a softer market, there's never been a better time for that. Got. Okay. So time saved and retention is up. Yeah. We're also good. Good. I heard. Also seeing, uh, a higher number or a higher average of number of, uh, policy. these per account because when you have more time, it's easier to upsell. - Oh, okay. - Oh, that's so cool. - So I like that. All right, so we're seeing front of the house, more policies and higher retention. Back at the house, we've compressed time. All right, very good. - And we're also seeing some service people being able to get redeployed to sales facing functions because you just need less people now to keep your existing clients. - All right, beautiful. Okay, so we will put your contact information in the show notes so people can easily find you and reach out to you. All righty, so Colby, I want to thank you for spending time with us today. - Thank you, I appreciate it. Have a good one. - This episode of AI for the IA is sponsored by the AI Growth Academy for Insurance Repreneurs where serious agency leaders learn how to apply AI with disciplined judgment and real leverage. If you want a simple one page on how we help agencies grow, protect margins and maximize valuation with AI reach out to me on LinkedIn or email me directly at michael@ michaeljans.com. I'll make sure you get the right next step, no pressure.