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Insurance Perspectives Podcast - ValChoice Pt 1

Insurance Perspectives Podcast – ValChoice, Part 1

This short summary of the HawkSoft Insurance Perspectives Podcast interview with Dan Karr, ValChoice founder and CEO, and Kelly Endicott, owner of K&M Insurance, shares the key discussion points from the interview. Time stamps are included so you can go directly to that part of the interview to listen to the discussion. The YouTube version of the podcast is available at the bottom of this blog post.

Why Does ValChoice Exist?

2:10 Dan shares the back story of being hit by a car, admitted into the intensive care unit of Stanford University Hospital and eventually learning no insurance company would pay his medical bills. He shares how this prompted him to leave his Silicon Valley tech career and found ValChoice. This back story is why ValChoice analysis is so effective. Focus group testing shows a 10x increase in trust due to this back story.

3:40 Hear Dan’s reference to the song “If it Weren’t for Bad Luck I’d Have no Luck at All” by Robert Blake.

3:50 Dan asked people in the industry “how could I have avoided this situation?” Everyone gave the same bad advice saying I needed to get financial strength ratings.

4:20 The difference between financial strength ratings and ValChoice is that financial strength ratings measure the ability to pay claims while ValChoice ratings measure the willingness to pay claims. These ratings are completely different. Using willingness to pay claims is a new – and effective – way of selling insurance.

Name One Aspect of ValChoice That Draws in and Keeps Agencies?

5:59 There are two primary use cases that draw agencies to us:

  1. A desire for increased profitability
  2. Reducing the anxiety level in the office due to the volume of re-marketing requests.

6:35 Ease-of-use is another factor and is one of many reasons customers don’t leave ValChoice.

6:45 Kenny also asked “why” these points work to keep customers:

  • Reducing agent anxiety – ValChoice works because of the back story told in the segment that started at 2:10. Based on focus group testing, Dan predicted to one agency owner that ValChoice would reduce their re-marketing by 75%. The agency owner said he would be happy with a 10% reduction. After six months of A/B testing and thousands of policyholders, the data shows customers that receive ValChoice ratings request to be re-marketed 75% less than other customers.
  • Increased profitability – This can be calculated by using the agency profitability calculator. CLICK HERE to go to the calculator.
    • 10:20 – Sidebar on how can this can be so effective

The Wine Analogy – Selling Fine Wine and Selling Insurance Are Similar

  • 11:44 Ease-of-Use – This is really important. Set it up in minutes. No new interfaces. Keep working the way people have always worked.
    • 11:57 – Story about implementing a CRM system when Dan was a VP of sales. One set of data. Two places to go to work with it. ValChoice is different. As an AMS add-on, we run in the background and turn the AMS into a CRM, making the whole system really simple. Agency owners and managers no longer need to demand users embrace a new system.

13:45 Exchange between Kenny and Kelly on how ValChoice reduces the anxiety in the office.

14:00 Kelly on using the re-marketing cost calculator.

How Does ValChoice Approach Data Ownership?

15:00 Agency data is agency data.

What is the Hardest Part of Working with Insurance Agencies?

16:00 A lot of what affects agencies is driven by carriers. More than one thing:

  1. Insurtechs came in, overcommitted, didn’t deliver, created a trust problem.
  2. Being new and different.
  3. Contentment/inertia.

17:30 Why is the industry content? Because of low-quality data analysis.

18:00 Example of low-quality data analysis

  • Built a channel analysis and filtered on IA channel, best companies for claims handling and service
  • 80% of the best companies lose market share every year.
  • Retention is an obvious way to bring immediate benefit to carriers
  • Some companies don’t think they have a retention problem because they measure in premium dollars
  • CLICK HERE for the Policyholder Retention Calculator
  • The cost savings for both carriers and agencies of reducing churn are significant
  • However, poor data analysis is causing this problem to be overlooked
  • One carrier told Dan they don’t have a retention problem. ValChoice calculates this carrier could increase profitability by $70 million per year with a focus on retention.

22:00 Results of informal polling showing the importance of claims handling vs. financial strength as a measure of insurance company performance.

24:30 Analogy of the car manufacturing giving one measure of car performance (an oil level gauge). This is the equivalent of a financial strength rating. However, what consumers need in their car is a fuel gauge. In insurance, the ValChoice rating is the equivalent of the fuel gauge.

25:10 Defining a disruptive innovation and how ValChoice has created a new market segment.

What is the Best Part of Working with Insurance Agencies?

27:40 I’ve met a lot of great people. Also, it’s personally fulfilling because ValChoice is delivering something positive to consumers, agencies and carriers.

Watch the Interview Below


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