DATA SHOULD HELP INSURANCE AGENCIES GROW: SETH ZAREMBA – EPISODE 089
On this episode of The Digital Broker, Ryan Deeds interviews Seth Zaremba about data-driven tools Zaremba developed to drive up revenue at his insurance agency. By listening to this episode, you will learn:
- Why so many agencies struggle to figure out how to make more money.
- How Zaremba and his team took apart every process and reorganized it under a new, coordinated system.
- How that system became Neon, a product that monitors every task and combines data from different agencies to provide actionable insights and empower the independent insurance channel as a whole.
Seth Zaremba was looking for a way to keep Zinc, his own insurance agency, profitable and independent without having to solicit outside capital. The only way was for the agency to make more money on its own. But how?
Thousands of tasks make up a typical insurance agency’s operations, so Zaremba began by grouping them all into five basic categories: prospecting, marketing, sales, customer experience, and data. All five are important, but what Zaremba found out is that they are important together. Unfortunately, many technologies don’t come equipped to look at it the same way. “If you look at the systems we use,” Zaremba tells Ryan Deeds, “none of them value those components in an aggregate. Each one is focused on doing one thing well. But all of those things relate to one another. Information about who to prospect, what works and what doesn’t, when do customers prefer you call them, which channel of communication they prefer—together, they tell a story about customer preference and behavior.”
Separately, however, they are of little use. “Agents are running their businesses on 20 or 30 technologies—everything from email, phones, agency management systems, etc.—that are not coordinated or talking to each other. Somehow, we’re supposed to create a quality product based on this disorganization. So we decided that every time we’d talk to a customer, an agent, or a carrier, we would put it all together into one transaction so that we could see how all of those actions relate to one another, and then we’d use machine learning to predict how to better serve customers.”
This was no easy job. It required taking apart every process and cataloging every action, task, and behavior that influences business outcomes. Furthermore, none of it would mean much unless everything could then be measured in accordance with some standard system, an omniscient platform that saw everything and knew everything. No such platform was on the market, so Zaremba and his team created one. Neon was born.
Neon monitors every action and task inside an agency, determines its relation to other actions and tasks, and associates some kind of metric to it, e.g., cost. This yields insights into what’s making an impact and what isn’t. Right away, it helped Zaremba’s agency stop losing money in places where it didn’t have to. “It turns out that looking at the whole thing at once reveals a tremendous amount of inefficiency. Most agents have never tracked every activity associated with quoting, for example, and therefore they have no idea how much the quoting process is costing them. We did. I can look up every phone call, email, direct message, and face-to-face meeting related to the quoting process. That is how I found that we were losing money on quoting. There was no way I could stay in business if I kept quoting the way carriers wanted me to quote. If I could solve small business commercial quoting, I could make significant gains.”
Ever since adopting Neon, Zinc’s growth has been “off the charts,” he says. “We’re seeing amazing results with it. Customers are coming in faster and staying longer. Our people are working more efficiently. Our carriers are seeing us deliver results. We’re making more money: this year alone, we’ve gained 20% in margins, just by operating differently. Same people, same customers, better process.” But it didn’t happen without a tradeoff. Zinc had to unplug all of its technologies and reconnect them all under Neon, and Zaremba is now asking other agencies to make the same leap of faith. Zinc isn’t hoarding Neon; B Atomic, Zaremba’s new company, is rolling it out to select agencies beginning in 2020, and not just to capitalize on a promising product, but to enlist other agencies’ help in making it even better.
For a data set to be valid, the sample size has to be big enough. The largest agencies and brokerages have the benefit of being able to produce adequate data sets on their own, but most independent agencies don’t. Worse, they’re not working together to overcome this common disadvantage, something that Zaremba is trying to change. Neon is designed to combine data from all the agencies that use it—in a way that, Zaremba assures us, protects each agency’s privacy—and produce a data set big enough to yield actionable insights. The idea is to build a communal resource that can empower independent agencies and help them compete with the larger ones.
“Historically, independent insurance agencies have been siloed. We want to connect them, while still keeping them independent. A group of agencies that share information and make data-driven decisions can and will create more value than a group of agencies that are siloed. Together, we can learn the best ways to serve customers, create opportunities, and run agencies in the modern day.”
What do you think? Have you been having trouble organizing your agency’s data? Are you curious about Neon or data management in general? We invite you to join our Digital Broker LinkedIn group, where hundreds of insurance agents, brokers, and professionals gather to talk about best practices and operational excellence. Join us.