The Changing Dynamics of the HNW Insurance Marketplace with Tim Hogan of

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Tim Hogan is a 30 year veteran of the HNW insurance space. During this episode of the Private Client Risk & Resilience podcast, Tim brings his amazing perspectives from being a high net worth underwriter and consultant to our conversation. We discuss how the dynamics of natural disasters and and non-weather related losses have impacted the insurance markets and the advice that brokers give their clients. We also discuss the value that a HNW insurance specialist can bring to a client who has significant assets.

Private Client Risk and Resilience Podcast Transcript

Kurt Thoennessen 0:02
There are more wealthy people today than ever before in the history of the world, the risks they are exposed to through the assets they acquire and their unique lifestyles are significant. The bigger the asset, the bigger the potential loss. The bigger the potential loss, the more complicated the mechanisms for protecting those assets becomes. This show seeks to uncover the risks that successful people face. So we can provide some guidance towards minimizing, mitigating and transferring them. From Coverage contracts and carriers to client experience, technology and claims, we will cover it all. Whether you’re an agent looking to hone your skills, or someone with significant wealth to protect, I hope this show becomes a valuable resource you can come to rely on to help you protect yourself, your family, and your clients. Welcome to the private client risk and resilience podcast. My name is Kurt Thoennessen. And I’m a senior advisor personal insurance at Ericson Insurance Advisors. And I’m also the founder and CEO of RiskRevu, which is an insurance technology platform that helps agents gather information in a modern way. So I am super excited to be back behind the microphone today, on my first podcast in a while with my buddy, Tim Hogan. And looking forward to our conversation. And you know, over the weekend, I was I was fortunate to be involved in a soccer tournament for my daughter. And there were five games in the tournament. And I was sitting next to a buddy of mine for every one of them. So we had a we had a chance to talk a lot, which was which was really cool. And you know, we covered everything from car repairs to health insurance to retirement planning. I don’t know what else we covered, but you solved

Tim Hogan 1:54
you solve all the world’s problems.

Kurt Thoennessen 1:57
I think we did well, at least in our problems. And it was just so great. And, you know, just reminded me about this, the power and the importance of having these conversations, sitting down and having a conversation with a friend, buddy, someone who you trust, you can learn so much in such a short period of time. And those little tidbits can really make an impact on your life. And Tim, you and I sat down last week, you know, down at the Starbucks and exit to you know, and, and we had a similar experience. And you know, it was our first time meeting. But you know, we had a great conversation, just sat there and chatted about insurance and, and other stuff for hour and a half.

Tim Hogan 2:44
All this stuff everybody loves to talk about.

Kurt Thoennessen 2:47
Oh, yeah, yeah, insurance and Starbucks.

Tim Hogan 2:50
And Starbucks Exactly. Yeah,

Kurt Thoennessen 2:53
I have. I have a friend who has the Starbucks app. And he lives by the Starbucks app. And so if they have, you know, so many stars, they’re giving away like double stars on Monday or Wednesday, you know, he’ll make sure that that’s the day that he goes to get like the extra cup of coffee, or he’ll say, Oh, I get a free banana on Wednesday, because they’re doing a special promotion. And again, through that conversation, I learned about stars in the Starbucks app. So now.

Tim Hogan 3:23
Yeah, I could have enlightened you as well. I feel like I paid for yours. Which

Kurt Thoennessen 3:28
stars. I was just about to say you pay for my coffee with Starbucks stars, which, honestly, I was. I was a little bit annoyed, but not really annoyed. That was not the right word. I was like, I want to use my stars.

Tim Hogan 3:41
I didn’t know you had them. I’m sorry. My apologies. You invited me up. I guess I should have let you pay.

Kurt Thoennessen 3:47
That’s okay. Next time. I’ll buy the coffee. And I’ll use this. And I’ll get the story go.

Tim Hogan 3:53
You get the stairs. Yes, exactly.

Kurt Thoennessen 3:55
So anyway, welcome to the show. Thanks for excited to have you here.

Tim Hogan 4:00
I appreciate it.

Kurt Thoennessen 4:01
Yeah, absolutely. So yeah, good conversation. And that’s what we’re gonna have today. And, you know, just diving into what, what you’re all about what makes you tick. You know, and where are you been where you’re going? I am, you know, we talked a little bit about this last week. But you have an impressive career. You’ve been you’ve been in some senior level positions in your career. And you’ve got some great ideas about things that are coming down the pike. So I’m really looking forward to sharing that information with our audience.

Tim Hogan 4:33
Yeah, there’s there’s a lot going on in our industry right now. And it’s just really fascinating to see how things are really starting to change. And I know we’re going to talk a little bit more about this. But yeah, it’s it is not your father’s insurance as they used to say, you know, so a lot has been going on and I’m looking forward to talk a little bit more about you know what I’m going to be doing with that too.

Kurt Thoennessen 4:57
That’s right. Yeah, it is. It is not our or fathers or mothers insurance, I the the industry is changing every year, all the time. There’s a stat I read the other day, in 2021, there were $343 billion in insured losses caused by natural disasters. And so you know, that right there, the amount of money that is being spent to repair and to recover from these natural disasters is has gone up tremendously, you know, you compare that to Hurricane Andrew, you know, knocking it

Tim Hogan 5:34
way down in the list now, by the way,

Kurt Thoennessen 5:37
right. So, as far as, as far as what, as far

Tim Hogan 5:41
as natural cause for natural disasters go? Right. It’s just been eclipsed by so many other hurricanes and so many other events, and thank God, you know, we have not had a quake, I shouldn’t even say that. So, yeah, it’s, it is something that you’re seeing, these numbers just continue to rise, and people keep moving into these locations where it’s gorgeous, and it’s right by the water, or it’s right by, you know, this beautiful vista, and your get brushed around you or the Earth moves around you. So, you know, we have to come up with with unique ways to to help these clients, and to help them understand just how they can evaluate what they have, and what’s the best way to go ahead and try to ensure that it’s right,

Kurt Thoennessen 6:33
yeah, I think you’re right, people are always going to want to live in these nice places, they’re going to want to live on the coast, you’re going to want to live in the mountains, on islands and, and in high rise buildings, and so on, so forth. And that’s where the insurance comes into place. It you know, it just helps them helps the banks helps the insurance, you know, pass on that risk to insurance company for the premium, you know, which is great, you know, and like, you know, you’re talking about Florida, 1300 miles of coast in Florida. You know, that’s what people are, that’s what the industry is looking at. Right? And I don’t know what the number is of what the value of the property on that coast is. But you gotta think,

Tim Hogan 7:16
yeah, it’s huge. It’s staffing, thank God, the, you know, it’s, it’s, it’s awful when they go across the state, and then head back up into either the East Coast or into the Gulf, because they’re getting it on both ends. Because that states, so that coastline, and it can easily with a cross, though that state and cause cause damage on on both coastline. So it really goes into what we were going to be starting to talk a little bit more about the marketplace and, and how that’s actually changing. And where do you live in? And what’s happening to the market right now. And I think you’re seeing as we all are in the industry right now, it’s really hard enough on the property, cash, the personal lines, side of things as well. You’ve got carriers who were actively involved in writing now that coastline. And, you know, we’re taking creative ways to look at how they could effectively do that, which are now saying, we don’t we don’t want to do that anymore. You know, you know, we’ve got our exposure. And it’s, you know, our reinsurance costs are continuing to rise, you know, our treaties are, are not allowing us to do certain things. So, we’ve got to take the steps to evaluate what our book of business looks like in areas that are coastal or other high risk brush or Quake zones and say, what do we really want to have our exposure to be here? And how much do as you’re talking about the dollar values? What is it really that? We can is it going to be an acceptable amount in the markets hardening, you’re seeing you know, what’s happening, you know, in Florida, we’ve we’ve we’ve seen the shift with some of the companies that are not rated well who’ve been gone insolvent, you’ve had what seven companies I think in Louisiana This year alone, you know, one a month go ahead and go insolvent and that’s left 40 or 50,000. policyholders you know, struggling to try to get coverage for for their property down there. And, you know, the state, the state fund is is is really not an ideal place to go for any of these clients if they’re middle market or, or especially if they’re high net worth, or ultra high net worth. That’s just not that’s just not the marketplace for

Kurt Thoennessen 9:49
it. It’s supposed to be the insurer of last resort.

Tim Hogan 9:53
And they’re not that anymore. Are they were we’ve seen that where you know, they are becoming The insurer of last resort, but it’s the only insurance that they can get. And, and I guess maybe that’s the last resort bid. But I tell you, it’s, it’s, it’s now in, you know, the 30 plus years I’ve been doing this, it’s it, this market has just been incredibly volatile, over the last, you know, couple years now with, with what’s been taking place, and we’re seeing, you know, whatever you want to say about climate change whatever side of the fence, you’re on with that the State Statistics and those numbers that you talked about earlier about the cost of, of the claims, and how much billion how many billions have been spent in, in paying out in fixing homes that will then be damaged again, right?

Kurt Thoennessen 10:53
Just look at that number $343 billion in 2021. And that was from natural disasters. So that still leaves other other losses that are not natural disasters. Water Damage is a big example. Water Damage accounts for 46% of the claims for property and cat are for property claims in the United States. And they say I think chub did this study, they said they found that 44% of homeowners within their their subset of clients experienced a water damage claim in the time that they’ve owned that home. So water damage is just such a huge problem. And it’s just it’s not, whether it’s non weather related water damage. So, you know, you get a cold spell, and pipes freeze, and now you got a burst pipe and you got hundreds of gallons of water pouring into your house, maybe you’re there, maybe you’re not you can catch it, but and water damage, if it’s sitting there for, you know, an hour, two hours. Oh, yeah, it causes significant damage the cleanup process. It’s, it’s not fun. It is not fun. So, and you mentioned, reinsurance and treaties, and, and all that stuff. And, you know, I don’t want to just brush over that. Because I think that’s a concept that, you know, not everybody, you know, completely understands. And, and I’m not a complete expert on it, either. But, you know, our audience, you know, I think we have insurance agents listening, we have insurance carriers listening, we have clients, high net worth clients, who are listening to this as well. So let’s talk about reinsurance. And, and that, how that plays a role in this. It’s even just for a couple of minutes. You know, I’ll start off. You know, as far as reinsurance is concerned, I had an experience recently, where I was quoting a home in California was $28 million home, and we had a quote for it. And then the end, the, the client didn’t purchase it soon enough. And within that period, that they didn’t purchase it, the reinsurance changed their contract, and they changed their terms. And because of that, we had to lower the amount of coverage and increase the price. Right. And so, you know, to me, it’s like, okay, you know, insurance companies are taking on some risk, but then there’s insurance companies for those insurance companies that are also supporting that risk. And exactly,

Tim Hogan 13:19
yeah, the layering they have to carriers have to layer their, their coverage or exposure in these situations, you know, their treaties are going to allow them to go ahead and do X amount up to X amount, then they’ve got to go ahead and get go out and get reinsurance facultative reinsurance on top of that, and then there’s layers upon layers of, of coverage, depending on the size of, of the loss it is, if it were 78, you know, in your situation, you know, getting the FAC facultative reinsurance or fac on that one property alone, you know, they’re only going to take up to x exposure, and then they’re going to have to go out and go to the marketplace to see where they can actually then find a, a company that’s going to want to go ahead and, and and partake in part of that. Or maybe only a portion of that depending on you know, if you’re if you’re off in your, you’re going to London and you’re you’re going to see you know, a number of syndicates who are going to be layering on that, or putting into that and they’re going to take 20% I’m gonna take 25% I you know, so it, it is something that when you were, you know, when they’re looking at what’s going on here in in the states and and they are seeing the losses and they’re seeing where the exposure is and they’re you know, they are now utilizing sophisticated modeling tools themselves to to help them identify just wait a second, you know, in that area where you know, California to brush stone and you need to go out and get that they’re gonna go ahead and run these these reports. To verify and see just what they’re they’re seeing and the risk tolerance, that they’re gonna go ahead and take for that. And it changes constantly. And it just is one of these, as you you are unfortunately experienced that, you know, if you don’t pull the trigger almost right away, or if you’re going to wait a month or two months or three months to make this decision, you’ve, you’re behind the curve again, and you’re out there trying to hustle to, to get this recorded and finding out then that Well, now, as you said, their position changed and less coverage more more cost.

Kurt Thoennessen 15:47
Well, and that’s good point is, it’s not always just a lower limit and a higher premium, it could also be a contract modification, you know, it could be a higher wildfire deductible, it could be removing a limit on water damage claims. So you know, it could be a contract issue as well. And, and that’s something else that I think we were going to dive into, because, you know, we’re talking about the markets and the challenges that we’re seeing today. But there’s also great variability in the contracts in the contract language. And one of the things and I think we should back up a step, because we’ve gotten off and we’ve, we’ve gotten off on a run, but I want to slow back down a little bit and go back to you. And I want to ask you to just do a brief introduction of yourself, you know, you’ve told me about yourself, but let’s tell our audience who you are, and, you know, what you’ve done, and, and so on and so forth. And because I think that’ll help support on the next part of this conversation.

Tim Hogan 16:48
You know, I started in the industry in the late 80s, mid 80s. With that, and worked for insurance carriers, from underwriting through claims support administration, up into middle management with them. And when I left the carrier side, I was with a firm Fireman’s Fund, handling their their high net worth market in outs in the Chicagoland area, the Midwest region. And, you know, it was, you know, that was an interesting time, as well back then, when, when, you know, carriers were, you know, tightening up still in the late 2008 2009, because of the, what took place in the market, and went ahead and went off and started a consulting firm, and was doing risk management consulting for a little while, got back onto the broker side and, and worked with some brokerage firms. And, in really, the specialty was really evaluating and doing deep dives on their clients exposures to, to evaluate to see just where and what they’re missing. When you we look at and you you see, you know, just all these, just the little things that as well, you know, the trust isn’t on there, or you’ve got a situation where, you know, the spouse is not also as a named insured. Okay, you know, that can cause issues. But, you know, it’s also evaluating what their their contracts are looking at, like, you know, what are the limitations, exclusions and restrictions that that are being applied to their contracts and saying, Well, okay, have you considered, you know, other, either and endorsements or, and maybe even a different carrier that’s going to provide you greater coverage might cost you a little bit more, but let’s talk a little bit more about what that is going to do. Let’s frame it in a picture of what really is what your exposure is supposed to be. I think Trump just did a study with with a Wharton last year when they were looking at the high net worth in the ultra high net worth and, and how they, you know, their mindsets on what they think about when it comes to to risk. And, you know, when you’re dealing with a middle market exposure, and you’re dealing then with a high net worth and an ultra high net worth, there’s a different mindset for these clients, when they when you’re dealing with these, these these individuals and as a as a consultant, as well as you know, what you’re doing, Kurt as in the agency of, of understanding just what and how they they need to evaluate their exposures. That’s ultimately what I believe a good risk manager is going to go ahead and be able to go ahead and do and provide them with with thoughts and solutions that may not be good insurance related. But it’s also working with financial planners and working with their life insurance as well as other avenues and tools to help them really protect their assets and protect their financial exposure with that, and again, it depends on what their risk tolerance and their, their, their risk aversion is, in these situations.

Kurt Thoennessen 20:26
And I think you mentioned a few things there that I just, I don’t want to brush right over. But, you know, you mentioned trusts, LLCs, a spouse, and the relationship there. And, and there’s other nuances to that, that could come into play with insurance coverage. And so, you know, I know, you’re, you’ve been a consultant, you’ve been on the carrier side, you’ve been on the broker side, you know, and, and I’m on the broker side now. And so what we’re doing is, we’re showing that there are, you know, whether you call them little things or not, and whether they are little or not, there are certain situations that these private clients, high net worth clients, whatever you want to call them get into, that there can be pitfalls within these contracts that a broker needs to help them identify. Most of the time, it’s very rare that you’re gonna have a client that’s gonna dig in, as deep as we do. Right.

Tim Hogan 21:20
Exactly. Unless they’re, you know, you find that your attorneys do sometimes,

Kurt Thoennessen 21:24
yes, yeah, absolutely. Right. And that, and that’s their job. And so and that’s our job, too. But talking about those, let’s dig it a little bit on the trust in the spouse, you know, these are, these are things that we look for, you know, in our conversations, to uncover gaps to uncover limitations within the contracts that, you know, they could become victim to in the event of a claim. So, you know, in your experience as a risk manager, as a broker, you know, can you share some other scenarios or some other maybe your process, you know, that you went through to help dig into these accounts, and maybe describe an account, like the an account, a typical kill account makeup that would render your services even more valuable?

Tim Hogan 22:08
Sure. And, you know, there’s, there’s not many people out there doing what I was, I was dealing with that and, you know, Kate Norris is starting up a firm and and mark to bolt in Chicago. And I know, Ken Butler was doing some things as well in the Ohio area. And I know there’s more. But it’s it’s certainly something where you’re looking at a characteristic of an account. Typically, it’s a spouse, husband and wife, who, who have multiple locations, multiple cars, they have a valuable collections or VAC policy that is substantial. And it really then looks at, okay, who do they currently have, what’s their current program setup like, and it’s amazing to find that, when you start to just get the information from a client, if they’re not already, in your agency, if they’re in your agency, Kurt, I can almost guarantee that I won’t find hardly anything wrong with with any of your accounts with that. But because you guys do a good job. And it’s when they’re not with an individual like yourself, that it makes it much more of an opportunity to help educate them on just how they need to be evaluating their current programs. So most of the time, you’re finding there with direct riders, unfortunately, they have a lion’s share of the market still. And it is it is something where, you know, they they are, if they’re not with a direct rider, if they’re not with one of the main carriers that focus in on the field of, you know, let’s just say, you know, 5 million assets, or even a million or more in assets for high net worth, or then ultra high net worth, I think, is 30. million. Is that they don’t, they don’t know what they don’t know, because no one’s really had the opportunity to sit down and help them consider just what is going on around them. And, and just what their exposures are with, with, with the risk of of having the, you know, the the nanny who, you know, if you don’t have a PLI or if you don’t, if you if you hire them yourself, now now all of a sudden an employee, and you’re subjected to in many states, you know, the work comp and disability laws of those states. And has anybody really talked to you about what do you have to do then to go ahead and get a work comp policy? And now let’s Talk about, you know, even though you consider this individual to be part of the family, because they’re watching the kids, they’ve been with you for five years or, or 10 years with a time. You know, they still, even though they might be considered family, they still we’ve seen so many situations where they’re being sued by their employees because of something was to occur, something was to happen, that would make them they the nanny or the employee, then say, well, wait a second, I guess I’m not being treated, like I thought, because of the situation. And, you know, someone’s, you know, whispering in my ear, well, you know, you can sue them, or you can bring suit against them. And, you know, they’re, you know, how much they’re worth, you see what they do, what type of vacations, they have what they have on their homes, then, you know, you deserve a little bit more of that, don’t you? And lo and behold, you’ve got employment practice suit on your hands, because of a disgruntled employee, if I’m in a situation like that, so it’s, you know, it happened to a family member of mine, where they had a nanny, and luckily, I was able to sit down with them beforehand and talk to them about this and say, Okay, you’re with a direct writer right now. And you realize that you don’t have any coverage, if something was to happen, when this individual is to sue you, or, or something was to happen, where she became disabled. And, you know, because she’s not able to work anymore. And what have you done then to to help her with this type of, of, of insurance coverage that might be mandated by the state or may not be mandated by the state, depending on, you know, you know, which state you reside in? So there’s, there’s a lot that has to happen with, with these clients, when the makeup of of what their exposures are of, of one who they are, where do they live?

Who do they have open in their mail? Who’s Who’s got access to checkbooks? Or do who knows where the checkbooks are, you know, it’s all of a sudden, we just taken a check out from the middle of the checkbook, nobody knows, nobody’s going to understand or see that being gone. That type of situation, and they are they you’ve given them access to some accounts, where you’ve seen it, we’ve all heard these stories where, you know, all of a sudden, you know, they are think it’s the, you know, their boss calling or doing something and they authorize a payment. And, you know, you’ve got some cyber issues there. So where’s their cyber coverage? There’s, there’s so much that that agents in brokers need to focus on, it’s really hard to get it right. Right out of the gate, because these are very busy, very, you know, they’re, they value their time so much that it’s hard to get with them to try to understand so maybe it’s also a situation where you don’t ask them a question about who owns the home, because, you know, you have access to the tax assessor’s websites. And, you know, this county does a great job of, of recording deeds. So you, you go out there, instead of asking the client, you know, who you know, who has ownership of the property, you go do your research itself, and I know, there’s tools out there that are trying to help with this as well, of digging into it, you know, property shark and others can, can do that, you know, there’s there’s costs involved with that. But, you know, if you, you know, if you got great people who can help, you can go out there and gather a lot of this information. You don’t need, you know, FEMA, it’s another thing for flood information to you know, FEMA has got a great website that you can go out to and and, and see if it’s in a flood zone or not in a flood zone. And you may be even able to go ahead and see if there’s elevation certs around the area that are been posted on the site, so that you can get an idea of you know, we just had one recently where the client didn’t have the elevation cert. However, when we pulled up the map, we were able to go ahead and see four different homes surrounding his that had certificates. So information on that that we didn’t have to go back to the client and you know, we had a better understanding of of what was going on with it. He was in our next zone but very close to an AE. And just wanted to get a better understanding of Elevate Question and, you know, base flood elevation on that so we can help him and and her make a better, better buying decision if they needed to go ahead and maybe look at that coverage as well.

Kurt Thoennessen 30:11
It’s great. All your your you’re describing this is, you know, as a risk manager, you’re getting these, these clients that are sending you this information, and then you’re just peeling back the layers layer by layer bed to better understand them as ensures better understand their risks, so that you can place appropriate coverage and make intelligent recommendations about their risk, you know, whether it’s to, you know, for insurance or for risk management, and you know, you’re fine. Got

Tim Hogan 30:44
no, no and exactly, it’s, you know, sometimes it’s, it’s, it’s interesting, because sometimes clients love to, you know, we just had one again, another client who had given an interview and was online, and there was a huge spread on this client. And looking at the wall. So you go, that’s a Warhol. Oh, that’s, that’s a Monet Picasso. Okay. And then you look to see, what do they have from their valuables perspective? It’s not there. And it was, it was a opportunity to, to be able to go ahead and go, Wow, okay, well, we’ll table that we’ve got that as a talking point now. But there was no conversation that we needed to have with the client, because we googled it, we found some information about the client out there. And, you know, we were able to go ahead, and and then when we did have this conversation with him, it was, it was a situation where it’s great. We, you know, we said, hey, there’s some public information out there. And just let’s talk a little bit more about what you’ve got. And it’s proactive

Kurt Thoennessen 31:58
risk management, yeah, you’re bringing something of value to that client, so that they can be better protected. And that, you know, they can then decide whether or not they want to take the advice or leave it or whatever they’re going to do. But the fact that we is, and this is kind of the, the conversation about the value of the broker, which I love, you know, I can talk about it all day long. The instances where, you know, I or my team or other, you know, friends of mine in the industry are providing this tremendous value that a lot of people frankly, don’t see, they don’t understand it, you know, it’s like, oh, you know, I got a homeowner’s policy through this person, but they didn’t realize how much time went into actually crafting and designing and placing that policy with the insurance company. And you know, because you talk about this peeling back the layers and doing this research and all this other stuff. Another layer of that is contract, research, and contract difference research. And this is where we kind of jump into one of your passions, which I want to dive into, and talk about perils, because perils is really cool. And I just want to kind of frame this a little bit. Because, you know, one of the passions I have, and this is been made real through RiskRevu is, as an advisor for our clients, and you mentioned, these people are super busy, they value their time, that’s absolutely true. So do I. And I want to make sure to do the best job for them in as little time as possible. And so that was risk review is all about, you know, putting together these smart forms to help gather information, make sure we get all the information, we need to do a great job. And so this is a tool that I as an advisor use to amplify the service that that I provide. And there’s other tools out there, you know, that are, in my opinion advisor tools, you know, not just tools that are looking to speed up the process, like I’m going to send you this link, and it’s gonna save everybody an hour a time, big deal. I’m looking for tools that are going to save time and improve the quality of my advice. And and that’s what risk review is. We’ve talked to Dan Carr from valid choice choice. Absolutely. Yeah, we’ve talked to other other tech companies that are building this amazing technology to help support us as advisors in this relationship and you’re doing it you’re doing it too.

Tim Hogan 34:23
So we’re trying to we’re Yeah,

Kurt Thoennessen 34:26
let’s talk about parallels what is parallel e

Tim Hogan 34:28
r y ls not. We want to help you understand the why when it comes to insurance, and at perils. We are you know, it’s it’s a startup right now. We’re trying to get off the ground. We are looking at evaluating an insurance contract, you know, personal lines, is, you know, I was just writing down some things you know, there’s so many new players in the marketplace right now. You have hippo root elephant kin lemonade Metromile then you’ve got openly I’ve never I’ve not heard of this, this is a brand new one for me and it was a USA company. nobler and OB LR are not blurred, nobler. I think it’s nobler. You know, and then you’ve got carriers, like, you know, safe COEs getting back in the high net worth marketplace. You know, they, when I started with them, they had quality crest and, you know, Berkeley is got into it get into it Cincinnati’s gotten into a nationwide is going to, you’ve got so many companies that are playing in, in this high net worth space, or, or just new to the market, as well as your talked earlier about trying to quickly do something, you know, eliminate says, you know, we can pay a claim in X, you know, two seconds or something like that. And, you know, you know, they do that and only like 30% of the time, I think or I read a stat on that. And maybe it’s 40. But regardless of that, you know, you’ve got all this this information out there, they only look at price, the genies out of the bottle in personal lines, we understand that we know price is a driver for this marketplace, even for the high net worth in a fluid because they they’re very particular about how they spend their dollars. And well, it’s

Kurt Thoennessen 36:23
also I think it’s important to mention that the the mass media marketing engine behind insurance salesman in the United States is just very difficult to to ignore, like who doesn’t know about the Geico commercials, you know, from the caveman to today, you know, to the gecko, where they’re talking about 15 minutes could save you 15%

Tim Hogan 36:45
or progressive with flow. And you know, we’re gonna give you prices on different companies for different companies as well. It’s all

Kurt Thoennessen 36:51
price. Price. Price price. Yep, they save you money. That’s

Tim Hogan 36:55
it. And that’s important. Absolutely. You mentioned that as well. But you also really touched on what is the requirement and needs are for a client is is to, you know, the old, I think it was AMCO, you can, you know, pay me now or pay me later situation where you want to get your transmission fixed. You we can do a you know, okay job for you. But you’re going to, it’s going to break again, and you’re going to have, it’s going to cost you even more. And personal insurance is like that. You go out there. And if you go and you purchase a contract, that is a basic standard ISO form three policy contract, what are you actually getting with that? What are the benefits? And what were the pros? What are the cons, and what we’re going to be doing at perils, is we’re going to have a tool called policy facts, and what policy facts that report is going to be able to go ahead and do is break down the difference is between a contract and look at the differences in these contracts, line by line, or coverage by coverage. Look at the limitations restrictions and exclusions in these contracts, and weighed them against what we find is what is the ideal contract gonna look like? Well, you know, we have the ideal contract built in developed, nobody’s gonna be able to purchase that. I mean, you’re gonna sell for, you know, unless you decide to self retain, and you’ve got the ability to go ahead and and and pay your, you know, 28 million, what was it $28 million for your UTV on that property. So you don’t want to take that hit, nobody wants to take a $20 million hit. But you want to go ahead and make sure you get the proper coverage and proper insurance in this situation. So what does that really going to mean for the client? We will go ahead and break that down for them. You know, you mentioned earlier about named insured, you know, who’s on the contract. And the definition of insured, you know, if the spouse is not listed as a named insured, let’s say an LLC owns it. And you know, the husband is the only member of the LLC, and the spouse is not on that. Well. How does a standard con? You know, you know, you as the named insured and your spouse, well, wait a minute, that’s a one it’s an LLC, to then it’s a situation where you’ve got a spouse who’s not listed as a named insured who’s not a member of the LLC. So a lot of carriers would not want to list this individual as an additional interest or additional insured on the policy in that situation. And she lives in a secondary hometown. If Florida most of the time, because she doesn’t want to be up here in, you know, the suburbs of Chicago or Detroit or wherever they’re going to be residing, whatever. And she wants to spend most of your time down there. So she doesn’t reside in that home for that 90 days, it’s being required and she, as what the contract reads, so the contract is going to read that she has to reside there, or he or she has to reside there for a minimum of 90 days. If you don’t do that you are no longer an insured under that policy. So that right there alone is is a huge limitation for this is a huge limitation, because no

Kurt Thoennessen 40:38
and no one’s going to be the wiser, right? Here’s a homeowner’s policy. And you know, we’re we’re putting it in the spout, one spouse’s name, and not the other spouse, just because that’s the person that you’re dealing with. Right, and then all of a sudden, there’s a claim and you got a you got a denied claim, because the other spouse isn’t listed on there, and they have this definition of insured. Yeah, I mean,

Tim Hogan 41:02
you know, I think with with, you know, some of these companies that I just listed off, that is going to be an issue, that would be definitely an issue. I think, with some of the other carriers that you deal with, it’s going to be an issue until you push. And, you know, then underwriting needs to make a decision about what’s the intent of the contract, what’s the intent of the policy in that situation? You know, underwriting needs to go ahead and say, well, our intent was to have this, this individual covered as well. I don’t think you’ll get that with any of these other companies that I mentioned here. You may get that with with, with, you know, the major ones that are dealing in this in this marketplace? Well, I

Kurt Thoennessen 41:52
think the point is, is that the contract is not a commodity. And you know, and a lot of people think that insurance is, especially personal insurance is a commodity and every contract no matter what company, you’re going to, if you and and it’s kind of a, you know, perpetrated by these online Raiders, where you can get a rate from seven different insurance companies, and it’ll show you line by line, you know, row by row, you know, this one, is this, this one is this, this and that’s all they’re looking at is price price. So all the only thing that’s important here is the price. But when you dig down to it, and you see, okay, well, this contract from this company, this, this one has the named insured definition without the spouse mentioned, this one has it with the spouse mentioned, this one is a better contract. And that’s why it’s more expensive, right? And this one’s less expensive, because it doesn’t have that better definition. So but people aren’t making the decision based on that they don’t know. And there’s no transparency in those advertisements for that, they would have to call the company talk to someone who’s probably not going to have the answer. Because they’re set, they’re just selling the policy, and it’s an 800 number anyway. So you know, it’s just, it’s that whole model of pushing that that commodity idea is just totally against or totally opposite from what the broker model is, which is even not

Tim Hogan 43:13
even in the broker model, Kurt, you’ve got a situation where you’ve got people that, you know, who are on your team, and I know, you’ve got a great team there yet, you know, to expect them to understand and know, what is going on for every single company. And every single change that takes place for this company is is is a daunting task, and you can’t stay on top of it.

Kurt Thoennessen 43:38
Well, it’s a great point, the so you got the simplicity of the price issue, but then you have the complexity of all this stuff, too. Yeah, you know, when you’re when you’re talking about going in and reading a contract and being able to distinguish one from the other, and what the differences are, it’s very, very challenging,

Tim Hogan 43:57
right? And, you know, especially when you start looking up, you and I talked about this as well, when it comes to you know, property of others, there’s a there’s a clause in in every contract is you know, let’s say you you you’re gonna rent a banquet hall for any event, wedding Bar Mitzvah, Bar Mitzvah, whatever. And your your homeowner’s policy is gonna go, yeah, it’s it’s going to extend liability to that, well, there’s an exclusion and limitation and restriction in your policy, that your property of others is going to limit it to fire, smoke, and explosion. Some of them will add water to that. A lot of them don’t. A lot of them. You talked about water being a major issue. A lot of them exclude water. So if somebody backs up a sink or a toilet, at that location that you’re at And that water goes out and causes damage to that location you’re on the hook for that, without your homeowners policy even coming in, don’t deny it because it’s sorry, it’s not covered. We here’s the here’s your here’s your exclusion for that. It’s uh, and and, you know, there are only a handful of companies ISO doesn’t cover it. But other there are a lot of companies out there that have made these modifications that have changed the ISO contract. Or if they’ve written their own contracts, they’ve written it in a way in a manner that would then include something like that. There’s one company that it’s not as clear, and almost as clear as mud. Beans, you know, I won’t mention the the carrier’s name, but it’s a toilet seat cover, I think, or something like that. Somebody is what somebody used to had that logo have at one point in time. But they do cover it, but it’s not clear. And, you know, in we talked about, you know, with Chubs restrictions on, you know, the named insured, you know, their contract reads very, very, it reads as if it’s, it flows, it flows, it’s it’s not, it’s not a standard, it’s not a standard contract that you you go and you see in our industry. And, you know, but they bury the, you know, we talked about trusts and LLCs, they bury that clause, deep into the contract that all of a sudden says, you know, oh, private entities that you know, that own have ownership in this or have an interest in in this property are covered automatically, under the contract? Well, that’s great to know. And it should be up there with the named insured and how a definition of insured is. But

Kurt Thoennessen 46:52
yeah, for the amount of times that we see, just in my own experience, so we see clients purchasing homes in the names of LLCs, or putting them into trust as part of their estate planning. That language alone is just extremely important to have in there just absolutely, to avoid any issues down the road, you know, because like we were saying before, you’re, you’re always peeling back the layers as a as an advisor, and you’re always looking for those things that are going to make a difference in the insurance portfolio. And that’s one of them. And sometimes, you know, you just don’t get that information. So you know, when you’re working with a company, like Chubb that has that automatically built in there, that can make it

Tim Hogan 47:36
it’s huge, and that they earn some points back on our, our policy facts report when they when they do something like that, you know, so it policy facts is going to allow a agent or broker or even the client themselves to look at and evaluate, you know, I’m going to start 1000 points, where’s my score? My company score is a 913. Oh, and, you know, my, my current company is in a 707 95? Well, okay, what’s the difference between a 913 and 795. And you’ll be able to go ahead and evaluate that if you want to stay up at night, and you’re an insomniac, we’ll be able to help them understand what those differences are, in that in that report.

Kurt Thoennessen 48:27
So let me ask you a quick question. So how are you doing this analysis? You know, because these contracts are very long, right? And you have a some sort of computer model that’s going in and reading these not yet.

Tim Hogan 48:39
We need to that’s what we need to build? Yeah. Because currently, right now we can we’re doing this manually. So we’re going to we’re looking at contracts. We’re evaluating and we’re going through we have our deal contract here. And we’re equating that, okay, so, you know, we go through open up the contract, okay, what’s the definition of an insured? You know, the insuring agreement, what’s the insuring agreement look like? Okay, that’s typically how it starts. Unless you’re, you know, chopped up, but then you go down, okay, what’s the, you know, you who are who are you and insured and that what are the definitions in that then we get into, you know, section one when it comes into the property side of things and then we’ll go into and look at all those different sections and all those different limitations. You know, you know, a company like pure is a great example of of when we look at property coverage where they will automatically if you have 50% of your your contents coverage to your property limit, they will automatically give you $50,000 worth of of jewelry, watches and things along those lines. Included in that contract were typically the limitations 2500 For for that, or maybe even 1000, for some, some contracts for jewelry. And so they’ll they’ll pay up to $25,000 for any one item. And 50,000 in aggregate, well, I mean, that’s huge. In that situation, Cincinnati, I’m going to shout out to them do a does a great job when it comes to seepage, one of the few companies in the marketplace that when you read their contract, it doesn’t exclude seepage, or hydrostatic, you know, we call it that, you know, that’s what most people would do it hydrostatic pressure, that is pushing the water up from underneath the foundation into into the home, Cincinnati would go ahead, and in many states, they cover that type of, of loss. So they get points back for that, in that situation. So we’re reducing points based on those restrictions, exclusions and limitations within the contract. And, and that’s how we go ahead and in, we want to automate that process. And we want to then bring in machine learning to be able to go ahead and look at the and be able to read it better, and then compare them based on what we have, and then make it a little bit quicker for us on our end, that we can go ahead and run through these and get these contracts into the database. And so it’d be much faster for you, on your side, when you run the report just to easily get the score and know what the score is.

Kurt Thoennessen 51:33
I can tell you right now, I mean, this this type of analysis and the automation of it would save me a tremendous amount of time. You know, because right now, I’ll get an opportunity to work with a new client, they’ll provide me with some information about that maybe they’re working with, you know, X insurance company, I don’t have those contracts. So I go to, you know, and I look up the contracts, and I gotta download the contract, I gotta research. Tell people what surface well, why don’t you tell some people with surface because you told me about it.

Tim Hogan 52:05
Surface the systems for electronic rate, forms find in filing or filing system forms and filing filing and forms are I think, whatever, but ser F dot com. If Are you google search space state code like and why. And it will go ahead and pop up with you to go ahead and look into that. And that’s the system that most insurance companies most in most states, I think there’s only four that don’t typically utilized serve, they have their own, but it allows you to go in to look at and pull up the rates in forms for the carrier’s in what they have filed with the state. And so when they have a change, we’ll be able to go ahead and pull that up and look at that change and evaluate that change to the contract, if it’s an endorsement into work are actually the contract itself. So yeah, you’re right surface is a great, great way of doing that. It’s time consuming. And it’s it is a it’s a tool, but it’s not a great tool.

Kurt Thoennessen 53:21
Right. And so what you’re doing is you’re augmenting that tool, with additional technology to make it usable, you know, on you know, on mass by the adviser community. You know, so this is, you know, this is a great idea. I love it, you know, as an advisor who is working with clients on a daily basis, working with new clients all the time, doing these types of analysis, not only for new clients, but also at renewal, because contracts are changing throughout the year. It would be extremely helpful, you know, for me, for my team for everybody to have this at our fingertips where you just, you know, you click a couple buttons and you got a nice report that helps you assess the the

Tim Hogan 54:02
and it’s great from from a retention perspective because when the client comes back to you and says I want to go you know, I got a quote from XYZ or USAA or whoever and you don’t know who what their contact looks like you don’t you don’t know what you’re comparing yourself to. And conversely, you know, if you’re, you know, we if you’re a direct writer, you’re only dealing with your own company. So you know, you you know, you don’t know what typically other companies are doing so it’d be a tool for for so many out there that would be able to help them when it comes to attracting new new clients to the agency as well as retaining clients because they again, they are seeing the price as being advertised the billions of dollars that are being placed out there for for advertisements all come back down to we can save you money We can save you money on your premium, but we’re not going to save you money when it comes to a claim. And that, you know, that’s where Val choice really does a great job. You know, Dan does, and that report that he has of putting the claims aspect into that and how that is then function into it. So, you know, running a vowel choice and running policy facts together, along with doing a risk review upfront. Or three, I think, you know, that’s the, you know, trace amigos there of of companies that that really can save and foster and develop and grow books and business for our community.

Kurt Thoennessen 55:42
No, absolutely. So I, I have to applaud you on your creativeness and your your innovativeness on solving this industry problem. I mean, this is, this is a great, great solution that’ll help a great number of agents, as well as helping clients become better protected from the risks that they face. So, you know, and it’s great, because you’ve also been doing, as you said, for 30 years, and this is an idea you shared with me that this is something you’ve been thinking about for a long time. 18 years now, yeah. And that, you know, the to have a cup finally coming to fruition, which is very exciting. But just the fact that you you’re building something out of your experience, which I can commiserate with. That’s where risk review came from. It was a problem that I was having as an agent, and something that I wanted to solve, you know, using today’s technology. So awesome. I’m very excited to use it once. It’s once it’s available. So

Tim Hogan 56:43
appreciate it. Thank you so very much, Kurt. And yeah, it’s it is a, you know, our industry, the models are changing technology is is progressing faster and faster. And I was just at an insurer tech insight event here in New York City. And a lot of great things happening in the Insure tech world right now. You know, the focus on not just, you know, doing it better, faster, quicker, but also, when it comes to risk management, and went helping clients in and evaluating exposure and the modeling aspect on things. It’s just, we are we are really, I think, even though as we say this is certainly not our, your father’s Oldsmobile or your father’s insurance company here. This industry is really becoming our kids. And and you know, the technology is moving things forward. So much faster risk review, I mean, what a what a great way to be able to go ahead and gather information. And if you were to take that deck page and upload it to us, our ideal aspect is we’re going to be able to read the deck page, get all the form numbers off that off that itself. So we know we can rebuild that contract and put that together to to give it to you, Kurt and so your team can then have a really great holistic understanding of just what this client is insuring at this point in time. Where because right now, they have no clue if they’ve got water backup damage on there, or if they do, you know, what’s the limit on that? Because they bought an increased limit on that it’s showing on the deck page, but what does it actually cover? And what does it cover? Or, you know, we talked about valuables? You know, that is just another area. And you know, we didn’t get even even touch on the access policies. And the most important thing in my opinion of insurances is the, the access policy on that. And yeah, it’s it’s going to be it’s going to be a great ride these next few years, because of how technology is moving. And just how quickly our industry is going to go ahead and get up to speed on we are always thought as let you know, insurance was never it’s never been sexy. It’s never been glamorous. It’s it’s never been a situation where it’s like, wow, let’s go into insurance. Well, I said that but I guess you know, I’m an insurance geek. But maybe I’m gonna lose my lights here in a second. I don’t know. Welcome to This is a proper Midwest storm here in New York right now. I can tell you that coming leaving from

Kurt Thoennessen 59:38
here all day. We have some lightning and some thunder. It’s been been, you know, fortunately, it was a nice weekend.

Tim Hogan 59:44
Yeah, it was it was gorgeous weekend, so.

Kurt Thoennessen 59:47
But anyway, I just wanted to say thank you. This has been an amazing conversation, everything from underwriting to changes in the marketplace to startups with P er

Tim Hogan 1:00:03
I understand the Y. Yep. Yeah, I

Kurt Thoennessen 1:00:05
got the Y. I know the y very well. I love the Y. And hey, man, thank you so much for coming on. This is amazing. And, you know if someone who’s listening to this wants to get in touch with you, what’s the best way to do that? How do you want them to do that?

Tim Hogan 1:00:22
Hogan’s at Hogan is a great way or go on my LinkedIn. Tim Hogan is at Timothy Hogan. I can’t remember. You’ll find me out there. CRMC CIC CPRM good looking guy there with with glasses though. No, no glasses today. Correct, sir.

Kurt Thoennessen 1:00:44
That’s okay. You look good both ways. All right, great. Hogan, H O G A PRYL So yeah, reach out to Tim. I give him some shout outs wherever you are, check out As he builds it, I’m certainly going to and to everybody who’s listening thank you for checking out check checking out private client risk and resilience today. I’m super excited as I said to be back behind the mic after a short break and looking forward to several other interviews coming down the pike. If you liked this episode, give us a like really liked it. Give us a review. We love the reviews and and keep them coming. So if you want to reach out to me, send me an email at perk at risk It’s Kurt at Thanks again everybody and have a great day.



Kurt Thoennessen

CEO of RiskRevu and Personal Risk Advisor at Ericson Insurance Advisors