The InsureTechGeek 12: Clarity with Auto Claims with Ernie Bray from AutoClaims Direct
The InsureTech Geek Podcast powered by JBKnowledge is all about technology that is transforming and disrupting the insurance world. We will be interviewing guests and doing deep dives with our own research and development team in technology that we see changing the industry. We are taking you on a journey through insurance tech, so enjoy the ride and geek out!
JAMES: Happy day, happy day, happy day! I have all of you guys out there in listener-land are enjoying yourselves. That you have been geeking out on insurance tech since our last episode. I know that was an exciting one. We got to really- dive deep in and get geeky on InsureTech and this week will be no exception. From beautiful San Diego California, we have Ernie Bray, CEO of AutoClaims Direct. Ernie, how are you doing?
ERNIE: Doing great James, thanks for having me on!
JAMES: Man, we are fired up to have you on here! And you and I share a common set of passions. We are passionate about technology, we are passionate about insurance, we are passionate about entrepreneurship and we are both Boot-Strapped entrepreneurs which make us complete weirdoes!
ERNIE: That’s right man! Hey, we did it all on our own!
JAMES: Yeah, it is like a start-up and end-up with that rapper–startup from the bottom now we are here. Start from the bottom now a whole team here! I always like, thank of that song whenever I think about Boot-strap, because, the MO in business school now, it just makes me ill, is, get an idea, go to pitch competition, go to angel networks, raise money, do you, you know angel grounds, series A, series B, series C. Dilute that crap out our yourself, lose all control, and then exit before you have to prove you can make money on the company. Doesn’t that seem to be the MO these days?
ERNIE: I mean I see a lot of companies do it that way, and I told people before, hey, to ease their own, if they want to do it that way, hey, all power to them. But from day one, I’ve kind of had that mindset that you know I want to build something to last, I want to build something long term. And so, hey, you know what, that is what I did.
JAMES: Yeah, you know that is an interesting way. There’s a lot of ways to run and start a business and it doesn’t mean that the VC way, the angel funding VC growth equity, you know 5 rounds is inherently bad because there’s a lot of good companies that come out of that process, but it can also be super challenging so we’re going to talk about that today after we talk about Insurance Tech because you and I both landed in different segments of this massive business, primarily focusing on claims, which is, you know I started over in property claims, you started in auto claims, I ended up heavily in work comp and property and you’ve stuck in this beautiful niche of anything that has wheels on it!
ERNIE: That is right, I mean when I, my whole thing started, I got out of college, I played college basketball and did not know what I wanted to do. And the next thing I ended up in insurance and you know I had that entrepreneurial mindset at heart, and yeah, I worked for a couple of major carriers for a few years, and kind of learned a lot. Once I started to get my niche, and as you said, it is just this industry, for entrepreneurs out there, those with good ideas and those, you know people with a perspective view, there is an opportunity. Tons of opportunity. And there are so many different niches out there, you could, you know to take action on.
JAMES: So, were you born and raised in southern California?
ERNIE: Well I was in central California. I came from a town called Porterville which is in between Fresno and Bakersville. So actually, kind of out in the country, really.
JAMES: Oh, it is, in fact, the movie that, was it, Kevin Costner was in it?
ERNIE: Oh McFarland? The one about the runners?
JAMES: Was that Kevin Costner? You know that was Costner that was in McFarland. That is not all too far from where you grew up, is it?
ERNIE: Not at all! And I know McFarland well yeah. Used to play in summer lake basketball games down there, it was like 105 degrees outside, but we would be going to gyms on those summer days, and yeah, that is right out there in the central valley.
JAMES: Yeah man, phenomenal movie by the way out there. Listeners if you have not seen McFarland You should. It is a great story. A true story about an awesome coach, that just kept winning and track the unlikeliness of resources and you did not have, and he figured it out, and it was just a great story. See, he left there, and he went to CAL Lutheran, and he went to UC Santa Cruz and he played college basketball and I am sure that was exciting. What did you think you were going into career–wise, with a sociology degree, and what did you end up going into, and how did you wound up into insurance?
ERNIE: Well going back to the same when I said played college basketball, so I played division two Division Three basketball, and during that time I would work summer camps for Magic Johnson. He had a camp for kids, I would be a camp counselor. A lot of college players would do that in the summers. That was one of the jobs we would do in the summers. So, I would work at his camp, at work at his Stanford camps, and I did not know what I wanted to do. My parents were kind of like, yeah once you become a teacher, I did not know, I come from a family of teachers. My dad taught for 30, 30 almost 40 years, and my aunt, my uncle, grandparents, everybody was a teacher. So that was my mentality, so I just sort of guessed a sociality degree, I did not know what I wanted to do. But then, once I graduated, I knew that I had to find something. So, I kind of found myself working in insurance! I got a job as an adjuster.
JAMES: Wow, that is a great place to learn the insurance business is not it?
ERNIE: Well, once I started, I look back and I started in 1996 or something like that. It was antiquated back then, I mean, we are talking, it was so paper–centric and, but you learned everything. It was a lot of hands–on training that went on. And I do not think that maybe that is going on these days. You have to be pretty versatile, so I pretty much learned from the ground up.
JAMES: Man, that is awesome! I learned it as well from sitting with a lot of claims adjusters. And looking at how they were handling data, and of course a lot of the time, I remember, the very first InsureTech Geek I got, was at a personal line and commercial lines property inspection company, that was working for, the big major property companies out there for personal and commercial lines, doing inspections. And so, we had to handle getting the order, taking that order, producing the inspection, and then sending it back. Which sounds simple, but at the end of the day, when you look at how much data collection and structured data is involved, there is not back in the day, which was a Wednesday, they printed it out and mailed the inspection then, right? And then that was only 18 years ago.
ERNIE: I mean, I’m telling you, there were clients I will tell you when we started our company, they were people that were still saying, hey you want to get things done, you got to send in by FedEx. Once you collect all the paperwork and just mail it in once a week. Oh no!
ERNIE: See how far we come into this industry?
JAMES: Yeah, we got a lot to do here. It is, I mean, it is a big deal to digitize an industry. Especially an industry that at the end of the day, the end work product of insurance for the thousands of years that insurance has existed since the early Babylonian contracts were paper, right? The end product was paper. And then after the paper was utilized, and the claim was filed, more paper was generated and then the payment was generated, right? That’s this industry, and so you’ve been there though, and that’s what so interesting about your time frame, the commercialization of the Internet, the advent of the personal computer, the computer, the placing of computers there but it’s desktops, and in the early 2000s when you started your business, seeing companies say hey, maybe we don’t need to print out a sheet for every single claim and half a clip next to the monitor. Which was a big deal back in the mid–early–mid 2000s?
ERNIE: Oh, you bet! I mean, there was a time where you used Polaroid photographs, 35millimeter photographs, I guess nothing was pretty much digitized. Carriers with even against using email. I mean, some carriers would not even touch email, so, to come where we have in this industry, is amazing. It is amazing.
JAMES: What do you think is going on now right now though? Because there is more discussion about predictive analytics, machine learning, artificial intelligence, drones, computer vision, self-driving everything like the level of discussion has just exploded in the last few years. It was not linear, right, it is like, the water kept piling up behind the dam and eventually the dam broke.
ERNIE: I think in some ways what happened is, for so long, the industry had been behind the times. They were so slow to adopt the technology. With all these new things going on, you said it is like a dam, ready to break. There are so many exciting things that carriers can utilize like you said drones, and really, we cannot use that on the auto side, but I mean, the property side. I have seen that happen. And seeing how all these technologies are out there. Carriers have so many opportunities now, really scale their operations faster than and a level they never could!
JAMES: Yeah! And one expand the lines they write, the states they write, TPA’s have the same opportunity, right? It is, if they can add that business faster, then they can make a lot more money, or mitigate risk better, whatever it is what their major risk projective is, it allows them to get there a lot faster. And this is been historically claimed. You started as an adjuster. Tell me, the progression, from when you were a claims adjuster, to now, in claim volume that they can handle, like, has there really, has all of this technology, all of this money, all of this work, at the end of the day, allowed an adjusted to do more work, or have a higher output per adjuster?
ERNIE: If a company tries to use the technology, they can be very optimized. They can make it happen. The key is, there are so many tasks in the auto claims process, that can be automated, or, you can reduce many of the touchpoints because this a pretty linear process. I mean, when you think about it, a person gets in an accident, they have to file a claim, the adjuster has to do the investigation, but the outcome is, either the vehicle has to be repaired, or can be repaired, if it is repairable, or it’s going to be determined that it is a total loss, and it’s going to be sent to a salvage yard, and they will have a payout, and they will move on. So you are going to have two routes that it is going to go, and the ultimate why you got to get up there is, fastest customers want it done fast, but they want it done accurate, and the key is, you also have to have empathy too, because even with the technology out there, I remember when you said it when I was starting, I think I got a good handle because at the time I worked at a local branch office where people would come in, they would sit down at your desk, and explain to you what happened, and they would have a little, you know matchbox car, and they would show you hey, I was backing out of this parking lot and this person came by, and am I at fault?
You would have to make those determinations sometimes, right there, with somebody sitting thereby you at a little branch office. And that interaction with people was important to me, I think it was good because it gave me the training of understanding what people were going through. But that was a very hands-on process like you said, it was very paper–centric. everything was like, there. Now, in our day and age, a lot of these things can be handled quickly and efficiently through automation. But you have to do it the right way. You have to find what tasks can you automate that can speed the process without losing that human element.
JAMES: What about, I am hearing a lot of folks, and we have been talking a lot, there is a lot to auto adjudication. The ability, because you said, almost like it was a prerequisite, the claims adjuster, of course, they have to conduct an investigation, but there is a school of thought now, that for a certain swath of claims that come in, that no one needs to conduct an investigation, that is using public data sources and information on the claim, an effective questionnaire and Q&A session through automated chat, that you can sniff out the vast majority of claim fraud, and auto adjudicate payments. Where are you at on claim auto adjudication and the implications of that?
ERNIE: Okay, so basically what you are saying is, we were talking about those who are side load types of claims, they are very easy. Very, single losses, minor damage, claims that don’t need a lot of interaction, you can funnel those claims, utilizing the vast, as you said, a person of loss information that asks a certain series of questions, you can funnel those claims right down a path, and almost eliminate many touchpoints, which obviously will make that customer happier, because if they know it’s minor, and they can either take the photographs themselves, you could run the claim through some computer vision, you can automate, put in algorithms to determine whether the estimated amount is a certain level, whether it needs to be audited. And with technologies, yes, you can do that, and you can get the outliers out, the small ones out, move them on faster, and basically what you want to do, is you want to take adjusters today and let them do what they do best. Let them adjust the claims that need more hands-on processing and eliminate the easy ones. And yeah! That is exactly where the industry is going. It is going to be more of a touchless type of process, and that’s why process and the workflow is really- important.
JAMES: And we are seeing that happen in homeowner personal lines residential policies, where a whole swath of claims now by some of the more progressive carriers out there, some of the more tech–centric carriers out there, are auto-adjudicating claims and saying, hey look, a third of these, we never knew to touch. Ask the right questions, get the right answers, request the information, approve the payment, and we can get this done in minutes. And no one has to touch it.
JAMES: And then it leaves our adjusters open to think about and manage potential CAT claims. Because you are always worried about CAT claims, right? Like you want to make sure that you capture, that you set the reserve properly and that you are keeping an eye on things, that could make it a CAT claim, right? Why auto? Like why didn’t you continue to expand and go after multi, multi-line claims handling software? Why just beeline in on auto and only do that?
ERNIE: Well, we could have gone out and done that, but my whole goal, was to stay very laser focused. I want it to be good at what we do, and find that niche in there, and go after it. So, when I started the company, what I saw was an opportunity in a lot of the overflow and the outsourced portion of the business. So, our specialty, a lot of carriers, these days, are trying to offload a lot of their workforce. If they can handle claims in the house that they can handle, there is still a lot of areas where they have to use outsourced vendors. So, my whole focus was to focus on that one area, that would cover commercial auto and personal auto, that covers all that overflow. And that small niche is very large. So, I figured, you know what, we can master that one area, and make this whole process seamless, and almost work as an extension of a carriers claims department, that would be a good place to be. And that is what we have done.
JAMES: There are people that, that I have been to conferences with, sat in meetings with, that are postulating, that there’s going to be a time at which auto insurance is irrelevant because people won’t be driving anymore. Tell me your thoughts around this concept, and where the insurance is going to move to? Because there has to be insurance, because bad things will continue to happen, and they will need to be risk covered. So, is it just me or are we going to move from having auto insurance to having product liability insurance for the self–driving manufacturers?
ERNIE: That is a good question. I have heard a lot of that myself, will the manufacturer take on the responsibility, will they just basically ensure the vehicle, who knows? These self–driving cars, that is interesting. I have seen a lot, there is a lot of hype about it for years ahead of time that it’s going to be, I’ve heard stories that it was going to be gone by the year 2020, we’d already loose, claims would disappear, and as we all know, this takes time. It will get there eventually, I think with time this technology will continue to advance, but as you said, I think it will probably be more of a product liability issue, because then, now, you have so many different factors, involved, you’ve got that human factor removed, then who is going to be responsible for losses. As the machine makes a mistake, is there something wrong with technology, so I mean I still typically speak in the average fleet out there in the market, it’s about you know 10 or 11 years old, for the turnover of cars, and you have new cars coming out with more technology out there, you know more driver–assisted tools, I mean it is still going to be a while before you see the majority of these cars self-driving or even fully autonomous type areas, so there will still be claims, but I mean it’s going to be very interesting like you said, to see where the liability starts to go
JAMES: Yeah, it’s not just Tesla, I got to test drive, one of my friends who’s CIO off a fairly large insurance carrier called me, and he bought a Hyundai Palisade, and he goes, you have to go drive this car. It is like a Tesla, but it is like a fraction of the price, and it is amazing. And I went and drove it. And I got to tell you, it is the nicest midsized is UV I’ve been, you know BMW X7, Mercedes, I mean, the Porsche, I mean, you go in all of these luxury SUV’s, Hyundai just wiped the floor with these guys. With the Palisade. And it’s self–driving tech was so spot on, I took it upon the highway, now it can’t do the lane change like Tesla, it’s not tight your nav system, but its ability to maintain a line, its ability to maintain distance and slow down, stop, restart and drive again, is a game–changer as a driver.
But I think the real answer for me lies in the aviation business, I have been a pilot for years now, and my plane has got a phenomenal autopilot, it does, I mean, really, I take off, and as soon as I’m off the ground, I push two buttons, autopilot takes over, and it handles most of the navigation, right? Climb, level off, you know changing direction, cruise, descent, I mean it can bring the airplane to a few 100 feet from the ground and then I take over and just finish it off. It is an impressive system, but legally speaking, first off, premiums did not go down, Secondly, I am still liable for the operations of the airplane while the autopilot is still operating. It does not alleviate me of liability. So, I think we can look to the aviation business and say you know what, we are probably still going to have auto insurance. GM predicted and we would have fully self–driving cars in the GM fleet by 2018 and we are standing here in 2020. So, people are going to miss their deadlines too, right?
ERNIE: I know. I mean, I think realistically you can expect it, 10 or 15 more years before you see, a huge change. but I think the real challenge is going to be when starting to see that dynamic of more autonomous cars, with still self, you are going to have that computer versus human and you are going to have even more confusion out there potentially.
JAMES: Yeah, Peter Diamandis and Ray Kurzweil. I go to their conference Abundance @ 360 every couple of years. They predicted that by 2026 Car ownership is dead. I am like, maybe in big urban areas, right, but not in College Station TX. The people get rid of the car if their dead and cold hands.
ERNIE: Out here in California, you go out anytime on the freeway, yeah.
JAMES: Yeah, that is not exactly. There is a human element to that, that is not necessarily going to play along with fully taking the excitement away, because driving is, many times very exciting. Which is why it is entertainment for some. So, all of this talk around automation, robotics, computer vision, self-driving vehicles, does not impact the reality that today there’s tens of millions of cars on the road, that have to be insured in America every day. And they are going to drive around, and it will still happen to them. So, you have got a laser focus on that particular effort. Where have you gone with it, and what is the next big exciting thing for you?
ERNIE: I think for us, it is really, personally as a company, it is going into insurance companies and TPA’s and bringing, this technology that we build, into the process. Because we are both a technology and a services company. Technology, tech–enabled services, but there’s so much opportunity out there with, I guess with insurers and TPA’s who are still very, believe it or not, very paper–centric, I mean guys like us who love the technology and we are following these things, we, sometimes I assume, people are already, companies are already utilizing solutions to be more efficient. And what is shocking to me, is still, there is so much opportunity out there, where companies are doing things in a way, that it is just I mean it is shocking. They are on the phone all the time and they are not even using the tools that could help them make them better, so for us, growing in areas where we can help customers, and bring new technologies into their place. Such as computer vision, different types of algorithms, things that can add good day-to-day value for a customer, so we are always trying new and different things. And say okay, let us bring in some computer vision, but we can we apply it, so we can get some real functionality out of it, not just do it for the sake of just doing it, where can we get some results?
JAMES: Well how about this, let us do some if-then statements, make it look like the software’s smart, and say we have AI.
ERNIE: Hey, you know something, that is the one thing out there, I think there’s a lot of hype, out there, and everybody gets caught up in that, but I think the key though, is you got to say hey, what is realistic, and what’s going to, at the end of the day, what is an adjuster going to be able to use and make their job more efficient? It sounds nice, but they want to close the claim faster, the customer wants to get back on the road, and a customer does not care, if there’s AI build in, they just want it done right.
JAMES: Yeah, and machine learning is the common subset of AI, people are using for this. Where do you think machine learning and other specific forms of AI have their home in insurance and particularly commercial and personal auto claims, is its automated reserve setting, is its automated adjudication for small claims?
ERNIE: I think there is a lot of automation. I love talking about this kind of stuff. This is, there is so much opportunity, I think in the area for adjusters, just even the recorded statements that are taken. When you are taking statements from a vehicle and recording this information, I mean still, a lot of times adjusters are taking the recorded statements. So, there is so much, I think unstructured data that’s been collected by carriers on their end, they could be feeding this data, if they do it in a structured way, they could be helping build tools that can help make potentially liability decisions. I mean, if you start to understand somebody’s backing out of a spot, somebody’s speeding by, well you have the duty and care to maybe to make sure that you are looking around why are you backing up, you could start to weigh and maybe even put some you know rules in, to decide, okay, well this leans towards of the idea that this person is at fault. Or you can take information out of a statement to help investigate the claim and I mean I think the real end goal in this whole claim process is to have the adjuster, the technology is to augment the intelligence of the adjuster. I mean, if you can start to build these tools in, and bring information to the adjuster so decisions are being made and they are just basically using the intelligence to solve it, that is why there it is going to head. That is what is exciting out there.
JAMES: Yeah, we had a guest on InsureTech Geek, Stan Smith with Gradient AI and they’re are taking diary entries and claim notes and reading the free text, teaching the machine how to read it, and they’re using it to identify contributing factors that contribute to claim loss increases, and then notifying the adjusters through their claims software. Hey, you got a potential outlier here, right, you got a potential CAT claim that you are reserving a $1000 for. And here is why. That is the type of intelligence I think he understands his company will be as pervasive as they want to be, obviously that is up to the market, right? I mean, up to the market on how fast they adopt that kind of technology and specifically his solution. But it is not the only one tackling machine learning. We have seen companies like Predictive Solutions trying to tackle safety data, and figure out if they have the ability to, and safety data predict the likelihood of safety instead of on a job, right? By reading free–text reports. And looking for contacts. And something pretty important that is so that social networks do all the time with machine learning, they look for sentiment analysis. Is this person happy, sad, angry? What emotions are they having? And the emotional state of a claim is important too, so that is pretty interesting to me.
ERNIE: Oh definitely.
JAMES: What else geeks you out on auto? Is telematics high on your list, and integrating with fleet telematics so when you have a claim, you can integrate all the telematics data into your claim file?
ERNIE: Most definitely! But then, with telematics information you can further help make decisions on the route of claims you go, I mean if you know, how much, here’s the thing, With the cars that are out there, with the data that is in there, there is going to be a time when these vehicles pretty much will almost self-estimate. I mean I can see; I mean I saw, I wrote about it an article, gosh it was about four or five years ago, I saw something from BAE Systems, and I think it was, as they had like a SmartSkin on airplanes. Have you ever heard about that? SmartSkin
ERNIE: That can detect? I mean think about that, if you have little microsensors build in all the panels of the car, and if you use collision repair rules, you could say wow you know the 2/3 of this panel is already dented, therefore, you know that needs to be replaced. Eventually cars will probably self-estimate themselves to a point where at least have a beginning repair course of what needs to be done. Hey, this needs to be replaced, this should be repaired, and you will start to have the symbiotic relationship with the car telling you what needs to be done than you using the human, no other technology that makes sure that happens. That is the, I get excited about that, the photo computer vision is nice because you can get and start to I would say trierarch files to the right method of inspection, or the right process, but when you start to have cars and telematics data and information on the parts of the car, start to give you feedback, that’s going to be fun.
JAMES: What is the coolest thing that your software does in production right now?
ERNIE: The coolest thing we do, I think the coolest thing that we do, which is cool for a client is, taking the information we provided and giving them the right path of where their claim should go based on our information in our data. Because a lot of times adjusters are not given, or they do not necessarily provide us the right information or where they think it should go, and we are finding the best path. Weather, let us say for example they provide a claim, well, you know what, that vehicle owner wants it done fast, quickly and accurately, well we determined the right may set off inspection too ultimately get that done faster, you know for their customer, so the speed at what we do that I think it is cool! Because at that helps that adjuster out
JAMES: Yeah, big time, right?
JAMES: Speed matters! As long as you can maintain the quality you want the adjuster to be able to get their job done faster
ERNIE: Well people want things done. We are in a society, hey you want your Amazon order, you want that prime delivery, or you want a dime, you want to know what is going on? And I think anything in today’s day and age, communication is key. Our platform provides a ton of communication and I mean, when people don’t what is going on and I have those moments of uncertainty, that is when customer satisfaction drops, that is when people are upset, so keep people in a transparent process hence our play clarity, give them clarity.
JAMES: Right, let us keep, where do we go next, let us keep, let us keep diving down their rabbit hole. Because you have a lab, ACLabs, what can you say you are working on in the labs that are going to come out on the market that you are comfortable talking about?
ERNIE: Well, I think most of our focus is back into enhancing computer vision. And our ability to make better decisions, so our kind of think tank and labs team, is kind of pushing ways to make the process even faster for a carrier. And I mean, like I said it’s a simple process, I mean a lot of times in insurance it seems like a simple process, you know you get a car, your car gets in an accident, you need to get it fixed, and you just want it done. You want to get back on with your life. But I do not think, a lot of times people do not realize the components that go on in the claims process or things that can be, cause hiccups. So, for us, I am myself, I am a real process-oriented person. That is my passion. I go in there and I try to say what can I do to peel away needless steps, and for me when we talk about what we can do in our labs is, how can I go onto a client and just drive the efficiency? So, when I sit down with them, I’m like okay, and I think that the flexibility of our technology allows us to do that for our customers so a passion for me is to go down with the customer and sit down and say hey, you know what, what is your sticking points? And everything we are working on in our process is about speed efficiency and removing touchpoints
JAMES: I ask my R & D team, my developers to be architects of pain, you know like find the pain, sorry, archaeologist of pain, and architects of solutions. Be the archaeologist that digs for the pain point because there are so many times in technology, we have these shiny objects that people build. I will give you an example of a shiny object in Auto that I so two years ago at a certain insurance technology conference. A couple, three different exhibitors, or marketing chatbots for commercial auto claims, and I went and checked it out. And I am like, alright, because we build actual chatbots that can interpret free text, you know and interpret context and sentiment and tell if you are happy or sad, you know like legitimately using machine learning. All three of these that were on display two years ago, were literally the stuff I build when I was 13 through an anti-text terminal back in like 1993, 1992 where I was asking an asking to pick through 1-5 and so, 1 is this, 2 is this, 3 is this, 1. I mean, it was like, you thought I wanted to chat with my application, which by the way we used to do in GW basic Pascal and Fortran and assembly, you thought I wanted to chat to my application through text and you just took my entire process and made it twice as long, but now it’s a chat stream instead of just clicking on the options on the screen and hitting submit.
Then we started to see like real legitimate chatbots come out, that actually solved a pain point, because they text you at the end of the day and they say what happened today. And you can just right back in free text, and it parses it and put it all in and that is legitimate. Right, it’s like solving a legitimate pain point but there are so many times in our lab’s groups because we at JBK Labs we have our, and we end up kind of chasing shiny objects, and I think as an industry in insurance, we get distracted probably a little too much now because there is so much new tech coming out, there’s a lot of shiny objects. Chatbots was one of the shiny objects. And it started fortunately, the legitimate ones have come out, the illegitimate ones have faded away. Telematics was hot and now it’s kind of pervasive, I mean I have a OnStar on my Chevy Silverado and it reads all the detail of all the things going on in my truck and then, sends me a report and then it asks me if it wants me to schedule service work on the truck. Like, holy crap, that is real right now. Do you know what I mean?
JAMES: And that is going to come, are you, are you on that note, you think you are going to end up being a telematics provider, like are you going to get into full fleet management and telematics?
ERNIE: No, I guess it is not really, I am not saying I am not going down that path right now, no, no I mean I think we’re just I guess staying focused really, just in that spot where we mastered the claim process
JAMES: Yeah. What about policies?
ERNIE: No. That is more of a policy admin, so no. We partner with a lot of companies to do that tough. We partner with a lot of claims systems for the adjusting side so, we plug our platform in and have because that is the thing today, when you look at technology out there, one of the key things out there is good partnerships. Being able to partner, integrate have a good API, and focus on partnerships these days, that is another key thing we are doing.
JAMES: Do you allow anybody that has a security key to, is your kind of an open API guy?
ERNIE: Yeah well yeah. I mean, I’m a believer, so we don’t need, we can’t do everything so whether we have, we can work with salvage providers, we can work with claims you know, policy admin systems, so our flexibility comes around when I say, the client, they are using different technologies, and I think being able to be flexible these days is going to be the key for a lot of software and tech companies out there because sometimes carriers have such unique workflows that the flexibility is one of the things that is going to be very important to be viable out there.
JAMES: Yeah. It is just, I have seen kind of a bifurcation (And I like that word by the way – bifurcation) of the InsureTech market where you get a bunch of tech providers that legitimately getting an API from them is like a five-minute process. You are like, of course, you have to have an account so you can have an access key to it, right, like, let’s say one of your clients wants you to integrate with this particular provider you know, they directly contact the provider they say hey, give them access to the API so he can connect to us. With our product that we had Smartbid that we ran for 12 years, we had an API that you would literally, you just go to api.smartbid.com and that was it. And then as long as you just had an account, you could just get the access key, and then you could read and write the application. We would let anybody as long as they had the appropriate authentication credentials and that is not what I run into and insurance a lot. A lot of times you have got some really high walled gardens right, and they don’t have an API and they still using some very antiquated forms of integration and like flat delimited fixed–width files going to secure FPT sites or some stuff like that, but if they do have an API they force you to give up a percentage of your revenue and a fixed annual fee and join their partner program to do a single method called an API which makes me want to drill my eyeballs out, right so where do you stand on the topic of integration?
ERNIE: Well, a lot of times, in our portion of the business with us doing the auto and commercial physical damage claims process, there are providers though that is indeed like the salvage providers, so there is a multitude of salvage providers, you know total loss providers, to total loss valuation, and everybody seems to play pretty well together in this process
ERNIE: Because which I like and I think really, the key is you got to look, I mean, even your competitors in some aspects can be partners in some degree and that is why our whole thing with our clarity platform does you be allowed, have a lot more platform partners, and seeing that, because we can’t solve, we can solve every portion of the claims process because we do, we do a certain niche process, but some companies can add value to us, we could add value to them and partnerships is where I think it is going to be. And that is the key. Plan well together with the other companies
JAMES: Awesome. Let us change gears. You are also an entrepreneur you are not just a technologist; you are not just an InsureTech enthusiast, you are an entrepreneur and you wrote a book called The Entrepreneurs Field Manual. What was the impetus behind that, what got you motivated to write a field manual for entrepreneurs?
ERNIE: Well it is kind of, sort of started as a side fund project. I mean, I am a very intense person when it comes to business. I mean I love the technology as you said hey InsureTech and insurance but there is more to it, you know as well, you’re running your own company, there’s more involved, you learn so much, you are dealing with people, you are dealing with employees, you are dealing with payroll, you are dealing with budgeting as, as bootstrapped entrepreneurs, we have to budget. You cannot think, you do not have the just millions of dollars just being thrown into to do that. You have to think efficiently, so for me, I enjoy inspiring others and I made a point to just sort of document sort of my journey.
Things I learned along the way and I especially have liked some of these tips, I have like 100 tips I just started writing down and you know hey, here is another tip, things I learned and then overtime I just decided to say I want to put it I want to put this into sort of a book where that if I could help some other entrepreneur out there and they get one or two tips that make sense to them and I’m sort of giving back in a way but at the same time you know put in my knowledge because have their spin. You going to have you’re your version of your success that you had because you went through your trials and tribulations so I think you know just getting out there and it’s sort of a fun project and I like to do that I like to write on the side, I like to write articles and I like to do that and so that was sort of my Genesis of that
JAMES: That’s awesome. Well, I appreciate you sharing your knowledge and being willing and trying to bring others up. I am part of Entrepreneurs Organization EO and we do a ton of sharing in EO, I mean just a lot of sharing, I have a forum of 8 other software CEO’s, and we meet every month
ERNIE: That’s great, I mean because you can bounce ideas off each other and that’s key because so many people like you said, they have different skills, they have different knowledge in different areas and we can all give each other advice and I think keeping those entrepreneurial groups together like that is key.
JAMES: Have you ever joined a peer group before?
ERNIE: I have before. I’ve done, I’ve done some just informal kind of stuff with fellow entrepreneurs around you’re in San Diego, where we get together, have lunch talk and do things and in the evening just quick phone calls too, like, hey how’re things going with you and what some of your challenges? And we sort of vent to each other and you get a little idea here and there, and I think that is the key to sort of having a group where you can kind of lean back on
JAMES: Yeah. It’s been huge for me, I have been in EO for four years and having a structured format to share that information and expectation of confidentiality and the ability to tap into a broader EO network of 15,000 CEO’s was a cool deal and it added a lot of value for me and it certainly changed my mind on a whole bunch of things. It was exciting. Well Ernie, any last thoughts on insurance, InsureTech, or business?
ERNIE: Well, gosh, just a side note as an entrepreneur I will give this to people, if you are an entrepreneur out there, even in the insurance industry, you know what, hey, it sometimes can be stressful, you are out there for your adjuster claims and InsureTech, business entrepreneur, whatever you are you can’t neglect your health. That is one thing. Building a company for 17 years like this, that’s one thing that I’ve always maintained is focusing on, you know eating good, exercising, taking care of your health, because you know what, you can get stuck so much and so focused that you could neglect the other parts of your life, and that’s one thing I think has one of my exciting drivers is that I find more energy when I go out and do things so, never neglect your health, take care of yourself because you know what by the end of the day that is what matters and that can even help you drive your success and even more when you are doing well.
JAMES: Absolutely! Can, I went and ran a 5K on Saturday and had a blast in it
JAMES: It is when I do my best thinking and it is also when I run is when I do most of my audiobook listening
JAMES: Yeah, and it really, it is just, you know I am so alert, you know reading in the evening, late in the evening does not work for me, it is like chloroform
ERNIE: One thing I do every day is I walk at least, walk about 40-45 minutes a day, and that is where I get on my phone and I have my earbuds in, and I will talk to … I will make some business calls, but I am getting exercise at the same time so I can always try, by the way, you know to get it in
JAMES: Yeah, some of the best business meetings that we have, if I am doing a one on one, I will grab somebody, and we will just go for a walk around a few blocks and it is amazing how much it improves the level of conversation. So, it is good too to hear about that. If you want to know more about information about him, it is ErnieBray.com that is erniebray.com. If you want more information about ACD that’s acdcorp.com and their new platform, I love your slogan here, the only thing we improved, was everything. That is so badass that is awesome. I love the brand, their clarity, you know hopefully it does give clarity right and that is the “-“
ERNIE: Exactly, transparency and a, right through there
JAMES: Yeah, that is amazing! So that just again is acdcorp.com If you are a big fan of the band, you will read this differently, it will be acdc-orp. I happen to enjoy ACDC on an irrational level, so, that is all good.
ERNIE: I have been learning guitar. My brother plays guitar, he got me hooked on learning stuff for about a year and a half and I had no musical background at all, so it is frustrating, but you know what I just stayed at it and I have fun. I play some of the old 80’ music trying do like, is it easy, it’s not that easy
JAMES: Yeah you know I am working on guitar myself. I played piano my entire childhood until I was 18, I was a competitive pianist and loved it and still play every once in a while, but not often enough
ERNIE: Good for the brain though, good to practice new things like that all the time though
JAMES: Oh, it is, it is. That is what flying was for me, Ernie. I went out a few years ago and said you know what, I always loved flying and I need to finally knock out my license and went and got my “-“
ERNIE: What are you flying right now?
JAMES: I have got a Piper Seneca V, it is a twin–engine 6-seater and you know goes 235 miles an hour, 25,000 feet and it will get me around the country real nicely. It takes me about 6 hours to get to San Diego. I got to stop in Deming NM
JAMES: And I can get to Deming and then I can get to San Diego so 3 hours and 3 hours or you know the great “-“
ERNIE: Did you see that The Top Gun Maverick coming out this summer with Tom Cruise
JAMES: Yeah, I know
ERNIE: Doesn’t he fly like a P51, does he own one, I think it, I saw him flying one
JAMES: Yeah, yeah and P51’s are kind of a big dream for a lot of pilots because they’re crazy fast, but they are very expensive to own and operate, we’ll all airplanes are. It is not a hobby the faint of heart in any way shape or form, but you know flying challenged me mentally, physically, emotionally, it was the hardest tests I had my life getting my instrument rating was exhausting. I sweat through all my clothes and I mean how many tests can you recount from college, I did undergrad in grad school, how many tests can you recount from those days where you walked out and it was a 3 ½ hour test and you were soaked from all your sweat?
ERNIE: Oh my gosh, I cannot imagine. That is crazy!
JAMES: And that is what my instrument rating was. My multi–instrument writing was not much better. It was exhausting and scary, you know I nailed it, I passed all three of you know the three big ones I had to pass, private, single, private, and multi an instrument. I passed him on the 1st try but you know it involved an enormous amount of studying. Completely stretched my brain. I cannot look at the Sky now without analyzing the weather, and you know it just opens brain up, a new area in your brain up and music, of course, does the same thing, so I am excited to hear you jumping into the guitar man. Next time I am in San Diego we will have to go and do a little jamming and I will do a little singing and you will do a little guitar
ERNIE: Yeah let me know
JAMES: Yeah Absolutely, I appreciate you joining us today and thanks for coming up on InsureTech Geek Podcast
ERNIE: Well hey, thanks for having me on!
The InsureTech Geek Podcast powered by JBKnowledge is all about Tech that is transforming and disrupting the Insurance world. I’ve your host James Benham, that’s jamesbenham.com. Thanks to big daddy Jim Greenlee our Podcast Producer, Kara Dalton-Arro, our Creative Producer, and thank you for joining us today.