Hello, everyone, and welcome to our fifth episode of Risk Playbook. I'm Mike Mitchell, Vice Chairman of Graham Company, and today I'm joined by Susan Hatten, Chief Marketing Officer of Holmes Murphy, headquartered in Des Moines, Iowa, and one of the largest privately owned insurance agencies in the United States. Susan is also the Chief Operating Officer of BrokerTech Ventures, the first broker led accelerator program focused on fueling innovation in the insurance brokerage industry.
Susan is a thought leader in the insurtech space, having helped launch BrokerTech Ventures in 2019. She has held several leadership roles over the years within the insurance industry and has also worked in business development, corporate community engagement and strategic partnership roles. She started her career in advertising and has nearly two decades of communications experience.
Susan, it's a pleasure to have you as my guest on Risk Playbook.
Well, Mike, the pleasure is mine. I'm excited to be with you today.
I'm looking forward to it as well, Susan. I'll start by apologizing here – I think I have a little froggy voice. I'm fighting some allergies, but I'm sure we'll get through it.
We'll get through it together, Mike.
All right. Sounds like a plan. Let's start off, Susan, talking a little bit about the insurance industry. Certainly innovation and technology is at the forefront of every industry today. Perhaps in large part, we can thank Amazon for that. But when I think of insurtech, and I compare it to fintech, I feel like the insurance industry is a decade behind the financial sector. I'm curious, number one, do you agree with that? And secondly, can you give me a high-level overview of the evolution of innovation and technology within the insurance industry?
Well, it's interesting you ask. So, you mentioned Holmes Murphy being headquartered in Des Moines, Iowa, which also happens to be the headquarters of the first insurance and insurtech accelerator, coined as the Global Insurance Accelerator. That was founded eight years ago, where your mention of fintech and some of the largest financial and technology accelerators started five to six years ahead of that.
So, you're right, insurtech is several years behind the fintech space – but what I've seen during that time period is that insurtech has now surpassed fintech in terms of venture capital backing, in terms of speed to market. So, I think that's exciting for us to think about as Graham Company and Holmes Murphy and BTV because I think the future looks bright for insurtech.
Now, there's a fact I didn't know – that's encouraging for the insurance industry, and certainly for BrokerTech Ventures. For the audience’s benefit, we often refer to BrokerTech Ventures by their acronym of BTV. Susan, talk a little bit about the ownership of BTV. We have a group of likeminded insurance brokers – Graham Company, Holmes Murphy and a handful of others, some of which compete with one another. How did that come about? And why did you believe that was the best way to innovate and perhaps change the game?
As you mentioned, BTV, Broker Tech Ventures was created three years ago. It started with an original idea that was around insurtech funding. We had taken from that initial concept, which it was really around, another broker friend of ours in M3 Insurance, and we had taken that idea and decided we wanted to make that concept of BrokerTech Ventures even larger. What we had the benefit of was that Holmes Murphy, through the thought leadership of Dan Keough, and their creation of Innovative Captive Strategies, had worked over time in the Captive Insurance space to bring together likeminded brokers to reduce the cost of risk.
So, we applied that similar concept to BrokerTech Ventures in bringing together likeminded and like-value quality organizations like Graham Company and Holmes Murphy and others to really bridge the, what you're identifying is the gap, between our work and the world of brokerage and the world out there that is insurtech. We do that together in what we call the pre-competitive space – and, we're just fortunate to be now at 15 brokers as a part of BrokerTech Ventures that we've developed over time.
Certainly my company, we couldn't do it alone – and because most of our owners are privately owned, they probably feel the same way, right? When I think of insurtech, a lot of that money, historically, has been given and invested with insurance companies and not necessarily the brokerage community, which is there to service the commercial accounts that are our clients. It's interesting that’s how it came about. So, when I think of an accelerator, BTV is a lot more than just a mentorship program for startup companies. Explain how much more we really are?
For those that the concept of BTV might be somewhat new, we've received some great press over the years around BTV’s accelerator, and we're really very proud of that. But as I mentioned, when we developed the framework for the business plan of BTV, we knew we wanted to start with an accelerator, but really build it out to be a multi-dimensional tower opportunity.
Mike, you know this well from sitting in on our meetings and operations calls, but we have what we call five towers of business operation at BrokerTech Ventures. The first tower is our accelerator – and we're fortunate we have three fantastic cohorts that have gone through our accelerator. BTV’s invested in 36 companies over the three years – our great executive director John Jackovin, runs our accelerator for us.
The additional towers really can stand alone, but are meant to support our accelerator and all of our work. I'll be brief here, and then Mike, if we want to dive into any of them further then we can. The second tower is early-stage investments. We knew when we built BTV, that the graduates of our accelerator as well as other insurtech companies may need additional funding. After they see success, they have some distribution opportunities, so we run that through our early-stage tower. The third tower is innovation. Innovation is where we view working closely with our carrier partners, and bridging that additional relationship with them over time and how they view innovation. That's also where we have our labs community that lives in the innovation tower. The fourth tower is capital. We believe through capital raised as a part of BrokerTech Ventures that we can propel technologies further and also see great returns. Then the fifth and final tower is media and communications. That's where I get to have a lot of fun and work with folks like Phil on your team, Mike, and really amplify BrokerTech Ventures in each of our brokerage firms through that work. So, that's a lot there, it's a lot to unpack. But the point being, we built BrokerTech Ventures with the intention that it would be a multi-dimensional, multifaceted business model.
When you say you've invested in 36 companies, and we're three years into it, it’s roughly about a dozen companies each year that go through the accelerator program. Some obviously are more promising than others, some you feel are worthy of investment, others may not be. Ultimately those investments gets them to the next stage of their development and hopefully someday become major game changers for the industry. Right?
Correct. Yes, absolutely. And again, we like to say, at BrokerTech Ventures, we cast a wide net. I work very closely with Dan Keough, our chairman and CEO at Holmes Murphy and also co-CEO of BrokerTech Ventures. We say that because really, BrokerTech Ventures is allowing us access into the unknowns. We are allowing Graham Company, Holmes Murphy, M3, other brokerage firms access into the unknowns, into what are the challenges, perhaps ahead of us that we haven't even thought of? And how can we use these technologies and these entrepreneurs to bring us closer to the development of those solutions and thinking ahead?
Susan, when I think of my business, I would say innovation and technology needs to accomplish really two things to be successful: One, to make us as a business more efficient, but arguably, and maybe more important, to create a better client experience. How do other businesses, perhaps that might even be in our audience today, how can they anticipate innovation and technology creating a better experience for them and their teams?
That's a great question, Mike. What I would tell you is, as we are evaluating technologies to come into the BrokerTech Ventures ecosystem, we always have a lens of how does this opportunity, this product, service or idea, how does this help our clients identify their risks sooner or drive down their costs faster? If we can answer that question, there's a great chance that we would have interest in engaging with that company.
So again, it's a framework of identifying risk and driving down cost that we bring to the table. Effectively, at the end of the day, Mike, we're in the business of delighting our clients. So, we believe we can create that client delight through the technologies we're securing and exploring through BTV.
When I think of these 36 companies, and the ones coming down the pike, for the most part, correct me if I'm wrong, but they're technology companies, right?
For the most part, but here's what I would say, the technology is only as good as the team, as the founding team that's behind it. So, when we're looking at solutions, we do look at the technology, we also put a lot of stock in the entrepreneurs and the founders of these companies. Because at the end of the day, that's really what will help propel these solutions forward. I would also say, some come to us in the early stages with a technology idea, and what we find out is it's more of a solution, or a product, that they're in need of our helping form. And in some cases, looking for distribution opportunities.
I can tell you that in three years from where we sit, you are really a trailblazer here, and the progress you've made through BTV is incredible. The acceleration seems to just continue to steamroll. Will insurance brokerage firms become technology companies? Or will technology companies become insurance brokers? Perhaps it's a little bit of both, right?
Right. I think that is the question being received by the day. What I would say, Mike, is that I believe it is a “yes and” – and, I do believe there's an age of the tech-enabled broker. Because I think what we've learned more than ever, in the last two years, is the value of relationships, and yet the speed of which we can be efficient through technology. How do we create that experience for the tech-enabled broker to have a place in insurance for years to come, and also become an attractive marketplace for talent for years to come? So, bringing in the new ideas, the new innovations, the new graduates, that want to look at an industry that is fun, entrepreneurial and innovative. I believe we can do that if we're embracing a tech-enabled broker mentality.
This is Risk Playbook, so we talk a lot about risk. For our businesses, if we don't do this, and we don't make it more convenient for our clients to work with us, we're going to be a dinosaur. I can deal with my bank and send money back and forth through my phone, I can order stuff and it shows up at my doorstep within 24 hours, I can look at my medical records online. We need to make sure we catch up with those kinds of things.
Let me just switch gears here for a second. I'm a fan of Simon Sinek, and I've read The Infinite Game. I know The Infinite Game philosophy is deeply rooted in BTV. I know his thought process, it's not about winning in the short term – it's about constantly evolving, it's playing to survive to thrive to keep playing the game. How do you overlay that into what you're doing at BTV and the philosophy?
You're spot on Mike. We talk a lot about The Infinite Game as a mentality in the building of BrokerTech Ventures. I mentioned the pre-competitive space where the 15 brokers who are a part of BrokerTech Ventures effectively do compete and there is a competitive edge there. But we also believe, the majority of our work as a broker is in the pre-competitive space. It is what we would say, are really the salt and pepper shakers, it's what we have to do as a broker to keep our lights on and to keep serving our clients. It's that 10% that might be proprietary, it is the secret sauce behind what we do at our brokerage that makes us unique and differentiated.
We believe if we can surround ourselves with likeminded brokers, likeminded companies of value, quality and entrepreneurial spirit, that we can go further faster in this innovation world. And through the work that we're doing with The Infinite Game philosophy, we can create a greater experience for our clients, we can propel solutions forward more swiftly and efficiently through our work together, and we can also potentially see a return on some of these investments that we've made. It's really beneficial in all three of those regards.
Susan, do you feel that COVID in any way accelerated this in terms of not only just BrokerTech Ventures, but also the need and the desire for technology?
Oh, there's no doubt, there is no doubt in my mind. I know if we were to have Dan or Ellen Willadsen, who serves as our executive sponsor, if we were to have either of them joining us, they would say the same, Mike.
I would say the COVID experience, while certainly catastrophic, in many ways, was actually the fuel that ignited the speed of which we were able to go to market with BrokerTech Ventures. We use technology every day, to create conversations and to be efficient with those conversations, we were able to move things that we had originally planned to be in-person, they moved to an online platform, and we're able to double the number of meetings and how we were conducting them.
Then I would also be remiss if I didn't mention the work that we've solidified internationally. We have BrokerTech Ventures accelerator, the Israeli insurtech accelerator headquartered in Tel Aviv. We just recently announced our accelerator fueled by BTV in Latin America, and we're working with several companies in Europe around the same kind of model. So, I can't imagine if you would have asked us three years ago, if we would have thought we'd be actually traveling to Tel Aviv to meet with our business partners, in a few weeks. We probably would have said we're out of our minds, but it's been a benefit to us. And truly you do see the impact of technology propelling businesses forward.
It's just another silver lining to COVID, right? There's many, but it's also challenging times.
I will add, Mike, one thing you'll be hopefully seeing and hearing – when we were in the business planning for early stages of BrokerTech Ventures, we had planned on this fabulous party at the rooftop of the Refinery Hotel in midtown Manhattan. This is one of my favorite places in New York. Of course, due to COVID, we had to shut the whole event down and we weren't able to do it. So, I keep saying, this is the beauty, we just have that much more time to plan a really fabulous party. More to come, Mike, and we'll make sure you're at the top of the invite list.
I'm going to hold you to that.
Susan, any of your cohorts come to mind, that you point to and say, this company or these companies are really game changers? Any really stand out to you?
We are so fortunate, Mike, that the 36 companies we've had go through BTV are still fully operational, they are growing, many of them are coming back to us to raise additional rounds of capital. That's fairly unheard of in an accelerator model. In many cases, you might see some of them drop off. But we've not seen that. So that's a great point to make.
Then, if I were to call out a couple, I would certainly mention Broker Buddha, which has seen great traction, not only in the work with our brokers, but also working with the insurance companies and effectively going back to that client delight. The idea is to create a frictionless transactional experience for our clients and they really exceeded our expectations in terms of their growth. I would mention a company like a Goldfinch Health that is doing great work in world of clinical innovations. We try to say we have diversity of application, and in the startups that we work with Broker Buddha, probably more on the property and casualty side, a company like a Goldfinch Health is more on the clinical and health and employee benefits side of the equation. Then some that have received great press and continued great growth would be at a company like TrustLayer.
I could go on and on – but really, we're thrilled with the trajectories we've seen with the first two cohorts, we've had the most greatest experience in working with, and then this next round we see great potential in as well.
Well, congratulations and best of luck for continued success with it.
Susan, like any business, there's risks. What do you see as the risks for BTV? And how do you deal with them?
Like any good business planning and operations team, we're thinking about what is out there in terms of risks. You could say, certainly, competition – if there were to be another broker-led innovation company of some kind, what could that be? That would be a competition.
I think we'd be remiss if we didn't mention the consolidation in the industry and how that impacts the makeup of BrokerTech Ventures. That is a part of why we created this, this ecosystem that we have, is so our privately held, independent brokers can join forces again in the name of innovation, but consolidation is out there.
I would also say, if there were to be a major pivot and change in terms of funding for the insurtech movement, that would change some of what we're doing through BrokerTech Ventures. But I do think the future looks bright. I think we're mitigating many of those risks in the business decisions that we're making, but we certainly are smart to keep them in mind.
You talk about competition, but you're out in front of it. And you have a saying, I've heard you say this, “never underestimate the value of planting a seed.” So, if you're first out of the gate, and you continue to work hard, perhaps the next person out the gate can’t catch you, right?
That's the goal. That is some of the benefit of the first mover advantage, right, is to be out there first. I do fall on that saying, in business and in life. I believe that if we're out there planting the seeds of connectivity, if we're out there planting the seeds of innovation and uplifting our industry for the benefit of all, I believe that we will benefit from that. That's really the foundational tenets of BrokerTech Ventures.
Susan, our listeners always like to hear about how somebody ended up where they ended up. How did their career get started, and so on and so forth. I'm going to tease you here a little bit – I see you started in the creative world of advertising, and now you're in the stiff buttoned-down world of insurance? I mean, how did that happen?
You're absolutely right, Mike. I started my career in advertising, in the advertising agency space. I had the great opportunity of working with a lot of brands, brands in financial services, retail, insurance, on down the line. It was at the start of really, what I would coin as the experiential marketing movement. So, I had the benefit of learning from those who were ahead of me in the marketing space and how to create an experience for a client, for a business, and a lot of learnings along the way.
Insurance, Mike, also runs in my family. My father was a Risk Management and Litigation Director for a very large construction company, and he worked closely with a company called Holmes Murphy. Over time, I had the good fortune of spending more and more time with those in the insurance space.
I also believe it's healthy to make yourself uncomfortable sometimes. For me that was learning a new industry, learning a new vernacular, and I asked myself could I bring a little bit of a different paint color to this industry that we live in insurance and maybe spice it up a little bit? So, credit to Holmes Murphy for believing in me and for allowing me to sprinkle in some creativity along the way, but I haven't looked back since.
You mentioned Dan Keough a couple of times, the CEO of Holmes Murphy and also the co-CEO of BrokerTech Ventures. He's a real industry leader. He's a dynamo, he has great visions. So, he obviously saw something in you and knew that your background would bring something different and a new perspective, which, has and seems to be working.
Let me just ask you in closing here, Susan, I came across a McKinsey study that noted only 29% of C-suite roles in insurance are filled by women. Obviously, we have a lot of work to do. But can you share your experience as a woman in leadership? Also I know you're really all about giving back and can you explain the role you play in mentoring other women in the business world?
Well, I would not be where I am today, in my career and personally, without great mentors. I've been lifted up by mentors all throughout my career, men and women alike. I also have been somewhat fearless in asking for mentorship, coaching and guidance. I've benefited greatly from one of my strongest mentors, Ellen Willadsen, who also happens to be at Holmes Murphy. I've benefited from their time and really their guidance and coaching, and what happens when you lift others up, in this case, other women in our industry, is you then are setting the stage for the next generation of leadership. So, had it not been for Ellen lifting me up at Holmes Murphy, in Women Optimizing Women or as a female shareholder, there would not be that next generation.
I believe that we owe it to the next leaders beyond us to lift them up and to help propel them forward and to share what we've learned in our career. Hopefully they can exceed, in terms of growth trajectory, even then what we've achieved thus far.
Well, Susan, you're a great leader and also a good person. That's a good way for us to wrap up. Again, congratulations on what you've accomplished so far. The future looks bright for you. I wish you a lot of luck with BTV ventures. Thank you so much for joining me today. It was a great conversation.
Mike, it's been my pleasure – and, thanks to the partnership of Graham Company because you've been a team leader as an owner of BTV all along the way, and we couldn't do it without you.
Well, thank you – and, to our listeners, I want to thank you for tuning in. If you want to learn more about BrokerTech Ventures, please visit brokertechventures.com.
Until next time, I'm Mike Mitchell, and this is Risk Playbook.