Tech leader declares ‘you can’t replace the broker, but you can empower them’
When Mike Furlong was just an insurance customer, it hurt. Getting commercial insurance wasn’t just hard, it was unpleasant. Having already found success in hedge fund technology, he knew there must be a better way.
The better way isn’t without agents or brokers. It’s without the headache… for the customer or the agent. Mike’s solution—Indio Technologies—is now trusted by thousands of agencies and brokerages throughout North America, is being used in 30 of the top 100 US agencies today, and it’s attracted $30 million in funding.
Mike shares how he sees the fast-moving insurance industry changing:
- How commercial agents can thrive by doing less of the manual-labor and drudgery they’ve been enduring for decades (with more time talking to clients)
- The unique role that ONLY an agent can play – and how emerging technologies can make agents and brokers better
- A glimpse into what the future of the commercial broker looks like, and how to get there ahead of the competition
If you have time for one conversation about the future of commercial insurance (and insurance in general) please do not miss this conversation with one of the industry’s foremost agents of change.
What are other agents & brokers doing to thrive? What are the biggest trends affecting the retail insurance agent & broker? What are the most important strategies and tactics you need to grow faster? Find out here in the Connected Insurance Podcast, where our hosts discuss the biggest issues affecting the independent insurance agent & broker with the industry’s leading figures.
Michael Jans: Mike Furlong, thank you so much for joining us. How are you today?
Mike Furlong: I’m doing well. Thanks for having me.
Michael: All right. I’m excited about this conversation in part because clearly you’re here as a success story in the industry, but I also think that you’ve got some really interesting perspective on what’s happening in the industry, which probably has something to do with how you were able to just discover a problem and find solutions to it. First thing I want to ask is, I know you perhaps a little bit better than our listeners do, tell show a little bit about Mike Furlong. How did you get to be where you are?
Mike: Yes, absolutely. I appreciate the kind words. I started my career in traditional finance, which I didn’t love, and that was in New York city. About five years ago, moved out to the West coast to San Francisco hoping to pursue my entrepreneurial passion and started a company that merged with another a couple of years ago. That company was called StratiFi, and it basically built software for financial advisors. Then I started Indio, which is software for independent property and casualty insurance brokers about three years ago. Originally, I’m from the East coast, from Connecticut and had grown up around a lot of finance, which is why… [crosstalk]
Michael: If you’re from Connecticut, insurance is in your blood. I’m curious first about the software that you built for the financial advisers, what did it do?
Mike: Yes, so it basically helps them streamline some of the process of investing in alternative investments like hedge funds, private equity funds, assets that were complicated to invest into for reasons of lots of paperwork and manual data entry.
Michael: Then from that it was Indio?
Mike: Then from that, it was Indio, correct.
Michael: Indio is how old?
Mike: Indio is three years old.
Michael: I think this will perk people’s ears up because it’s a really fairly remarkable story. [coughs] Excuse me. How many members are on the Indio team? How many employees do you have?
Mike: We have about 65 employees today.
Michael: Three years to 65, that’s fast growth. You’re distributed in more than one location, am I right about that?
Mike: That’s correct. About half of our team is in San Francisco, about half in Austin, and we do have an offshore engineering team as well.
Michael: Got it. I’m curious about that. Where do you have the offshore engineering team?
Mike: We do it in Poland; great English speakers there, great education system, and quite a technical demographic.
Michael: Got it, all right. You’re relatively new in the insurance industry really, right?
Mike: Yes, I was completely new to the insurance industry three years ago.
Michael: Before we talk about technology, problem-solving, and the solutions that you bring and that Indio brings, I’m curious about this, so new in the insurance industry, what do you think, how does it look to you?
Mike: Yes, it’s a great question. What did the insurance industry look like at first glance to me, I think a lot of people look in from the outside with a very high-level view and say, “Oh man, it’s inefficient, there’s unnecessary middlemen and whatnot.” My experience was not the case. My initial impression was that it’s a very complex industry, the policies are legalese. I was basically blown away by the complexity and the amount of– Particularly on the commercial line side, how nothing is really the same. There’s so many different types of businesses, policy type, lines of business, exclusion, it’s just not a one size fits all type of approach.
I think that was my first impression. I think my second main impression was the need for service orientation, relationships, and how important those are and the trust there beyond just for selling it. It’s a complex industry, and I think there’s a necessary level of service that will never go away.
Michael: The sale process has complexities, clearly, especially on the commercial end side. Then I think are you also saying that post-sale, the service, the relationship, the journey, there’s complexities associated with that as well?
Mike: Yes, absolutely. Arguably there’s more complexities in the post-sale process from what I noticed and what I continue to notice just given the ongoing service requirements. Whether it’s the issuance of a certificate, midterm endorsements on a policy, any expansion that require a new policy type, new risks, new markets businesses are going into, and businesses really rely on that insurance broker for that entire process.
Michael: Got it. I’m going to circle back to a number of things that you raised here, but I want to understand you a little bit. When I look at your resume, I say, “Oh, tech guy,” also, “Financial background,” and now, “Insurance guy.” What do you think? What is the strength that you think you bring as a professional?
Mike: I think it’s a lot of what you just outlined where my background was in traditional financial services where I did have to understand the necessary complexities of these regulated industries. I think if you approach insurance from purely a technology mindset, you miss out on the complexities that make it difficult to sell insurance through an app. I think having this dual background in finance and technology allowed me a unique view. It gave me the ability to have more of a realistic view of what’s possible and attainable in the short term, while also I think, I have a pretty clear vision of how I think the future is going to work.
Michael: We’re going to dive into that vision, but before we do that, there’s something on your resume that I find fascinating; you did some work either with or for Y Combinator or companies associated with it. Can you share a little bit about that?
Mike: Y Combinator, my first company was a part of Y Combinator, they’re an incubator, they made an investment into the company. [crosstalk]
Michael: Were you a participant in the Y Combinator boot camp type of experience?
Mike: I was.
Michael: Okay. That may be of less interest to some listeners. We’ll go through it quickly, but for people who are interested in technology, that’s fascinating. There’s some notoriety around the Y Combinator experience, what was that like?
Mike: It’s an incredibly well-known and prestigious incubator that has helped to start and be the first investor in many companies that are now household names; Airbnb, Stripe are among the two that are well-known and there’s many more. It was a fantastic experience. They really give you a quick intensive 12-week course on how to start a company. People like Mark Zuckerberg, Peter Thiel come and talk to you, and you get to interact with them. [crosstalk]
Michael: Really? Yes, got it.
Mike: Yes, it gives you a really good idea of what made startups successful and ultimately, it’s really geared at helping startups raise funds from investors which the program culminates what’s called Demo Day, which is where you raise… [crosstalk]
Michael: Right, because you really have to be actively working on your project while you’re going through this boot camp and training, right?
Mike: Yes, absolutely.
Michael: Okay. [laughs] All right. Then you gave a demo, that’s part of the deal, right?
Mike: Yes. It culminated with giving a demo to a number of investors. Again, this is my previous company, but it was a really good experience to pitch a product in front of a number of people and understand what it takes to raise capital.
Michael: Fascinating. Quick segue to the company, Indio, that you have right now, you’ve been successful attracting venture capital to that, am I right?
Mike: Yes, we’ve raised about $30 million in venture capital today.
Michael: The sources of that, there’s some fairly familiar names, some Silicon Valley money?
Mike: Yes, one of the more traditional venture firms, Menlo Ventures, recently led our series D which happened a few months ago. 8VC is the other main investor. That company is led by Joe Lonsdale who started Palantir and Addepar, companies quite similar to Indio in many ways.
Michael: Congratulations to you, that is quite an accomplishment. Now, the story, you left or you sold your previous company?
Mike: Correct, yes.
Michael: Then, boom, now you started this other one. Something must have caught your imagination, so if you would share with us what happened.
Mike: At the time, I was transitioning out of the other company post the merge. While I was running that company, I had to apply for commercial insurance… [crosstalk] I noticed how manual and paper-driven the renewal process was. Every single year my broker would send me a blank CNO, ENO app, cyber app, what have you. I thought, “Man, there’s got to be more of a TurboTax-like way of doing this process, something that’s more online-driven.”
I really appreciated the advice, feedback, and knowledge of my broker who helped me understand all the policy terms, exclusion, clauses, et cetera, but the process itself was entirely paper-driven. Each year the broker, even though they knew the data from last year, was sending me blank forms. When I was transitioning out of my last company, some investors were like, “Hey, you should really look into commercial insurance.” Initially, there were a bunch of companies at that time raising funds to try to replace the broker.
When I looked at the state of it I said, “You know what, my experience is that the broker adds a lot of value in regards to helping understand the complexities of this process. I don’t think that you can really replace them with any sort of technology. However, I think that there’s a tremendous opportunity to empower them with technology.” That’s the direction we originally chose, which at the time was quite contrarian to build software for the traditional insurance agents.
Michael: That reflects the big story, the big picture that I think we’ve seen a lot of. I’m curious what your perspective is on this. We saw a lot of money come into the industry in the last few years, let’s say over the last 10 years, largely to do exactly what you said, disrupt. Now we’re seeing more and more partnership with the existing systems including the independent agency system. Of course, Agency Revolution is an agent-friendly insurtech. Are you also seeing that more of the insurtech leaders and founders are more willing to work with, not just work against the legacy systems?
Mike: Yes, absolutely. Someone like Agency Revolution was one of the, I would say, first.
Michael: [laughs] We’re one of the early pioneers, we’re still pulling spears out of my chest.
Mike: I think that absolutely, I think it’s two-fold. One, investors are saying, “Okay, these companies aren’t looking quite the way that we thought they would.” Founders are realizing, “It’s an uphill battle to license as an insurance company or go through all of the insurance processes when they don’t necessarily have a background in it.” It’s hard. It’s complex. I think a lot of these companies if they haven’t failed, they’ve just rebuilt a tech-enabled broker or tech-enabled carrier. Those companies are just going to end up looking like traditional carriers [crosstalk] that are not technology.
Michael: A few minutes ago, you talked about your vision for how this industry could operate. What is that? What does it look like?
Mike: I think if you look at property and casualty insurance, particularly on the commercial lines, I think a number of things are going to happen. I think private equity firms and others are going to continue to roll off brokers. I think that if you look at the count of insurance agents and brokers in the United States, the 36,000, I foresee that probably getting cut in half over the next five to 10 years. I don’t necessarily see the headcount in the industry really shrinking, but I do see it’s going that way. I see carrier direct on the personal line side, really getting more market share.
I think that the high net worth personal lines will be something that the brokers continue to control. I think that commercial lines for anything outside of very, very small SMB is going to be controlled by the broker. My vision is that the broker, really the broker or agent, use the terms interchangeably, really becomes more of a advisor to the insured as opposed to a transactional middleman and it’s much more focused on a consultative approach to insurance. The conversations aren’t about filling out paperwork, getting quotes, et cetera. It’s more about what risk you have and high-level strategic advice where the broker can really be effective around a lot of the complexity in the industry.
Michael: All right. Not just Indio and we’ll get to that, but how do you think technology can support that vision where– I think what you’re saying is that the commercial broker could focus on the things that really matter and less on the things that don’t, and the technology will provide some efficiencies on the stuff that doesn’t matter as much like we don’t need a highly professional commercial lines broker to help somebody fill out paperwork instead of advising them, guiding them, and consulting with them on how they can best protect themselves, right?
Michael: How do you see technology in general? How is it changing the life of the commercial lines broker?
Mike: I think that there’s a number of different ways. First off, agencies have lived in these agency management systems for a long time, and they guide a lot of the processes. Although they may look old or outdated, and they are to a degree, they do things that are feature intesnive, they’re very feature intensive, they have a lot of powerful functionality. I think that Vertafore and Applied are the main two, are really making strides to improve.
I think that a lot of the change can be driven by them and them adopting better technology. I think that there’s just so much that’s happening when it comes to being able to use other technologies like e-signature or Zoom conference to have remote meetings. I’m sure at some point there will be a commercial line raider. There’s a personalized space, the quotes can more easily be obtained.
I just picture a world where you meet with a customer, the data collection process is done digitally. That data is sent to the carriers digitally, quotes come back much faster. It’s presented digitally in a digital proposal to the customer. Then all that information is integrated back into the system of record. I think that workflow needs to become more automated, it ends up resulting in a much better customer experience, and the broker becoming more of an advisor to the client versus having to produce all this.
Michael: A smooth flow of data all the way through the process. Initially, where do you see that data coming from? What’s the source of the initial data? Typically we say, “We get that from the customer,” but now there are more and more approaches to gathering data from other sources. Where do you see ultimately useful data can come from?
Mike: I think that outside of the customer directly inputting data, I think there’s information that can be attained through public records, through the internet of things, and through other sources where that data is already collected and it may be much more reliable. At this point, Zillow and Redfin probably know the square footage of some properties pretty well.
Michael: Let me paint this scenario, where instead of making sure that the customer fills out the 16-page app, the broker goes to the customer and says, “Does this look right? Are there any changes because I’ve got all this data.” The customer doesn’t have that frustrating experience of like in your case, repeating it every single year.
Mike: Exactly, and it’s more of, “Hey, does this look right? Sign here,” and it’s not like going to the doctor’s office for the first time every single time you gotta do the process [crosstalk]
Michael: Like, “Seriously, I got to fill out that again?” It is a frustrating customer experience. Medical industry aside, I think that there’s some consensus about the frustration of the commercial lines’ customer journey, and it’s gotten to the point where in order to serve them well, because of all the complexities, it’s a cumbersome, awkward jerky process. I think you’re trying to make it smoother and a more delightful process for the customer.
Mike: That’s exactly right.
Michael: Let’s talk about the solution that you’re attempting to bring to bear, that you are bringing to bear. How exactly does your solution begin to solve that problem?
Mike: What we do is we focus primarily on the interaction between the broker or agent and the client. What we do is we provide insurance agents with an online platform where we’ve digitized over 7,000 different insurance carrier supplemental applications and other forms. By digitize, what I mean is we convert them to online smart forms where the data maps between those forms and year over year into the next year form. Then we give them the broker/agent a platform where they can fill that out with the insured. To the insured, it feels like TurboTax. Instead of getting an email with 10 attachments, you just send them a link, they click the link, and they go through a wizard process online to fill out the insurance application. That is at a high level what we do, we really streamline the applicant’s renewal process.
Michael: It’s a more delightful experience for the end-user, the insured, and the agent or broker, right?
Mike: That’s exactly right. Primarily, we help the agent and broker save time by centralizing it, streamlining it, and reusing data. A lot of times they even force to fill in some of the forms for the client. For the client, it’s obviously a huge time saver, it’s a lot easy. It’s finally a digital process as opposed to what they’re used to.
Michael: Do you have some sense, either anecdotal or perhaps empirical, that gives you an idea of how much time you’re saving or how you’re transforming that customer journey?
Mike: It’s a great question. It really does depend a little bit on the size of the customer, the end customer. If it’s small business, there’s less data entry. If it’s a mid-market client, Indio can save 30, 60 minutes per renewal and you multiply that out by 50, a hundred renewals for the account manager, account executive per year, and it starts to be a meaningful amount of time-saving. Obviously small business might be less per business, but it ends up being a lot more in terms of count of a client.
Michael: All right, so to the extent you’re comfortable with this Mike. What’s market adoption? What feedback are you getting from your customer base? What are they saying? What’s it like in their world?
Mike: We’ve had pretty amazing growth and adoption. We work with over 310 insurance brokerages or agencies at the moment that comprise thousands and thousands of end-users that use our system every month. We estimate that we process multiple billions of dollars of the application premium through our system each year on a run-rate basis. We work with about 34 of the top 100 property and casualty insurance agencies, including three of the top 10. The adoption has been pretty good. As opposed to we’re not an agency management system and we’re a very lightweight solutions, so it’s very easy for an agent to adopt it and change a big part of their business very quickly and easily and have an impact on their customer experience
Michael: Are agents or brokers sharing with you what the new customer experience is like? How that’s enhanced?
Mike: That’s the primary piece of feedback we get. We get emails forwarded to us all the time that say, “My insured loved it this year,” or the emails forwarded to us or directly from the insurance saying, “This was way easier. I didn’t think something like this could exist,” and so that’s the primary reason I think the business owner buys us because they realize that we can help them potentially reduce churn, improve customer experience, separate themselves from competition, et cetera.
Michael: Before we wind up, I’m going to ask you to share how people can learn more about Indio. First, if you are going to deliver a message, you’ve been observing this industry for a few years, and you’ve been very active solving a problem for the industry now for three-plus years. If you wanted to deliver a message, like say something on a billboard like, “Pay attention to this or do this,” to the broker community, what would you say? What do they need to pay attention to?
Mike: I think adopting technology might be painful at first, but it pays dividends in the long run, and I think that change management is a difficult thing that I’ve seen. I don’t know quite to say, but if I was to put it on a billboard, I think that the technology adoption happens at an exponential rate. We’re growing at an exponential rate. I know firsthand and customers are demanding a digital experience to anything administrative that has to do with their business, and insurance is one of the primary administrative tasks. You’ve got to provide a better experience, especially if there’s more options out there as carriers are trying to go direct [crosstalk] around the broker.
Michael: Got it. In part, do you think like this change? You had to have people code the solution, but to some extent, do you think consumers are learning about the way they want things to be from other industries, and they’re saying, “Insurance, it’s time for you to wake up and do it like that too.”?
Mike: Yes, that’s a great question. I think that partially it was me saying, “Hey, you know, QuickBooks and other solutions for the business owner, for the CFO are really changing the way that the administrative processes for a business and especially an individual work.” I do think that we took advice and learned from those other solutions. I totally agree with you that that’s something that’s– Consumer expectation is changing because of the way that other industries are being affected, and to a large degree, insurance has lagged behind.
Michael: Yes, okay, got it. I’ve got another question about technology, and I find myself asking this of my guests who are in technology. Here’s the problem, the insurance industry is changing very rapidly, and there is a tremendous amount of venture capital and another capital that’s fueling some of the change. A lot of the change is coming from the introduction of new technologies. A lot of my guests are insurtechs, and they’re all over the place. It can be confusing for an independent agency principal to make decisions about which technologies to adopt, and frankly, which technologies not to adopt, which technologies work really well, and which technologies perhaps don’t fulfill their promise.
The selection process, making decisions about technologies when they are emerging like dandelions in your front yard all over the place, it’s difficult. Sometimes the common reactions are, one, “It’s just too much,” or two, “Anxiety, not sure what to do, I’m going to bury my head in the sand.” Yet, an agency principal as a leader needs to have some way to be responsible and to have a mature process for the selection or the identification and ultimately the purchase of various technologies. How do they do that? What advice would you give to– most agency principals, they’re not technology professionals, but they know that their world is changing because of it. What should they do?
Mike: Yes, it’s a good question. In addition to all that, I think agency owners consistently have remarked to us that they’ve felt burned by technology solutions in the past that promise a lot and haven’t necessarily delivered. I think on that note, although there are a lot of technology solutions, there are few that have gotten significant traction. I think that’s something that an agency principal can use to immediately filter out viable options.
To your question on process, I think you got to look at ROI. If you believe that the broker is here to stay, but they’re going to become more of an advisor in these tasks and other industries that have been either automated or streamlined is going to touch insurance, then you’ve got to be looking at, “Okay, what technologies can I adopt to be ahead of that?” while also keep in mind that, “Okay, how does this affect my immediate ROI so that this decision doesn’t cost a lot of money and be prohibitive.” I think that levers of ROI you can look at are, “Is this going to bring me new business? Is this going to increase the customer retention I have? Is it going to save my staff time?” I think if one of those three levers is meaningfully hit, I think that that’s a huge thing.
I think if you’re going to go pay for software that allows you to get a work comp quote in 30 seconds versus five minutes through Travelers, Hartford, or what have you, that might be a novel invention but scaled out across your staff, it actually doesn’t have– Maybe you’re saving a thousand minutes a year, that’s actually really not that much money. I think being quantitative in the way that you look at what technology is doing and making sure it’s providing an ROI far greater than what you’re paying is extremely important.
Michael: Got it. All right, two last questions. First is, who is your solution, Indio, best suited for? The second one is, how can they find out more about it?
Mike: Yes, our solution works best for independent agents that work in property and casualty and have a significant portion of their business devoted to commercial lines. It works even better if some of that commercial line is– You’re focused on E&S markets where there’s a lot of paperwork, and most commercial lines folks agencies are going to have that. The product is primarily driven by account executives, account managers, producers do use it, but renewals are the majority of business and paperwork, and that is the majority of our user. You can find out more about us at useindio.com, that’s U-S-E-I-N-D-I-O.com. You can also email me directly at firstname.lastname@example.org.
Michael: Got it. All right. Mike, first of all, congratulations on what you’ve done in a very short period of time, that’s very impressive. Secondly, thanks so much for sharing your insights and your perspective with our audience today.
Mike: Yes, thank you so much, Michael. Really appreciate to be on.
Michael: It’s been a pleasure, thanks again.
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