Building Lasting Client Relationships In Chaotic Industries | with Brennan Grone

You know, I have a couple people that come to mind who are like the go to insurance advisor for a large national franchise. And these are people that have decades of experience in the space that I get to learn from every day. And I don't think I've had this much fun selling or distributing a product in my entire career.

Hey, welcome back to the Broker's Voice. Andy Neary here, founder and CEO of Complete Game Consulting. I'm excited to have Brennan Groen, executive vice President of Rainbow. Brennan, welcome aboard.

Thanks for having me. Happy to be here.

Where are you joining us today from?

Yeah, I'm from St. Louis, Missouri, born and raised.

I got to tell you, man, you know, you're a big Cardinals fan. I'm a Brewers fan. Our brewers are kind of out of control. Good. Right now. It's. It's been pretty fun to. Pretty fun to watch. To even imagine that they might win 100 games this year. I would not have expected that at the beginning of the year.

I'm glad one of us is having a good. It's great to see, man. We were at the Cardinals game the other night with about 5,000 other people. You know, it was awesome.

I actually took my dad to. I was just in Pittsburgh for a workshop. Took my dad to a Pirates game because we've always wanted to go to PNC Park.

Yeah.

And they were playing the Blue Jays, which I didn't realize was about. Only. It's only about a three, three and a half hour drive from Toronto. There were more Toronto fans than Pirate fans at the game. Yeah, it was pretty, pretty. You felt bad for the Pirate players. But anyways, that's not why we're here. We're here to talk about Rainbow. One of the reasons I wanted to have you on Brennan is, you know, you and I chatted offline. Rainbow's got a. It's a pretty unique program and, you know, before you and I connected, I. I didn't know anything about Rainbow. And so what I wanted to do is use this conversation to give people in the insurance industry a good opportunity to learn a little bit about you guys. So why don't we just get right after it for the folks tuning in going, all right, Rainbow, no clue. Let's. Let's go. What the heck is Rainbow? And what are you guys doing to have an impact on the commercial insurance industry?

Yeah, thanks for asking. So at Rainbow, we are a program manager. We primarily focus on writing risks in the admitted markets for restaurants and then beauty and wellness businesses and our bread and butter pun Intended is definitely restaurants. It's what we got started on. It's what we were founded on. And we've made an awesome mark on the marketplace already. I think a lot of that comes from, you know, our expansive appetite. I don't think you'll hear many sales guys come on the podcast and say this, but it's true. We're definitely an underwriting LED company. I think we all pride ourselves on wearing like a smart risk selection underwriting hat every day. However, that doesn't mean that we are not flexible. We love to play in the gray area. I think we're able to put a lot of risks on our books that other admitted markets wouldn't even consider taking on. And I think some of that is because of our unique approach to underwriting, how we gain reinsurance capacity through some of our partners. And it's really allowed us to help agents get a lot of wins on the board quickly in these niche verticals that we focused on.

Yeah, let's talk about that for a second. You know, you said no pun intended, and in that statement, you used bread and butter Appetite. All good puns for. For the industry you guys are focused on. Why is it, and dare I state the obvious, but in the markets you're playing, restaurants, things like that, why is risk so hard to place at times?

To me, it boils down to a couple of really simple things, I think. One, we all see the trends in the US Here. Things get more litigious every year. Lawsuits for silly things that are really difficult to prove are growing year over year, which is crazy and it's really harming the industry and what we do. Now, that being said, I think the toughest piece of what we do is definitely the dram shop laws by state providing liquor liability. We do provide liquor liability in every state that we ride in, including really tough states and markets like South Carolina. We have to be a little stricter in those markets like everybody else, but we have found a way to partner with the right agents and through them, the right insureds to really help out in the marketplace.

So do certain states like a South Carolina tend to have more rigid, litigious guidelines, which make them a bigger risk than another state?

I would say it's actually rigid is an interesting term. I would say that, you know, a state like South Carolina, the amount of things that can happen that a business owner can get sued for if someone enters their establishment is extremely broad. And you know, without going into maybe specific claims examples we've seen at Rainbow, you know, I'll Tell you, I've seen a lot of different horrible claims where a business owner, you know, has gotten sued. Insurers have paid out max limits for something that was very obviously not their fault. These legal systems are set up to be so favorable to the consumer that oftentimes companies end up, like I said, paying out max limits. You know, these can be multimillion dollar claims for something that is very obviously not the business owner's fault. And it's very unfortunate. So we're always advocates for legal reform in these states, where applicable. And as we see legal reform shifting in a state like South Carolina, you can bet your bottom that we're getting ready to be more expansive and to quickly enter that marketplace with more favorable terms for the insurance.

Yeah, that's a, that's a great. I love how you positioned that because now that I heard what you just have to say, I said rigid. What I should have said was these are states where, let's be honest, the restaurant could basically be sued for anything.

It's a free for all, man. It's crazy.

Yeah. What about. So let's talk about, you know, being a hard to place risk. One thing I see in the insurance industry is when there is that, that hard to place risk, which tends to happen more on the commercial insurance side than say employee benefits. You just don't see a lot of advisors want to go down that path. Right. Because if they're like, well, if it's a hard to place risk, why would I even spend time doing it? Because there's just not a lot of options out there. What advice would you give somebody in that position who is looking at some of these niches like restaurants and maybe going, eh, should I even waste my time there? What would be your thoughts given that you guys are, you know, are, are an organization at carrier that's just focused on helping people find these hard to find niches?

Yeah, no, it's a, it's a great question. I'd say one, just foundationally, I'm a firm believer that things that are very difficult worth doing. I'd say moreover, in, especially in the insurance industry, these really tough to place or complex risks for agents oftentimes come with high premiums and they can be great revenue generators within your business. Also, if you think about this competitive space, like, you know, let's talk about maybe a casual dining restaurant with 40 to 50% of their sales being alcohol receipts, there's not many carriers or programs that want to take a look at that risk. And that's very beneficial for the agent because, you know, essentially they're going to have the insured cornered and it's very difficult to compete with you as an agent. If you've set up the right coverage for the agent or for the insured, you're a valuable counselor to them and provide all the right coverage lines. You know, you're going to be a huge advocate and asset to that insured. Where others are going to bow and say, ah, that that looks too complicated. I don't think I have the right market for it.

That's actually really. I'm glad you said that because we see it all the time. You know, an analogy I use is if you're willing to go down a path most won't, you're going to create a nice little differentiator in the market. It's the same thing. We do a lot of content on our end, right in the retirement planning 401k world where there's more strict guidelines around what you can and can't say in content. You see a lot of people say then why should I even do it? I got to get it approved, it's not worth it. And we're telling people, hey, because of that, if you're willing to go there, you're going to create a huge differentiator because most don't even want to do it. And I think it's the same in your point. When you think of niches in the commercial world, everybody wants to go after construction and trucking and manufacturing. But when you find that niche that is a higher risk, hard to place where most people aren't willing to play, you could really create a corner on the market. And I've got to believe, Brennan, you're probably see it if you're the restaurant owner and you've got an advisor who's going to bat for you, like that's an advisor you're not going to leave anytime soon.

It's extremely valuable. And you know, I think what I've had so much fun with that rainbow here over about the past year is we're able to take these, these old school processes, right? Think a court forms, a couple of weeks of back and forth with an underwriter just to get a, you know, a mid sized risk placed it. When I say midsize single location restaurant risk, you know, that could be a 40 to $60,000 premium risk and that's a great premium to be writing. But if you spend multiple weeks or months on that deal, you're not going to be profitable. You're going to sink way too much Time into that. At Rainbow, we've allowed agents to come in, quote these risks straight through our platform. We have a real application. It's 44 questions. We definitely didn't fall into that insuretech trap of the shortest app wins. We also didn't fall into the. Into the trap of the platform. Does all the underwriting. You don't need to talk to a human. I think we've really solved for those two things. But the best part of Rainbow, I really think it, you know, I remember distinctly being an agent, you're quoting a risk, you see the refer to underwriting button and you're like, ah, the risk is dead and I better go somewhere else. It's not the case at Rainbow. At Rainbow, I have underwriters on call from 8 to 8 Eastern. And if you hit that refer button, you're going to hear back from somebody within two hours. Oftentimes that's going to be an approval. Say, hey, here's some credits. Go buying it. We're excited to compete on this one.

That's awesome.

Our agents love it. I love it. You know, as a former agent, I'm like, man, I wish I had to have Rainbow on my shelf when I was producing because I would have written a ton of business.

I'm going to ask some maybe ignorant questions. Just a great gain some clarity for the people tuning in. So I heard you say Rainbow's a platform so I can come and submit a quote right on a platform. Right on Rainbow's platform.

That's correct.

Let's talk about underwriting turnaround time because let's face it, underwriting turnaround in general these days is not very good. But now you throw a hard to place risk there, man. What am I looking at when it comes to when I can expect a quote back? Because I honestly, Brennan, I'm hearing from commercial advisors in some other markets that it can be upwards of a month, which is absolutely insane. So what does the underwriting turnaround time look like with Rainbow right now?

Yeah, it's an awesome question. So, you know, I mentioned the 2 hour SLA a moment ago and that's not always our turnaround. For a binding quote, I'd say about half the time on referrals. Within two hours, agents are going to find out whether they can bind it or whether we're really not a fit for the risk. And I looked at one just last night where we're unfortunately not going to be a fit for the risk. The insured has a permanent dance floor. I'd say about 60% of their sales are alcohol. They stop serving food at 8pm they stay open till 3 or 4am that risk is a little bit too much fun for us at this point. Maybe later we'll be ready to take it on. But then again, yesterday I also saw a great family style restaurant in Northern California. They've been open for about 50 years. It's like an $11 million TIV or total insurable value between the building, the contents inside and some other risks were taken on. It's a frame building and there's no sprinklers. I think it was a wildfire score. B. So like hey, all the things I just spelled out there are an underwriter's nightmare. No admitted markets were saying yes to this agent and this insured. We were able to get a quick approval for a couple of reasons. One, me and my team worked with the agent to really explain to underwriting kind of the gray area between the application and real life for the insured. I think seeing a 50 plus year old family run business with very few claims, zero claims last 20 years, which is crazy, it's unheard of made us very comfortable with it. But then having a partner like accelerant behind us. We write on accelerant's paper and they're, they've been an awesome partner for us since inception. We love working with them. They are, they're like a risk exchange. So they're able to divvy up the risk on this to a lot of different players. And compared to a lot of other admitted markets, they're going to take on the whole thing so that where they wouldn't be comfortable with our flexibility and accelerants risk exchange. We're able to divvy up the risk between a lot of parties and take on these risks all day when they're the right fit for us.

That's cool. So you know, you and I were talking offline when you think when if I'm going to, if I'm an advisor right now and I do have some opportunity in the restaurant space, what are some things that maybe I should be looking for? As far as you talked about the risk, you guys declined because of the dance floor and the things like that. I think we talked about offline liquor splits, you know, like how much of the revenue is coming from liquor. What are some of the things I could be doing as an underwriter to excuse me, as an advisor to field underwrite to go, is this going to be a risk or is this one I should probably walk away from?

You know, I Think, like, by and large, for at least for my appetite, it's pretty broad. For pretty much any risk outside of fine dining, maybe a wine bar, we'll go up to a 5050 split between food and alcohol sales, which is incredibly broad. Most markets stop between 30, 35% alcohol. So we're really able to go a lot further there on a fine dining risk. Or like I mentioned, maybe like a wine bar or like a local brewery that serves some. We can go up to a 65% alcohol split on those. Those gross sales, which can be really helpful. By and large, what I found is most of the claims we see on the liquor side tend to happen late at night. As I get older, I realize there's definitely something to what my dad used to tell me that Brennan, nothing good happens after midnight. He was right, I was wrong. But, yeah, by and large, hey, you know, we do see much higher claims frequency on businesses that serve alcohol that are open past midnight. I think the main thing I see our restaurant specialists do really well, and I'm thinking of a specific agent that told me this is they won't insure a restaurant that won't let them in their kitchen. And I really liked hearing that. Where, you know, I remember I was at this conference in Vegas and this wonderful agent came up to me and we do a lot of business together. And I got to meet her in person. She's like, I refuse to insure a restaurant that won't let me into the kitchen because I feel like something is off. I want to know these insureds. I want to understand their business. And ultimately, if she felt like if she couldn't get back into the kitchen or to sit with them in the office at the location to get a better understanding of how things are running, she couldn't really properly advise all the different coverage lines they may need. And that could be anything from, you know, specific BPP limits. Right. It could get down to EPLI or maybe a wine collection endorsement that the insurance wasn't even aware that she would offer. So I'd say the best field underwriting happens in the field. And oftentimes for these retail businesses that have a lot of foot traffic, you gotta get out in the field and walk into the restaurant, get the lay of the land, see how things are running, to really understand what they need and where to place the risk. Unfortunately, in today's day and age, some risks do belong in the surplus lines market. Maybe that's because they're not run as properly as some other risks. It could truly Just be the nature of the business.

Yeah, well. And I think looking at an industry like the restaurant, going back to what I said earlier, if you're an advisor who's willing to take on this type of. Of initiative to help an industry that can be very tough to place in the insurance market. These restaurateurs know each other. If you help one, they'll tell others. And I see it as a big opportunity to not only create a little differentiating niche, but also create a stream of referrals if you can help one or two. Because I gotta believe it's. At the end of the day, it's kind of a small world. They talk to each other.

Definitely the fun piece of this from a marketing standpoint that I. I like to think back to the time when I was an agent. Everybody likes to go out to lunch and dinner. You should always be prospecting as an agent and a producer. So, you know, ask lots of questions when you're out, you know, having lunch or dinner. You know, see if you can get to know the chef, see if you can get to know the day manager, the owner. There's lots of different ways to get in. I distinctly remember the first restaurant policy I wrote as an agent. It was right across the street from my office. There's a carrier rep in mind that used to come see me all the time. And he'd always be like, hey, do you wanna. Do you wanna meet me across the street instead of. Instead of at the office? I'm like, oh, I'll be at the bar in 15 minutes. Like, you know, just give me a minute. And one day we'd had a couple of beers and the night manager was getting there, and he said, oh, hey, Brennan, it's good to see you. Hey, Colin. Cause we were there pretty often, and he was like, we're having a lot of trouble with our work comp. I was like, hey, if I can quote it on a napkin right now, will you let me. Let me bring you bids for everything. And I quoted their comp on a napkin because comp is really easy to quote. There's just a couple of factors. And so I asked them like four questions, quoted the comp on a napkin. The PDF I brought them the next day was within. I think it was within a couple hundred bucks. So they're like, oh, wow, that's. That's magic. And that was the first. The first restaurant account I wrote as an agent, which was pretty fun.

That's cool. I love hearing that. Let's talk about the markets right now. Geographically, Are you guys focused on any specific markets today? And then as you look ahead at the future, are there other markets you're looking to expand into?

Yeah, awesome question. I think geographically we're live in about 30 states. We're absolutely going to continue growing that footprint. Now the question I often face as we look at geographic expansion is how do you enter a market like Florida and stay there? I've seen lots of carriers or programs or MGA's go into a market like Florida or Louisiana, think that they have some kind of underwriting edge. They take some claims on a hurricane, they fizzle out and they're gone the next year. That is not how we want to enter some of these markets. So we're being very thoughtful about what kind of entry do we want to take into a state like that. But frankly, we have plans to go live in at least the greater 48, if not all 50 states. We also, outside of geography, we have plans to continue rolling out specialized vertical focused programs. And I say specialized vertical focused. You know, we came out to the market with restaurants. We've been very successful in that space. Our next endeavor has been this, this class we've called Beauty, Wellness and Fitness. Think hair and nail salons, beauty parlors and instructor led fitness. We actually just wrote this awesome chain of hot yoga studios down in Texas. They do hot yoga, infrared saunas and cold plunges. They have this really incredible business. You hear that and you think that I don't know what kind of revenue stream. I was blown away by the revenue stream these folks have created through this, this business down in Texas. And I'm really excited. I don't know exactly when we'll have our next program ready. Some of it's capacity dependent, but we will continue launching these kind of niche focused programs.

But when you think about it again, beauty and wellness, it's unique niches, just like restaurants that have their own complexity and unique risks. Right. And so if you're an advisor, everybody, I'm going to say it again. Every advisor wants to go into the what I would call the bigger, more common niches of the construction, the trucking, oil and gas, whatever that might be. I mean, here are opportunities as an advisor to find a niche not a lot of people are playing in. And not only could you create a nice little corner on the market in your own location, your own geography, if you start writing restaurants or elk beauty salons or hot yoga facilities, guess what, you could be working with franchises and chains around the country. That market expands very quickly and we have clients who've done that. We have clients who work specifically with franchises, clients who work specifically with these small niches. And their market is no longer the geography where their office is located. They're working with people around the country. Let me ask you, you know, you've got a background. Let's get to know Brandon a little bit. So you've been in the industry for quite a while. What tell us a little bit about your journey and what led you to ultimately seek Rainbow as an opportunity to help them grow.

Yeah, well, I'm an insurance kid. My grandpa and my dad were in our state farm agents. So I grew up thinking insurance was boring. I didn't understand it. I hated when my dad would drive by a house and say, hey, I insured that house. Oh, we know those people. And I quickly turned into that dad in my, in my mid-20s doing the same thing to my wife. I think what, what's so fun for me with Rainbow and restaurants is that the grown family was in the restaurant business for about 30 years here locally in St. Louis. My grandpa George, we just had a baby last summer whose name is George. We named him after Grandpa George. They had I think seven cafeteria businesses grown cafeterias here in St. Louis. So I grew up hearing about premiums, which was boring. And I grew up going to grown cafeteria, which was really fun because my grandpa George would be there and you know, we'd get good food and he always makes sure after dinner I had cherry pie, which was my favorite. And he'd take me back in the kitchen and I'd meet the staff and see how he ran things and you know, he taught me how to. I just, I have this great memory of helping him bake pies on Sundays, which was really cool. So as I, as I thought about moving from the last insurtech I was working with and I was talking to our founder Bobby and I was thinking, you know, insurance serving agents, which I love doing. I'm very passionate about the independent agent and I understand the day to day, the struggles, the wins, the losses. And then getting to focus on restaurants, I was like, this is, it's almost a slum dog millionaire moment for me. Like, this is perfect. I couldn't think of a better thing for me to spend my time on. So it's just been a ton of fun. I get to work with on the other side all these incredible restaurants. You know, I have a couple people that come to mind who are, as you mentioned a moment ago, like the go to insurance advisor for a large national franchise. And these are People that have decades of experience in the space that I get to learn from every day. And I don't think I've had this much fun selling or distributing a product in my entire career.

That's cool, man. I got to ask. I'm a branding guy, and I, you know, what's behind the name? We talked. You shared with me offline, but I'd love for you to share. For the people tuning in, I find it interesting how the names continue to evolve in the insurance world. The players, the carriers are all coming up with unique names. It reminds me of being a baseball guy. There was a time when the minor league teams often all had some pretty common nicknames, but now when you look at the nicknames within the minor league organizations, they are just as wild. Like, it's. Who can come up with the craziest nickname? The Trash Pandas. That's the name of one of the minor league affiliates. But my. My cyber liability insurance is through cowbell insurance. I'm like, where are these guys coming up with these names? Talk to us about where. How did we. How did the founders land on Rainbow?

Yeah. Last year, talking about minor league teams, I'm just thinking about the Savannah Bananas. They were in St. Louis, and my son and I went. It was a ton of fun. Yeah. So it's a. It's a really interesting story. And, you know, what it's founded in is basically over the last several years, I think that a lot of new players have entered the space. And for every creative name you see out there, there's three really boring old names that have something related to ensure embedded woven into them. And so I know that our founders really wanted something that was going to be different and stand out that would be memorable. I've heard this story a couple of times. You know, they were sitting around, you know, they've been developing a product. They've been thinking about where to enter the market, and they were also riffing on names all the time with a whiteboard. And our founder, Bobby, said, rainbow. What about Rainbow? And allegedly it just stuck. And then they were working with this big national kind of marketing firm to help with some of our branding and our logos and some of these color schemes. And this woman who's a really big deal in the marketing, branding, naming convention, really wanted to meet the guys, and she was like, I just wanted to come on and say, I love the name. Don't change it. And they got like, some. Definitely some wind at their sails with it. And we've ran with it, and I. I have to tell you I love the name and the branding because a lot of times, you know, as, as we're actually working to change this right now because we've launched more than just the restaurant program. I hear our agents tell me all the time in the field, oh, Rainbow Restaurants. It just sticks in their head. Rainbow Restaurants. Rainbow Restaurants. And I love it.

So sometimes the best names are the ones that don't have this really cool story behind it. Except in a whiteboard session we just called out Rainbow and people are like, yeah, let's go for it. So that's cool. Thank you, Brendan for taking the time to jump on. I think this was great information. I hope there are commercial advisors that are watching this right now going, yeah, maybe I have a restaurant opportunity. I've thought about getting in some of the markets you're going to be getting into the beauty, the health, the wellness. What would be the easiest way for an advisor to reach out and connect with you if they are interested to learn more?

Awesome question. So I think one I want to be really clear. It's very easy to get set up, to test out, quoting with us and to get appointed. I don't issue out production requirements at this time. All you have to do is go to userainbow.com so USC the word rainbow.com you can reach out to my team salesuse rainbow.com or you're welcome to just look me up on LinkedIn and send me a message and we'll get you set up. My name is Brandon Groan. We are always looking to work with new independent agents across the country and I like to think that we're great partners for growth.

Awesome, man. Well, it's been a pleasure having you. I'm sure there's going to be people who want to know more about what you guys are doing. So thank you for the time, taking the time to be here.

Yeah, thanks for having me. This was a ton of fun.

You bet. And everybody else, if you're tuning in, you are a commercial advisor. You have somebody on your team who is, who may have some restaurant risks that they are currently insuring or looking to insure and in the future, health, beauty salons, things like that. Make sure to give Rainbow a look and reach out and contact Brendan right away. Be good.