Transforming the Insurance Industry with Matt Essick

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech and tacos, tacos and tech you know we got tacos and tech is on smash border green guacamole keeper countins counting beans Contador quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping fire tortillas round jalapenos in these modern times a crappy beer and coffee my coding yoga posse fold the body origami we be surfing coronado eating tacos El gordo, the taco stand in pesto lucha libre and sombrero Got a shout out to cost angels by the ocean watch the sunset la Hoya shores Entrepreneurs trying to get funded When San Diego Startup Week is popping in the summer Oceanside, the Tijuana esti be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who you believe stars are within reach we interview and founders who be shooting for the Moon SDTechOS with your host, Neil Bloom. Startups get the party, startups get the.

Welcome to the Tacos and Tech podcast where we discover cutting edge San Diego technologies and the builders making it happen. I'm your host Neil Bloom, San Diego's tech ambassador and together you're going to put a face to the name of today's tech leaders with our own blend of local lifestyle. This segment is brought to you by Cox Edge. Our longtime partnership with Cox Business has helped their engineering teams develop new tech products for small businesses and startups. Cox is investing in Edge capabilities and working with developers and engineers across the ecosystem to deliver ultra low latency compute solutions, helping customers to improve application performance and to reduce cloud transport and on premise infrastructure costs. Interested in hearing more about Cox Edge? Please visit coxedge.com and mention Neil Bloom or freshbroodtech.com for our partner discount.

And welcome back to the Tacos and Tech Podcast. I'm your host Neil Bloom and I am joined by Matt Essick, Chief Marketing Officer at nsight. Hey Matt, thanks for joining the podcast.

Hey Neil, great to be here. Thank you for having me on.

Yeah, likewise. Thanks for being on. We're excited to get to know your story, NSIGHT's story, which has been a cool growing company here in San Diego. Know some people who've worked there now getting to know you, which is great, but can you give us a quick overview of what NSIGHT is and then we'll circle back, do a deep dive into it?

Sure. I think everyone's familiar with the boom in fintech here over the last several years. And there's a side of that that is around what we call insurtech. And traditionally, as we know, insurance didn't really excite a lot of people. But about five or six years ago, everyone in the technology community and the venture capital community started looking at insurance and saying, hey, this is a sector that can be transformed. And we're really shifting over to what we call that sort of millennial model today, right around everything's digital. Experiences need to be digital. And for these big insurance carriers and distributors, there's a lot of digital transformation that needs to happen internally as well to drive efficiencies, better processes, and better customer servicing. And so we've focused on working with insurance carriers and distributors out there to drive transformation for many of the most complex products out there. So it's a product sort of focus around annuities, long term care, and permanent life insurance. And many of these products are actually investment products. And we'll probably talk a little bit about that. So we tend to say what we do is sales acceleration because that gets people excited, and it's really around transforming that sales experience across the value chain. Got it.

Okay. Yeah, you do mention the kind of highlight of the industry. And I think the big brand name everyone knows is Lemonade.

Yes, yes.

But so much more behind the scenes. So, yes, excited to dive into this with you, but let's get to know a little bit your background. Where'd you grow up? Where are you from?

So I originally grew up outside San Francisco in Marin county and went back east for college and spent about four years in Boston and then came back to San Francisco after graduating. And I tend to think this is interesting. I came back in the first boom in the bust in San Francisco. And so we're what, 23, 24 years beyond this now? But this was 1997, and I traveled a little through Europe and such. I was an econ and an English lit major in college. But I came back and I said, I don't know what I want to do. I kind of like doing everything. So I actually caught on with a startup that was about two blocks from where the Giants ballpark is right now before they had actually put that in. And we were making virtual private networking software and a lot of what we call sort of basically authentication software right when Microsoft NT was out there. So very small startup, probably about six people when I joined. We grew, eventually were sort of acquired by Siemens, and really that was through the late 90s. And so I sort of went through that whole boom in the bust where San Francisco went from being a party every night. You know, companies were poaching people from each other to actually, you know, a lot of companies, you know, shuttered overnight completely. My wife worked for one of the big advertising agencies in San Francisco. I think they went through about nine rounds of layoffs. So, yeah, it was. It was a tremendous time to see the two extremes. And that's really what it was, you know, in 2002. You know, I think San Francisco, I tend to say it was in a sort of virtual depression from a technology standpoint. And that's hard to imagine now given where it is and given the growth that's accelerated past then. But back in about 2002, the question was, is any of it coming back? Man, I don't know. So basically, my wife and I, we decided to go back to business school and graduate school. So we left the us went to graduate school in the United Kingdom in London, spent two years in business school, and then I left. Once we graduated, I found myself going to the other tail end of what I call the innovation curve, and that's insurance. And So I spent 10 years working for Zurich Insurance in the UK across different areas of the business, both what we call property and casualty and life and annuities, and really actually working on a lot of digital innovation and with marketing divisions over there. And I think the. The interesting thing relative to the US just kind of counter to how things usually develop globally, is that there was a lot of digital innovation, especially around the insurance industry, that happened first in the UK because it's a single regulated market. Whereas here in the US we have about 50 different regulatory regimes attached to the States for products and actually selling products out there. So you're familiar with Policygenius? Yep, we saw those models emerge in 2005 back in the UK. There was one called Compare the Market. Their marketing strap line was Compare the Meerkat, and they had a little stuffed animal meerkat and they trot out the meerkat and it's the same exact model as Policy Genius, right? Get your insurance quick, get it for the best price, and compare different, basically, products from different carriers and a great experience online. So spent 10 years in the UK in London, loving it. And it got to the point where we'd had our kids over there and decided to. We were either going to stay there for the foreseeable future or come back. So we came back in about 2014. I met up with Bill Unruh our CEO at NSight and back in early 2015, the rest is history. So we've been working on insight and growing the business and we've got a little bit of a pivot story that we can dive into. But right now we're really starting to take off.

Love that super cool story and good insight. Being internationally, did you get a chance to peer into the London or UK startup scene while you were there or you were pretty focused on, on insurance?

You know what I saw there, which was really interesting was in the last couple of years there from 2008, 9 onwards, was the emergence of fintech on the European side with the 2008 financial crisis. What happened is a lot of the investment banks capped a lot of the big basically salary packages for the investment bankers. And so really where some of the push for fintech was was that you saw a lot of the people that went into investment banking. Right. That were really smart from a financial standpoint. The sort of opportunity was somewhat capped. So they said, look, I'm going to actually go a different way. I'm going to start my own fintech company or startup and transform this industry. And I think some of that is, you know, was driven certainly by the financial crisis, but certainly some of that I think is also generational as well. And I think that's a big dynamic that we're seeing obviously across financial services today and it's happened across pretty much all the sectors is we're almost seeing sectors reconstructed. Right. Re architected for a new generation.

Yep.

I'm Gen X, so I'd like to say unfortunately it's not my generation, but I do kind of, my view is we're kind of moving between two different models here. One by the boomer generation that was built and has existed for the last several decades. But we're really now shifting over to what I call the sort of millennial model here of financial services. And it's evident by they've got stats around the number of Fortune 500 companies that are dropping out of the Fortune 500 and the one number of new ones that are coming in as well.

Interesting.

Yeah, I think it's very interesting.

And leads to just expectations of accessibility and choice and those kinds of things that weren't a priority, you know, in past rounds of innovation. It sounds like.

Exactly, exactly. When you think about how everyone's experience and expectations today are defined by Amazon. Right, right. They're defined by, you know, Walmart, you know, online, this sort of choice and accessibility to information, the basically drive for self service Today. And in a very simple way, understanding what's the best product, what's the best value for myself has sort of been driven in to all consumers today. And so they certainly expect that in what I call the indirect channels, when they're engaging with for instance, a financial advisor or anyone who's actually selling them a financial product or service, they take the same sort of D2C or direct experience expectation that they have and they want that same expectation or they want to basically achieve the same level of transparency in any conversation with someone who's actually intermediating the sale. And that's really where we focus is helping insurance carriers on the life and annuity side and the distributors, whether that's financial advisors, whether that's agents deliver a more transparent, easy to understand consumer oriented experience around these complex products like annuities in the permanent life insurance suite and long term care, where they can be very, very complex.

Got it. That sounds like a great segue into kind of talking through the birth of insight. Take us through a little bit of where obviously we know the change in dynamic and the changing decision maker. We understand that part. Now what was Bill's understanding? Was he the sole founder or were there other co founders and what was kind of the big premise that he was bringing forth here?

So Bill was not the original founder. So we've got to prove the story here.

Got it.

And so originally the company was founded around selling disability insurance online and direct. And this is. We talked about Policy Genius. Right. A little bit of humor here. And so that was the original incarnation. And Bill came into the business probably about seven years ago. I came in probably about four or five months after him and we were looking at the business and looking at the model and I'll talk to that in a second. But our direct competitor at that stage, at a very early stage was Policy Genius. And so, you know, you're looking at your model, right. And how you're doing online in terms of SEO and SEM and we're looking at Policy Genius. And so it's funny now where we've turned out. I think Policy Genius is probably valued, you know, at several billion dollars. But it's funny how time evolves.

Yep.

I think one of the challenges that we saw is that there is this sort of overarching trend to a lot of D2C direct to consumer sort of servicing and delivery. But the challenge with, with insurance around some specific markets is awareness and interest with consumers. Right. To be blunt, and I've spent, you know, past 18 years in the sector for the most part, insurance is a low interest product category. We're not selling Michael Jordan, right, Original Michael Jordans. And so that creates tremendous acquisition challenges. And so for a product line like disability insurance, there were sort of ultimately three challenges that we foresaw with the business. One was that there was low awareness out there with consumers. And in a D2C model, that makes it hard really to drive the acquisition funnel. Two, disability insurance is not cheap. And so in terms of the portfolio or the wallet that a consumer has to spend on insurance, they have to spend on car insurance, right, because it's legally required. And then there's what we call sort of the core protection products like life insurance, disability, unless you're a surgeon, is sort of a nice to have and viewed as such. And if it's expensive, that makes it even harder to drive that sort of acquisition and sort of sales rate. And then third, what was actually happening on the insurance end, and this is a very interesting dynamic just in terms of how products are sold in different industries, is that from an underwriting standpoint, the carriers were really starting to become more constrictive around underwriting for selling these products. It almost got to the point where it was becoming harder and harder to get a customer that you'd acquired to put in an application to get them underwritten. And ultimately, for a DTC model, we came to the conclusion that it just wasn't scalable out there, which is usually not what you hear when you talk about DTC models here going online. That really led to, okay, what do we do now? And this is really about the pivot, right? And you start with that view of if you have somewhat of a defined business strategy or a vision or a business plan, and it's somewhat successful at the start, it's always about achieving product market fit, right. And continuing to iterate and iterate. But if you've got some road in front of you, it's really easy. When that road or that vision disappears, then you've got, you know, what, what is the road? I'm actually going to define where do we go from here. We actually tried a couple of different models, you know, and probably took about a year. We were tremendously lean and we were doing sort of lean startup test and learn around different models and what may work. We had this sort of core capability around insurance. And ultimately, you know, I think it was sort of Bill's vision that we wanted to start to build platforms that transform the experience for selling these products. For a lot of the agents and the advisors that we were meeting as well as basically the insurance carriers. It's a tremendously inefficient industry and it has been for the last 20 years. The experience for these products is built around this. We call it a 45 page PDF. It's called an illustration. It's really a quote. It's a little bit like your mortgage process, right? Where you look through this big stack of paper and you go, I don't know what I'm reading. And that causes a lot of discomfort around the transparency in today's age where the consumer is used to really understanding what they're buying. And it was completely sort of not digital in any way, shape or form. So it didn't support any interactive discussions, which is really the format and the language of financial services today. Right. Highly visual, easy to understand. We all get it in our 401k accounts now when we log on online. So we decided to help carriers and distributors more of an indirect model versus a direct D2C model, help them transform their sales operations. And that's everything from basically how they quote these products internally to make them more efficient, all the way out to the experience that an agent or an advisor presents to a consumer that is more interactive, visual, you know, interesting and encourages basically play in education.

Wow, interesting. Kind of makes me feel, or just I get this feeling of into its turbotax flooding everything. Right? Is it kind of like that? It's like turbotaxing the world, like whether it's mortgage or the insurance process, I don't know. Is that one that, you know how people like to say Uber for X, is this turbotax for X for insurance?

You know, it's funny you say that because that was Bill's sort of paradigm, right? We need to make it more intuitive. It needs to feel like intuit. And so, you know, very much when you think about in simplistic fashion, what are we trying to do? That was sort of in some ways a guiding mantra, right? This experience needs to be modernized, whether it's intuit, whether it's the other leading consumer experience platforms out there today. And this was very much at the start of fintech, I think it was. How do we actually bring that philosophy around the consumer and around consumer understanding into this new sector, but enable the current distribution to actually take advantage of this.

Got it. Okay, so we love a good pivot story. Sounds like it was a big one. How does that take you to where you guys are today?

Well, after we decided on that strategy, as you know, and I'm sure other whether it's founders or people involved in sort of early stage establishing product market fit does take time. It's a lot of iteration. We did a lot of talking to agents, advisors, you know, hundreds of conversations a month talking to distribution and understanding from a distributor sort of business model what were their problems they were trying to solve. And so it's been a constant sort of focus on agile iteration and learning from the market and really trying to solve real life problems. So, you know, over the past couple of years we've introduced different modules to the platform. We've got a module that really transforms how quoting is done for the teams that do it inside these distributors as well as carriers to make them more efficient, also to modernize it. So the UI feels more modern and something that when they bring new generations into the business, they feel more comfortable within. And we've got a module that really focuses on sort of that point of sale experience. And that's really speaking to the challenge, I think for the industry, which is when you look at life insurance, annuities, but also financial services in general, the average age up until I think last year was really sort of, I think somewhere between 58 to 62. When you talk about a life insurance agent, a financial professional or a financial advisor. And so really, really part of the strategic focus here going forward is what I call sort of generational rebirth. How do we bring the next big generation again, that's sadly not generation X, but how do we bring millennials into this field? What are the tools that they expect? How does a millennial financial advisor or agent want to engage with their clients? Right, they want to do it digitally. That's really becoming more and more focused for the entire financial services industry itself, even down to what new types of products should they be thinking about designing for an entirely new generation?

Incredible. Well, just like we said Intuit before, which happens to have a huge presence in San Diego, you know, the fintech scene in San Diego has grown as well. Seeing even the estate planning space have some new entrants there and insurance. Do you think there's something to San Diego that happens to have a play in fintech or is it coincidental?

I don't know. I think when we started there were a few sort of fintech startups out there. I think just the amount in the scale of funding and investment that is now going into fintech, I think last year it was 44 billion of investment went into fintech globally. My view and my perspective here is that the entire financial services sector is really being remade right in bitcoin and grabs the headlines today. But you mentioned estate planning, right. Everything is shifting from the old school sort of paper based, even if it's around developing a will, to something that is a sort of application based digital experience today, whether that's for consumers themselves to do, a lot of which they may have had to go to a third party for, whether that's an attorney or some other sort of financial professional, or for the distributors and the manufacturers of these products themselves to really transform how they do business, both for the internal benefit but also really to make sure they're in line with consumers out there. So I think there's just been tremendous investment across the board, across the US no doubt. San Diego as an area of very significant aggregation of brain power technology. When we look at whether it's biotech and all the different sort of defense industries that are here, there's just a lot of smart people around. And fintech really I tend to view it as it does take sort of financial smarts with a combination of the creativity and the art of actually creating great experiences. That's the sort of magic today.

Totally, yeah. And some of the history that talent has trickled down into these new industries like hnc, which is one of the first fintech algorithm developers, developed the Falcon algorithm to look for fraud in finance picked up by fico. And you still see the FICO buildings there off the 56. And like we mentioned TurboTax, I think they were in the early 90s acquired but kept the team. They got 2, 3000 people there. So you know, talent wise and where we live, San Diego, people don't want to leave. So you can stay in an industry, stay in your locale and apply it to the same industry and expertise you already know then. Absolutely. On top of this, you know, generational and wealth transfer that you're talking about, great headwinds for us for sure and great to have density. So I'm guessing, you know, you're finding good talent here. Gotta imagine maybe the pandemic has changed where you look for talent. But you know, still might as well find someone in your backyard if you can. What's growth been like for you guys and how's that, how is that scaling?

So growth has been. And I think it goes to. You mentioned the sort of pandemic and some of the dynamics that we've had over the last sort of 15 months. Right. And certainly we've seen a shift whether it's in the, you know, the carriers and the distributors that we partner with, but every sort of technology company out there today, it's just a tremendous time of hybridization. We've really focused on shifting our model to a hybrid model. While many of us, you know, most of us are in San Diego, I do most of my work from home now. You know, certainly with COVID we've gone probably 80, 90% virtual as an organization. But from a hiring standpoint, I think now we look both in San Diego, but we've also seen even some of our employees move to other markets, right, for quality of life and other purposes. And so you start to see, especially around insurance, we're in a kind of a niche area. And so most of the carriers, from a sort of how the sector evolved over 200 years, most of the carriers are located in the east, on the east coast and the Midwest. And so most of the people who know these products actually are spread out across the US So it's given us more flexibility to hire across the country. We have seen, you know, some more and more people coming down to San Diego, which has helped as well in terms of recruiting. And I think our sort of growth stage, we tried to, you know, especially over Covid, keep things lean. You don't want to sort of get overstretched. You go back to last March, right, And the question was, what's the world going to look like? Where are we headed? No one really knew. So we've operated somewhat lean. But the next stage of growth for us is really around, you know, how do we sort of continue to accelerate the market leadership position that we've built? How do we continue to expand the platform that we've been developing along the lines of what our customers need and really start to stretch for one of the positions out there where we see the market around life insurance and annuities and the distribution of these products really consolidating to around 3 to 5 mega platforms out there. And that's what you'll find in financial planning. So you look at financial planning and there's e Money, there's MoneyGuide Pro, there's RightCapital, but there's sort of three to four platforms by share that really dominate the market. And then you'll see five or six ones with much smaller share. We certainly see that that same dynamic is going to evolve pretty rapidly here in the life and annuity space. And we're fortunate enough that when we started, we were really one of the ones starting to push this new frame and paradigm out in the market. And if we can continue to grow and execute, it's always about execution. We certainly believe we've got a very strong chance of being one of the top three life and annuity platforms in US Distribution.

That's awesome. I love the goals, the insight, and where you guys are headed. We'd love that you're building, obviously, here in San Diego, largely. And now we got to know the big question. Where are you eating in San Diego? We got asked favorite taco spot, but I think you got a spoiler for us.

Yeah, yeah. I'm a ramen. I'm a ramen guy. I'm one of those people that could eat ramen seven days a week. And unfortunately, I probably imparted that to my son and my daughter as well. We find ourselves over on Convoy. I go to Rocky Rocky Ramen a lot over there, but I love ramen. I mean, I love tacos and all different types of food as well. But for some reason, over the last sort of three to four years, ramen's had my number, so to speak. And I love basically exploring different ramen places as well. I think we live across from the UCSD and they've got a few new ones going in there as well. So we're in the age of ramen, I'd like to say.

Okay, I like it. I can appreciate it. The Tacos and Ramen tech podcast will adjust it for just this one episode maybe, and you may have a tip on a taco themed or taco and Robin fusion spot. So maybe there's something there.

A colleague sent this over. It's called I haven't been There, so don't take my word for it, but it's called Mr. Birria and it is literally, as you say, Neil, a taco and ramen themed restaurant. And so they've got both and I'm looking forward to going there. So they've got Birria Ramen served with chili oil and Birria ramen and tacos as a single dish. So you can get both.

Interesting. All right. Love it. I love a good fusion.

Yep. And I think where that is, basically it's down in Santee.

Okay.

So eminently drivable.

Yes. Sounds good. Sounds like something we should do. Meet up for taco and ramen and break bread.

That's fantastic. Looking forward to it.

Yeah. Well, first of all, really appreciate Matt, you joining the podcast, but also what you guys are building and the insight on the industry and for leading a new movement and allowing my generation to own it as a millennial. So thank you.

No, thank you, Neil. It's been wonderful. Thank you for having me on. And really always enjoy talking about sort of, you know, where sectors are going and financial services are going.

Absolutely. Thanks, Matt. Appreciate it.

Thanks, Neil.

Cheers.

Thanks for joining us on the Tacos and Tech podcast with Neil Bloom. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem.

Big shout out to School of Rap.

For our rad entrance music. And this podcast is edited and mixed by Patrick Norton at citizenrecording.com you can find Neil Bloom on Twitter at Neil Bloom and on LinkedIn as well as well as fresh brewed tech and tacos in tech Pod on Twitter too.

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