Scaling Your Agency in the Age of AI with Seth Zaremba

Welcome to the Agent Leader Podcast. This is the podcast for insurance agency leaders to raise the bar, to challenge your thinking, and to become a best version possible leader who leads a best version possible agency. My name is Brent Kelly. I'm your host. And today I'm super excited to have a guest with me, Seth Zaremba, who is the CEO and founder of BeAtomic. Hey, Brent. And I initially met Seth. What was it, Seth, at the conference in 2017, '16?

'17, '18, something like that. Yeah. Elevate Conference. Yeah. It was awesome.

Yeah. And Seth will not brag on himself probably, but I'll brag on him. And when I would show up in a room and Seth was presenting or speaking, I felt very, not as smart as Seth. Seth's a very smart guy and we're going to talk. All kinds of things, insurance, technology, data. But I think what's really cool about Seth, yes, you are a smart guy. You know data and analytics and some of this tech pieces better than any human I've ever spoken with, but your heart is all about the people in the industry and how to help them. And that's what this podcast is all about. So without further ado, Seth, welcome into the podcast.

Thank you for having me. That's an awesome intro.

Well, it's a pleasure to have you on here. And, um, I guess what I want to start with and where most podcast interviews start with is how did you get to where you are? And, um, I would certainly want to hear about, um, what you do at BeAtomic and the founder and CEO and what that means. But, um, you don't have to go all the way back to childhood if you don't want to. Um, but just kind of give me the evolution of Seth and, um, the background in business and how you got to where you are today. Yeah, I, I've had the rare privilege and, and it, it truly does affect the way I think and act now. I've had the rare privilege of sitting in some pretty cool spots in the insurance industry.

And, um, when you talk to people in insurance, oftentimes they fall into a slot and they'll do 20 or 30 years in that same spot. Um, I've kind of, um, had the privilege of every 5 to 10 years of moving in and trying something different. And so, um, served on the board of a state association and got to work at the national level. So that was kind of cool to see how the sausage is made on insurance law and stuff like that. Um, I started an agency as a producer, so failing miserably the first 2 years before I became a pacesetter. And I actually learned that sales was a skill and I was like, okay, that's amazing. So, um, and, and filled out my book and then, um, me and some buddies Uh, along with the state association, started an aggregator, one of the first networks in the country, and built that up to hundreds of agencies before it sold. And then I started my own independent agency from scratch in 2008 and scaled up and sold that, uh, to private equity about 4 and a half years ago. And started my InsurTech trying to solve what I think is the biggest and most important problem that's facing independent agents today. So a little bit of everything and some high perches where you get to see a different perspective of what the agency broker world is dealing with and how to try and help it.

Yeah. Really cool. Just so many, uh, experiences, right? I mean, association, starting an agency aggregator, and then you should be, uh, you really should be, uh, on TV, Seth, because you had a really good tease there, solving the number one problem that agencies face. So boy, what a good takeoff point. Don't keep us waiting any longer, Seth. I know you're gonna share so many nuggets of wisdom, but what is that problem, uh, that you see as the number one issue?

Yeah. Um, so, uh, I'll step back to go forward. Um, when I, we started a network in 2003, there weren't a lot of networks out there. And the number one challenge that agencies were struggling with was market access, right? Um, carriers were coming in and saying, hey, Brent, if you don't have, uh, let's say you have $100,000 of volume. If you don't have $5 million tomorrow, we're canceling you. That was the big move back then. And so, um, the number one issue that agents had back then was access to, to carriers and then ultimately commissions and revenue and stuff like that. So that was the biggest problem then. And I was so pleased with the work that we did. Fast forward to today, I think the number one challenge that agents and brokers are facing is how to scale an independent agency. Without many infrastructure changes, we are still the same organizations that we started in, Brent. It is still a bunch of humans on teams working in bullpens, cubicles, or from home offices. And most, if not all of the process is still just human driven. But fast forward to today, the macros don't support that kind of operation, right? So you think about it. Cost of, of humans are getting higher and higher, right? So our expenses as agencies and brokers are getting higher. Revenue input is down over the last 6 to 10 years. Um, it's been decreasing commissions, decreasing profit sharing contingency. And so customers have already chosen their technology. They're working on mobile technology. Carriers have already chosen their technology. They've, they've invested in big systems like Guidewire and Duck Creek. And yet in the middle are independent agents and brokers almost in a time capsule Unchanged, still trying to figure out how to take care of humans, provide world-class experience, and then also live on margins that allow them to sustain and grow. And I think the rubber has hit the road where it's just not as easy as it used to be. And so I think scaling an independent agent and broker is not like we've been teaching it over the last 20 years. And you bring in data, you bring in APIs, you bring in AI, and it can become confusing or even scary at times on how to do it. So I think that is the challenge of our times and it's what I'm really interested in help solving. Yeah,

maybe this is a bad visual, but I just think about all this noise and clutter coming in and you got people thinking of a kid closing their ears like, ah, you know, like I just can't, I can't even process all of it. So I know you help sort some of that out. And I really enjoyed our conversation a couple of weeks ago to catch back up. And it reminded me the best thing I see about entrepreneurs is that they typically have solved a problem for themselves. maybe their own business, right? And you go, wow, I could really help a lot of other people, um, with this. So if you would, um, share a little bit about, you know, the evolution of the agency that you sold and, um, how BeAtomic came to be. Um, I think there's a, there's a really interesting story behind that.

Yeah, we were, uh, when I started CINC in 2008, we were a project at the, the local Big I, uh, PIA Big I at the time. So I was literally, my agency was an Agency of the Future project. And I wrote a white paper. It's probably still somewhere in the annals of the state association, but on how to use things like cameras and doing video presentations and working remotely and things like that. So if you don't come from insurance royalty or you don't have insurance heritage, you've got to figure out how to distinguish yourself. And so in 2008, it was all about how to start a technology-driven, efficient organization and drive it. Well, by the time I left the agency, it was $45 million in sales and it was We had figured out how to do it with half the headcount. We had industry-best EBITDA, and a lot of what we were doing was now based on just efficient workflows, using humans the right way, and then relying on technology and process to be done at the lowest cost. And so that recipe and learning through that, oftentimes painful learnings. I mean, we really had to build our culture around change because that's not something independent agents do very well. So a lot of scars from that, but that process of trying to figure out how to run efficiently so that we optimize humans for relationship and for expertise, but then we leverage technology to create world-class experience, industry-best margins, really became the basis of our agency. And once we saw the results we could get out of that, and me kind of being that industry tinkerer that's like, hey, wait a minute, what's the next problem? What's the next problem? It became clear to me that when I was done with the agency world, I wanted to focus on what I think is the most important problem, and it's scale. Think about this. Independent agencies have no scale. We're all independent. We all pay full retail for our desks. We pay full retail for our computers. We pay full retails for everything. And yet we have something in common that does scale, which is process. And so how do we leverage what we have in common so that we get the best margins and experience for our people? But then how do we stay independent for our customers and for the advice and the carriers we pick and the products we sell? So that we remain relevant in these, these crazy times. That's really the mission and that's where it came from was my own experience.

Yeah. I have to smile. I've, you've said this on the podcast before. The best part about being an independent insurance agent is you're independent. Yeah. Worst thing, the worst thing about being an independent insurance agent is you're independent, right? So I, I think you hit the juxtaposition really well. Like there's a lot of freedom and opportunity, but also there's a lot of duplication and replication and of course frustration that comes with that. So you mentioned a few times, And you've just said the number one problem, and you've used this word 3 or 4 times, which hits my heartstrings because, um, we talk a lot about capacity and, um, we maybe don't use the word scale as much.

Yeah.

But maybe if you could, Seth, just provide some examples or, um, just an overview of where you've seen agencies that have been stuck, um, that you've been able to help maybe rethink scale and processes and what that means, um, and how maybe you've helped them get through some of those frustrations.

If you think about where agents started, myself included, when I became an agent on April 1st, 2000, April Fools', it was all about expertise, your CIC, your risk management. It was about your unique processes. It was about your detail, right? And so we built organizations that said, what makes us different or special is our expertise, our knowledge, and our insurance processing. We Our certificates are better than your certificates. The way we document our AMS makes us E&O-proof. And so we have cooked over generations into our cake that the things we do behind the scenes make us really special as a business. And I would argue, Brent, that no customer cares how we document a file. No customer cares how we change a vehicle. No customer cares about the detail that goes into it. And so We've built our organizations on that as our distinguishing factor, when in fact it always was just our relationships, our expertise, our knowledge, and the way we work with our customers. And so I think many organizations have just cooked over generations and probably happened to you, Brent, when you got to your first agency was like, hey, here's our procedures manual.

Right.

Here's how we do a bond. Here's how we do it. And you're lucky to be here because we know how to do a bond. Well, when we cook that into our people, would they begin to think that what makes them special as an insurance professional is their process? It's not. It's their ability to work with a customer, to work with an underwriter, to solve problems. And so if we could separate that processing, which isn't at all what makes us special, and, and have that done faster, better, cheaper by something or someone else so that we can spend more time on the thing that truly makes us special, which is relationship. Well, I believe that is where the 21st century scale Belongs. And I don't think AI is coming for relationships. I think it's coming for our excuses.

Ooh, that's good. I love that. Yeah. It reminds me of funny moments. I remember, I don't know when it was, 2003, I got my CIC.

Yeah.

And then they send you the business card, the little thing. And it's like, and I thought, now my business is going to skyrocket.

Everybody wants CIC. Yeah.

I'm going to be like, hey, listen, by the way, just between you and I, I'm a CIC. And you know what's crazy? Not one person cared. And that was 2003. And I just keep thinking like this evolution, it's like, well, we have the data or we have the knowledge, or even we have some degree of the wisdom. I think ultimately why wisdom is great, it's the application of that. And And I just think moving forward, the superpower is your point. Everyone's going to have the data and the knowledge. The superpower to me, and maybe this isn't the right word, so help me out, but it's connection. Like that, that is, and we talk all the time. That's why I love talking to Seth is like, we believe that technology will not replace relationships, but it sure as heck can enhance them. And that to me is really, really exciting.

100%, because the intelligence is a commodity now. And it's knowledge, to your point, is a commodity. Everyone has it everywhere all the time, including the customer. I mean, they've Googled us, they've AI'd us before they even speak to us. It's who connects with them, right?

Yeah.

And so I think if I'm buying stock, I'm buying stock in the IA broker agent ability to build relationships because that's the one thing that I just don't believe in my core that AI is coming for. So I think we've always had the secret sauce, which was our ability to connect with people, to solve problems, to use wisdom, to be able to help our customers get there. And like I said, I think we've oftentimes let our organizational or our lack of organizational scale become excuses. Hey, I don't have time to call the customer back. I can't handle that many customers. I can't do this or that because it's just, I'm too busy doing that. All of that just has slowly pulled us away from relationships. And the infrastructure, Brent, is set up that way. And here's what agents and brokers don't often think about. The game is actually set up that way. We have to fight the man when it comes to that, because think about it, carriers, and, and love carriers and wanna work with carriers wherever we can, but carriers have solved their problems. They've said, hey, we've got portals and accords. You figure out how to get it in there. You figure out how to scale an organization. You figure out to hire people. You figure out to train people. We don't care. We will get data in our system the way we want it, when we want it, by using those things, right? We're the ones on the other side that have to make it look like magic to the customer and efficient to our operation and kind and good to our people in order to do that. And so, um, that disconnect between the fact that everybody else in this chain has found their seat or solved their problem, and as independent agents and brokers, we have not yet, is the opportunity if we focus on the things that make us special, like relationship.

Yeah, that's really well said, Seth. And, um, a question I wanna bring to you in this podcast, you know, it's something, um, we talked about a, a few weeks ago, um, and I know you talk about it all the time. You talk about cost per transaction and all those things that go into that. And you've got a lot of case studies and data around that. And we align on many philosophies and things that we talk about so often is the tiers of business. You're probably losing a substantial amount of money on your bottom tier clients, right? Okay. But you've got like case studies to back some of this up. So in a very broad sense, Seth, what have you learned? About cost per transaction and how that's been applied to agencies, maybe how you used it personally and just where you see that going in the future.

I think it's the single most important data point you can get to in your agency. And I'm sad that we're still talking about, well, here, I've been driving electric cars for 6 years now, 7 years, 7 years. But someone will come up to me and say, how many horsepower is in it? I'm like, are we still measuring car performance by the number of horses it takes to drag it down the road at a certain speed? But we get in these mindsets of like measuring things through old metrics. In insurance, I related to revenue per employee, right? Or best practices EBITDA or things like that. So, there's these legacy metrics that developed for a very good reason because the granular data was not available. Our systems didn't make it, we didn't connect to things, and we didn't necessarily prize it. But you can't talk to a single manufacturer who doesn't know their unit increment cost, their unit increment type, And their unit increment volume. Because if you don't know what you're doing, how many times you do it, and how much you make or lose in it, you don't make money in pushing steel or cars or anything like that. Well, professional services has escaped that metric because we could always find people to work at a certain cost structure with a certain margin from the carrier where we didn't have to worry about unit prices. We'll make it up in volume, Brent, right? We'll make it up in volume. You get to $1 million with a carrier and you'll get a bonus. You get to $5 million, we'll make it up in volume. Well, now All of that archetype has been stripped away, and now more than ever, professional services needs to be treated like manufacturing. Your cost structure is the basis of what you do, how many times it happens, and how much it costs. And, and if humans are our most valuable thing, then putting them on the most valuable transactions, the ones that generate retention, customer experience, expertise and knowledge, referrals, upsell, cross-sell, that is where we need to make sure we are staffing the line. But in fact, if the transaction type they're doing at volume is certificate of insurance, add, remove vehicle, add, remove driver, cancel policy, the part that no customer cares about how it's done, if we drive them into that, now our transaction type and our transaction volume is actually taking it away from the thing that matters the most. And so the cost per transaction is a way to think about it, that every person in an organization is made up of the things they do, how many times they do it, Does it have value or not value? And how much does it cost when you do it? And by understanding that, you can now start to direct people to where they have value. You can start to look for connected technology or process inside of your organization that lowers your cost per transaction. And then you can look at transaction type and say, you know what, Brent, as a salesperson, I want you to do these 3 things about 4,000 times a year, and you're going to win and we're going to win. And so, the unit increments, that we were given when we came into this industry no longer apply because the macros no longer suit that we'll make it up in volume. And if you don't believe me, ask private equity right now who is gonna make it up in volume. But there's a lot of jets on the runway in private equity that are trying to figure out how to get to IPO because the idea of just making up in volume hasn't delivered the growth or the EBITDA that they thought it would do. And so I just think that we have to start thinking different about professional services.

Really powerful. As you were going through and how we do this and all this kind of stuff, it came back to me, Seth. I've got 5 kiddos. We were talking a little before we started recording. My oldest is getting married coming up. My youngest is 8. I say all that is that I tell this to teams all the time. Like, what is the one question that little kids ask abundantly well? It's also a little bit annoying. Why? And I think that's what I'm hearing you say. That's what you're challenging things. Why? Going back to the horsepower example, why? And, and if you ask those questions enough, you realize, to your point, maybe we're measuring the wrong thing, or maybe there's a different way we need to look at this.

And even more than that, if you're losing a dollar every time you do something, doing more of it doesn't get profitability. It doesn't get survivability. And so, and, and, and so we have to get away from this idea that professional services is somehow going to avoid the realities of the 21st century. It's not. So now it becomes the artful collaboration of really good humans, really good technology, and really good processes that allow us to optimize for the things that our customers will value. And I would just say our industry has done a pretty bad job of helping independent agents understand and perform in this new world that we're living in. And that's where my passion and all of my time and energy goes now.

Yeah. You know, we've had conversations in the past and, yeah, I know you're familiar with our, with the stuff that we talk about quite a bit. Yeah. But, but I mean, just going back to the basics, been around for what, 100 and almost 50 years now, 80/20 and that whole principle, right? It's just do the right things for the right people at the right time. And, and I made a big note cuz I share this and I'd love to get your thoughts. Um, you know, we talk a lot about capacity, right? For an agency, which could be a lot of different factors of why it's good or bad. But to me, one of the superpowers of an agency is leverage. Um, and I mean, that's really what you're talking about to a degree is giving agencies the tools and more importantly, the focus. When you do the right things, the right people at the right time, it gives you an unfair advantage that some people don't even realize is there. So agree?

Yeah. So just break this down. Your average professional account manager who is the, one of the most important people in an organization, they can do between 8 and 15 things a day. They can do about 125 to 150 things a month, which means Your humans can do between 1,500 and 1,800 things a year. That's it. So my question is, what should they be working on? Should they be working on a certificate of insurance? Should they be working on an auto endorsement? If you have 1,800 shots on goal and you're an independent agent and your number one value is relationships, why would you have them think that their value or their workflows or their jobs are based on document changes, AMS updates, And those type of things, you are wasting the most valuable shot you have. And what does it do for them? It burns them out. It makes them classify their value to the agency in completely the wrong way. It makes them sometimes even resent someone who tries to expand it. When a producer comes and says, hey, I got a great opportunity, it's like, great, that's 1,900 things. And now I've gotta change my life for that. And so we're conditioning people to think about and do the wrong things. And so ideally, an organization in sales and in service should be saying, hey, If a salesman's only gonna get 300 shots a year, or if an account manager's only gonna get 1,800 activities, what do I want them to do that drives value? And then for the things I don't, how do I develop process or technology to lower my cost per transaction so that now I can get the net cash I need to invest in the organization and the growth? And I just don't hear a lot of people talking this way right now.

Definitely a shift in thinking. And, you know, we talk a lot with You know, producers, and it's a little easier to kind of grasp this, but like, this is gonna shock you, Seth. You can only score points when you're in the game.

Yes.

Right? So we talk about the producers, right? And from what you're saying, what my brain is taking me to is like, there's a similar aspect for the service teams. Different, but not that different. Like producers, if you're in there checking emails during the day, you're not talking to clients, right? And doing money-making stuff. That's pretty basic, but it's true. We got service professionals. Who can collaborate, who can think, who can empathize, who can, whatever terms you want to use, are doing remedial tasks that keep them really busy, but they're missing shots on goal. To your term.

100%. So think about this. Uh, in my agency, 1 point of retention was worth $50,000 net cash. At a 12 or 10 multiple, that's $500,000 of agency value, right? And so who affects that retention? It's your account managers. Another stat. If you look at the cost of service, it's the most expensive line on your balance sheet, right? If you look at an operation, 60% of the agency revenue goes to cost of service. Well, what is the cost? It's not desks, it's actually the people. I just hung up on this morning with an agency. It's a large agency and their average cost for a good account manager, average cost is $87,000 in salary. So if you get $87,000 divided by 1,600 to 1,700 things, you're about $38 a transaction. Do you wanna blow $38 on a certificate? Do you wanna blow $38 on an ad remove vehicle, or do you wanna put $38 at something that's going to help the customer increase retention, open up the door for a producer for upsell, cross-sell? You see, by thinking about unit type and unit count and then unit cost, all of a sudden you look at it, it's almost like you're, you're moneyballing your organization and saying like, okay, I'm going to use data. I'm gonna use modern thinking to be able to put my people in the best position to win. And when they win, guess what happens, Brent? They make more money. See, as they win, the agency generates more revenue. And as somebody who is focused on retention is working with clients, when they need compensation and raise, you wanna give it to 'em because now, hey, you talk to the customers, you get back to them, you open up doors for the producers. Like that's revenue worthy. And so as the agency makes money, more of it trickles down to the people. And the time that we give them, the gift of time that we give them by automation or technology allows them to do more of the good thing. More of the good thing drives more of the good results.

Wow. I, as you said the, the first part there, uh, you said it so well. You said, well, you know, the salary was $87,000 and you think about the transactions, what is that? And you're, you know, your head's just flying through this. And I'm thinking to myself, I wonder how many agencies have ever asked that question, right? Very few. But versus they probably thought, well, okay, $87 grand and That's about what per month and what would that look like over 3, whatever. You could look at a lot of concepts, but you're getting to the grand. You're like, okay, actually what you're paying them for, how effective are they with the time? It's different if you, if I talk to producers and I say, what's your value per hour? Well, is what I'm doing now producing that or not? And I just don't think agencies think this way. That's why your perspective is so important, son.

Well, and think about it. Producers still live in a world of Magic, right? There, I, I've, I'm a producer. I've been a producer. I've hired producers. There, I don't care what you tell me. I've built CRMs. I've done it. There is still a little bit of fairy dust on producers. There's something about it. I don't know what it is. It's just a, it's, it's just a rizz that you have it and you use it. And so, with producers, it's harder to manage, right? Mm-hmm. You gotta let the horse run a little bit. But when we get into account managers who are the bulk of the organization and the heart and soul, the beating heart of the organization, It's really about processes. It's about the things they do, the type of things they do, the value of those things and how much they cost. And so I really do think the new math of insurance says, hey, I've got to understand where I'm deploying my capital so that it goes to incent the right behaviors. And right now, if you look at insurance operations, it incents all of the wrong behaviors.

That is an important point. I'm glad you brought that up. I have literally Been on a call, uh, private, won't name names, and it's been a few years, but I mean, you talk about capacity where literally I've had a service team manager go, we don't really want to write any more business. That's a problem, right? And this is, as Roger Sitkins would say, you too could be a consultant, right? But that's a problem. Well, where does that come from? And you've already addressed some of this, Seth, but like the amount of transactions, the overwhelm and all this kind of stuff. And it's like, I can't handle anymore. And I like we were talking about the new math because there is a psychology behind this too. Part of that is the alignment of sales and service and philosophies and all these kinds of things, because I've also had producers come to me, Seth. They're like, it doesn't matter what kind of business I write or how it comes in or whatever the case, because it's not my problem anyway. But it is at some point.

Yeah. And think about this, the, just take compensation from a carrier level and I've seen it over the last 5 to 10 years. It used to be profit sharing and contingency. Give me growth and profitability. As carriers have invested in data, in large systems, underwriting, and things like that, increasingly they've quietly said, I actually think I know more about profit than you. Brent, I used to need a frontline underwriter like you, and you were an important part of it, but actually I don't think you know much more than I do. As a matter of fact, I have access to data you don't. And so quietly, Slowly they've been pulling back profitability, right? And saying, I own that, which means what do agencies own, Brent? Growth. And growth is not just premium. It has to be cash and cash comes from operations. And so we are now manufacturers. That's the economy we have to think of. Carriers manufacture the product and we're the distributors of it. And if we don't have margins on everything in distribution, then we can't be meaningful distribution partners for the manufacturers, the carriers. And so. We have to think of ourselves in the world we're living in, not the one we were raised in. And it's just different.

That's, that's, yeah, absolutely. Uh, amen to that. I have a few more questions I want to get into and we've talked a lot about and brought about this idea of it's, it, you know, the technology and all that is there to leverage relationships. So from your vantage point, right, being a producer, agency owner, now involved in what you are at BeAtomic and helping agencies, where do you see the greatest opportunities And I'm gonna use our term, you can phrase whatever you want, but relationship deposits. Yeah. But if we're gonna talk about leverage and moving away from the transaction stuff, and now you can be more proactive, intentional, whatever word you want to use from your vantage point, and maybe you demonstrated this in your agency, where are those opportunities for whether it's service team, producers, whatever, operations staff to be more relationship focused that really does move the needle.

I think all of us who are of a certain age, you and I included, we were taught that we had to have a killer process. I was a State Auto pacesetter, and so I got my X-dates, my cards. I went to my carts. I, I had my mirror, smile before you dial, 50 calls a day. You do it. And, and that was needed because we didn't have technology to support us. I look at the salespeople that we have at BeAtomic now, and they're loading up AI and saying, hey, read all my emails, gimme a summary of the day, look at my calendar, Find the top 5 in my prospect and just let me focus my week on the, the, the things that are gonna matter. It, it might be my access to a carrier that a prospect has. It might be in my knowledge or expertise. I'm a CAIC or, uh, an ARM expert, right? Or, uh, I have a specific, uh, strategy, uh, as an agency. So, uh, if we can focus on those things and let the, the technology kind of handle the stuff that used to be our job as producers, right? To be able to run your process and hit your X dates and do all that stuff. Automations and technology will do all of that for you. And so if you're a producer out there, I would really encourage you to speak with your agency about the culture of how to enable technology to make me a super producer. And I, I used to think that a producer had to make themselves be that, but now I look at technology every day and I think, no, I need to be at an agency that has a culture of enabling super producers. And super producers are spending 80, 90% of their time on relationship and talking to people and all of the other stuff that I thought used to be a job of a producer is being done by automations and tools that allow me and afford me that time. Now you have to get the results, so you can't just be out there doing that. But I do believe that's what I think the human touch of a producer that's freed up to be able to do that is where we need to be. And even the same thing applies on the operation side.

100%. Yeah. And I think, Seth, as you were You were saying that, I mentioned 80/20 earlier, right? Most people know 80/20, and I think real— really, I think more and more it's, it's really like the 5% that drives the 95 or the 2.5% that's gonna drive the 99. And, and this is my takeaway from some of this, and it's not just 'cause I say it, I do believe it, is that I don't think that agencies have a profit or a growth problem. I think they have a focus problem. And I think you start to highlight that what you're saying is there are certain pockets of focus. Boy, if you can laser in on that. And, um, just to your point with producers, they're actually really good at that anyway.

Yeah. We're the ones that make 'em say, no, get back in the office. I don't see you enough. I, I don't see notes in your CRM. I don't see your email count. I don't see that. It's like, wait a minute. Am I good at the other thing? Because that's where the revenue comes from. Right. And it's like, we're just, we need more shots on goal if we're producers. So if we're gonna waste those shots on systems and process as opposed to relationship and expertise and value, We're not going to win as much as we otherwise would have.

Yeah. So I want to get your feedback on this, but I always find it interesting, right? We know technology and AI is going to continue just to rapidly accelerate. It's not going away and we're all going to be using aspects of it in different ways. And there's ways to do it better and worse and all that kind of stuff. But I'm asking more of just a generation question. Because my kids are spread out, I have some different viewpoints of this. And I also just try to observe society and I find it interesting. That, for example, at college commencement speeches, when people are talking about AI, you've got thousands of college students who are roughly what, 21, 22, 23 years old, and they boo, like boo. AI is like a swear word to a degree. I had a conversation with my 17-year-old the other day, and I was, I just mentioned something about ChatGPT or showed her something. She's like, God, I hate that, Dad. Now, I don't know what all that means, but I do think the next generation always kind of pushes against the generation above them. And my point isn't that technology's gonna disappear, but why is that happening? Like, what is it about the next level that— and my thought, and challenge me here, I think this idea of relationships isn't just right because I believe in human relationships. I think it's actually what the next generation is not just seeking, they are hungry and thirsty for. So I don't know, do you agree with that? Number one, and what's your take on that?

I think we've done a great disservice by describing change with 2 letters, AI. What do you do with it? I work with it every day with the Atomic and I struggle with it sometimes. So when you give just like, hey, change is good, Brent, here's AI. It's like, well, wait a second. I think I think we need to go back to the humans that we are and talk about the recipe. And we don't do that. So let's talk about the recipe. If we're leaders, we build a culture, right? Leadership builds a culture. The culture defines what we believe, why we believe it, and the things that we do, right? Culture dictates behavior. And behaviors, lots of good behaviors means lots of good outcomes. And so I think when we talk about AI, we should say, listen, as leaders, how do we feel about it? What do we need to know and how do we do it? How then do we bring it into our culture of success, of winning, of doing the best for our customers, best for our carriers, and the best for our team? What behaviors could benefit from it? And therefore, what outcomes can we all generate that are going to help everybody win? And so I think we're just having way too simple of a conver— and this is where I think us old school dudes are actually good. It's like, everybody stop. Let's just do this the old way. Let's talk about leadership. Let's talk about cultures that define behaviors and behaviors that generate outcomes. Now, where does AI fit into it? What do we need to do to work with it? And then how does that help everybody win on that? And I just think leaders are having a hard time having that conversation. And so when we throw the AI cookie at 'em, it's like, I don't want the cookie.

Yeah, it's a great point. And I almost came back, I mentioned this earlier, but I, as you were saying that, it just reminded me of like, again, it's not that technology or AI is good or bad or awesome or evil. It's a thing. But I think the question I,

Why?

Why? Like if we're gonna, right, AI, why?

Why?

What's the point? What's the purpose? And I think like with anything, like with kids and teams, when you understand and can buy into the why, the what becomes, oh, okay. Yeah, that makes sense because that leads to that. But if you've got uncertainty or unknown, like you said, I like it, just the AI cookie. It's like, I'm good.

Well, think about it this way. So our platform service center plugs into your AMS, your phones and your email. You can push button process stuff. So you go to an account manager and you're like, hey, Here's an assistant that will do that for you. And it's like, well, why? That's what I do. And I, I could actually do it faster. It's like, oh, could you? Well, you only get 1,800 shots at goal. You're gonna use 60 shots on a certificate. Okay. So you are gonna be really good at the thing that nobody values. Congratulations. If you put the 1,800 on things like relationship, you'll make 13.8% more because you're not doing that stuff. And so I don't think we're having great enabling conversations with our people. Talk about what really matters, how compensation really works, and how these tools can be useful in helping them accelerate their careers and also do better and more for our customers, which is gonna drive retention, which drives revenue, which drives increased compensation. It's that cycle we're not talking about the right way.

Yeah. Yeah. It's, and Seth, whether it's our customers, whether it's our team members, right? I, the, the acronym we always use, been around forever. I said, everyone's tuned into the same radio station. W-I-I-F-M. What's in it for me?

What's in it for me?

And, you know, and it's like, well, here's what's in it for you. Oh, right. Well, now this thing isn't bad or evil, maybe, right? But at least I understand. So I think it's such a fascinating conversation. I got a couple more questions for you here. What is most exciting you right now? Because you're a guy that, I don't know, You, you've already said it. I did this, I did this, I did this. You see things differently. Like, hey Seth, what's exciting you right now? When you get outta bed and you go, woo, I wanna talk about this or work on this or break this thing apart. What is it for you right now?

I was nominated for Best Practices, uh, when I owned my agency 8 times. Great program. A lot of people take a lot of pride in it. All 8 times I was rejected by Best Practices. And they said, the way you operate is so different, you're gonna mess up our data set. So you're doing amazing things. Keep doing it. But you're nothing like everyone else. And so you're gonna screw up our data. And it was like, oh, I guess that's a compliment, right? So when I look at what gets me truly excited and why I put every ounce of my energy in right now is I, when I went to best practices, they said for an agency your size, best practices would be a 29% EBITDA, right? That's what they said. 29.4%. Your averages are getting 25, 10. Your below averages are getting X or Y. I now can see that 39 to 49% EBITDAs are possible for an independent agency. And I'm talking about right now. If you take what I'm saying seriously, if you say, hey, I have a set defined budget and a set defined number of things that happen, and I'm gonna start moving those things that can be automated to automation, I'm gonna position my people to high-value targets and workflows and processes. And I'm going to leverage and support my producers and my, my people the right way across that. There's another 10 to 15% of margin sitting inside every independent agency right now that is just waiting to be tapped. And I believe we are in a moment to tap it. The cost per transaction can now greatly fall, significantly driving net cash to an organization. And I will not rest a minute until independent agents are in the 39 to 49% EBITDA margin. And I think it's possible. I, I know it's possible. I know it's possible. I see it every day. And so I think if, if independent agents get more net cash, customers win cuz they're gonna get better experience. People will win because they're gonna work on high-value things. They're not gonna burn out or leave. And, and our agencies will be sustainable long-term and more valuable. And so that's what gets me, I, I'm fired up for it. You can probably tell.

I, I I could tell. No, it's awesome. And just a quick story on that, Seth. Again, names will be left undisclosed, protected, innocent. Yeah, but it's funny because I mean, I'm a pretty transparent guy and we have some philosophies and data and metrics around things. So this isn't all just tongue in cheek, but we talk a lot about standards of 15% organic growth, 30% operating profit, and $300,000 of revenue per employee. Now, are these magic numbers from the sky that No. Uh, and I, and I laugh about this cuz again, revenue per employee, it depends. You could reference a number in a lot of different ways. I do find it very much about a health of an organization in terms of capacity and different things. And that's not the point of the story. The point was I had someone recently ask me, well, scientifically and da, da, blah, blah, why 300,000? I basically just kind of smiled and I go, cuz it's possible and you can.

Yeah.

You know, that doesn't mean it's right for everybody and where you're at. I, I get that. But you set it up really well, Seth. You're like, well, people think it's not possible. In the book, and I think you've read it before, 10x is easier than 2x. The idea of not possible unless what? Well, unless you talk to Seth, you know? So Seth, on that note, I have one more final question before I get there. How can people connect with you? Where's the best way to talk to Seth, learn more about BeAtomic, all that good stuff?

Yeah. So if I haven't scared you, all of what I'm saying is built into our product. So you can go to beatomic.com or you can get me at seth@beatomic.com or Seth Zaremba at LinkedIn. I'd love to continue the conversation on that, but the math maths, it's provable, it's demonstrable, and it's available. And so it's either going to be done to you or by you. I'll let you choose.

That's good stuff. Yeah. And yeah, and I said at the beginning, a part of Seth, what I love about you is Yeah. You know your numbers, you know your analytics, you dive into it, right? But there's a big why behind it and you just expressed it earlier. So I appreciate that. All right, Seth, are you ready for my final question? That has nothing to do with insurance. You go back and maybe we'll just, you start your career or started your first agency or got involved as a younger Seth. Seth, you've aged very well, much better than me, right? But if you look back, let's say 20, 25 years ago, right? And you today walk out of your room there and you bump into the 25-year younger version of Seth. And that younger version of Seth looks at you and goes, wow, first of all, you've aged very well, Seth, but looks at you and says, okay, I only have about 30 seconds, maybe a minute. If you could offer me, the younger version of me, one piece of advice, what would you offer the younger version of you?

I would tell me, Don't believe that confidence is a gift, that you're born with, you're lucky enough to be born with it, or that confidence is something that gets delivered after 10,000 shots or something like that. I would tell me confidence is a skill, and anybody, just like baking a Nestlé's Toll House cookie, anybody can do it. And if you focus on skill first, if you build that, everything else will come. As a producer, sequence is the most important thing. If you focus on confidence as a young man, Seth, If you focus on that and you, all of your base confidence results will improve. Everything will come faster if you believe and have confidence that you can achieve that stuff. I thought confidence was a byproduct of sales. I thought it was a confidence of a byproduct was a confidence of building a book or building a business. And so I was always waiting for it to come. And in the moment when things aren't easy, when results don't come soon or fast, what do we do? Well, it must be me. I must be doing something wrong. And we become our own worst critic. Confidence is a skill. It is the possession of every man and every woman. Go build that first. If you have confidence, you'll be the best husband, you'll be the best father, you'll be the best son, you'll be the best brother out there, and you'll be a really good insurance professional too. And if you get into sales, you'll sell like crazy. If you get into service, you'll have retention that blows the industry away. And if you want to start an InsurTech and transform the economics of the independent agency, you can do that too. But It's not a gift. Don't believe that. It's not luck. It's not something that's just born of a miracle that gets delivered to some people and not you. It's a skill. Go work the skill and everything you want will come to you.

I always want to be really cautious of responding because your philosophy and what you said there is so powerful. So everyone like listen to that. And I get the fortune of asking this question and getting so many different viewpoints because there's no wrong answers. There's just your own life perspective. But it was really interesting as you said that I just about a week ago, I don't know. I had a couple hundred producers on in one of our, our sales meetings and it got into this. In fact, it was, I'll just give you the scope of this, uh, Seth, but it was about referrals and why not? And we don't ask and there's uncertainty. And what it really came down to was confidence, which then I asked the question, which you already nailed this. Where does confidence come from?

You build it.

And you build it. It's a skill.

It's a skill. It is. And it's as simple as the Nestlé Toll House recipe. It's a few ingredients and you do it. And you know what? Here's the other thing, Brent, are the people who love us confused? They say they believe in us or they have faith in us. Well, faith and belief is the assured expectation of something not beheld. Confidence is the ability to know that you can do something. And so when people tell them that they believe in us or they have faith, hey Brent, you're going to make your sales goal. I believe in you. It's like, that's great, but it's not real. Confidence is the understanding and knowing that you can do it. You build confidence. You're not born with it.

Yeah. Yeah. It's dynamite stuff. And, you know, we could, you know, you, you've been in sales. Life is sales, right? Because all of sales is, is transfer of belief. That's what it is. And you nailed it. So Seth, I knew I'd enjoy this interview and, and take a lot away from it. I know the audience will as well. Certainly reach out to him. He's doing dynamic things in the industry. And Seth, just proud to have you on the podcast. It's great to catch up with you again. We're not gonna wait as long. next time since we continue to connect together, because I love what you're doing. So I appreciate having you on here today. Thank

you. Thanks for the opportunity to speak to your audience and with your audience. I love what your organization does. I've seen Roger and you for years and I just, I believe in it. So thank you.

Well, thank you. Appreciate that. And for the Agent Leader audience, again, appreciate you being a listener. I wish you all the best in your success and we'll see you again soon. Thanks for listening. Take care, everybody. Today's episode is brought to you by Rough Notes Magazine. Since 1878, Rough Notes has helped independent insurance professionals stay informed, sharpen their leadership, and grow their agencies. From industry trends and technology to marketing and specialty lines, Rough Notes delivers practical insights that you can put to work. They also offer Rough Notes Advantage, giving agencies additional tools and resources to help them Compete and grow. Visit them at roughnotes.com. Hey there, agent leader. Brent Kelly here. Want to take just a few seconds to remind you that now is the time to create your true best version possible agency. If you go to sitkins.com/bookacall, sitkins.com/bookacall, Book a call. We'll get to know more about your agency, conduct an agency assessment, and provide your agency with a customized plan to help you avoid some of the pitfalls, frustrations, challenges, and roadblocks to get your agency to true ultimate freedom and become its best version possible. It all starts by going to sitkins.com/bookacall.