Sean X Cummings, chief marketing officer of Embroker, has used his curiosity to his advantage while navigating the insurtech space. "I am an ex-hacker, curious interloper and industry malcontent who questioned everything — at a time when no one really knew how this tech industry would unfold," Cummings said. He now uses his knowledge to assist Embroker as they attempt to stay ahead of the curve and forge a new path for the digital insurance industry.
ValuePenguin had the opportunity to speak with Cummings to learn more about insurtech, as well as new developments currently in the works at Embroker.
Q: The coronavirus pandemic has accelerated many insurers’ need to establish a digital footprint. What measures is Embroker taking to stand out as a digital business insurance provider amid a growing number of competitors?
The traditional side of the insurance industry has not changed in 300 years. They have in that time developed an arcane language meant to confuse people, and it benefits them if their customers are confused and think they need that insurance provider. As for the newer startups like us in the insurtech space, we take a different approach than most of them. The ones you have likely heard of — Lemonade, Hippo, Metromile, Pie Insurance — are what you call monoline carriers. They concentrate on one insurance product: workers comp or renters insurance or car insurance. Those policies are also simple in comparison to the complex, difficult policies such as directors and officers, employment practices liability, tech errors and omissions, etc. By concentrating on the more difficult policies, it is a much higher barrier to entry for true competitors. Monoline carriers will always have the next startup nipping at their heels because those policies are much easier to craft and bring to market.
Q: What are the potential benefits to digitizing the insurance purchasing process versus purchasing insurance in a traditional manner?
Margin and customer expectations. Let’s take it from the back end first. The digital sales process saves 8% from what a traditional carrier can provide due to their overhead. The automated administrative processing of servicing the policy probably provides another 9%, and by using data science and machine learning another 6% to 10% from what traditional carriers can do. On the front end, that means that we can undercut their pricing by 15% and pass that savings on to the customer, all while providing a better product that customers expect to be digital, and still have 10% underwriting profit to the traditional carriers’ 3%. Not to mention a customer can get insured in minutes, instead of days or weeks the traditional way. Who wants to wait weeks anymore? Amazon Prime proved customers want faster delivery of the product. If you buy from a place that takes weeks, your opinion of that brand sinks precipitously.
Q: In a world that is always evolving, how important is it to remain inquisitive and always think with the future in mind?
It is the definition of a tech startup mindset. While the traditional insurance industry is the department of "no", a tech startup mindset always thinks "how". It is key to my hiring. I have specific interview questions designed to get at how someone thinks and processes information when choices are taken away from them. If someone cannot pass that part of the interview, I will not hire them, regardless of what their resume indicates. Finding those who have that curiosity, combined with mental flexibility and acuity, is how we will win.
Q: We’ve heard Embroker is launching a new digital product. Can you expand more on what it is and who it benefits most?
Two, actually. First, we have a standalone commercial crime policy — the first digital one of its kind. It protects a business from losses due to crime-related issues such as petty theft, fraud and burglary committed by both your employees and outside entities. And then we are very excited that we are launching a standalone cyber insurance policy. All you have to do is read the news to understand how valuable that is to business owners in a world of remote work, huge amounts of data and hackers.
Q: Do you find it challenging to remain on the forefront of innovation?
That is an odd question. I mean, I am supposed to answer, "Yes, it’s hard," right? But honestly, I do not know any different, so for me it is easy. This goes back to your earlier question. If you are insanely curious, you are always trying to find out how something works, and like an inventor thinking of ways to make it more efficient. I am reminded of a quote from Bill Gates: "I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it." Inherently, I am lazy in that I want to be as efficient as possible, and insurance is a very hard, wonky and entrenched industry to disrupt. So I guess it’s a perfect match.
Q: What is something that Embroker does differently when compared to competing digital insurance companies?
As I mentioned, most are monoline carriers, and we are taking a more holistic approach on what a business owner needs. We fundamentally believe they do not want to go to five different insurtechs to protect their business. At some point, consolidation of policies is inevitable.
Q: Many new business owners may only have experience dealing with personal insurance products. What differences can these emerging entrepreneurs expect when purchasing business insurance for the first time?
They can expect it to suck in comparison. Seriously, compared to personal lines, which are easy in the grand scheme of things, business insurance takes a lot of information in order to get a quote. Now, to a business owner who has already purchased insurance the traditional way, it seems magical, but to the first-time business insurance purchaser? Their expectations are much, much higher. And it is those expectations you will get compared against. I guess we are doing pretty well on that front, with a 78 NPS, but like your earlier question about the future, I personally will not be satisfied until we try to make our experience as magical as possible. "Create magic" is one of our core values at Embroker, and our goal is to have so much information on businesses that without a business owner entering anything we can provide quotes for them — "Insurance as a Service", so to speak. That is when we know we will have succeeded for the business owner.