Overcoming Failure and Rising Again - Ben Webster of AGILE Underwriting

Ben Webster, founder of Agile Underwriting Services, joins Dexter Cousins to discuss his journey as an entrepreneur in the insurtech space.

With a passion for developing innovative insurance platforms, Ben has successfully built and scaled multiple bootstrapped insurtech startups from the ground up, turning them into profitable businesses.

His extensive experience spans over 15 years, making him a true veteran in the industry. His deep understanding of the insurance landscape, combined with his technical expertise, enables him to drive transformative change and create meaningful value for both insurers and policyholders.

"The hardest problem is distribution. You can launch a product after 18 to 24 months of development, and then it's tumbleweeds." - Ben Webster

About AGILE Underwriting
Insurance brokers are being asked to do more with less with a range of tasks that drain time and eat profit.  With AGILE, brokers are discovering a more profitable way to sell insurance. AGILE Underwriting Services is a Lloyd’s cover holder and insurtech MGA specialising in Casualty, Construction, Cyber, Financial Lines, Retail Travel, Wholesale and more. Find out more - https://www.agileunderwriting.com/

About Todays show
We reflect on the impact of the COVID-19 pandemic on Ben's previous venture, Insured By Us, and the hard lessons he learned from that experience. Ben explains the success of the AGILE model focusing on niche insurance products and the benefits of having a diverse portfolio as he struggled to keep Insured By Us alive.
Ben also shares insights into the challenges of finding the right people, navigating distribution and dealing with regulation in the insurance space.

Some founder insights Ben shares in this episode:
- Agile's diverse portfolio has helped the business ride the wave of market fluctuations.
- The insurance industry is highly siloed, making it challenging to find people with expertise in specific niches who can be successful in a startup.
- Distribution is the most difficult aspect of launching an insurance product, and AGILE has developed strategies to validate products early on.
- Ben emphasises the importance of a growth mindset and the need for entrepreneurs to be comfortable with uncertainty and feeling uncomfortable.
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"The writing was on the wall, and I knew that I was going to have to make redundancies. I wanted to do it as early as possible to make sure that people got a good payout." - Ben Webster

Contact: info@tieronepeople.com

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Transcript

0:00:00 | Dexter | Professional with a remarkable track record in the insurer tech space. He's one of the most underrated entrepreneurs, in my opinion. Ben has a passion for developing innovative insurance platforms. He's successfully built and scaled multiple bootstrapped insure tech startups from the ground up, turning them into profitable businesses. Before we chat to Ben, just a quick one to say thanks for your support in tuning in.

| 0:00:26 | Dexter | If you're new to the show, make sure to give us a follow and subscribe on your favorite podcast player. And if you're in the mood, you can leave us a five star review. It really helps me promote great founders like Ben to a global audience.

Ben. Welcome on your Fintech Chatter debut.

| 0:00:44 | Ben Webster | Excited to be back, mate?
| 0:00:46 | Dexter | Yeah. So for some context, when I first started, what was prior to Fintech Chatter was a blog, and I think you were guest number two. So it's taken us a long time to kind of get you onto the podcast, but I'm really glad to have you here for several reasons, I think. One is you're somebody who I've got a lot of respect for. Two, I think you're kind of one of the most underappreciated entrepreneurs that we've got in the ecosystem here.
| 0:01:19 | Dexter | And third is I think you're doing some really interesting stuff with Agile. I've talked enough. Why don't you tell us a little bit more about Ben Webster and Agile?
| 0:01:27 | Ben Webster | Sure. So Agile is a Lloyd's cover holder, an Mga and an InsureTech. We work in niche insurance, and when I say niche, I mean really, really niche. So no home and motor. The only really retail product we do is travel, but we do things like pilot personal accident insurance, wedding insurance, we do scaffolders insurance, vacant land insurance, construction accident health, financial lines, It contractors insurance, all the tiny little things that make the world kind of kick over and run really nicely, but that most people ignore.

| 0:02:10 | Dexter | Right. That kind of flies in the face of the kind of general advice that you're given when you start a business, which is to focus on one thing. So how come you focus on so many different things?

| 0:02:23 | Ben Webster | Well, there's a lot of reasons there, but thankfully, given COVID, what occurred with COVID I had a travel insurance business that didn't fare well during COVID at all. The Agile fared really well because we had a diverse portfolio and so some lines of business struggled through COVID and others just excelled. And so, thankfully, with that diverse portfolio, we were able to ride the wave of COVID a lot better.

| 0:02:48 | Ben Webster | But also at their heart, an insurance policy has really similar fundamentals. You have an insured person or business entity, you have a time period that someone's insured for, you have events that they're specifically insured for. Policies need to renew, you need to be able to communicate with brokers and customers. And once you get those fundamentals in place, the individual rating factors for each product are the things that vary, but under the hood the products are really quite similar.

| 0:03:21 | Dexter | Now, the other challenge, I guess, is how do you find the people to go and do all of these different kind of specialist niches? My kind of life prior to tier one people and one of the reasons why you were one of the first or the first founder approached was I did a lot of work in the insurance sector. And those niches you're talking about people who spend their whole career deep in that one thing. So how have you been able to compete against that?

| 0:03:53 | Ben Webster | Insurance is unbelievably siloed. So someone who specializes in accident and health will stay in accident and health for their entire career, right? Someone who specializes in financial lines will stay in financial lines pretty much their entire career. There are generalists who move around but it is really siloed. The other issue with insurance is that there's a huge gender issue, right. It really is men in their kind of who dominate senior positions and it's a genuine problem that we're trying to work on but the kind of baseline of people in the industry is just not there.

| 0:04:36 | Ben Webster | So we hire specialists, we try to look for generalists that can go across departments, we try to train juniors that start off in aviation and then we move them to liability and then we move them to cyber to make them more well rounded and try to understand those underlying principles across the products right. To see where the similarities are. But it's not easy.

| 0:04:59 | Dexter | What have been some of the challenges around distribution? Because that's, I guess, the other key challenge for any fintech InsureTech.

| 0:05:08 | Ben Webster | Yeah. So once you've got the pipeline know, finding capacity and then being able to build a product and deploy it to market, the hardest problem is distribution. Right. So I often do a talk to InsureTechs at InsureTech Australia around. This is the pain that you have to go through to launch a product and it can be 18 to 24 months from the start of the idea to finding capacity and having the regulatory footprint and getting the product and the testing and then launching and it can be a whole lot of pain.

| 0:05:35 | Ben Webster | And then you launch and it's tumbleweeds. Literally no one's interested in the product. So we've developed a bunch of strategies to try to validate the product as early as possible to make sure that there's actually a market there for it. As we've grown, it's also easier to launch. So the cost to launch is much, much lower. So we can experiment a little bit. And part of the idea is to have many horses in the race and see which ones are going to be the winners and which ones we have to put down and you have to be brutal about putting the products down that don't work as well.
| 0:06:06 | Dexter | Yeah.
| 0:06:06 | Ben Webster | So the most difficult thing with the types of products that we're working with is it's not always direct to consumer. So we have the broker in the middle and so the brokers are our clients as well. And a bunch of the software and the products that we develop are actually to make their lives better and to make their lives as frictionless as possible. So we've got kind of two layers of customers because we do sometimes go direct through brokers and we help brokers create direct brands as well. And so we need to think about the end customer, but also the broker in the middle and sometimes affinity partners. So we sometimes distribute through online stores or we do drone insurance, for example. And so drone providers will often recommend our drone product as well. Right. So we need to think about those kind of steps. But brokers are a key market for us to satisfy and help make their lives better, essentially.
| 0:07:01 | Dexter | Now, in the intro, I kind of mentioned you as being perhaps one of the most underrated or underappreciated entrepreneurs that we've got in the ecosystem, which is.
| 0:07:10 | Ben Webster | Very generous up here. Yeah.
| 0:07:11 | Dexter | But I don't say that lightly. If we can maybe apply some context to that and share a little bit about your kind of background, I think it would kind of help people understand why I would say that.
| 0:07:24 | Ben Webster | Sure, I can do that a little bit. I guess. I'm a serial business starter. I've had several businesses. I started working for a big agency that then morphed into WorldNomads.com and travel insurance, Direct. And that's where I learnt about insurance.
| 0:07:43 | Dexter | We had Simon on the show actually think about a year and a half ago.
| 0:07:47 | Ben Webster | Yeah, it was a great yeah, yeah, he's a good guy. Really innovative. Right. So early in InsureTech, before the word was invented. Right. He was a genuinely innovative company. Right. And they were innovative when it comes to regulatory footprint as well. They were one of the first kind of InsureTechs to get to be able to sell a product worldwide, which was an amazing kind of achievement. It took them a long time.
| 0:08:13 | Ben Webster | It's a genuinely amazing achievement.
| 0:08:16 | Dexter | I actually mentioned you in that episode, right. Because I recall when we did that blog interview you taught about the early days of World Nomads and you would have bets around a sweepstake around how many policies you would sell in the week. And it was like between one and ten. I think when you left, they were doing one every 30 seconds or something.
| 0:08:42 | Ben Webster | They had amazing scale. Yeah, they were doing really big numbers. But we were the second direct travel insurance product. So Columbus Direct were there and then travel insurance, Direct and World Nomads were the second direct product in Australia. We also built the first Pet insurance site when I was there, Petcover.com Au, which has been sold several times to other people. And from there I kind of left and started a digital services agency where I started consulting to banks and insurance companies and NGOs and government organizations, and I often say this, I stupidly started hiring a lot of developers thinking that there must be a better way.
| 0:09:24 | Ben Webster | And I didn't have a great plan for that agency. It wasn't a good structure, but we never ran out of money, we never ran out of jobs. We had really big jobs with people like Westpac and ComBank and Australian Medical Council, really big jobs. But the problem with an agency is you're selling your hours. And I was going to die by the time I was 32.
| 0:09:50 | Dexter | I think the other issue, as well as you look at the economic climate that we're in, a client can give you 30 days notice, right. You're left with all the cost and the risk.
| 0:10:01 | Ben Webster | Exactly. And you're always worried about even if you've got three months of jobs with an agency, you're worried about month four. If you've got 13 months of jobs, you're still worried about month 14. And you can come to terms with that over time, but you're still constantly feeding the beast. And it's a great business with cash coming in the top, but you're spending it all at the back and you're kind of chasing your tail all the time. And so when the opportunity came to come across back to do some travel insurance with Woolworths Travel Insurance and Hollard, we jumped at it and I kind of shut plus two down. I sold a bit of software to some of our customers, which was nice, got a tiny little bit of an exit from it and then started insured by US, which is the travel insurance platform.
| 0:10:48 | Dexter | Now, tell us a little bit about insured by us because this is where really you and I kind of connected. And it was a really kind of great model that you had.
| 0:11:00 | Ben Webster | Yeah. So we were remote first and four days a week before it was kind of needed or trendy. Right. We were really early.
| 0:11:10 | Dexter | I just want to interrupt there anybody who thinks that I'm against remote work and work from home, based on the post that I have on LinkedIn, should go and read that interview blog that we did in 2017 because and still am fully supportive of that model. I think what I'm trying to say with my posts is it takes a certain type of person to make that model a success.
| 0:11:39 | Ben Webster | Yeah. And also certain type of employee as well. It's not for everyone. Some people really and I have this discussion with Agile because Agile is also remote first. It was always part of our strategy and we have this internal discussion and it's not about age demographics. It's not about we've got older people in the Agile team who just love and relish working from home and we've got the reverse. Right. So it's not specific to kind of age or a lot of people think younger people want to be juniors want to be in an office and they want to learn from being nearby people. Or they think older people are used to being in an office, so they want it.
| 0:12:24 | Ben Webster | It's across the spectrum. It's just dependent on the personality type. And we've had people leave the business who are happy, but just saying, I need social contact. One thing that insurer by us was really good at was manufacturing those water cooler moments. We were constantly in touch with each other through slack and zoom and all those things, and it was an amazing vibe. We actually had an amazing team, and it was really humming, and we were in twelve time zones.
| 0:12:57 | Dexter | Yeah, I remember that. I was just about to mention that. I think the thing that really struck me was that you operate in 24/7.
| 0:13:04 | Ben Webster | We were, we're in twelve time zones, and it was really humming. Obviously, I'm using the past tense because COVID happened, and that business really took a massive hit. We could talk about that later, but it was really humming, and it's almost more important if you had the ability to go and interview some of the people who worked in the team, rather than just hear it from me. Because when you hear a founder saying it was going amazing, you're kind of skeptical, right? But if you talk about talk to some of the team, they absolutely loved it.
| 0:13:35 | Dexter | Let's talk about that, because another reason why I think you're one of the most underappreciated entrepreneurs is we've lost sight our belief of what an entrepreneur is. So let's talk about that journey that you went on with insured BIOS, and things are humming, it's going great, and then we have a global pandemic, and borders across the world are shut, and you're a travel insurance business.
| 0:13:59 | Ben Webster | Yeah, there's a lot in there, I think with insured by us at the time, we were 38 people, we were in twelve time zones. January 2020, february 2020 were our two biggest months. The pandemic really hit about the 20 January, that's where we started getting notifications from insurance and our capacity providers. But February was still one of our biggest months that we'd ever had in the entire lifecycle of the business. The business was five years old at that time, right?
| 0:14:31 | Ben Webster | And we were doing big numbers. We were the travel insurance platform behind about 20 brands in the market. You're talking woolworths. RACV RACQ. We had our own brands as well. We were doing about 95 mil of policies a year, nearly 420,000 policies through the platform a year, ten mil a month, threat mil a month going through the platform, of which we got a tiny, tiny little percentage for being the platform, and a little bit more when it was our brands.
| 0:15:00 | Ben Webster | But we went from literally doing ten mill a month, eleven mill a month through the platform. To doing -200 -500, and we had to refund literally hundreds of thousands of dollars in policies to people and I had to fund that as well. Right. And we were bootstrapped. The writing was on the wall. In about March, the writing was on the wall and I knew that I was going to have to make redundancies and I wanted to do it as early as possible to make sure that people got a good payout. Right?
| 0:15:34 | Dexter | Yeah.
| 0:15:35 | Ben Webster | Insured by us was an A team. It really was full of amazing people who could have been elsewhere but decided to stay with us because of the culture. I was a little bit worried about their employment opportunities, having to let them go, but I was fairly sure that they'd get hired pretty quickly. And they did. Right. They all did. But in the middle of the pandemic, literally just over here, everyone, our family was almost in one room.
| 0:16:07 | Ben Webster | I had a little office, which is now one of my kids rooms. I was shutting the door, letting kind of ten people go at once, coming out tears, getting hugs from the family, and it was a particularly difficult time. We were a kind of seven $8 million revenue business and we went from that to nothing within the space of four or five months. The business is still alive, it's still possible, but it's really like I've got one employee and I'm just keeping the lights on at the moment and hoping that we can come back.
| 0:16:47 | Ben Webster | So it was a particularly tough time, right. But the hardest thing, honestly, was we'd worked so hard on that culture. The team was just humping. Such great team, there's so many good personalities. We'd gone through some pain to get it to where we were and the culture is always shifting. But the hardest thing was kind of grieving at that loss, that team and that people.
| 0:17:09 | Dexter | I want to ask you about that because it's one thing to have failure because you screwed up, right? And kind of you reflect and you look back and you go, right, I did that wrong, that wrong. And all the warning signs were there and I ignored them, or I thought I was better, or the ego took hold, right. That's usually the kind of path to failure that most of us go down. It's not very often that the path to failure is just some unprecedented event that lots of businesses benefited from, but you were the kind of one that got smashed.
| 0:17:45 | Dexter | How do you keep kind of balance, right? And not to become bitter and twisted and angry at the world, because you've had that all taken away from you and you did not deserve it. It was nothing to do with what you've done.
| 0:18:06 | Ben Webster | Well, there are lots of lessons, right? I still think you can take lessons from it, but it wasn't an easy time. It was a tough time. Like, it was a really difficult time. I was lucky that Agile was running at the time and I had the support of the Agile team as well. And agile was taking off. It was literally one day where I was doing a zoom, letting someone go at Ibu and then opening another zoom half an hour later and hiring someone at Agile because Agile was growing.
| 0:18:35 | Ben Webster | So it was almost a night and day situation for me. This is going to sound really cheesy, but I've always been a fan of The Stoics, even before they got popular with entrepreneurs.
| 0:18:47 | Dexter | And Ryan, don't take me down that path. We're not having Stoics on the podcast.
| 0:18:55 | Ben Webster | I studied them at university. Right. I did a highly practical degree in literature and philosophy and I've always been a fan. And exactly what you said the biggest solace was it wasn't because I had a gambling problem or that I'd made some huge error in investment or I'd done something inappropriate with an employee. It was totally out of my control. And lots of other businesses didn't see the pandemic coming.
| 0:19:23 | Ben Webster | Right. And that's one of the things that The Stoics talk about. Focus on what you can control and what you can't control. And I ended up up the creek. And the only thing you can do when you end up at the creek, even if you did cause it, is then find the right way to deal with it in the best possible way. So everybody got their payouts. Everybody got good payouts, really good redundancies. Right. We made sure that everyone was taken care of. We helped them try to find new jobs.
| 0:19:49 | Ben Webster | Everything was done in a really transparent way. Everyone was aware of what was happening. There was no cloak and dagger kind of things going behind closed doors or anything. I was completely open the whole way. And I think I still talk to a lot of people from the business. I miss them like crazy. Right. I just miss them. I just miss them being around. But yeah, the only thing you can do is just when you end up up the creek, do it in the best way you can.
| 0:20:18 | Ben Webster | I was just going to say there's still so many lessons, right?
| 0:20:21 | Dexter | Yeah.
| 0:20:22 | Ben Webster | Only being travel insurance was a massive mistake. We should have diversified where we were trying to diversify into a couple of other lines of insurance along the way. But one lesson from that is we were stuck servicing White Label customers. And so I will never White Label ever again. Right. Your product roadmap ends up being driven by your White Label customers who don't have the same objectives as you.
| 0:20:50 | Ben Webster | Right. They say that they want to grow the top line of revenue, which is what you want when you're getting a cut of every policy sold. But the features that they request and the features they demand don't reflect that. And so I will never ever White Label again. Right. What we do at Agile is a little bit of White Label, but what we do is you can put a logo here, but nothing else changes. This is the way it works.
| 0:21:16 | Ben Webster | You can ask for something and if it's a good idea, I'll listen and we'll put it in the roadmap maybe. But if it's not a good idea and I don't want to do it, I'm not going to do it. Whereas at Ibu we were driven by the large insurance companies that we were providing the platform to, and that was a huge mistake that I was trying to correct. But we were just so far down the road and there were such big customers that we just couldn't get out of it.
| 0:21:40 | Dexter | I'm going to sound bite that section. I've been chatting a lot to customers and clients over this last twelve months and warning of the dangers of partnerships. I've given examples of what I've seen in 2009 and 2010, which is the last economic downturn, major one, and these kind of partnerships and white labels are almost like seen as the panacea growth and they turned out to be anything but. They were just for both sides of the kind of relationship, just these kind of albatross around the neck.
| 0:22:16 | Dexter | And so as technology, I think, has evolved that the implementation can be faster, I think there's still a lot of danger or warning signals that you have to be wary of when you're entering into a partnership with a large corporate.
| 0:22:33 | Ben Webster | Yeah. And it's a really tricky relationship. And sometimes in meetings I was sometimes called the truth blurter because I would go to meetings and just blurt out the truth. And I remember meeting a really big partner and they said, so we've done a lot of user research. We do lots and lots of user research. And if you've ever bought a policy from someone like UE, they have the antithesis of the model that we approach. Right?
| 0:23:00 | Ben Webster | We try to get you the price as quickly as you can. I don't care about your personal details. I'm not going to phone you up 30 times after you get a quote, I'm going to give you the price and then if you want to go ahead, I'll collect your personal details, right? I take the minimum amount of details I need to return a price to you. Right. This huge partner, and they were a very big partner, they were a medical insurer. They said, we want to have their date of birth, their email address, their address, their phone number.
| 0:23:30 | Dexter | Now they're saying don't give us anything.
| 0:23:33 | Ben Webster | Exactly. Or before you give them a price. Right? Or before we even say, where are you going on your holiday? This is sort of travel insurance. We want all of those details because their primary driver was getting details into the CRM so that they could cross sell other products. Right? And I said, that's a really dumb idea, it won't work. You're going to have the worst conversion rate ever, trust me. We've done lots of experiments. I can show you the experiments. We showed them the experiments, didn't listen, right?
| 0:24:06 | Ben Webster | I lost that business, like, three years later. They came back to us and said, okay, we're willing to go with you, but we still need this thing, right? I went because it was now part of a bigger deal with a partner that we were with. I said, okay, we'll do it. It's still a bad idea. It's not going to work. Twelve months later, they come back and go, why is our conversion rate so bad? I've told you we removed it.
| 0:24:28 | Ben Webster | And conversion rate just goes straight up to nearly kind of 20%, right? They were at like three or 4%. It went to 20% just by removing all of those fields. But that's four years of lost time because they thought they were right about their product roadmap and they didn't want to listen to an expert. And I have trouble sometimes saying that I'm an expert, but when it comes to travel insurance, kind of am, because they wanted to drive the product in their own direction and they didn't want to listen to us.
| 0:24:58 | Ben Webster | We lost four years and they could have been with us. They didn't have a travel insurance product live for four years, right? They could have been live and earning premium the whole time.
| 0:25:08 | Dexter | Yeah, well, I've moved away from that word expert and just come up with a term. I'm just more informed, right. And I think this is the key, right? I see this a lot with large corporates. One of the reasons why they're coming to startups, it isn't necessarily for the innovation piece. It's because you're more informed, because you get access to way more information than you do working in an insurer.
| 0:25:42 | Dexter | I've seen this with even when I've and I remember the Insurer Tech meetups, right? We used to do an IAG where nearly everyone talking about all this great stuff they're doing in AI and how you can now we can know exactly what the driver is doing and we can know how good a driver they are. And then next month I get my premium and it's gone up like by 20% on a second. And when I asked the actuaries who turn up to this, yeah, well, there's been a load of people having crashes because they're on the mobile phone.
| 0:26:16 | Dexter | They're younger people. I'm like, Well, I'm not one of them. So with all this great technology, how come I'm getting hit with a bigger premium? It's like, oh, well, we're not talking to them, they're not talking to us. Pricing is different risk to this. And so in these large organizations, as you mentioned at the beginning, right, everybody's in their silo, not just in the niche that they're in, but in the discipline as well.
| 0:26:42 | Dexter | So naturally knows pricing, but they don't know what the customer's thinking.
| 0:26:49 | Ben Webster | I think the biggest thing with any big corporate, but especially in insurance, is that they're separated from the customer, right? And so at the height of Ibu.
| 0:26:59 | Dexter | We were doing that's not just insurance ben.
| 0:27:04 | Ben Webster | And one of the reasons that they come to startups is because we have that culture of talking to the customer, and we know that that's the secret source. So at Ibu, we were doing a month, we were doing four user interviews. We were doing with a customer who had got a quote and not proceeded, a customer who'd bought a policy, a customer who'd made a claim, and we were talking to an internal agent who were using our internal tools or our claims tools, right? And that was every month, we were doing four user interviews. Sometimes, if we were implementing a new feature, we'd do a whole bunch of other user interviews, and I would get the entire team to rotate and sit in on those user interviews, right? So I had a UX specialist run the user interviews, but the devs would sit in or customer support. People would sit in and listen to real customers real time and engage in the conversation with the customers because there's nothing very few user interviews I've come out of where I haven't kind of slapped my forehead and gone, I can't believe I never thought of that.
| 0:28:04 | Ben Webster | I can't believe that we missed that kind of opportunity to make their lives better. And so that's the secret sauce, right? And so big insurers, big corporates, they get further and further and further separated from the customer, and they don't listen to them, and that's why they need to come and talk to startups.
| 0:28:21 | Dexter | I want to talk a little bit more about the Agile model. As I mentioned in the intro, I think when you kind of first started the model, there were some really interesting ideas that you had around, I guess, being able to empower insurance execs to go and have their own business, run their own line. How is that? I think it was maybe four or five years ago when we kind of first had that chat. How did that pan out?
| 0:28:49 | Ben Webster | It's had mixed success, to be honest, and I think it's down to personality types. When I started working for myself, even before I had the to, I was like a small business evangelist, right? And I'd go to anybody and say, yeah, start your own business. I remember being at dinner tony Robbins of small business, and I remember being at dinner parties with my wife, and she would always say, not everybody's meant to start their own business. And I'm like, sure, everybody can. And I remember being at dinner parties and literally sitting opposite someone who's like at PwC, getting 300K, sitting next to his partner who's six months pregnant and going, I want to go start a marmalade brand. And me going, yeah, man, do it tomorrow. Quit.
| 0:29:35 | Ben Webster | And my wife's kicking me under the table, going, he's the worst person to start his own business. And I've learned the hard way. That it's not for everybody, right?
| 0:29:43 | Dexter | Yeah.
| 0:29:43 | Ben Webster | Especially when you're not funded, when you don't have ten mil in the bank from an investor that comes with a whole bunch of other problems. But you do have ten mil in the bank, right, when you're not funded and you're worried about making payroll, which sometimes that happens. Right. We're way past that now at Agile and I was way past that for a long time at Ibu. But when you're worried about can't, there are certain risks you can't take, but every day is a gray area.
| 0:30:12 | Ben Webster | The reason that I keep doing what I'm doing and the reason that I'm still in insurance right. Is that it's a puzzle that I'm never going to be able to solve. And I remember the Dropbox founder saying every day, I'm at the edges of my abilities. Right. I'm constantly at the edge of my abilities and I'm constantly pushing those boundaries. Right. And that's not for everybody.
| 0:30:29 | Dexter | Yeah.
| 0:30:29 | Ben Webster | Lots of people like getting up in the morning, going to work where they have no idea that someone had to order the desk, order the computer that they're on, order the network, order the electricity to be on, clean the toilets when the cleaners didn't turn up. Right. Like I've literally done that before. Right. There's lots of people who just like to turn up, do their work and go home and I totally get that. Right.
| 0:30:55 | Ben Webster | And you need people like that in a business too. Right. You need those people because they're invaluable. But if you want to run your own business, you have to be comfortable with gray areas and you also have to be comfortable with literally getting your hands dirty sometimes. Literally. So the model at Agile is that heads of departments like our head of aviation, our head of financial lines, they own a portion of their department and we profit share.
| 0:31:23 | Ben Webster | And in the event of Agile selling altogether, they will get the same equity split when we sell the business. Right. And we do want to sell eventually we'll sell to a big insurer is where we're going. That might be five years, that might be ten years down the track. It might be two years. We'll see. Right. But the ownership of the department, they need to act like essentially a business owner. Right. And lots of the people that we've brought on board do that really well. And we've had a couple that haven't really worked out at all.
| 0:31:57 | Dexter | What you mentioned is probably, I think, the biggest frustration that I've had since I started tier one people is trying to really educate not only the startup community, but government education that we don't have a skill shortage. Right. It's just highly unattractive industry for people to come to.
| 0:32:23 | Ben Webster | Right.
| 0:32:23 | Dexter | Even with all the glass and the glamour, people then get in and realize actually what it is. In my experience, if I was to put an ad up, 99% of people who would respond to that ad are not going to be right for a startup. It's not because they're not good, it's not because they haven't got the skills, it's because it takes a certain set of behaviors, attitude and ultimately, I think, accountability.
| 0:32:53 | Dexter | You kind of talked about your experiences as a founder and even as founders we see in a lot particularly big funded startups there's not level of accountability. It's not their money they can get out of dodge. We kind of have this addiction to failure porn where you got people, they're talking about how tough a journey it's been. They've not lost anything their investors have, they've got another job, then they actually made money doing this thing and there's a kind of trail of destruction left behind as well. So I think it's a really interesting kind of dilemma that we seem to be asking all the wrong questions, right. How do we solve a skill shortage when actually it's not right? So just you're never ever going to be able to find enough people who are crazy enough to want to go and take on that amount of risk, particularly employees right. Where the payoff is.
| 0:33:57 | Dexter | Maybe if we sell one day you're going to be rewarded for all the sacrifices that you make.
| 0:34:03 | Ben Webster | Yeah. I think one of the attractions to startups and I'll use Ensure by US as an example is that you can quickly grow your skill set and move through, I guess, career tiers quite quickly that you'd never be able to do in a corporate.
| 0:34:28 | Dexter | How many people though have that growth mindset? Right? I just kind of look at a school, for example, my kids at school, despite them even being taught now about growth mindset at school, there aren't that many kids that kind of aspire or would think like that. Right, that's because I think of all the things that you mentioned right. Like most people seek comfort, not seek to be on the edge and be uncomfortable. And I think what's really interesting when I look at my network, one thing that I would say unites all of them is that if you ask them when they're at their most uncomfortable, it's when they're starting to feel comfortable.
| 0:35:10 | Ben Webster | Yeah, that's really interesting, isn't it? Yeah, I guess where I was going is there are people within corporates who have a foot on their head, right. They have a buffoon manager above them and this is why one of the reasons I started working for myself right? You have this buffoon who's been in the job for 25 years, who has not kept up to date with any new technologies or approaches to anything, has never heard any of the new approaches. Thinks startups are all just the new shiny.
| 0:35:44 | Ben Webster | Or you've just got a manager who just wants to is about kind of keeping people in the dark, and they've literally got their foot on someone's head. Those type of people, when they've come to work with me, I suddenly go, Try and do this, and they go, yeah, I'll do that, and they nail it. And you go, all right, have another responsibility, and they nail it. And suddenly this person who started as a customer service person is now my head of operations because she's amazing.
| 0:36:12 | Ben Webster | And I literally had that experience, right, where multiple times where I hired someone really, really junior and they excelled. And so I gave them something else and they nailed that and they just kept going up and up and up and up, and they would never would have had that opportunity to grow that quickly in another business, right? So I think that's one thing that's really attractive at a startup that you can't get in a corporate world and definitely not a government where you're going tier by tier by tier by tier, right?
| 0:36:38 | Dexter | Yeah. And I think, look, that, again is the challenge, right. How do you find those people, right? Because, yeah, they might respond to an ad, but then you get the resume and say, well, they don't look right on paper, they don't even get to meet the interviewer, the hiring manager. And then the other challenge is, how do you figure that out, right, in an interview where people are telling each other what they want to hear, right?
| 0:37:04 | Ben Webster | We can't and like, oh my God, hiring is just the most difficult thing, and I don't have a good answer for it. We have a really good process at Agile, we had a good process at Ibu, but it evolved over time. And I made so many mistakes, but I think you literally cannot find out whether or not that person is the right person in the interview. And definitely those kind of diamonds in the rough like that I just kind of talked about, they're really hard to find.
| 0:37:35 | Dexter | Yeah.
| 0:37:36 | Ben Webster | I think when I'm trying to attract people, I'm kind of looking for disaffected corporate people, right? People who are grumpy with the corporate world and go, I want to do something different. And I will literally say to them, because I don't want to sell anyone a lemon either, right. I'll say to them, you're going to be wearing this many hats, right? You're going to be doing all kinds of different things, and you're not going to have four assistants, you know what I mean?
| 0:38:00 | Ben Webster | You're not going to have someone who you can go, can you go do photocopying for me? Or that kind of thing. You're going to have to do it all yourself, right? And someone who jumps at that to me is someone who goes, yeah, I'm ready to get stuck in. And then if you just give them more and more responsibility and then support them behind so they're not doing all the photocopying all the time, right? Then they can grow.
| 0:38:18 | Dexter | I think that's one of the challenges with the interview process, right? I ask those same questions of people I've never met anybody says, oh, that's not for me. Everyone. Oh yeah, right. But then they get in and data I've collected over the last seven years shows that over 90% people that move from corporate to startup leave within the first six months. And when we've kind of explored and tried to find out why, it's usually been around accountability issues, which is either they've made a mistake and they've tried to hide it, or they've made a mistake and have blamed someone else.
| 0:38:54 | Dexter | And the reality is, when you're pushed to the edges of your comfort zone as you've talked about, that's when you start to make lots of errors, right. Errors in judgment, errors and work. And you kind of have to constantly be correcting those things. Whereas in a corporate you make a mistake and it's like, oh, if you own up to it or you own it, that is actually to the detriment of your career.
| 0:39:23 | Ben Webster | Yeah. And you talked about failure before, but at a smaller level, within a startup, the people that you're empowering to try new things, they have to know that there's a net underneath them.
| 0:39:33 | Dexter | Right.
| 0:39:33 | Ben Webster | And so it's okay for them to fail and make mistakes. Right. Because we're trying new things. Right. But again, coming back to that idea of constantly being at the edges of your abilities is really not fun for a whole lot of people. Lots of people thrive on it, but a whole bunch of people just want to come in and do the same thing every day and then go home. And so I think trying to find I'm not sure the best way to find that personality, but I'm much better these days.
| 0:39:59 | Ben Webster | I've got lots of kind of gut feels these days about corporate people moving into startups who aren't going to work, right? And one really big red flag, an obvious one, is what's my title going to be? Anyone who's interested in a title, right? Anyone who needs work to feed their ego, who needs their job title to feel like they're above people. That's a big red flag.
| 0:40:28 | Dexter | Right. So main is when I'm approaching somebody about an opportunity, if one of the first things they ask for is a job description, I know they're not the right person. But gone to your point around how do you identify that person during an interview? The only way that I've found that's effective is what I would call self selection. And that is you have to be absolutely transparent with that person or any person that you're interviewing about. This is actually what it is like to work here.
| 0:40:59 | Dexter | This is the situation that we're in, how much money we've got, how much runway we've got. These are the resources that you're going to have available. And this is what we expect you to do in the first 90 days, the first six months, the first twelve months, the first two years. And what you'll find is most people, when they're put with something that visceral in front of them will go, you know what, it's not for me. And it's actually the most effective, I think the most effective recruitment tool that we've got at our disposal.
| 0:41:33 | Ben Webster | I agree. And it's partly what I meant around I don't want to sell someone a lemon, right. I'm trying to tell them explicitly what they're going to be doing and I don't want to do a bait and switch. Right, yeah. And every role, no matter what, has something crappy in the job. Every job has something crappy that might just be having to sift through 100 emails because you're doing customer support or there's always something bad about every job and it's that person who says, I want to become an executive without having done the stuff where they had to get their hands dirty.
| 0:42:11 | Ben Webster | That's a big red flag. Right?
| 0:42:14 | Dexter | I think what is also kind of really interesting around people when they're making these choices, as you've pointed this thing around status and over the last ten years, it's become really cool to work at a startup and I think that's had some real kind of challenges around hiring the right people as well. Fortunately, I think we're starting to see a lot of the noise around startups kind of rescind and so we're seeing now people that are really thought about long and hard about whether this is right for them, are still in the space or looking to get into the space.
| 0:42:53 | Ben Webster | Yes. So startups an interesting word for me. I try to think of us as a startup because I want to keep that scrappy mindset of a startup, of challenging the way that things are always done, but I really think of us as a small business and don't think of us as a startup, and partly because we'd never been funded. I've always been bootstrapped, right? So we've never had climbing walls, we've never had foosball tables, do you know what I mean? We've never been that kind of culture and we've never had kind of four year vesting schedules or that kind of thing.
| 0:43:26 | Ben Webster | We've had ESOPs, we've had bonus structures in place, but never anything like a Twitter style kind of startup. So I think that startups have now gone through that curve where people are starting to see that they go, that we were talking about failure and people going on failure tools after they do it. The day before you read the story in SMH or you read the story online, that someone's shutting the doors the day before they were in the media going, we're killing it, we're killing it, we're killing it.
| 0:44:00 | Ben Webster | I think that people are starting to see through some of the lies and ask the right questions when they're thinking about moving across to a startup.
| 0:44:08 | Dexter | Talking of startups, end of 2016, I think it was maybe it's the beginning of 2017, bunch of us in a room doing a meet up called Insure Tech Sydney, which then became InsureTech Australia, which then morphed into and joined forces with Fintech Australia, which then split again, became Insure Tech Australia. We've seen this kind of real journey, right? And we've been on kind of pretty much from the beginning together.
| 0:44:39 | Dexter | What's your sense as to where the whole ecosystem right? And when I talk about fintech, I mean everything. And I don't like to break down into insure tech and reg tech. I think we kind of should all be together because we're just a small economy. But when you kind of look at an eye level helicopter view, what's your sense as to where we're at now and the progress that's been made over this last seven years?
| 0:45:05 | Ben Webster | It's just not fast enough. We need to go faster. I thought we'd be a lot further down the road than we are. InsureTech Australia was an amazing group of people who were only motivated by altruism, right? They literally wanted to create a better ecosystem. And it was such a great group of people, and they worked so hard, all of us worked really hard to get that ecosystem up and running. And I think that we haven't had success lobbying organizations like ASIC or the Insurance Council to make things easier for InsureTechs and fintechs to get started.
| 0:45:47 | Ben Webster | I think that the big insurance companies have a monopoly or an oligopoly, and they're saying, just stay over there, we're happy to kind of pinch stuff from you. But they're not really interested in innovating. Right. They're trying to keep their position kind of safe. And I would too, if I was there, but I thought that we'd be a lot further down the road than we are. There's been very few key changes to legislation.
| 0:46:16 | Ben Webster | InsureTech Sandbox, fintech sandboxes, they just have not worked at all.
| 0:46:20 | Dexter | Right.
| 0:46:21 | Ben Webster | The hardest thing with an InsureTech, especially similar for fintechs, is the regulatory footprint. The regulatory barriers to getting up and running are huge. If you wanted to become an APRA licensed insurer, you're talking about huge amounts of capital. You're talking about nearly twelve months worth of paperwork just to get approved, let alone even if you got the if you've got the best huge bank account from the best kind of capital providers in the world, you still have to go through twelve months of paperwork to get up and running.
| 0:46:56 | Ben Webster | And I understand why we've had HIH. There's a reason why we're regulated, right? People need to be able to trust in insurance companies and insurers, but there has to be an easier way to experiment with innovative products without having to go through that pain.
| 0:47:13 | Dexter | Yeah. What would be your suggestion or recommendation or what would you like to see?
| 0:47:19 | Ben Webster | I actually think that we need and this is the antithesis of the way that I've done things, because I've done things bootstrapped and on my own. But I actually think that we need a fund. The hardest thing for an insurer to back an insure tech is that and we've been in this position ourselves at Agile where we've backed a couple of insure techs. The minute they sell five policies, if you're selling a liability component, that's five times $10 million worth of exposure for maybe $400 worth of policies. Right.
| 0:47:55 | Ben Webster | So I've now got 50 mil of possible exposure that I might have to pay out for $400. This is something that InsureTechs don't necessarily understand, right? They just go, we're going to sell lots of products and we're like, well, you're selling exposure as well. So that risk to reward for an insurer to back that insure tech is just not a great it's not a great algorithm for them to try to back it. So we need to take away that that risk. And developing a big fund where you can incubate and fund and grow InsureTechs is, I think, the only way to do it.
| 0:48:37 | Dexter | Yeah. So we've got superannuation funds that are putting some of their, I guess, customers money behind VC firms that are putting it into all sorts of different investments. Do you think there's then a case where you have specific funds that are a bit like the future fund?
| 0:49:01 | Ben Webster | I think that it's actually the money that you need to pay claims that the fund would service. Right? So it's not necessarily the funding of running the business. I personally, my background would say the InsureTechs have to figure out how to get money to run that. I'm literally talking about the money to pay claims.
| 0:49:19 | Dexter | Got you.
| 0:49:19 | Ben Webster | So if you come to me and say, I want to do telematics car insurance and I want to sell a million dollars worth of car insurance in year one, that means that I've got to have some money in the bank to pay all of those claims. It's that money talking about needs to be there and if there's free capital to do that, that they're happy to invest in a portfolio structure. Right? So you wouldn't just go, we're just going to back car insurance. You would go, we're going to back this one and this one and try to get a diverse portfolio the same way that a VC does. Right.
| 0:49:51 | Ben Webster | But it's the money to pay claims that is the thing that's needed.
| 0:49:56 | Dexter | We've seen as well, kind of over this last seven years, ideas kind of come and go peer to peer insurance. I still remember our conversation about that, which I don't think either of us back that one. But what do you see as the evolution for insurance? Because it's centuries old product. It's nearly 1000 years old, I think. How does that evolve?
| 0:50:29 | Ben Webster | The biggest problem with insurance, I think, is that it's complicated. And when you're selling a product to a customer, to the end customer, most of them don't understand what they're buying. And you see that come out in the retail products like pet insurance, like travel insurance that have the highest number of claims at AFCA. Those products need to be simplified, and I think that Parametric is a way to do that.
| 0:50:58 | Ben Webster | And Parametric insurance is basically think of it like the easiest example know Cyclone insurance, right? So when a Cyclone hits Far North Queensland, the biggest gap that customers have is getting the claims adjusted to their.
| 0:51:17 | Dexter | House.
| 0:51:20 | Ben Webster | In record time, like getting them.
| 0:51:22 | Dexter | There as soon as or take somebody who's just bought a new car and his wife takes it for a drive and gets caught in a hailstorm.
| 0:51:29 | Ben Webster | I don't want to get involved in that. But yeah, that gap between when the event happens and when a claims adjuster can get to the house and then provide funds, that's the gap that a Parametric product can do. So it basically says if a Cyclone event happens within your postcode of winds above this or rain above this or flooding above this level, we're going to pay you this much cash. And it's basically like, if this, then that will happen to a customer. I go, well, I know if I get over 100K wins in my postcode, even if my house is not affected, I'm still going to get a payout, right?
| 0:52:05 | Ben Webster | Because I may not be able to get down my street because the street is flooded. So the idea that I can easily understand what the metrics are for when the payout happens take pet insurance, for example. Customers buy pet insurance all the time, and then they go to claim and they go, oh, no, your particular breed of dog is excluded from skin condition coverage because on page 85 of the product disclosure statement, we've excluded it, right?
| 0:52:33 | Ben Webster | I've written policy wordings that are 95 pages long, right? Travel insurance policy wordings. And I've always wanted to put in a policy wording on page 75. If you read this clause, I'll pay you $100 if you email this to see if people actually read the policy document, because we know that not everybody is, but those policy documents are also driven by the regulator, right? So we need to put things in the policy document to satisfy things that Afgha says or ASIC says, right?
| 0:53:00 | Ben Webster | So that move to Parametric where if this defined event happens, you get this defined amount paid. I think that that is a really big movement. And the other really important thing to think about insurance, it's not a great it's not a nice analogy to hear, but I always think no one wakes up in the morning and goes, I can't wait to buy insurance. I've been really looking forward to this day where I can renew my insurance policy.
| 0:53:24 | Ben Webster | Nobody says that, right?
| 0:53:26 | Dexter | You're talking to the son of one of the top three life insurance salesmen for Canada Life in the still to this day, I get beat into me about how you don't sell nobody buys life insurance. You sell it.
| 0:53:45 | Ben Webster | Yeah.
| 0:53:46 | Dexter | This is like a door knockout and.
| 0:53:49 | Ben Webster | It'S like that kind of thing. I can't wait to engage with the content strategy of this insurance brand. I mean, no one is doing that, right? I liken insurance to a toilet brush. No one wakes up in the morning and says, I can't wait to buy a toilet brush today. But when you don't have one, you're in the shit. So you really need to show people why they're going to buy the product and why they need the product.
| 0:54:19 | Dexter | Just the battery's gone on that. You know what? We're cool. We'll just keep running because it's on that one anyway. Well, Ben, we're coming up to a wrap. What's next for Agile?
| 0:54:33 | Ben Webster | For Agile? For Agile, we have really big things coming. Some of them I can't really talk about. The biggest thing is that we're going international. The hardest thing for Agile is that we have proven the model works. We've proven that the platform works. We've proven our interactions with brokers work. We've found really great niche markets. What we need now is literally more product. And by product, I mean literally the insurance product off the shelf to sell.
| 0:55:04 | Ben Webster | So we've got distribution sorted, we've got platform sorted. We need more product and that know, better relationships with London, with Lloyds, better relationships with local insurers to deliver more product to our brokers and to our customers. So that's what we're working on at the moment, is finding a way for us to have better product and secure product. So we've lost some the way that Lloyds works is you get what's called a binder, which is basically the rights to sell a product in a certain jurisdiction.
| 0:55:37 | Ben Webster | And we've lost some binders, so we lost our financial lines binder, because the market's really tough. And Australia suffers from this problem where if an insurance company in London syndicate has losses in the US or Europe, they'll just pull out of a market altogether. They'll pull out of financial lines altogether. Even though the Australian Book of Business is doing really good, solid business and making them a profit, it's not big enough for them to worry about, right? So the numbers they're doing in the US, if they lose a billion dollars, they're just like, we're pull out, they'll come back in three or four years later when the market improves.
| 0:56:11 | Ben Webster | And so that's happened to us. So we need that security of product. And so that's what we're working on at the moment, is making sure that that product is secure and can't be taken away from us.
| 0:56:20 | Dexter | Well, Ben, it's been fantastic to kind of reconnect and just chat. We get some amazing talent listening to this podcast. If anybody's interested in.