COVID19 Special Episode #6, The Last of the Special Episodes
This is Cass and for this final episode I am joined by Chris Burand and let me tell you, you are in for a treat. He blew my mind twice and made me think about things that I have yet to.
He opened my mind to solving this crisis we are all in for the future so it never happens again. I promise you, this is mind candy with many different flavors.
Enjoy and Lead.
Jason Cass 0:00
Hey, hey this is Jason Cass with Agency Intelligence podcast. Here today, this is actually normally this would be an Agents Influence podcast, conversations with Jason Cass. For loyal listeners, you know that I have two separate podcasts. I’m bringing Mr. Chris Burand and who you guys have had before who literally in the last 12 months is the number one most downloaded podcasts in the last 12 months. Um, and he really, a lot of people know him. They know his… a lot of people didn’t know him and now are following him and thinking, holy cow, why did I never know about this guy? All of the COVID Special Episodes have all been with current agency owners or somebody who’s working in an agency, hence Agency Intelligence. But this all directly has to do with agencies. This has to do with directly we’re not we’re going to talk about the industry. We’re going to talk about a lot of things but we want to dive straight into no outro, no intro, no ads. I reached out to Chris he usually takes a while to book but I said Chris, we need to do this.
Jason Cass 1:00
Now he hopped on and said Cass, anything I can do for the industry. So I want to put it together and I’ll put your hands together, please, if you stand and you clap, don’t throw money. This is all over the audio Chris Burand, thanks for taking your time to come with us.
Chris Burand 1:13
Oh, Jason, thank you very much for having me this morning.
Jason Cass 1:17
Wild and crazy times. Right, Chris?
Chris Burand 1:20
This is. You know this is my fifth massive insurance disruption in my career. each one’s been different. But each one it’s been quite similar in different ways. So it’s an interesting time for sure.
Jason Cass 1:32
Do you have those in your head? I mean, can you rattle those off? What would you say would be those five? If this was your fifth? What was the other four?
Chris Burand 1:39
So the first one was when I came into the industry, there literally was no liability insurance available for any price for certain kinds of businesses.
Jason Cass 1:48
Chris Burand 1:50
And that was a horrible time. Just horrible. Then obviously, we had 911, which was interesting.Long going, and we had Katrina, then we had 911. I mean, the credit crisis, and now we have this.
Jason Cass 2:07
Gotcha. And you said that a lot of those, you know, have been very unique in their own ways, like a pandemic versus the financial crisis, right. Nice night and day, but very similar, but night and day. Um,I mean, what are some of those similarities here that you’re seeing between those five?
Chris Burand 2:28
In each case, customers care about coverages for about the next two years. Coverages dropped price for about 24 months. And next part is agencies with strong balance sheets always come out on top.
Chris Burand 2:47
And agencies that are proactive and really, truly caring for their customers and working with them in a real proactive, constructive manner. They really sit in the catbird seat for about those 24 months, and then everything gets back to normal and price becomes much more important again.
Jason Cass 3:08
Wow, interesting. I have never heard anybody put it in the timeframe of 24 months. That’s, that’s interesting. Let’s dive a little bit deeper into that real second, Chris.If that’s new to me, I know that’s new to a lot of people, but not everybody. But who is, what makes that 24 months? What’s that? Is that just what you’ve seen from the prior four times?
Chris Burand 3:31
Yeah, just what I’ve, I’ve seen in about a 24 month period.
Jason Cass 3:34
That is interesting, that psychological reason of why that does, why society does that. I mean, it’s just, I mean, do they do that and other things, right. Is it just their insurance or is this their buying consumer habits overall? Right. I have no idea. Yeah, I know. I’m just curious about that. That is interesting concept. Something you talked about in December of last year, very heavily you’re right about it a lot, Chris, is that in the time of, at the time you talk about maybe a financial or something disrupting the market over the next 12 to 24 to 36 months, as I have heard a couple other smart people say that those who have balance sheets will be sitting pretty. And I talked about this, I believe in number Episode One, two or three, something around there. And I brought up you in that conversation that we had. And I hope and understand because I don’t think a lot of agents understand that a P&L profitable doesn’t necessarily mean that you’re building a great balance sheet and balance sheet is where your wealth is my saying that right?
Chris Burand 4:38
Yeah, balance sheets where your wealth is, anytime there’s a disruption. It’s how much working capital do you have? The more working capital you have, the safer you are, the ability to take advantage of the opportunities presented in a downturn. You know, balance sheet is what it’s all about.
Jason Cass 5:00
I’m not a stock guy, Chris, I’m not that’s not me. I’m not a hey in and out, I have my little investments with my, with my people, they take care of it, help me, I know what my plan is. But they deal with that. I went and got that Robin Hood app, and I dropped about $2500 into that thing.
Jason Cass 5:17
You can see how people who have liquid cash right now are able to put money into something like the stock market where everything is 60 to 70% off. You know, that is just by having that capital, that solid balance sheet enables them outside the industry to be able to capitalize where other people just can’t because they’re frantically looking or they’re frantically trying to pay bills or trying to stay afloat. And I know we’re at a point in time loyal listeners that we just can’t all of a sudden say oh, well, hey, I’m going to start doing what Chris says I’m gonna have a great balance sheet. You need to start doing that. And I understand that’s not going to help you tomorrow or next week. But it’s important to start to listen to what Chris is saying and those commonalities between this, which I think is really good.
Jason Cass 6:05
Number three, you said was the fact that those who concentrate on their customers, those who, I was taking notes here, proactive agents are sitting in the catbird seat is what you said. And give me a round what I think we know what that looks like. But what does that proactive agent sitting in the catbird seat look like to you? What are they doing, Chris?
Chris Burand 6:30
They’re reaching out to the clients asking them about what their concerns are. They are not walking away from discussions about what the appropriate coverages are.
Jason Cass 6:40
I love that. “Not walking away from those conversations about what appropriate coverages are.” That’s good stuff right there. That’s good stuff. Um, you see that’s about six minutes so good stuff I got I got to make a time note of that one because I don’t got time to to keep it. So Chris now, what are some of the things I think truthfully I hate to- this is a weird subject to talk about when I asked this question of how people will come out better on the other end, because we’re taking, we’re putting our situation into a scenario that is like a wartime effort. I mean, it really truly is. There’s people dying on the front lines. I think there was like 1500 people that were admitted to the hospitals yesterday, you know, and they’re expecting like, almost 2000 today. There’s people that are dying, and I want to make no small bones about that, but that we deal with a lot of that in our life. And the point of this special episode is to take us away from that for 20 to 30 minutes, so that you can, we can be leaders helping leaders lead their people. So let me go back. I just I should always throw that out. Chris. But Chris, on the other side of business, where do you see agents coming out ahead? Not so much coming out ahead… Where’s the difference? Is there a new norm? Will we go back to the norm or is there a new norm, and what are your thoughts on what that might look like? Thoughts on that?
Chris Burand 8:05
It’s gonna be a pretty interesting situation. Because at the heart of this from not from a life and death perspective, which again, all due respect to that…
Jason Cass 8:18
Chris Burand 8:21
…is this is an insurance coverage problem for the world’s economy.At the end of the day, the economy is suffering because businesses and governments and schools to some extent or another, I don’t have business interruption insurance to the extent that they need it. Now, I’m not saying that there should be or shouldn’t be coverage, but there’s an opportunity here to solve the problem within the insurance industry, maybe with maybe without the government’s help of and maybe prevent this from happening again. We can avoid a 25% 30% unemployment rate with the right kind of insurance programs. We have an opportunity in the insurance world to solve a societal problem. If we can work constructively with the governments of the world, and build out the program, instead of running away from the opportunity which is what I think I see, in many ways the industry has done.
Chris Burand 9:29
Yeah, it’s a big risk, but it’s also a big opportunity. With that being said, I’m already working with and I think it’s going to only gain momentum on providing private industry solutions to individual entities on a go-forward basis because the mechanisms already exist to do that.
Jason Cass 9:52
I’m following you.
Chris Burand 9:54
And so I think we’re going to see the more sophisticated, more educated people in the industry both at the carrier side and the distribution side really work on providing these solutions in the event something like this happens again. And those solutions are probably going to be available to clients by the end of 2020 without any problem.
Jason Cass 10:20
What I’m hearing there is something I never really thought about Chris, how profound but yet simple.It’s what we do in life is we solve the world’s problems with insurance products, right? By transferring that risk we’re able to foresee things that possibly could happen and when it does, we’re going to share that risk. So you literally said that we could fix a pandemic or a crisis or whatever could happen that’s causing the unemployment that these are factors that can be prepared for and be prepared for with insurance products.
Chris Burand 11:02
Jason Cass 11:04
Just not simple BI/EE but but simple but products as if this happens again, this is how these people would be paid this is how business would still function. Mmm hmm. That takes BI/EE to like three levels deeper, right? It’s just not so much you just lose your ordinary payroll or whatever, you know, your normal income. It’s now we’re going deeper to say, what are those other things? I really have never thought about that. I think as an industry, we are running away from this BI?EE conversation. And that is a total on that was a breath of fresh air from you right there, Chris to hear you say that. Because I think if we change our mindset, and we look at this as a societal problem and say, how do we solve this right? We had people who were passing away and dying and leaving their family with debt and all kinds of taxes that needed to pay and the insurance world step up said hey, you know what, I think we can actually ensure that when this person dies, we have a product that they could pay for a lot of those issues or taking care of the family. Right? Like like an insurance product took care of death.
Chris Burand 12:07
Right? Exactly. Yeah. And you may need a backstop from governments and all that. But that this is a business income problem. At the end of the day, the vast majority of what the economies of the developed world are going through is nothing more than a business income problem. There’s some event cancellation, there’s going to be some D&O there’s going to be some work comp.But and there’s going to be some life insurance issues for sure. But in real reality, the life insurance actuarial table should have addressed this. The bigger issue there is probably on the investment side. And this is a we have the mechanisms to deal with business income claims. We have the claims adjusters we have the processes, we have the procedures. And yeah, we’re kind of running away from it like from what I see.
Chris Burand 12:59
And not that we should offer coverage where coverage doesn’t exist.
Jason Cass 13:03
Correct, right, it’s not what you’re saying.
Chris Burand 13:05
But that’s not what I’m saying.
Jason Cass 13:08
Because what you’re saying is, is we shouldn’t be paying coverage where coverage doesn’t exist. But next time we have products that we can prepare for where that product doesn’t exist, or that coverage doesn’t exist, and we can get that fixed. We just have to be prepared with that. That’s right. We, and we can’t run away from that I’m going to help you sing that message. I’m going to help you tweet that song. Because I really do truly believe that what you’re saying here, I think is something that I’ve heard no one out there talk about. And that is you are right. The whole world is dealing with it. This is a business income issue. And Chris, I believe emphatically, and here’s why I think that America now we lead the world, but we should be leaders in this because I think that our besides other parts of Europe and Asia and stuff, our capitalistic society makes it private industry, specifically insurance able to thrive, right? It allows it to be the best in the world. So we should be able to capitalize on that business income. And I think if we lead correctly as a country, we could actually apply products to the entire world that we then could, in the event of something like this, we could be able to help the entire world because we’re helping each other anyways. But why not collect a premium in the meantime? Sorry, but that’s just a way that I’m thinking about it in preparing for it next time. I don’t think a lot of people are talking that way. Maybe people up in the higher echelons of, you know of government or, or insurance companies, and maybe you’re hearing some of that. That’s the reason why I brought you on. That’s a great perspective. Great perspective. Really, really good. Let’s talk about some real quick, real quick. Just get your personal opinion.
Jason Cass 14:48
But do you think… I don’t think. I don’t think BI/EE should be paid? Because of the circumstance. Do you think it will end up, do you think Insurance companies will be pressured into paying, and if not, how do you think they may step up?
Chris Burand 15:07
That’s a great question.
Jason Cass 15:09
Right now it is.
Chris Burand 15:14
The pressure that they must be under the pay is .. is pretty intense. You know in one sense or another, what I think is going to occur is that I think there’s going to be such a deluge of lawsuits, that at some point in time the carriers may or may not be able to even have enough adjusters address them all in a timely fashion. And so they’re going to have, there’s going to be some pressure just to pay to get rid of the suits, right, wrong and different. I think that might be where you see it. Without the backstop from a government. I don’t, the claims are just so far off the charts, and the premiums aren’t there that I don’t see how that they could pay for it. It’s just the scope, it’s just the scale is just off the charts.
Chris Burand 16:09
So I think that’s going to be the catch, if they will. I think that were the most interesting proposals I’ve seen is from JP Morgan Chase. JP Morgan Chase. I don’t know if you saw it, but they
Jason Cass 16:21
No, I haven’t.
Chris Burand 16:22
They made an offer to adjust and pay all the business income claims, with the government providing a backstop.
Jason Cass 16:32
Chris Burand 16:33
And it’s like, well, if JP Morgan Chase, the bank can step up. It seems like insurance companies might want to get the goodwill that that offer generates. And there’s a reputational issue here for the right.
Jason Cass 16:50
Yes, there is.
Chris Burand 16:51
This is a way to solve the problem for everybody in many different ways. Maybe we’ve already passed the time where that offer could have been made, but that would be, that’d be a good way of addressing it from my perspective.
Jason Cass 17:04
Yeah I know, if they came through with something. If they came through and I’m not for them paying the coverage without it being because I think there’s also another side to it, Chris, that you don’t hear a lot of people talk about, but I’ve heard talk about it’s very true. It’s how many of those policies out there don’t have business income. That’s the issue for the insurance agent, specifically, because whenever all of a sudden they come through and say, hey, we’ve decided we’re going to pay these BI/EE claims with the federal backstop, which my, um, I only have one source that’s telling me I asked another source who I think would know, and they said they hadn’t heard it. But what I’m hearing is that the NAIC, some of the main CEOs are in talks with the government about saying, okay, on an effort of goodwill, we’re gonna pay this, but there’s going to be a backstop. And the backstop can be way far back next time, but right now, it can’t be very far back. I mean, we’d never collected these dang premiums in this. I think it’s a great opportunity for that to happen.
Jason Cass 18:01
At the same time, the agent that a lot of pocket, commercial package policies, a lot of these BOPs all have the business income in it. And I think that that’s where insurance companies, I wonder how that’s gonna change coverage in that Chris. How many they were just giving away business income like it was going out of style but if the government forces them to now start picking up exposures, that is very, very hard for them to actually actually be sound. I wonder if all of a sudden you start seeing them not giving that away anymore. Back when we were selling commercial package policies in early 2000s, mid 2000s. When I first got in, there was hardly any BOPs. And I mean, in business income extra expense is something I would separate us to separate myself from the other agent. Now it’s given away, but I wonder how many of those commercial package policies for other agents didn’t mention business income, and when it gets paid, think about those phone calls that the agent is going to get. That’s going to be crazy.
Chris Burand 18:53
So I found a quote from Chubb and from 1995 that said, One of the problems with business income is agents don’t know how to sell it. They don’t understand it. They don’t know the coverages what have you. I have a separate company that specializes in coverage education. And next is cyber the coverage that agents have the most difficulty understanding. And I would argue, based on our experience, teaching classes, the coverage in which agents have the least knowledge is business income.
Jason Cass 19:31
I can see that.
Chris Burand 19:33
Yeah, so I think your point is really important from an E&O perspective is did the agent offer the right business income package? And it’s not just the worksheet, right? We get a lot of people that say, ALS will just do ALS on everything. But ALS is clearly not the right answer for everything.
Jason Cass 19:55
Correct. Also, if the agent didn’t know what he was selling, did he sell it? What kind of deductible? Did he pay it out a third, third, third, he paid off 50%, 80%. All that stuff now, which is kind of like, Oh, yeah, as long as you had it something, no, that could become real. So, and there’s a lot of issues. If they go that way, I do love the goodwill. I do like that. But I mean, I’m not going to sit here and say that I’m innocent of this, we probably got some package policies that don’t have BI/EE and I know our larger clients do not but can’t really say that those middle a lot of our small clients, small business clients, they’re literally all on BOPs. So most of them have it. But then again, we also have to explore the language have we really ever looked at the language of some of these BI/EE forms? We used to whenever we had to add them by endorsement, you know, and you would see them in the commercial package policy. Now you really don’t even really see it anymore because no one reads a BOP policy or make sure all the endorsements are in there actually to read those endorsements. I’m assuming that they’re the same but at the end of the day, I learned just the other day that one of the directors and officers coverages that I sell for one of my companies for nonprofits. I had another rep come in and said I know you sell a lot of them but let me read you their forum versus mine, blew my mind. I was like, holy cow, like this other company not going to mention any names, they’re leaving something out, I immediately got on the phone with their underwriters saying, Hey, we’re gonna have an issue here if this is the way that this reads and that’s what I don’t think they’re going to change. But you know, there’s those types of things. It makes you kind of wonder, you know, about what how, what those forms read, because everything just thrown into a BOP now? You know.
Chris Burand 21:38
Yeah, it’s a good question. So when we teach the classes, especially on the BI classes, we actually cause all of our clients and students to read the forms that they’re selling, and read multiple forms that they are selling. Yeah, imagine that. And then we do a compare and contrast exercise. And it isn’t all the same…by any means.
Jason Cass 22:06
Yeah, it’s not a lot the same yeah.You know, umbrellas are the same way follow forms you know and I mean dude it gets deep out there and it really does and I think that’s what scares a lot of people out of commercial insurance but at the end of the day I’ve never liked that I just educate myself do the best I can make sure I got good you know with a low deductible in this role. You know, that’s just the best you can do out there in the world is educate yourself and try to help others. Um, anything else you want to add anything else you want to put to this. This is Episode 6. This is the last one people have been going through this whole thing. I think they feel more refreshed. I hope as leaders we were able to help them lead their people. I mean anything you want to just kind of boat up and say out there Chris that maybe something you were gonna say, maybe you didn’t
Chris Burand 22:52
Sure a couple things. Number one education is truly understanding what it is you’re selling. It’s a great opportunity customers are going to pay attention to it for the next 24 months. It’s a great opportunity to do their just do the right thing. If you know what you’re selling, you’re you can do the right thing by your clients so much more effectively. And my clients that are that I would argue are the most knowledgeable are probably outselling everybody else three to one at this point. So best said one of the best sales tools in the world is to actually know what it is you’re selling.
Chris Burand 23:31
Just kind of weird how it works out way.
Jason Cass 23:35
It’s weird. If you wanna teach math, you gotta like know math. I mean it’s really weird. You know, it’s the same way with insurance you. Yeah, that really truly is. Um, do you think people are out there selling right now? And if they are they doing it differently?
Chris Burand 23:50
I have clients that are definitely out there selling, they’re doing quite well right now. In fact.
Jason Cass 23:55
Like, like certain in certain needs, like cyber and other things specific or just everything
Jason Cass 24:00
just keep on going like nothing happen …wow
Chris Burand 24:02
Yeah, everything. I mean, it’s, it’s kind of a weird deal. But when you’ve built a reputation for yourself of really truly deep coverage knowledge in a time like this, and people are scared to death that they do or don’t have coverage. They are willing to listen and they are willing to switch agents a lot faster, right this moment as a result of that.
Jason Cass 24:49
Didn’t think of it from that aspect.
Chris Burand 24:51
Yeah, yeah. I mean, I’ve, uh, I got an email from a client. He said, just one producer closed another million dollars in the last two weeks. It’s like
Chris Burand 24:41
It’s going. Yeah. Now, there’s a capricious aspect to this. And that part is one we can’t really control for the time being. And that is, is that some agents out there and my heart goes out to them is that they have specialized one way or another in some niches that are hurt the worst, you know, if you’re specializing in restaurants or hospitality, I don’t know what exactly the solution is for the moment.
Jason Cass 25:15
And that’s a 12 month repercussion, right? Because the audits gonna come. And so all these expectations of Oh yeah, we’re gonna have 10 million in sales or this much in payroll and that audit is going to come. So agents are hurting now possibly, and then it’s going to hit them again. When that audit comes in, they get chargebacks right.
Chris Burand 25:34
Right so that’s another reason for going back to the beginning. That’s another reason for having a strong balance sheet.
Jason Cass 25:39
Mm hmm. Damn right. That’s a truth point. Yeah. Hmm. Wooh. there’s a lot of lessons a lot of lessons I’m learning as a business owner, Chris, a lot of lessons that I think I think everybody is we’ve no one’s ever been through this. But one of the things I think that’s pretty profound. My buddy Nicholas Ayers said it and he was he was..
Jason Cass 26:00
He was he’s kind of a smart but on Facebook, but but he has very high education. And so he speaks when he speaks to be funny. He’s still very educating. But he made a very good point. And it was a long post about, folks, we’ve only been sheltered for two to three weeks, and our economy has collapsed. We don’t know we’re losing our minds. I mean, this is a worldwide issue, but he made a good point. He said, What would we do if something took us down for 8,12,16 months? I mean, we wouldn’t be able, you know, my brother in law, Chris, he has 179 guns, you know. And I tell him all the time, Tommy, why do you have all these guns? Dude, you don’t need to have all these. He said Cass, you never know what’s gonna happen. Well, I’m telling you what, after seeing what’s happened for two to three weeks, you put us out for 8,12,16 months.
Jason Cass 27:00
All a sudden, it may be smart to have 179 guns, you know, because that’s where I’m probably gonna head is to Tommy’s house, you know, I mean, where it’s like, dude, um, it’s a really, really good point. And I think you said something that can prevent that. That’s how profound I think it was. And that is that this isn’t that this is you said, this is a BI/EE opportunity. And we need to solve the world’s problems with insurance products we always have. And this is an opportunity for us to do that.
Chris Burand 27:33
It really is. It truly is. It’s a fantastic opportunity to help the world help ourselves in a very, you know, capitalistic, it’s white capitalism works when we come together.
Chris Burand 27:46
So, hey, I’ve got one of the things that just send out to everybody real quickly. And that is, is that if you’re in a state, where the insurance commissioner Department of Insurance has allowed people to postpone payments for two months, for three months or whatever it is, identify, work with your companies to find out what that means relative to what you have to do on agency build business.
Jason Cass 28:12
Okay. Okay, interesting. Any certain reason you just trying to get that out there’s awareness?
Chris Burand 28:19
Just get out there’s awareness because if you’re not if you’re an agency build that means the agency probably can’t cancel the policy any more than the company could. And yet you may not get paid. And so are you then still on the hook? How is that all going to work? And I don’t know that the carriers have everything figured out on that yet. Yeah, but there’s a lot of money for agencies that have a lot of agency build business on the line there and you know, you want to avoid becoming the bank.
Jason Cass 28:50
Dude, thank you very much for that. That’s why that’s why I love Chris you think about stuff outside the box. You know what I mean? It’s I’m telling you, if you and I ever like sat down and had a had a cold, refreshing beverage around a fire, where it’s not real hot and we sit out there all night, I think you and I would sat there, we could probably create the products that would fix the world, Chris I think that’s,that’s we could do. Chris, I appreciate you for coming on man. I really, really do. Um, thanks for helping us. Thanks for giving us this insight and a fabulous podcast very positive and it’s expected nothing except that, so I appreciate it very much, Chris.
Chris Burand 29:33
Great. Thanks. Have a good day. Stay safe.
Jason Cass 29:35
Yeah, stay safe. Stay healthy to everybody out there. So this is gonna wrap up the COVID Special Episode. Now keep in mind, what I’m doing is I’m turning this into an E-book that will be available next Wednesday. No marketing, no ads. No, I’m not even going to ask for your email to get it. My marketing friends is saying Cass you’re giving away a goldmine. No, I’m not. I’m giving away information as fast as I possibly can. I want to get it packaged up and immediately out the door because there’s people who don’t listen to podcasts. And there’s people who need to hear the fantastic things that Jeff Roy said. Erik Garcia, Wessly Anderson, Elisha Cavanaugh, Erin Nutting, Miles Merwin. And now the one, the only, the myth, the legend, He’s here. He’s not a myth. He’s a legend though. Mr. Chris Burand. And this has been Agency Intelligence podcasts, where, you know, we do give you real agents inside real agencies, giving you the real agency intelligence and not the artificial that they try to make you believe. This has been Jason Cass, and that was Chris Burand, and we are out.