AI Wisdom Ep. 37: Creating a Future-Forward Commercial Lines Insurance Brokerage

Digital Transformation, Insurance Industry News & Views - July 14 2021

Spike Lipkin, Co-Founder & CEO, Newfront Insurance shares his vision of what it takes to effectively differentiate in today’s market and the vital characteristics of forward-thinking insurance brokerages. As co-founder of one of the fastest growing brokerages in the United States, named to the Forbes 2021 Top 50 Fintech companies list, and described as a brokerage for the 21st century, Spike shares how he and his team successfully raised over $100 million of funding with a valuation of $500 million in 2020 and provides highlights on their recent expansion into aviation through the recent acquisition of Aviation Marine Insurance Services.

Newfront, a four-year-old brokerage uses its own proprietary technology to simplify the insurance buying process for clients and the selling process for brokers. Their system allows differing application forms from multiple carriers to be automatically filled in with one set of answers. Streamlining and accelerating the process, helping their clients save money and find the right coverage for their risk.

After a painful experience buying insurance early in his career, Spike Lipkin shares that years later he became obsessed with the insurance industry and wanted to build something in insurance to improve the client experience. Early in the process, Spike and Newfront Insurance co-founder Gordon Wintrob realized that brokers are incredibly crucial to the industry but very underserved by technology and the platforms available to them. So, they set out to build a modern brokerage.

Aside from talking about a hardening market or rates, Spike shares his views on two key trends that are impacting the industry and reminds us that innovation in other industries is going to drive further innovation in the insurance industry, which is ultimately going to benefit the clients. As Spike puts it the winning brokerage is going to be one that is ‘tech-enabled and modern.'

He also shares insights on bottlenecks in the current insurance buying process and his predictions for the broker’s role of the future as technology plays a bigger and bigger role in the industry.

Join AI Wisdom – Talking Insurance Innovation host Ron Glozman, CEO and Founder, Chisel AI and Spike to hear more great insights and examples of how insurance brokers need to embrace technology and process improvement to meet the changing needs of their customers. Click play to listen to the full episode (listening time: 25 minutes) or read the full transcript below.

Full Transcript

Ron: Hello and welcome to “AI Wisdom – Talking Innovation in Insurance.” On this podcast, we talk to business and Insuretech leaders about how artificial intelligence is transforming the way we buy and sell insurance. I am your host Ron Glozman, Founder and CEO of Chisel AI and a strong believer in the power of AI to help people work smart and enrich their lives. So, let us get into it.

An array of social, technological, economic, environmental, and political factors is driving commercial lines insurance brokerages to quickly embrace and drive innovation across their organizations. On a mission to deliver the optimal customer experience, brokerages are finding ways to reap the benefits of technology to streamline their operations and offer value-added services.

I'm very pleased to have Spike Lipkin, co-founder and CEO Newfront Insurance join me today as we discuss the key characteristics of future-forward brokerages and what it takes to successfully differentiate in today's market. Spike, thank you so much for joining us. Before we jump in, you know, can you please introduce yourself?

Spike: Thank you so much for having me, Ron. I'm delighted to be here. My background prior to this was not in the insurance industry. In fact, I was the person responsible for buying insurance. So, early in my career, I had one of those jobs where I inherited all the responsibilities no one else wanted. It turns out insurance is incredibly high on that list of very, very important, but no one really wants to handle it. So, I had the client experience of buying property and casualty insurance and what you realize when you buy property and casualty insurance is its really painful. You fill out this mountain of paperwork, you don't really know what's happening after you fill out the paperwork, you wait all this time, you get back these confusing options. There's this one conversation that really sticks with me where I got back this proposal from our broker and it had all these different coverage options, and I remember reading through it and being very confused. And I went to this very senior executive who'd been in financial services for decades. I said, you know, "I don't understand this insurance stuff. What do we do?" And their response was, "Pick the middle option and move on. No one understands insurance."

So, it stuck with me that, here's this product that's completely fundamental to society, to commerce yet very misunderstood and still a very painful client experience. So, years later was obsessed with the industry and wanted to build something in the insurance industry to improve the client experience. What we realized pretty quickly is brokers and the professionals who serve clients are incredibly crucial to the insurance industry, but very underserved by technology and the platforms available to them. So, we set out to build a modern brokerage. The idea was to combine software with best-in-class human expertise and support. That's how Newfront was born initially in my living room about four years ago today. We're about 200 people. We serve customers in about 12 different industries. We have grown very significantly over the last four odd years, and we think our biggest years are still ahead of us. So, we're really excited with where we are today and excited to tell you more about it, Ron.

Ron: I've had the personal pleasure of watching your growth since almost the beginning. I think the living room sounds a little more comfortable than a garage as most startups seem to start in. You have access to the fridge and maybe some couches.

Spike: It's very true.

Ron: Before we jump in, I'd love for you to talk a little bit about and congratulate you actually on some of your recent announcements around funding at the end of 2020. You also recently expanded into aviation, which I want to learn a little bit about. So, can you tell us how much you've raised to date, what it was like to fundraise during a pandemic, and then we'll talk a little bit about aviation?

Spike: Absolutely. So, we've been lucky to have very supportive investors. We've raised about $110 million to date. Fundraising during a pandemic was pretty straightforward. We had a number of insiders that were excited about where the business was going and wanted to put more money into the business. We saw a few areas where we could invest and accelerate. And so, it was a very, very painless couple hour process that ended up with a couple of handshakes and a bunch of more money in the bank. So, we were very, very fortunate, I think, among a fortunate set of companies to have supportive investors and a strong cash position.

Ron: I think that's certainly a wonderful position to be in and probably not the typical fundraising experience at least I know when we go to fundraise. I think we also have it easier than most, but it's certainly a little bit longer than a few hours and some handshakes. But I love to hear a little bit about your expansion into aviation because I'm certain that you didn't choose it randomly. You didn't like sleep and wake up and say, okay, we want to go into aviation, and you, in fact, did an acquisition of Aviation Marine Insurance Services. Can you tell us a little bit about the strategy and thinking behind that?

Spike: That's right. What we've learned over the last few years is what our clients expect from us is expertise and when they transact insurance, they want to transact with someone who works with businesses like theirs on a daily basis. So, while some of what Newfront does is very general, a lot of what we do is very specific. It's specific to construction, specific to agriculture and we had found that a number of our clients had aviation-related exposure, we insure a number of agriculture clients who have crop dusters. We have private clients that have private airplanes and some airplanes scattered throughout some of our other practices. So, what we realized is that there was this big opportunity within aviation to build up a new vertical and so, we set out to find a like-minded aviation leader. What we ended up finding was an entire brokerage led by a broker who was in the prime of his career. He had inherited the firm from his father and wanted to grow the business and very significantly, he wanted to infuse his client experience with more technology. He delivers his renewals by airplane, which is already very innovative, but the client experience associated with that hadn't changed since he inherited the business from his father. So, we saw this opportunity to infuse his client experience with technology, free up a lot of his team members to spend more time with their clients and so, it was a very strategic move for us. We are really excited to serve the aviation vertical going forward. So, if anyone listening on this podcast has an airplane or helicopter, we'd love to help you out. So, that's how we got into aviation.

Ron: That's an amazing story. I didn't hear you mention drones and maybe it's because it was…

Spike: We can help with drones too.

Ron: Drones?

Spike: Yes, we can help with drones too.

Ron: Love it! That's awesome. I think that covers it a little bit, but Newfront has been described as a brokerage built for the 21st century and you were named to the 2020 CB Insights list of the most innovative financial services business in the United States. What do you think makes Newfront so different from other brokerages?

Spike: I think it's a few things. One, I think we are looking at every part of the brokerage and looking at other industries and figuring out, how do other industries deliver an incredible client experience, and how do we bring that to the insurance industry? So, very importantly, when I look at our team, we have professionals from the insurance industry who are incredible, but we've also recruited great people from tech and other industries and we're bringing practices from those industries for our clients. So, one is taking this more holistic view at how to build a modern client experience. If you look at the banking sector, for example, smartphones and the internet completely revolutionized banking.

We all have access to our bank accounts in our pockets. We can send wires anywhere in the world. We can check our balance. It is crazy to think that you can do that, but you can't access basic insurance information from your computer or your phone.

A lot of what we're building is that modern experience that clients are accustomed to in other industries. So, that's one component of what I think makes us very differentiated. Another area is we're building something for the very long term. One of the things I noticed when we entered the industry was that many of our competitors were playing a bit of a different game. You know, you have a set of private equity-backed competitors that because of their ownership structure have to think in three to five-year increments. Well, my view is the great businesses are built not over three to five years, but over decades and decades and we have the luxury of being able to think really long term and make investments that benefit our clients over the very long term. They're also a set of publicly traded brokerages that are stocks that trade on earnings per share. So, it's very hard for them to invest heavily in innovation because they disrupt that earning stream that investors have come to them for.

We saw this opportunity to play a different game and have a capital structure that looks different for other brokerages and be able to make investments that are very, very long term, but we think where the puck is going so to speak.

Ron: I think that's a wonderful strategy and I think that's certainly going to make you stand out from the crowd and I hope it will bear fruit for you guys. So, what do you think are some of the main bottlenecks today that you see when it comes to commercial insurance buying as somebody who's done it in the past and had a really bad experience and what are you doing to remove those bottlenecks?

Spike: I think there are two bottlenecks today in the buying experience at a very high level. So, one is around sharing information. So, historically, the way you've applied for insurance and procured insurance is you pull all this information from your various systems, and you put it into an application. But if you think about it over the last decade, a lot of that information is now in the cloud. And when you renew insurance historically, you're having to basically start over and fill out new applications. What we're able to do is pull structured data into our system and persist those answers from year over year for our clients. So, it's a very different application process. We are also tapping into third-party data sources to pull information for our clients about their businesses into the applications. So, I think the information-sharing process is very different and I think as we collect more and more pieces of information, we're going to be able to change how the application process works, how renewals work. I'm really excited about that.

The other part is transparency. So, one of the innovations that Uber brought to the transportation industry is previously when you went to hail a taxi, you waited on the corner anywhere from three to seven minutes, and you had no idea and you just sort of waited there with your arm in the air. Well, what Uber did is you pressed a button and it still might take three to seven minutes, but there's expectation setting that happens in the app where you can see exactly where the car is. You can see exactly how far away it is and we think that transparency brings peace of mind to clients. So, a lot of the software we've built that enables the transaction is actually giving visibility for clients into where we are in the process of procuring and managing coverage for them. And that transparency, I think, builds trust, and will become a hallmark of the insurance experience going forward. That's one of the things that software enables and that we're building towards.

Ron: That is such a great example of expectation setting and, in some sense, the outcome could be exactly the same, but because the experience for the client is so much better, it increases the brand value and the trust, that transparency. So, I'm curious if you think that COVID-19 has had an impact. So, right now it's June 8th, 2021, and in Canada, we're just about to come to the end of our third lockdown. Hopefully, no fourth lockdown and I know in many parts of the U.S., they're starting to open up. So, what are some of the factors that you saw as being market impactors? How do you think they impacted the industry? And are we going to see it continue?

Spike: Obviously seeing suffering in the world and among our clients was obviously a terrible thing. I think the positive thing that came from COVID was it forced a lot of our industry to accelerate their adoption of technology. What I heard in education and in medicine was that in a year, those industries advanced a decade in terms of adopting telemedicine and I think the same thing happened in insurance. I think what a lot of insurance brokers and insurance professionals found was that in order to do their jobs effectively, they needed to change the mode in which they did business.

Having a cloud-based system where we do not need to be in front of our clients in order to serve them effectively, having a system where our clients can self-serve and access their information at their fingertips really played in our favor.

I think what a lot of insurance brokers are realizing today is we're not going back to the pre-COVID world and we're only accelerating towards a world where technology and client differentiation through technology is only more and more important. So, I think it actually accelerated the innovation in our industry. And, again, I don't think that's going to slow down.

Ron: Good. I'm glad to hear that and I think the consumers will also be happy with that. So, what do you think are some of the trends outside of COVID, COVID aside, that are having the biggest impact on commercial insurance right now?

Spike: I think it's two things. Aside from talking about a hardening market or rates, I think there are two trends that are impacting the industry. One, I think the nature of risks are changing. If insurance spent hundreds of years getting really good at insuring buildings and physical world risks, if you think about where value is being created today and it's going to be created over the next hundred years, increasingly, it's not in the physical world. It's in this digital world. So, I think we're witnessing the creation of new markets and the creation of new products to go along with those markets. You know, so obviously cyber is a prime example. It's a rapidly growing market. Every business today has some form of cyber exposure and I think there are new risk exposures that we don't know about today that our industry is going to have to adapt to because our clients are going to have those issues.

I think the other trend that's happening is the client experience that other industries are bringing to the table is shedding light on the fact that we have a lot of work to do in insurance. So, I used that example in banking of being able to send money anywhere in the world from your phone, when you can send money anywhere from your phone and you can't get an insurance certificate from your phone, something is wrong.

I think innovation in other industries is going to drive further innovation in the insurance industry, which I think ultimately is going to benefit our clients. You know, the other one is human capital and I think what we're seeing is, we have a problem particularly in the brokerage space of not building an on-ramp for young people to enter the industry and build a career. This is one of the great careers out there. You can do well by helping people, by being involved in your community, by supporting businesses and non-profits, but the industry is not doing a great job of inviting people in and training them. So, I think that needs to change and I think that's vital to the future of our industry.

Ron: I love it! I love how focused you are on that experience for the client. I think it's interesting because oftentimes some of the guests that we have are on the carrier side and we've had some representation on the broker side, but I think it clearly shows how dedicated it is to that client experience because that's what the most important piece of the value proposition is, is getting the client peace of mind. That's what in theory we're selling them is a piece of paper that's a promise that says, "We'll pay you if something goes wrong so you can sleep well at night and not have to worry."

Spike: Absolutely and I think we constantly remind ourselves our clients are with us because they want help reducing losses and managing claims when they do have losses. No one is excited to buy insurance and that's not really a job to be done. The job to be done is mitigating risk in the world and helping them with their claims. So, while earlier on we had to focus a lot on transacting insurance, increasingly, we're focusing on how do we support our clients in actually making sure they have fewer losses. When they do have a loss, they have all the resources to make sure that loss is as minimal as possible.

Ron: For sure. I think loss prevention is certainly something we're going to talk about. We're going to take a quick 20-second break to tell you where you can find more information and insights about insurance innovation. We'll be right back.

[If you liked this episode of AI Wisdom, subscribe to our blog, Writing the Future: AI in Commercial Insurance at for feature articles, interviews, opinions, and more.]

We're back with our featured guest, Spike Lipkin. Let's jump right into the next question. We started off talking a little bit about innovation and you just briefly touched a little bit about cyber, what do you see as the next insurance landscapes that are starting to come out there and evolve that brokers have to better address and manage the risks and how they affect them in their customers, whether that's business interruption or something else?

Spike: I think going into the future, the businesses that win are going to be the ones that embrace technology. So, I'm obviously biased here, but I think the winning brokerage is going to be one that is tech-enabled and modern. I think the winning freight brokerage is going to be one that's tech-enabled and modern. I think the winning, transportation company is going to be one that is tech-enabled and modern and that will bring a new set of challenges and a new set of risks that we need to make sure our industry is adopting and ready to serve.

Spike Lipkin Quote 2 (white background)

Ron: For sure. They'll all need to insure themselves for cyber risks because that will be the deadliest liability to everybody. So, one of the things that I often hear about, and we face even internally is figuring out how to go about change management and overcoming obstacles because oftentimes innovation and change is scary, and it can be very challenging to get the ball rolling. What are some of your recommendations for brokers who are struggling with change and implementing new technologies and business models?

Spike: I think it has to start with the client. So, when you sit down with your clients, look at the products that they use every day. My sense is they probably use cloud-based accounting systems, cloud-based banking systems, cloud-based tax systems, and so how do we ensure that our experience in the insurance industry is on par with what our clients expect from other industries? So, I think a big part of it is meeting our client's needs. I think frankly, one hard aspect here is that the insurance industry has not done a great job of investing in itself and keeping up. We have a handful of very very large software vendors that are owned by private equity and in talking to agency owners, many agencies are not thrilled with the existing technology options. So, it's not exactly the fault of agency owners or brokers that we don't have the right technology, the industry in some ways has not invested to the degree it would need to build that technology.

Ron: For sure and I think that's something that we often hear is that it needs to be a cohesive effort because it can't just be brokers trying to go digital because they rely on the carriers and the carriers can't be the only ones trying to go digital because the brokers need to provide the information digitally, so that they can have instant quoting or a lot of these really cool things that could be available if everybody worked together and the problem...not the problem, but the challenge is bringing everybody to the table, getting them on the same page, and figuring out that strategy and this is something that's obviously been tried before. There is ACORD and there's lots of these standards that try to make it happen. But I don't think anybody has quite nailed that piece yet. But I think you're right, where it has to come down to that collaboration and everybody has to want to move forward to this. So, what in your opinion is the one thing that everybody in the commercial line space should be doing today to better serve policyholders throughout the buying process if you had to choose just one?

Spike: At Newfront, we believe data is the key ingredient in this industry. Everyone has a lot of it. Every brokerage literally has file cabinets, in some cases, full of data. Being able to actually understand that data is going to allow us to better serve our clients and anticipate our client's needs.

If I were sitting in a brokerage today, I would be thinking about how do I take advantage of this huge amount of data that I have today? How do I take it from what is probably an unstructured format and put it into a structured format? And then how do I run analysis to understand what my clients need.

Ron: I love it. So, can we talk a little bit about AI because our specialty is obviously AI, and a lot of people talk about AI as being a game-changer for the insurance industry? Where do you land on the spectrum? How do you feel about AI and where do you think it can have the biggest impact in the insurance value chain?

Spike: We obviously agree and we're building towards a future where we believe humans are really good at certain things and computers are really good at certain things. That doesn't mean that computers are going to replace people, but it means that people will be able to focus on the highest value parts of their job and computers will do the rest. So, when I think about the role of artificial intelligence in our industry, first, there's this data angle where there's huge, huge amounts of data and I think technology can help us interpret that data and understand our client's needs.

Secondly, when you look at insurance documents, there are sets of rules. So, I think over time artificial intelligence is going to help us actually interpret those documents, interpret the rules, and understand scenarios and outcomes. I also think one of the challenges in our industry is PDFs have become the API format.

PDFs are how we transport information and there are some fairly straightforward use cases for artificial intelligence of pulling information out of those PDFs and putting it into a structured format that's easier for clients to understand.

I think that's some of the work you all are doing. It's some of the work we're doing as well. I think that is going to have really, really big impact even just on the client experience of buying a policy. Being able to look at a really clear comparison versus having to look at the underlying "documents" is really valuable. Humans can obviously do that, it's really laborious, a lot easier if we let computers do that work.

Ron: Agreed. A hundred percent agreed. So, you touched on this a little bit. What would you say is like the day-to-day life of a broker in 5 to 10 years? How does it look different than it does today?

Spike: So, when I think about the broker's role today, part of it is this very valuable client-facing work, where you're talking about strategy with your clients, you're helping your clients reduce and minimize losses. But the other part of it, unfortunately, is you have these really skilled professionals who are data and transaction processing machines. You're having to get massive amounts of data in one format and wrangle it into another format for your clients. At one point, we did this study and found that half of a broker's inbox is status updates, "Hey, where are we with this?" "Have we submitted this?" I think as technology plays a bigger and bigger role in our industry, we are going to help remove the human from some of that more transactional work, and we're going to allow our insurance professionals to focus on the really valuable client-facing work that they do. So, the role will be less of this dual track of expert plus transaction to much more focused on the expertise component and less focused on the actual nitty-gritty transaction.

Ron: That's a wonderful vision. So, Spike as we wrap up, what is one piece of innovation wisdom that you'd like to share with our listeners?

Spike: I think it's embrace technology. You know, the future is coming, the future's already here and when you think about your clients, they're increasingly getting younger, they're increasingly a generation that grew up with the internet and they have certain things they expect from the vendors they work with and their trusted relationships. So, I think it's embrace technology, figure out how to meet clients where they want to be met and I think increasingly that's combining this seamless digital experience with expert advice.

Ron: I love it. Spike, thank you so much for joining us. Where can people find out more about you and Newfront Insurance?

Spike: Check out at If you're a business or an individual looking for coverage, we'd love to help you out. If you're looking to help us innovate in the insurance industry, reach out to me. My email is, we're hiring across all of our teams. Thanks so much for having me, Ron.

Ron: Of course, thank you. And as always, if you'd like to stay up-to-date on the newest happenings in insurance and innovation, please check out

That’s a wrap for this episode of “AI Wisdom” hosted by Chisel AI and me, Ron Glozman. Thanks for listening.

If you like our podcast and want to hear more, check us out at or tune in and subscribe wherever you get your podcasts: SoundCloud, Spotify, iTunes, Google Podcast, or Stitcher

Join us next time for more expert insights and straight talk on how AI and insurtech innovations are transforming the insurance value chain. See you on the next episode!

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