AI Wisdom Ep. 30: Broker Strategies for Navigating a Hardening Market

Insurance Industry News & Views - January 6 2021

As the hardening market conditions continue into 2021, different commercial insurance lines are being affected in different ways. Some insurance providers are changing their underwriting guidelines, the way they underwrite risk, tightening new business guidelines, and increasing premium rates, causing insurers to review their portfolios and adjust their risk appetite to maintain healthy portfolios. It can be difficult to obtain insurance coverage and prices are not as favorable to the buyer during a hard market. More selective underwriting and new competitive realities make it tough for insurance brokers to find appropriate coverage for challenging classes of business.

New strategies are required to successfully navigate through these challenging times. Many brokers are facing the first hard market they have experienced in their careers, and they are looking for guidance.

On this episode of the “AI Wisdom – Talking Innovation in Insurance” podcast, host Ron Glozman, CEO, Chisel AI speaks with Dan Keough, Chairman and Chief Executive Officer at Holmes Murphy & Associates and Co-CEO/Co-Founder at BrokerTech Ventures about strategies that commercial insurance brokers can deploy to steer through these difficult business conditions.

Their discussion touches on these four key strategies brokers can deploy today to successfully navigate the hard market.

1. Make Sure You’re Adding Value

The broker’s role is to understand the why, to listen and to add value in terms of why the client may or may not be part of the reason why rates are increasing and the losses that are contributing to the hardening market issues.

2. Effectively Manage Expectations and Be Nimble

It's critical that brokers understand the dynamics of what’s contributing to the hard market and effectively manage expectations on all sides – the customers that pay the premiums and the carriers. Brokers need to spend the time educating their customers to ensure they understand the why behind the rate increases and to the extent where their losses contributed to it.

3. Nurture Your Team

Your employees are at the core of your business. As employers its critical to focus on your team to understand the uncertainty they are facing as they work through this challenging time while balancing client needs and demands. They no longer have the luxury of parking their family issues at home when they come to work, because they are working from home now. Executives should think about what health and wellness programs they can put into practice to strength their employees’ wellbeing and to be there for their teams. Organizational engagement companies like ethOs can provide holistic approaches to improving workplace culture, engagement with multi-generational staff and address all aspects of an employee’s wellbeing. Or mental health apps like Joyages, can empower employees to feel their best and perform at their peak.

4. Nurture Relationships with Open and Transparent Communication

It’s vital to maintain and nurture partnerships with carriers and customers by ensuring all issues and concerns are brought forward early on to invoke a level of trust with all parties. Don’t isolate. Bring the underwriter to the virtual table, open up communications between the broker, carrier, and client for a more open, healthy relationship.

To hear more business tips and insights, click the play button to listen to the full episode (listening time: 29 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 InsurTech leaders about how artificial intelligence is transforming the way we buy and sell insurance. I'm 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's get into it.

In a special report titled "Commercial Insurance Market is Hardening" published in May 2020, Fitch Ratings predicts that commercial insurers will be hard hit by pandemic related losses with the effects felt through the first half of 2021. As the hardening market conditions continue into 2021, new strategies are going to be required to successfully navigate these challenging times. Many brokers are facing the first hard market they've experienced in their careers, and they're looking for guidance. On today's episode, I'm very happy and excited to have with me today, Dan Keough, chairman and chief executive officer at Holmes Murphy & Associates and co-CEO and co-founder at BrokerTech Ventures, to discuss strategies that will help you commercial insurance brokers deploy and steer through these difficult business conditions. Dan, thank you so much for joining us today. Can you please introduce yourself?

Dan: Sure. Ron, great to be with you, and thanks for having me on your podcast. My name is Dan Keough. As you indicated, I'm responsible for Holmes Murphy. Holmes Murphy is the third largest privately held insurance broker in the country. With respect to public and private, I think, we're top 20 to 25. All that means is that we're big enough to compete with large public brokers but also small enough to meet the needs and listen to every client regardless of size. I've been fortunate enough to enjoy a great career that's had a lot of different avenues. I started a captive insurance company back in 1999 in partnership with Holmes Murphy, which in that company I had an opportunity to partner with a lot of the best privately held agencies around the country. And then, through Holmes Murphy and BrokerTech Ventures, I had an opportunity to scale up a technology ecosystem platform really to bring technology companies into the universe of insurance for insurance brokers benefit, clients, as well as insurance carriers. So, pleased to be with you today.

Ron: I love it. I think, your background is going to have so much volume and so much experience to speak to. So, let's jump right into it. I think I talked a little bit about the fact that it's a hardening market, and for some brokers, it might be their first hard market. What are some of the challenges that a hard market can present for brokers, and what are the impacts of an economic downturn as far as how brokers need to conduct their business?

Dan: That's a great question. Twofold, the challenges that a hard market presents, I think, the first and foremost from a brokerage standpoint, I think, our first responsibility is to understand the why. Why is it a hard market? What does that mean? And then ultimately, how do we, listen and kind of understand what does that mean to all the stakeholders involved? I mean, insurance company trading partners have kind of needs where they're trying to get rates based on maybe historical losses or concerns that are coming. We haven't met a client yet that likes to pay more in premiums. So, our role is to understand. Our role is to listen. Our role is to add value in terms of why our client may or may not be part of the reason why the rates are going up or the losses that are contributing to the issues. But at the end of the day, the hard market, I think, it affects most if not all customers.

I think, as brokers our job is to make sure that we have the ability to manage expectations on all sides primarily the customers. Customers that pay the premiums, they have to understand the why behind the rate increases and to the extent where their losses contributed to it. It's easier to understand from a client, but not oftentimes do they equate good loss experience with increased pricing, particularly if you think about our industry, if there's a hard market, 1 out of every 20 years, most insurers and most insurance premium payers are used to having cheaper costs next year even though their exposures are growing. So, it's a managing of expectations I would say that would be the biggest challenge that we have in making sure that we understand the dynamics of what's contributing to the hard market.

When you go into the economic downturn and what impact that may or may not have on our clients, I think for insurance brokers, we have to remain nimble. The pandemic added a significant amount of uneasiness, lack of clarity, and certainty of what it's going to impact our customers. In our industry, we follow the fortunes of our client, and so if our client's impacted negatively, ultimately, that will impact us at some point.

And fortunately for us we are in the Central Midwest part of the country from Minneapolis down to Texas and Denver to Chicago area, and we've been fortunate in that regard in terms of just being central to the U.S., and the economy here has been pretty stable. Our clients have been pretty stable. We're luckier than we are good. I think we have to acknowledge that. We're not New York or LA, and we're not the largest hospitality broker in the country. And different industries have been hit different ways, and fortunately, the clients that we have not been overly punitively hit. Everyone's been hit to some level, but I think, the economic downturn in 21 still has us cautious about what that might bring.

Ron: When you think about some of the strategies that brokers should be employing that might be different than how they were going about their business let's say one year ago, what would be some of the strategies that come to mind? Maybe if you could think of one or two or three of them.

Dan: Yeah. So, I think when you look at...I'll start with the client strategy. When you think about the hard market and what we do, I think, you have to think differently about how clients share risk and to the extent where you've got a client that's got good experience and good controls. I think, having them take on more risk, whether it's through a traditional deductible structure or self-insured retention in a traditional way, or there's several alternative options out there that are possible for clients to consider during times like this, whether it's captives or self, private insurance company type options, things like that. So, I would say that that would be more client-facing as it relates to insurance brokers running their business.

I think our biggest challenge and our biggest opportunity to manage is our payroll, and that's the people that we that touch our clients. I think, what we have to do is make sure that we just keep our focus in on our talent. Our talent is going through challenging times through the pandemic. They bring their whole person to work. So, they don't park their family issues at home when they come to work because they're working from home now. And so, I think, we as an employer have to make sure that we are meeting them where they are, supporting them in the challenges they are facing, not only their obligations, their job, and their clients, but also the challenges, the environment shifting around them and the uncertainty that they're going through.

Certainly, the relationship between the employer and the employees that we all work with every day has evolved. It's gotten more intimate. We're trying to be more understanding of what their needs are. I think that keeping an eye on your top talent and making sure that you're connecting and meeting them where they are and supporting them through this, I think, is probably the thing that we think about at Holmes Murphy.

Ron: I love that. It's interesting because at Chisel AI, we've been having a mental health month, and one of the things that we've been doing to promote mental health, one of the things that science shows is physical health is also very closely related to mental health and being active can be a way to boost your mood. So, we're having a step competition. We're encouraging people. I recognize it's winter. At least here in Canada, winter is soon upon us, but we're still encouraging people to get outside as much as possible or on the treadmill inside and walk or run or do something to get active. I'd love to hear is there something that you guys are doing to try and support your people? Because you talked about it. I love that. I think it's so important. Is there something you're willing to share in more detail?

Dan: A credit to you and Chisel AI for doing that. I think it starts with leadership. I mean, I think, you believe that it's in your employees' best interest to be aware of their mental health and take care of that just like they do their physical health, but they do go hand in hand. I think, from our perspective, what we've done in the last years, we started a company called ethOs that really is all around employee engagement, organizational health, and well-being. Really, their first project was really working on Holmes Murphy.

We have a desire to be the best for our people. We want to make sure that, our purpose is around making sure that, your design is unique. Our responsibility is to help you meet your unique potential. I think, when you think about that for an individual employee or a customer, we think about that in ways that, "What can we do to help each and everyone that we touch reach their unique potential?"

So, Ethos is all around helping our clients to connect with their employees, and certainly, they're helping Holmes Murphy connect with our employees, specific to things that we're doing in the industry as it relates to mental health and the whole engagement opportunities where we've got opportunities that we're building in terms of proprietary products around Joyages and Responder Health. Basically, you think about frontline emergency responders, they have probably more stress and more anxiety and more challenges. So, we've got some technology, things that we're building around that industry segment in those responders. And then second, we've got, an app called Joyages that we're developing for employers to connect with their employees to support our overall well-being strategy.

Ron: That's amazing. I love it. You said something in the previous answer as well that I want to sort of circle back on and also conjoin to our next question. You talked about "How I used to do martial arts, and they always said to us, you know, 'When you come into the dojo or into the studio, you leave your problems at the door.'" Then you said, "These days people are working from home, so they can't really leave their problems at the door." At the same time, one of the things that's very important to brokers is maintaining strong carrier relationships, especially in a hardening market. So, what do you recommend? Because you can't necessarily go out and meet these carriers and build a relationship with the underwriters. What do you recommend to brokers on how they can improve the relationships with the carriers?

Dan: That's a great question. I think particularly in these times where at the core of it all is the relationship and understanding between the insurance agency and broker and the carrier. Do they trust the information that you're providing them? Do they understand the risk that they're on? Is it priced, accordingly? They have more or less confidence in different brokers or different individual producers.

I think, it's important, in an industry where it's a promise to pay industry we have an integrity-based system is to operate at the highest level of integrity and operate with the best interest of all the stakeholders in mind.

Obviously, our insurance company partners are vitally important to that, and they're vitally important to the success of our clients. So, what we believe is that working in partnership with our carriers and our customers is really the best approach for us.

We like to make sure that there's open and transparent communication around issues. We want to make sure that we're bringing forward concerns that we would have if we were on the insurance company side. So, we're looking after the insurance company's best interest just the way we would look after our insurance client's best interest. When you do that, I think, everyone enjoys the best open and healthy relationship in total over time.

I think, when there are issues, and issues always come up, you're in the best position to address the issues that you have in a way that everybody feels like it's being done the right way for them and for everyone involved. I mean, if you push for always something on one side that's going to come back and haunt you.

During these times where we are disconnected, I do think it's important to make sure you bring an underwriter in the room and make sure that they're given the opportunity to meet the client. We can break down the walls. We don't have to isolate. Some people isolate the client to elevate their position. We believe more actually the opposite. We believe if you invite everybody to the same table, and you sit around the table, and you have a conversation in a way, and today's table is a virtual table. So, it's a pretty inexpensive way to have people join the conversation, add value, and have a deeper understanding of the why the situation is, what it is for that unique client experience.

Ron: That's so powerful, and, I think, that's so wise because oftentimes you hear of horror stories where people aren't necessarily upfront with their partners in different types of relationships. So, on a similar note, let's take the flip side of the equation. Are there pitfalls that people should be avoiding? Rather than the strategies that can help them grow their business, there are oftentimes just clear-cut mistakes that can end in a business's demise. What are some of those pitfalls?

Dan: You know, I think, the biggest thing that we see is that when you lose touch with the client or you lose touch with your carrier and you go to the other side of it, which is you take them for granted. I think in this world in these days where everyone has so many things that are pressing upon them. When they're working from home, they got their kids, and they got maybe their spouse and their dog, and they've got all of that added distraction, it's easy to not make the effort to take that extra call or take that extra time to respond to an email.

If you take your clients or your carriers for granted, or you think that you know where they're coming from when you really don't, I think, those gaps of understanding in these times could be greater than other times.

Ron: So, in that same vein timely and transparent communication is always key for nurturing relationships. What steps are you seeing brokers taking to establish relationships and create more frequent communication? Maybe more specifically a lot of people talk about technology, and I've had many guests on the show that have said that this has been a catalyst for them. They used to think about work from home being sort of a dream and not really something that could ever be executed on successfully, and now they've gone from sort of experimenting with 5% of their employees at a time to like 90% of people now work from home. I think, technology oftentimes has a part in that. So, I'd love to hear are there specific technologies or are there steps, are there processes, are there changes in the framework of how you guys work and communicate?

Dan: Certainly. I mean, this has been a tipping point for technology certainly in our company and, I think, our industry. I think, there's an acknowledgment that we all can do things more efficiently, effectively in the industry, and that's really behind some of the reasons why we got behind BrokerTech Ventures and try to accelerate that. And then the pandemic just put an exclamation point on it. I think, as employers we all grew up in a mindset of you had to be at your desk, or you had to be in the office at least to be perceived working and that's really not the case. I think, that technology in terms of business process, visibility into workload, visibility into the speed in which information in the depth of understanding can be absorbed whether through your dashboard's AI or other intellectual capacities that are out there that the machine and the technology can help us with the visibility of information, the depth of understanding of our customers and our people. Then it's just a matter for us to digest all of that. When you get into the flux for the future topic we certainly as an employer in a relationship with our employees and customers want to be there for them when they need us, but at the same time, that doesn't mean they have to be at the office 9 to 5. So, we will be more nimble and flexible in the future.

I think, it gives us a great opportunity to – with integration of technology into our business process, from submission through renewal, all the way through, it allows us to do work from anywhere. I think, that allows us to increase the talent that we can attract and really the employee value proposition that we offer Holmes Murphy teammates.

Ron: I love it. It sounds like a place I would wear and work. So, we're going to take a quick 20-second break to tell you where you can find more information and insights about insurance innovations. 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, Dan Keough. Let's jump right into the next question. Dan, you recently participated in a panel at the TechAssure Virtual Summit on insurtech and innovation. What role do you see as far as innovation and adoption of cutting-edge technologies playing for brokers especially during these challenging times?

Dan: Well, that's a great question. I think we're still learning and, I think, we're on the front end of it. Our industry is learning and trying to embrace this as unique opportunity. We started BrokerTech Ventures, less than 14 months ago, and, I think, we struck a nerve in the industry. Holmes Murphy's always tried to pride itself on being kind of a leader and stepping out in front of things that we feel that the industry needs. And we're fortunate in the fact that we've got great relationships with carriers as well as other agencies around the country. And we feel that the technology and innovation and the adoption really can be accelerated through BrokerTech Ventures.

You've got forward-leaning agencies and you've got a coalition of insurance carriers that want to work together to make a more efficient ecosystem. There is an opportunity to work on the pre-competitive space, amongst agents, brokers, carriers and increase the ease of doing business for our clients. So, I do think that the adoption is going to be there by willing participants and collaborators.

We operate, Ron, as you know as kind of the infinite mindset where we want to collaborate with our competitors. We want to be contributors to a better ecosystem going forward, and we want to do it in ways that we believe that if we lift up in a more efficient environment that Holmes Murphy and our stakeholders will be lifted up in that way. So, we're really excited where we're at with the tech integration into the industry and the velocity, which we feel we can make an impact on that going forward.

Ron: Right. For those listeners who do have access, Dan hosted a panel that I participated in as well as several other thought leaders. You should definitely check it out. It was titled "Insurtech and Innovations." So, in that same vein of thought, what are your tips as far as what considerations should be top of mind when looking and considering insurtech solutions?

Dan: Well, as a CEO and founder of a company, maybe I should ask you that question. When you think about it from a tech perspective, what were your biggest challenges in trying to get an old industry like insurance? What was the challenges and the mindset that you had overcome to get through to the other side, Ron? I'd be curious to hear your perspective on that.

Ron: It's interesting because the challenges we faced were primarily around education, and that's not necessarily the piece that, I think, brokers when they're looking to buy need to be educated on. You know, we started working on this four years ago. These days people are more familiar in some sense more comfortable with the thought of automated submission intake and policy check and potentially quote comparison and all these different things. But for us, it really came down to education. How does machine learning work? How will I be able to trust it? Do I have the ability to change the answer when it gets something wrong? Does it get better over time? All of these sorts of standard questions. On the flip side, I think, when I look at it as an insurtech solution, and people come to me and say, "Why are you different than your competitors?" I think it really comes down to is it off the shelf or is it specific to insurance? Is it something that you're going to have to invest money and time customizing, or is it something that you can kick start right away? Because if you look at some of the generic offerings from Google and Amazon and IBM, they're really powerful, and the marketing is really, really good, and it sounds the same, but then comes the kicker which is like we don't have pre-built models that can detect like policy numbers and all these things but will help you label the data, and it's going to take you six months and a million dollars, and then maybe you'll end up there versus insurtech solutions that are very, very specific. I've given many talks on this. I feel quite passionate on it.

Dan: Well, that's great. What I see is that from the industry's perspective is that we're much more open to trying to help tech entrepreneurs like yourselves and others, find a pathway into the industry and do it in partnership with you and help you be successful. We're much more open today than we were several years ago.

Ron: I think that's certainly true. I do feel like the industry is more open and accepting and, in fact, embracing. What do you see as far as the role of brokers? This is often something that, I think, people fear is are their jobs getting replaced. You know, "Is the company just trying to replace me with a machine?" What do you see as the role of a broker in the next 5 to 10 years, and how is it changing over time?

Dan: You know, I think, the insights in the technology that's coming is really going to enhance our value. I don't see it being a replacement too. I think, if you think about technology flying planes, certainly, you're still going to need a pilot to take off and land, and you're going to need a pilot there in case, the technology doesn't work. In our industry there's a lot of things that we do that don't add value to the end-user. What we need to do is think about how we can have technology help continue to move our industry and then everyone associated with that to the highest part of the value chain where we add value. I think that there's so many opportunities in the customer value chain for us to think about the integration of technology to moving people to the right end and where we balance out the use of technology and the people to add the most unique value to our clients. I don't see it as a concern. I see it as a unique opportunity.

Ron: I love that, and I agree 100%. I think machines are really, really good at routine repetitive mundane manual work. What they're not too good at is the soft skills, the judgment, the relationships. Nobody wants to buy from a machine. I think, that's really where brokers can really expand their relationships, get to know the customers much better instead of spending time doing some of these repetitive mundane tasks. If they could invest one or two more hours with the client learning more, they might even, have additional opportunities for additional coverages that the client might actually need, but they've never had the time to explain to anyone because there's just so much paperwork. So as we wrap up, Dan, I would love to hear, for 60 seconds one piece of wisdom that you want to share with our listeners, and it doesn't necessarily have to be business-related or brokerage related or technology related. It's just something that you feel..., we talked about mental health, we talked about many things, you feel like people need to hear.

Dan: I don't know if I have any wisdom to espouse. I just think about our industry being really one of the best industries in the world for people that love people and that have high integrity and have others' interests at heart. I've been blessed by being in the industry, and my hope is that I have the opportunity to help others be successful. When I think about BrokerTech Ventures and really what Holmes Murphy's good at is helping develop people and develop them into their unique potential.

When I think about BrokerTech Ventures trying to find these technology companies that have a desire and a passion to make our industry better, we share the same passion around how can we help lift them up and help them find a pathway where they can realize their full potential.

We've got an accelerator that..., we were fortunate enough to have 12 great capabilities go through it last year. We have another accelerator cohort application starting soon, and our desire's to have the best capabilities come through that accelerator and then adopt them and show them how we want to help them be successful, give them access to our relationships, our customers, give them some intellectual capacity that we see from a different perspective to help them, give them the best chance to be successful.

At the core of all of it, I love what I do and who I do it with. I'm a really lucky person that way. I hope that others that are in the industry find their spot that allows them to be their unique self and bring their best version of that every day to work for their own satisfaction and their own satisfaction that they can share with others around it.

I think people like to be around positive thinking people that want to make a big difference in the lives of others.

Ron: I think that's a great way to get people to love the industry, and I agree. I think we've had a couple people on the show this year talk about the need for young people exiting college and university to feel excited and passionate about insurance. And, I think, you put it very succinctly there. So, thank you so much, Dan. Where can people find out more about you, Holmes Murphy, BrokerTech Ventures, and everything that you're up to?

Dan: Certainly, we're on Twitter and in all of the socials. Where I'm at is You can certainly reach out to me anytime. I'm happy to help out others anytime I can. I appreciate getting connected with you. I'm excited to see Chisel AI and see where you guys end up in the future. You've got a great thing going there. So, congratulations to your success as well.

Ron: Awesome. Thank you so much, Dan. As always if you want to find out more about the latest and greatest in insurance innovation, please check out our podcast as well as Thank you, everybody, and stay safe.

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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