The Digital Pivot

We discuss how current events have pushed the insurance industry deeper in to using and accepting digital tools including digital inspections.  Learn some of the ways to properly craft and use digital inspections.  See if this digital pivot is bad or good for the inspections business.

Transcript

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Tom LeGros : 0:00

Today is June 2 2020. And this is inspected CAS sponsored by preferred reports.

Tom LeGros : 0:19

Hello, and welcome to our second podcast of this season. The first one focused on how to safely do physical inspections during the pandemic. And now this one is going to focus more on how the insurance industry is really changing the way they do things. Some of this change was already in progress before the pandemic ever occurred. In fact, there's things called in short text, which are pure, data driven companies that that don't follow the normal underwriting process or in some cases, not even the usual you know, agency to broker to carry your process. They just do what's called value chain compression where they take out the middlemen. They go directly to the consumer and people can go online and put in

Tom LeGros : 1:00

information such as you know, for a homeowner's policy they put in their address or their house, and it comes back with an immediate quote, they say, Yep, that's good for me. They give him a credit card number and bam, they have insurance. That is something that is highly unusual. And we'll discuss a little bit about the underwriting process in a few minutes so you can see how it's changing. There's a lot of things that are going on right now. There's obviously the pandemic that we've been dealing with all year. And now we have protests that turned into riots in over 85 cities over the past few days. This weekend has been particularly aggressive riding in major cities, including our city here in Atlanta, as well as Los Angeles, San Francisco, Boston, Philadelphia, you know, just pick any major city that you know, there's going to be riots and of course, this the centerpiece of all this is Minneapolis, our economy is down. And now our recovery is no doubt going to be hampered not only by the the continual pandemic in the background, but also now. These very hard to predict civil unrest

Tom LeGros : 2:00

There's no doubt that the people who are involved in this are going to go home to their friends, family, loved ones or whatever. And next thing, you know, there's going to be another wave of Coronavirus, infections sprouting out across the country. We saw that after that brief spring break that occurred in Florida, there were scientists that were able to track using anonymous cell phone data, basically, were able to isolate all the cell phones that were on beach in Florida, and then track those cell phones to their ultimate general area where they went back to, and there were hotspots that developed after that. So I have no doubt that we'll see some of that, as the protesters as well as the writers leave the various cities to go back home and take whatever they had they received with them back to their family. So that's going to be a whole nother situation to deal with. So I think where the future was becoming a little bit clearer, is no longer that way just because we have another variable thrown at us. And then add on top of that for the people that live in the Gulf states, like I do, and prefer reports is based in Lafayette, Louisiana, in fact,

Tom LeGros : 3:00

Looks like it's gonna be an active hurricane season, we've already had two named storms, we're in our third tropical depression that looks like it will develop throughout the week. And that could threaten interests along the United States Gulf Coast as well as Mexico. So that's just another thing that insurance companies have to worry about. And that's really where the pivot comes in. Because no matter what happens, there's the old adage of there's there's nothing as certain as death and taxes. Well, you need to throw in the need for insurance because you can't buy a car, especially if you're financing it, you can't finance a house, you can't open a business, you can't even have a not for profit event. At some public facility without having some type of insurance, you have to show a certificate of insurance to show that you're insured at least for liability. That's true for car insurance as true for business. I suppose you could operate some type of business without it but that would be extremely dangerous because you would be personally exposing yourself to all sorts of unlimited unlimited losses in the event of something going wrong. So insurance has to Find a way to continue working. Let's get a few definitions out first. So that way everybody understands what we're talking about. Digital says the name of the show is the digital pivot, right? digital means something other than analog. And by analog, I mean traditional. So digital is going to be a more modern approach to something that is very steeped in tradition, as you'll see a pivot. His latest business catchphrase has been around for a couple of years. But basically, that means a change in direction. And for businesses. This could mean a new product line, a new business model, and but regardless, it means change for the way that the business is functioning. In some cases, the pivot is a very abrupt change. Like let's say you have a manufacturer that makes automobiles that suddenly pivots to doing nothing but ventilators as we've seen happen in some manufacturing plants here in the United States with Ford, GM, now they're going to go back to what they were producing before. So I think that a pivot is more something that allows a company to be agile to to basically survive and the environment it finds itself. Now as far as wood Digital inspections are there's two types. One is all digital. And that means that you use some type of digital or electronic product to be able to gather the information. This could be a self assessment application, which is a smartphone app that would allow the insured to go around, take photographs and provide the information that ordinarily an experienced insurance inspector would do. And then the other one is digitally augmented, that means that you may go send someone out to actually look at the building, look at the outside, especially if you're covering property. Take the photographs as necessary. measurements to determine square foot, you know, if you're if you're, if you have a premium based on the size of the building, for instance, for your property coverage, determine the age look at some public records and pull down some databases that are available that will show you know what kind of environmental hazards there are, what kind of exposures there might be, and then you can put all this together to do your underwriting. So that way, at least the underwriter gets to know that the building's still there it exists. He's not just looking at something that on paper may have visited. Two, three years ago, that it in fact is there, this is the condition it's in. And then this is what the inside looks like or this with this is with the operations. And those type of inspections that mix of traditional and digital allows a higher confidence by the underwriter that the places there that hadn't burned down, and they're insuring a vacant lot for a lot of money that they shouldn't be. But at the same time, it avoids any kind of direct physical contact with insured because they don't have to make an appointment. They don't have to have an inspector who they don't know come out to their property. There's no accidental handshake and coffin wearing a mask, all that kind of fun stuff, and they're able to get the information they need to go ahead and underwrite the risk. Let's take a quick look now at what the field underwriting product is. Okay. So underwriting as we discussed in the first show is basically the way that insurance companies determine how they're going to or whether or not they're going to insure a particular piece of property, a business, automobiles, a home, whatever, it's it's the thing we commonly refer to In the business as the risk, okay, the risk is just an all inclusive term for what is being insured. With a risk comes exposures exposures are exposures to loss, let's say for instance, you know, obviously, the number one exposure to loss in a residence is from fire. So they're going to want to see when you're underwriting, what is the risk for fire. And one of the ways that you look at that, traditionally is how old is the home and when was the wiring last replaced, if it's dealing with old wiring, or if it has certain types of breaker boxes that that are known to overheat or cause fires, then that would be a much greater exposure. And in some cases, what we would also call an uncontrolled hazard, which means that this is something that is going to burn the place down if they're not careful. It's not a matter of, if more like a matter of when, and those are the things that the underwriters have to calculate in their minds as to whether or not they need to go ahead and proceed with the policy or adjust the premium accordingly to the risk. Now, this type of underwriting can be done and is often done by a certain digital approach because a lot of times When you, especially as a business, you take out a policy, they're going to run a DMV report, for instance, or they'll ask for business references, they may ask for financials to show that you're properly finance that you're profitable, and that you have a business plan to continue on because they want to make sure they get their premium payments. And they also know that a business that is barely hanging on may have a propensity to to have events that occur that will allow insurance payoffs to kind of help offset their losses. arson, for instance, would come to mind. It becomes, you know, all sorts of hazards who have to enter into the mind of underwriters. You can imagine these guys are a lot of fun at parties, because they see the bad side of just about everything because that's what we in the insurance risk management business have to we have to see what's the worst thing could possibly happen was the best thing to happen and plan to shoot somewhere in between minimizing the loss as much as possible. Now, this field underwriting process has been unchanged for about the last century, the forms the format, if you matter of fact, you can google underwriting There's a book that the Google scanning project is scanned in. That basically is an underwriting manual from the early 1900s is a fire underwriting manual. And it asks the same questions that we asked Today on our on our so called modern forms or even on our self assessments, the digital self assessments. Same thing is a very traditional insurance is a very traditional thing. Insurance falls in the financial services industry, which is banking, insurance, real estate, and face it, we're not very much embracing of change. The way this business has been conducted has been conducted for centuries, loans, banking, all that kind of stuff has been established throughout centuries and common law as well as practice in Europe, and then into the United States is the colonies developed and became a country and all that was passed on down. If I'm not mistaken, Benjamin Franklin is the first person to establish an insurance company in the new United States are the colonies I guess, and it just become the United States. And it was a thing was Philadelphia fire They were a mutual fire group that would cover fire losses inside the city. And then from there, you know, a group. A lot of the practices you'll find that have gone on and very traditional groups like this have not been proved by are backed by science, there has been not a lot of data that shows if you ask someone x and the answer y, then z will happen. There's not a lot of research that's shown that I think we'll see more and more of that as we get into the world of big data, which that is where we were moving to even before all this happened to where we want to take a look at all the data that especially the insurance industry, which has been a data monster for years, I mean, they collect everything they could possibly collect actuarial science is the study of, you know, mortality rates, fire rates, whatever, what is my probability of this building catching on fire and costing me money if I insure them, and then I base my premium based on that probability and I also mixed my other risks in with that so that way I can spread everything out and make money as an insurance person. That's All probability, that's all statistics is all math. And they've been doing this for a long time. So big data is just a faster approach. I think that as we move through these unstable and stay unstable is probably a good word to use. But But through these times where it's very difficult to forecasts, the variables that may occur, I mean, nobody was thinking two months ago that cities 85 cities throughout the United States would be in some cases shut down, not because of the virus, but because of civil unrest. I mean, that's something that we haven't had to deal with at any large scale for decades. I mean, if you go back into perhaps the 60s, then you might have some of this, but even then, I don't think they were as widespread and certainly not as violent. The protests back then, with the exception of a few riots that come to mind that really weren't part of the civil rights movement. It was non violent. I mean, that was the whole purpose of it. It was a protest it was to get their point across to say that something wasn't right. They need that society needs to fix it. And ultimately, that moved society in the direction that they wanted. However, violence, damage, destruction, economic harm, doesn't get your point across, it gets you the wrong kind of attention. And it certainly creates even losses for insurance companies to carry. So it's very difficult to look forward. Fortunately, we do have a wealth of data to look back on and we're able to now use some new products that will allow us to even underwrite in this environment. So that's what we're gonna look at next is what type of digital products are there and how could they possibly be used to make sure that the underwriters have the information they need to go ahead and underwrite these risks? These are frightening times for your insurance. They're understandably apprehensive about meeting new people in their homes or businesses, but you have to get the information necessary to be able to underwrite their insurance policies. Preferred reports one of the largest nationwide providers of insurance loss control surveys. has the answer. Get your inspections done ASAP, as safely as possible, using our revolutionary self assessment, report and smartphone application with your insurance and answer questions, and provide photos and other documentation for your underwriting file.

Tom LeGros : 13:16

Using state of the art validation technology, you can be sure that the information you get is being received from your insurance. as a standalone or combined with a physical inspection, referred to ASAP is your way to get critical information now. Contact preferred reports today. I prefer reports.com. That's preferred reports

Unknown Speaker : 13:38

and asked about their new ASAP, safe as possible digital inspection product.

Tom LeGros : 13:55

Let's look at what's causing this digital shift this pivot that the insurance company is undergoing right now, we first saw it as data began to be much more accessible by people other than really high end probability theorists, mathematicians, that sort of thing. It was when, I guess the advent of better processors, more memory, faster memory, cheaper memory, that allowed us to build computers a lot smaller, a lot more efficient, a lot faster, to be able to do millions upon millions of calculations to be able to then bring in the concept of artificial intelligence and machine learning. And basically, this was then an opportunity to build a way to allow a computer to take all the information that it has to come up with some type of relationship or theory about the way things occur. And then use that to predict whether or not events will occur in the future. And basically, with machine learning in particular, you get your whole set of data, you throw your data in it. Of course, there's I'm being very simplified with this but you give the data over to the computer, the computer runs it over multiple times. And comes up with an idea that a plus b equals C, for instance. So it knows every time that a and b is present, that C is highly likely to occur. Therefore, if c is a bad thing, you don't want that, then you look for the A and B flags. If a and b are both present, you don't want to do that because you know C has a high probability of happening. Now there is a little bit of a problem with this, in fact that that algorithm or that that formula, a plus b equals C is only good for the length of time that the data supports it. So the more data you feed, you feed a machine Machine Learning Program, the more likely it is to come up with other alternatives because a plus b equals c may not be something that remains it may be a plus b equals E. And that becomes the new thing, right? And that's because it was just given a bunch of more data points for it to digest. And when it did, it realized that there was a much stronger relationship with something else with a and b happening. And that is a much easier way to predict e instead of C. So it gets complicated. But what this has allowed me and why insurance companies are interested in it is the fact that it makes it less costly to bring on policies. When you're using some type of automated process. It replaces humans as an agent, as a broker, even as an underwriter, because there are what's called blackbox underwriting firms with Lloyds uses, which is basically it's just an entire data driven process from start to policy issuance to underwriting to moving on with the policy that can exist. A lot of this, you know, not all the states have adopted these things, because it becomes, you know, it's a very complicated process is also one that's not easily understood by people who are not data scientists, for instance, and the states haven't exactly been quick and bringing on staff that are very experienced at analyzing data algorithms or data processes and face it, there are some data relationships, especially ones that are heavy with financial demographics that may lead to some level of what used to be called in the business or still as I guess we're redlining, which means that you're avoiding certain groups, whether it is a racial group or Financial Group, lesser wealth or whatever in favor of other groups, and that you're only going to insure them. And the people who don't fit that profile don't have access to reasonably priced insurance or insurance at all. And the states want to avoid that there's laws to prevent it. It's very easy to find that when it's based on just basic underwriting policies, but when you have a computer that's making the decisions for you, and by the way, the computer doesn't tell you how it's doing. And it just does, it becomes very difficult for them to analyze whether or not this is a bias that was intentional, or was it a bias that just occurs because of the type of information that you use to create, you know, the profile or whatever, hey, it gets all complicated, but it really is money driven, because now you can come up with an insurance company that exists in the cloud. You know, there's no brick and mortar buildings. There's a data center somewhere, or a server farm somewhere that's leased from Microsoft or Amazon Web Service. That's where your machine learning You have some data scientists, people that are licensed in the insurance business. And basically they open a web portal, you go to it put in your information, what kind of insurance do you want? And it says yes or no. If it says yes, here's how much you want to pay, give me your credit card number, we'll go ahead and issue a policy. And that's it. You've got insurance coverage for a year. And then next year, you do the same thing and hopefully, nothing's changed to cause it to go up or what that takes away the agents that can potentially take away the underwriters that can take away the brokers. Anybody that knows the insurance business, it's kind of like the movie Shrek, where he says, life is like an onion, you peel back the layers while the insurance company is very much like that. You have layer upon layer upon layer of administration and reinsurance, and all sorts of things the way it works as a normal consumer, nobody really cares about it, as long as they know that they're covered and that they get their claims adjusted in a timely fashion. And they get, you know, compensated for their losses in accordance to their policy language. You know, that's just the way it works. They don't see all the inner workings but there's a lot that goes on and obviously anything that's going to save money and make policy issue is faster they're going to be in favor of so that's the move towards the inshore Tech's, which are technology based insurance companies. And you're going to see more and more. Even the traditional insurance companies coming out with some type of insure tech products or programs, you're seeing that now. And part of that underwriting process, obviously, his data, the problem with relying on just strictly data is data is only as fresh as the day it's made. It doesn't stay fresh. And a lot of the information that's accessible by most people is going to be for instance, on property, especially his public assessor data, and basically the assessor's office or the tax collector, whoever in your jurisdiction goes out, takes a look at your property measurements, construction class, a few other features, and they create a calculation based on that they take all this information, they put it on a website, they make it available to data aggregators, big companies that will go out and make sweeps pull all this information in and then in turn, put everything together and then sell it as a package to users like insurance company and even preferred We subscribed to several different services like that. So we can use this data in our inspections as well. The problem is not every assessor's office is as high tech as every other. And it also is that the data is not as fresh as you think it is, just because you download it today doesn't mean that information was collected recently. In some jurisdictions, they only reappraise every three to five years. And that means they only send an appraiser out every three years or every five years. And that's when you get reappraised Now ideally, the appraisers office, the permits department, everything should be all interconnected. So that way, if you're going to put a 2000 square foot addition on the back of your property, because you're going to add a showroom, then that should be added into your assessment so that way your taxes are adjusted for the next tax year, rather than waiting for the three to five years, but the law doesn't necessarily allow for that. Because remember, a lot of these laws were written before technology was where it is and in some cases, it's just not what they want to do is too much paperwork. So you may go out to a you may have sorry, not go out, but you may have someone come in and want to buy insurance or their place. They don't know their, the necessarily their square feet, they put their on their their estimate or oftentimes agent will just pull whatever's on the assessor information. And that's what happens when you pull data, you'll get whatever that assessor information is. And in fact, you're actually entering a building that's 2000 square feet more than you thought it was, which changes the premium basis, which means that you should be charging more money because you have more risk, right? The places bigger mortar burned down. And that showroom may be a showroom for high end furniture or something you don't know, you just know that that it's a furniture company and that it is 3000 square feet when in fact it's 5000. So that data is stale. You're making business decisions based on information that just isn't accurate. It was accurate for when it was made, but not for the time that you're making the underwriting decision, which is why physical inspections go out, and we oftentimes will find inconsistencies between what the assessor data says or the policy says versus what is reality and that's because of additions that weren't counted. That's because the company Not only does x and y, but they decided to add z on for a product line that didn't tell you that. And z also has an extra 15 employees that you didn't know they had if you're covering workers comp, and the only time you get that is through physical inspections or annual audits to where they can determine whether or not there's been any substantive change in the operations of business. Same thing with a house, just because it has an assessor record doesn't mean the house exists that is there anymore. It could have burned down two weeks ago, you don't know. those data points are not readily available in all jurisdictions to show when those things happen. So that's the danger of relying on strictly data. And then also mentioned that there's that that opportunity for some type of bias to come into your decision making bias that could potentially be litigated later on. And you certainly don't want that or run afoul of regulatory agencies in your states. But nonetheless, insurance is still pushed for the underwriting period 60 days in most cases, to say yes, this is what I want to ensure or no, we're not going to ensure that so To make all this work, they have to come up with a way, especially now to get it done. And that's the digital inspection products. So we'll look at the first type of digital inspection product. And that is strictly digital. That's where there's no involvement with an experienced Inspector, okay? And those products can be either just a data poll off of the available data aggregators or sites that you have. And there's a bunch of government sites that are free as long as you have the technology to get the information from them. You can determine earthquake risk, Hurricane risk, flood risk, tornado, windstorm, you know, whatever, there's all kinds of things I can tell you when the last hail hit was, how close was it with the claim was, how much the claim was that sort of thing. And if you're going after a property that you're writing roof coverage on, and you find out that it has a 95% chance of a heavy hail exposure within the past year, or in the next year, then that's probably something that you would have to adjust on your premium if you want to write that knowing that you're likely going to have a hail claim. So that's kind of information that that is useful. So you're able to pull that in, we're able to get Some information that way that's strictly 100% did. Now also digital to an extent is a self assessment app. And preferred has one called ASAP. And that is self assessment app is an application that people download to their phones, or their pads, iPads, iPads, iPhones, androids, whatever you want. They download that. And then they're able to then walk through a little form that basically asks them a series of questions, and then asks them to provide evidence by taking photographs. There's all sorts of processes present that allow you to validate the photographs because as you know, smart devices have GPS in them. smart devices have clocks in them and some other sensors. So you're able to determine that they're at the right place. This is where they should be. And they took the photograph at the right time. Now there's great ways one would suppose the game that because after all, it is a computer and there are creative people out there and I suppose that could happen but face it as an insurance policy. It's not that big of a deal. It should not be as high a threat that the average homeowner the average business owner is going to waste their time trying to gain that system. Okay. And besides you have, you have ways of validating things and, and there's some other processes that I'll tell you about to make it a lot more confidence in what the report showing. So you get your information. And some of it may on the surface look as good as if you had a physical inspection, because the ones that we've seen it preferred the insurance do a pretty good job of taking the pictures as long as you give them directions, and they're pretty good at it. However, there's still this group out there that that don't trust downloading applications on their phone. And there's ways around that with a with a web based form too. But quite honestly, if they don't trust the app, they're not going to understand the difference there still know that they're going on the internet, give up their information, and they're going to feel that's risky. And then you also have a big segment, depending on where you're writing insurance of the population that may be older and may not be as technologically aware as the middle age for younger people. It really depends on what their business was or what their opportunities were when the smart tech, you know, emerged 10 years ago. really took on as to whether or not they're able to use that information. So you have to be careful with that because you may be eliminating, especially if you go straight digital, you may be eliminating a potential market segment that generally is wealthier and has less claims, then the younger group, especially in terms of homeowners insurance, so that's another thing to look at. and augmented digital inspection would be one where you go out and do a traditional inspection and that would be mostly on the outside so that way you don't have to contact anyone, you're able to send somebody out they go do their thing and it doesn't take very long appointments usually aren't required because they're really not not fooling with anybody. If you go up take your camera out, take some front pictures side rear pictures if you can go ahead and see if you can see what the roof looks like using a type of camera pole or whatever so you can get a roof shot give the underwriters are gonna have a roof you could use a drone. There are certainly detailed roof inspections I prefer does using unmanned aerial vehicles ua bees drones professional that can fly 100 feet plus and give you great shots of what the building is with with the surroundings are. And in fact, when we set up those they call the missions, drone missions. We're actually coordinating things between the FAA and no fly zones and air traffic control and stuff. So those inspections can get complicated, but they return a lot of information that's very useful for underwriting without anybody actually having to climb on a roof. But at least you have someone that went out there, they looked at the property they saw was there, they took measurements so that way you have confidence that the information you have in your data is good. And you can combine that with the stuff that's inside. And then you're able to at that point, properly underwrite the risk. And there's some things some best practices that we suggest for these digital inspection products and recover that neck.

Tom LeGros : 27:44

If you're going to make the decision to move forward with a digital inspection product, such as a self assessment application, there's some things that you need to think about. Because these are things that we've learned throughout the time that we've developed our product and we began developing it several years back. We In fact, we hadn't intended on real leasing it until the pandemic came along. And it became an issue that people want to be able to get their inspections done without appointments and things like that, there are a couple of things that you're going to want to do. First of all, you got to make sure that it's short. There's no magic number, but let's just say 20 to 25, might be one, if you want to call it that, where once people go beyond that many questions, it really becomes fatiguing for them, they don't want to keep answering questions, they don't wanna keep taking pictures and you have drop off, and then your inspections aren't really worth anything. So it's gonna take some time for people to use these things. So you need to make sure one that they're educated on it that is going to be coming that the agents or whoever else is telling the insurance that they're going to have this app that they're gonna need. And then you may want to look at incentivizing them in some way. In other words, giving them 20 bucks off on their first premium payment, maybe $100 off on the deductible, something that compensates for the time that they're gonna spend on doing that self survey. There's even gift card opportunities. I mean, it preferred we'll we'll do whatever you want, but we recommend that there's some type of incentive to encourage the question form itself. There's a lot of ways To develop it, you have to really pay attention to the way you format the questions and you want to make sure that you're explaining things to an extent without giving people cues on what is bad and what is good because you don't want to coach people into giving you just the best answers because they're afraid. If they give you the wrong answer, then they're not going to get insured. So you do have to watch how that that works. And a good company that has a survey, self survey system set up that have experienced field inspectors working with them can certainly walk you through that, because the next big component is no matter what it should not be a untouched process. In other words, it should not go from the time that is ordered till the time that your underwriting department receives it back without it being checked by a person at preferred. In fact, with our ASAP app, we make sure that every inspection 100% of them is looked over by a experienced field inspector or reviewer that works with regular inspections, traditional inspections, if you want to call it that. And from there, they're able to look at the photographs. They're able to look at the information they're able to look at Data pools that were done to determine if there's any inconsistency if there is they can flag it. And also, when you're looking at the photos, see if there's anything in there that wouldn't have gotten caught, you know, the insurer is not going to necessarily know that a certain thing is wrong. And we're able to then make recommendations for risk improvement. You can do that to some extent, with automatically generating recommendations based on how they answer but that's not going to catch everything. In fact, they may not catch the important things, especially in commercial inspections, where you may ask them, Do you have rag control? oily, greasy rag control? If you're running a garage? I say yes, absolutely. We have a service that comes by and picks it up once a week. But in the photographs, you see oily rags everywhere, you know, and a mechanic shop, they're all over the place. It's a fire risk. So yes, they have a service. They say, Yes, they do. But in fact, they're not following that service. You can ask them, Do you actually follow the guidelines that these people have? No, of course I don't. I'm gonna burn my place down accidentally because somebody's back there smoking next to kerosene. They're not going to tell you that. But you can see that in a photograph because quite frankly, A lot of people don't know what inspectors look for, especially in business type inspection, homeowners inspections a little bit different, you know that if your gutters are falling down on the front, if your roof is caved in, that's probably going to be a no go for the insurance company. But it's also going to be very difficult for you to hide that using the special validation processes that any self assessment app should have in place. But if you don't have this human component, and if you your company is charging you for that, then to me, that's just an extreme. That's why I prefer reports we don't charge for the review process is included as part of the fee. In fact, that doesn't raise the fee at all compared to the competition. So you're actually getting though an experienced Inspector, looking at the information saying, Yeah, look, I see that there's a problem here. They're saying that they have a safety guide. But yet, here's a photograph of three guys on a four story building that are over the edge and they don't have safety harnesses that OSHA requires or common sense requires. So I think that the fact that they mark that they do have a fall prevention program is probably true. Whether They know what the program is or not or uses, it is highly unlikely based on what we're observing in the photographs. And that gives you that interpretation. Otherwise, your underwriter may get the report, the report shows green, they move on to the next one, assuming they even look at it, assuming they even see it. So that's why it's very important to make sure that you have somebody experienced looking at now, there's plenty of other tips and hints that we could give you. In fact, we're going to have a white paper that's going to come out on our LinkedIn site that will walk you through 12 tips to creating a successful self assessment program. And some of the things that I share with you certainly are and start wrapping up. What is this going to do to the industry? Is this going to change the way inspections are done? Is this going to change the way underwriting is done? To a certain extent it will, I don't see it as something that is going to change it dramatically. I don't think you'll see inspection companies, at least not the larger ones or the ones that are more diverse go away. I think what you will see is more frequent inspections, because now instead of Face it inspections are not cheap. And depending on what the premium is on the risk, you know, if it's a small business or a lower priced home, there's not a lot of room. There's not a lot of profitability in the first couple of years of a premium because you have to pay commissions to the underwriter as giving commissions to, to the agents, if they're involved commissions to brokers, I mean, it's a lot like a real estate deal, everybody gets a little piece of the money. And a lot of times as paid out over the first couple of years, we want to make sure that the costs are kept low. But it might be a good idea to take a look at that risk more than once. During the three year period. Sometimes it takes before they re inspect it. With self assessments, they could inspect every year, every six months whenever they wanted to. They could in the excess and surplus business, for instance, where they're writing, non admitted work were not admitted or not admitted to a state but it's a program and they they can set the prices that they need to price for a particular program. They can set up a rule that says you need to send me an inspection of your building. This is where you've had claims in the past. So I want to see pictures of this Every month, or else we're going to cancel you. And if that's part of the agreement in the program that they're in, and then the insurer doesn't send you your pictures one month, then you issue a notice of cancellation. Because more than likely, it's because that hasn't been fixed. And when we talk about recommendations, what better way to make sure that they're following the recommendations that are made, then have them show photographic proof that you can validate that in fact, you told them they need fire extinguishers properly tagged, they can show you a picture of a properly tactic fire extinguisher, they took it the next door place or the place up the street or at the fire extinguisher store, you don't know. But at least with the the the type of validation we can do, you know, took place at that building at such and such. So with that, I think you can see where there's actually a good marriage between traditional inspections and digital inspection. And that's why I think this pivots can be a lot harder than I originally thought. The business was slowly nudging towards digital or acceptance of digital at least as part of the process. I think it's going to be pushed now much more and much deeper into the digital approach. But I do not think he will do away with the traditional approach, there is a great deal of value to an experienced insurance inspector. Oftentimes, these guys were underwriters or safety people with the insurance carriers and stuff that can go out and give you a quick look or a much more detailed look. And face it, there are some policy types like workers comp, for instance, or manufacturing, where you're doing product liability, you might be doing other types of things that are not readily accessible to a self assessment app, where you're gonna need to have a specialist go out and still continue on with the inspections. But that doesn't mean that you can't use a self assessment app, for instance, to have them walk through a factory once a month to show that it's clean, well kept and whatever, at least, you know, it'll be cleaned up and well kept for that walkthrough. And if it isn't, then that tells you a whole whole thing. If they didn't bother, at least clean it up to do the video once a month, then they're certainly not taking care of it the rest of the day. So that's definitely something to consider when you're ready to make that jump when you're ready to push deeper into the world of digital inspections or Hybrid inspections where it's combination, you know, interviews by phone or, or whatever. Certainly preferred reports can help. We have products for all of that. And we've been doing it for a while. We're not the new kid on the block. And there are other companies out there that certainly offer a two we think we're better but at the same time, there's other ones out there. Just remember that you want to make sure that the information is validated and that you have a human taking a look at it. All right. For our next show, we're really holding the topic open, because with all the stuff going on, Originally, it was going to be on business continuity planning. I think it may still be, but we'll see what kind of what kind of twist we put on it. With the protests going on civil unrest. The President announcing that certain groups are considered terrorist organizations which by the way, once you use that word terrorist, that creates an insurance issue, and we'll discuss that. So stay tuned for next Tuesday on that. We'll have two more shows and then I believe at the end of June, we'll take a two week break as we go into the Fourth of July weekend and come back, but I expect to have a listing of what the show titles are tentatively done. But we want to pivot to we want to be able to be to use all the biz buzzwords in business agile, to be able to move our content to what is newsworthy and current. So hopefully, we don't have a lot of weird stuff going on, we can just stick to plain old business continuity planning something that people don't do, right. And something that people really don't understand that business continuity planning is not just about something like a pandemic, but it's about everyday operations of your business. And whether or not key employees are out sick, or couldn't come in or whatever, how you can continue operating your business effectively, efficiently and profitably, even when you had us so we're going to get into that. Thanks a lot for listening. Hope I didn't bore you too much. Please feel free to subscribe to the podcast and as always, feel free to send us email as well. You can reach us at feedback at preferred reports calm feedback at preferred reports calm Have a great day. Transcribed by https://otter.ai