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PODCAST OPENER
Welcome to the Inside Insight podcast presented by CR Solutions. At Consolidated Risk Solutions, we are taking our expert knowledge of the insurance world and using it to innovate the industry using technology, groundbreaking thinking and a personal touch. Join us as we talk to masterminds both inside and outside of CR Solutions about how the world of insurance is changing, and how we can be sure to grow along with it. If you have to manage insurance in your work, then you can benefit from the interviews, conversations and insights we’ll be exploring to elevate your business’s success.
INTRO (00:42 – 03:06)
Trevor Casey: This is the Inside Insight podcast.
Beau Lunceford: I don’t think we’ve ever had a consistent opener for this. I think it’s always something different. I don’t hate it.
Trevor Casey: Nonsense.
Beau Lunceford: I mean, we’re a podcast about innovation, so it only stands to reason that every single episode would start with a little bit of innovation.
Trevor Casey: We do have that same [sound].
Beau Lunceford: Well, that starts, but when we start talking, it’s a different kind of nonsense every time.
Trevor Casey: Yeah, that’s true. I mean, as we said, this industry is a little dry.
Beau Lunceford: We got to keep it fun.
Trevor Casey: We’re the lotion that is just keeping it moisturized.
Beau Lunceford: Wow. I don’t hate that. I’m moving on. Guys, we’re excited to be back again for another episode. We are thrilled to have joining us this time Chad Hollingsworth from Insight Risk Technologies. I think you’re going to love this conversation. But before we jump into a brand new set of innovative insights, Trevor, tell us a little bit about Chad for our audience.
Trevor Casey: So Chad Hollingsworth is the co-founder and president of Insight Risk Technologies and a driving force behind ensuring Insight Risk delivers on its vision of a safer, more productive future for construction through the integration of insurance and IoT. Prior to his current role, he was the co-founder of Triax Technologies, Inc. and principal of On Target Consulting LLC, where he served construction technology companies with channel partnerships and go-to-market strategies, including insurance. Chad was part of the development team that created, Spot-R, an IoT platform that helped improve worker safety, boost productivity, automate reporting and timekeeping, and optimize operations. He’s a recognized industry leader in IoT and SaaS solutions for commercial construction and industrial markets.
Beau Lunceford: That is a lot of abbreviations.
That’s a tongue twister, but I feel like this conversation truly peels the lid off of that. And you learn a lot more.
Beau Lunceford: Like everything that was mentioned here, I think we’re going to be able to unpack during this conversation. So I’m really excited for everyone to hear it and to, if you haven’t already, meet Chad Hollingsworth. So, Trevor, are you ready?
Trevor Casey: Let’s do it. Diving in.
Interview (03:09 – 31:22)
Trevor Casey: All right, everybody. Welcome back to another episode of the Inside Insight podcast. We are joined today with the co-founder and president of Insight Risk Technology, Chad Hollingsworth. Chad, how are you?
Chad Hollingsworth: I’m great, Trevor. Nice to see you.
Trevor Casey: Hey, it’s good to see you, too. We really appreciate you taking the time to hop on the podcast and teach us a little bit more about Insight Risk Technology. So to start off with, give us a little bit of your background. Tell us where you came from. What started this idea of Insight Risk Technology?
Chad Hollingsworth: Well, thank you guys for taking the time and all you do to bring awareness to the industry. It’s a much needed void that you are filling. So I’m happy to be a part of this. I have kind of a unique way in which I think I ended up in insurance. As you probably hear over the years, a lot of people say they stumbled into insurance. And it’s pretty squarely put myself into that bucket. I come originally from a technology background. I’m a serial entrepreneur. This is the third company that I founded. And a company I founded almost 15 years ago now was a first leader in its space to build wearable safety and technology products for construction. We were building sensors and networks to deploy on job sites so we can enhance worker safety. While we were building that company out, we started to partner with some large U.S. insurance companies and brokers. So I started learning insurance from the perspective of a technology vendor. And I always found that there was a lot of just call it industry blockages that keep you from innovating or changing things quickly in insurance. I think that’s changed a bit over the last few years, but some of those are there. So I kind of always thought the best way to integrate some of these technologies that could reduce losses was to do it from the ground up. And Insight Risk is basically a culmination of those earlier efforts at Triax. And essentially, we are an MGA that focuses on builders risk construction today in the U.S. What makes us different is that not only are we an MGA, but we’re also a technology service provider. So we’ll get into that more, I’m sure. But we basically put our money where our mouth is around the technology put on sites. Everything we do is around reducing losses. And we feel like we have a unique way of partnering with the insureds around our model. So you could think of Insight Risk as having a foot both in the technology side as well as the underwriting side.
Trevor Casey: So I’d love to learn a little bit more about, me and Beau say we’re two halves of the same brain. I’m really more on the insurance side. He’s really more on the marketing and people and processes side. So let’s kind of dumb this down to somebody who doesn’t know what an MGA is.
Beau Lunceford: Please dumb it down.
Trevor Casey: And kind of walk through what an MGA is and how you guys actually consult through your technology and provide better rates for your clients and how that technology is used.
Chad Hollingsworth: Sure. So for anyone listening who doesn’t know what an MGA is, the easiest way I explain it’s basically a hybrid of an insurance carrier and insurance broker. It’s a vehicle in which you can innovate quickly within insurance. Essentially, you build an underwriting model and a business model around a unique way that you think you can write business. And then you first go to a number of different insurance carriers that have program groups and you try to get them to basically back you in and underwrite under their behalf. So it’s a way for them, the carriers, to explore new ways without having to hire a bunch of people and invest a bunch of money in an area that may or may not work out. So they can essentially invest by partnering on the capacity side. Once you have that half of the equation, there’s a whole another half where you need to build distribution out. So MGAs typically work with wholesale or retail brokers, and they are compensated slightly differently than a broker and a carrier. Essentially, you get a commission for business that you write, but you also get a profit share based on your performance and your loss ratio performance. So what that does is it keeps you aligned with really both sides. And if there is a claim, you don’t have a balance sheet, all your carriers backing you up do. So it’s a great way to kind of partner with both sides to bring an innovative new solution to the market. Your second part of your question, which is around, what are we doing on our tech service side? So specifically in four-wall construction builder’s risk, over half of all the losses is from water damage. So that’s water that comes from pipes that leak, frozen pipes that break, maybe water that seeps in during a construction project when the building is not fully enclosed properly. These things tend to happen towards the end of the project when a lot of the construction value has already been spent. Some cases finishes are in place. So when you get a water damage claim and the typical story you’ll hear over and over again is, we left on Friday, we came back Monday, 10 floors were flooded out. Those claims quickly add up well into the seven or eight figures and can really, if you’re underwriting this business, can devastate your loss ratio performance and they’re a plague in the industry. So about half of all the losses in the type of builder’s risk we write is from these types of claims. We saw that as an opportunity to bring technology to those projects where we could dramatically reduce that. So we are a solutions provider where when we get a project in, we look to underwrite the risk transfer, but we also have a technology service company that will customize a water damage technology and prevention plan, as well as design an IoT solution to install on the site. We also have people that will install it on the site, help maintain it, backup, monitor it. So we put skin in the game, not just from the capacity side as we’re trying to underwrite these risks, but we also back up the technology with our service offering. And really, we make that all come together by giving a premium credit and better deductibles. So when you opt in to use our tech package and you’re writing insurance with Insight Risk, you’re getting a product that’s incredibly different in the market because we’re really partnering with the insured. We’re not just sending you a list of vendors saying, hey, pick one of these five and you get a discount from the tech company. We’re actually just taking care of that for the insured. The last part of it that we built into it, which has been very successful in terms of us getting the technology more widely adopted, is we’ve essentially built a rental channel. So because of construction, these projects end, we can reuse this technology over its multiple year lifespan. And so since we’re buying this technology, deploying it on the site and reclaiming it after, we can amortize that cost over its multiple year’s lifespan. Both pieces are critical to the success of the business, but really the service offering and backing up our technology offering with capacity is what ties it all together.
Trevor Casey: So let’s say we’re building a project in New York, or for that matter, what you said, you have a project that’s completed and it’s in New York. Property manager or construction manager is away on vacation, it’s Christmas. Let’s say pipe freeze, pipe bust, water spewing everywhere. So when it comes to your technology, is it really more of a flow sensor where it’s just a, ‘Hey, property manager, there’s a leak somewhere?’ Or is there actually the ability for them to come in and shut off the water remotely before they can actually get there? How does the technology play for the people who are actually using it for some of these claims?
Chad Hollingsworth: It’s a great question. So the basic answer is every site’s a little different. We have an account management team that works with the insured to figure out the type of project, what the needs are, basically how risky it is from a water damage perspective. And then we have basically a bronze, silver, gold offering. The basic level is just environmental and puck sensors that are measuring for water, temperature, humidity. We’ve actually found those to be incredibly successful. And that essentially is alerting you when there’s an issue, and it’s all about getting there to stop something before it becomes a big issue. Removing severity in the book is really what we’re focused on. But we do also offer flow and flow and shut off options. So it really depends on how that consultation goes with the insured. And then we will basically recommend a couple different offerings and let them pick.
Beau Lunceford: Which one is the most popular in terms of implementation, I guess? I’m sure that different people have different issues that they are trying to solve. But what’s kind of the across the board? What are people choosing and how is it that it’s helping them?
Chad Hollingsworth: So it’s interesting to see how it’s been evolving over the last couple of years. What we found is at first we started doing this, it was mainly just the environmental sensors were more common. And in our opinion, that gets you 90% of the way there anyway. But I think what was driving that was price. And we have since, as we’ve evolved our technology team and some of the solutions we’re working with, we’ve been able to drive down the cost of the flow and flow and shut off. So we’re actually, as of the last few months, seeing more people gravitate towards the environmental with the flow and or shut off. Ideally, it’s best to have all three. But I think when we’re seeing with our repeat clients, once they’re comfortable with like, hey, I really like monitoring my site on my phone and knowing on the weekend if something was wrong. I know it’s not a far leap for them to say, hey, I’m willing to pay a little extra to shut that off remotely if I can. So it really is interesting. And I think it’s a great sign that people are evolving in this. We actually stopped a claim on a site about a month and a half ago where we had the shut off valves and. They were doing charging water lines for the first time and an elbow joint on like the sixth floor of this building, pretty large building wasn’t properly attached and instantly water was gushing out of the main line. They were able to shut the whole thing down within a few minutes by pressing a button on their phone. But if they didn’t have that, what they realized at the time was the only main shop was locked behind a door in the basement and no one had the key to it. So that 30 minutes of something like that could lead to a pretty significant issue. So it’s really just getting these tools out there for the people who are building these projects so they can do their job on time and on budget.
Trevor Casey: And it seems to me and correct me if I’m wrong, is from the amount of work that you guys have been doing with some of these suppliers, you’ve knocked the price down. So the buyback or the credit that you get back from your carrier would almost negate the cost or make it so cheap that it’s like, why are you not doing this?
Chad Hollingsworth: I think people are surprised. The best way to do is get a quote from us and see how it looks for you. But the people are usually shocked at how low our pricing has gotten, where on a number of our projects it gets above a certain size. Our clients actually make more money by taking the technology. The premium credit offsets more than the tech rental service fee. So when you can start presenting ROI like that, you’d almost have to question why someone would turn it down. It’s like, wait, maybe do I want to be on this risk? This guy is going to turn this down. So it is interesting when people get to actually see this and feel it for the first time that they tend to react very positively.
Trevor Casey: Is there anything within your system that may give preemptive alerts? So let’s say Bozen, again, we’ll use New York. He’s a project manager of a project and it’s been historically warm for a week, but then it’s coming up to historic cold. And it may say, hey, you need to check on this because there’s a possibility of freeze coming up. Is that something that that it does or is that a little too far out there?
Chad Hollingsworth: First of all, Beau would be a tremendous project manager, so I don’t think we have to worry about that.
Beau Lunceford: There it is. That’s what I’m fishing for.
Chad Hollingsworth: You can Venmo me later for that.
Beau Lunceford: It’s in the mail.
Chad Hollingsworth: So we actually do have solutions in place for what you just described. We within our platform, we’re monitoring the temperature that’s essentially from your weather app. So we know kind of where the trends are going based on your local GPS position. But then we’re monitoring the humidity and temperature in real time on these projects. So we’ll know if temperature starts dropping. We actually stopped a claim a year and a half ago where it was up in New England and it was a stretch of weather where it was well below freezing. Someone had left the roof hatch open right above a main fire line and for the weekend. And we had a temperature sensor right under there. And we could tell that the roof hatch was left open because the temperature started dropping. And so when temperature starts getting about 45 degrees, we start sending alerts to the site team. In this case, they came back a couple hours later and fixed it. But that is a great example of that would have been a frozen pipe issue on the top four. So these relatively inexpensive things, little sensors can do a lot to save a lot of headaches.
Trevor Casey: For my own curiosity, how big are these sensors? Like, are they hard to put in? Are they easy? Does your team have to put them in or can ABC Construction just have their guys do it?
Chad Hollingsworth: They’re not complicated to install. I’d say if we had secret sauce, it’d be how we design the system to have a minimal amount of hardware and have some redundancy in the network. That just comes from years and years and hundreds of projects of doing it. But the sensors themselves, the environmental sensors about the size of a hockey puck. The flow monitoring system, basically a little clamp over the pipe with a little box on it. None of these things like you could carry all of them on one hand. A little suitcase, you’d probably have everything you need to do a pretty large project. So they’re not cumbersome to move around. The installation part, we like to do it ourselves and make sure it’s done properly. It’s part of the service that we offer. Most of our clients, especially first time ones, love that that’s part of it. These guys building these buildings have a lot on their plate. If you can remove installing a sensor system that they may not be familiar with, they’re usually appreciative of it. But that said, some of our sites where we have a number of repeat sites with same clients, they are comfortable doing the install themselves. And we would essentially someone, one of our account managers would remotely support it to make sure it gets up online and is set up.
Trevor Casey: So from these repeat customers, are you seeing most of them using the same technology that they’re moving from site to site? Because I know you said they can leave it and put the walls up over it. Are you seeing most of them reuse it or are they leaving it and just buying new technology additional?
Chad Hollingsworth: So if it’s an owner, we have the builder’s policy with the owner. We actually see about 50 percent of the time they keep it. And they’re like, hey, we’re going to own and operate this building for a number of years. Let’s just keep it. There are a lot of property carriers now that will give you some credits for having this technology on your property. On the contractor side, we almost always take it back because most of our clients on that side are general contractors. They actually don’t own a lot of stuff. They rent it. And so our rental model fits in very nicely with that. Now, that said, if someone did want to buy it because they’re going to always use it, we would just make sure they’re refurbished and things like that. There is a little bit of maintenance that goes on with these things. Surviving a job site comes with a couple of scrapes and bruises. But we are flexible on that side of it. But most people opt in for what’s the easiest for them, which is the rent it and return it.
Beau Lunceford: So I have a perhaps dumb question about the way that the credits roll back after you enroll as a part of the program. How do those things connect together from the beginning to filing claims to using the technology to at the end of the policy cycle? How does that work together?
Chad Hollingsworth: And when you say credit, you mean like the initial premium credit for using the technology?
Beau Lunceford: Yes, I do. Do I do I need to correct my language on that? Because, again, Trevor is the insurance brain. I’m just I’m just a pretty face. So what would be the correct way to ask the question, I guess?
Chad Hollingsworth: I think you asked it correctly. I just wanted to make sure because we have kind of two different levers. So when we give you a quote, the quote comes with an option for the technology and the option without the option with the technology has a premium credit, which usually in most cases will pay for all plus some of the technology service. Then we cut your deductible. So we’ll take your deductible. Let’s say it’s 250,000 on a project. We could take it from, let’s say, 250 to 200 out of the gates. But we also have what we call an alert response credit. And this is why I was confused my brain because your question was great. But when you respond to an alert within 30 minutes during working hours and one hour or non-working hours will cut your deductible another 50 percent. So we’re incentivizing risk management practices by our users. So we not only are we getting in the tech at no cost, in most cases, we’re saying, look, all you respond to your alerts, use it as it’s designed and set up for you to do, which we’re going to help you guys train you, make sure people are using properly. And you do it, you use it, we’re going to reward you again. Because we would much rather take away those big claims I talked about at the beginning of this podcast, because those are the ones that really hurt you if you’re underwriting a portfolio of these risks. So we also found that it’s a newer product. We rolled it out a few months ago. But again, it’s a way we’ve innovated around this technology service offering where you couldn’t really do it if you were just doing risk transfer, just doing technology.
Beau Lunceford: It’s a little bit like teach Amanda Fish and give him the fish. You’re showing them how like how it is that you can reduce your risk and improve your safety. And you’re also giving them the fish that help them to do those things that keep their claims down and all those different things. Oh, that’s a very important nuance, I think, that is important to call out here.
Chad Hollingsworth: I’ve never thought about that. But it’s a good analysis. I guess it’s like we’re fly flipping guides. It’s like, we’re going to show you how to fish, we’re going to make sure you’re catching some great fish to get you get your money out of it.
Trevor Casey: Honestly, it sounds like this is a no brainer product, especially for an owner, because your deductible gets bought down, your risk gets almost deleted. And your claims are going to be minimal if you have them. So people, please, all of Chad’s information is going to be in this show notes, reach out. I mean, this is a solution that is a chain, a game changer, in all honesty.
Chad Hollingsworth: I appreciate that.
Beau Lunceford: And Chad, we only have one final section of the podcast. But before we jump into it, is there anything else that we want to make sure that we’ve talked about today that you tell us a little bit about insight risk and the things that you’re doing? And what might even be on the horizon for you guys that you want to make sure that our audience and our listeners know about?
Chad Hollingsworth: I mean, the one thing I’ll just mention is, we’ve continued to evolve our risk transfer solutions around the technology. We have a lot of conviction around our technology working to the where we’ve actually now have a new product we’ve just rolled out last month, which is a couple of two months ago now, which is a water damage deductible buy down around our technology. So there are hundreds of thousands of projects, we’re just never going to have the chance to underwrite on because we’re still small and growing. But those projects are being stuck with really high deductibles, and it’s become a pain point in the industry. So we now have the ability to basically ensure just the water damage component of the project and buy down the deductible to as low as $50,000 on these projects. It’s a way for clients to enhance their risk management and get the technology included. A lot of contractors and owners are buying them down now, but they’re just basically trading dollars with the carriers that write it. So if you come through us, you’ll save a lot of money on the total cost of the buy down, which includes the tech package embedded in it. So it’s a great way to trial us on a project. You may already have great rates in place in your MBR, but you’re really frustrated with where your water damage deductibles still are. This allows us to really work with anyone, and it’s a policy designed to sit alongside existing policy. So it’s a great way to get to try out Insight Risk with whatever else you may already have in place.
Beau Lunceford: Beautiful. I love it so much. Oh, fantastic. So before we wrap everything up here, we have dug into so much great stuff. The way that Insight Risk is really changing the game here with safety and technology and coverage, like all these different things, we have started to ask a question at the end of our episodes that is, what is your inside insight? What is the thing that gets you up in the morning and keep doing what you’re doing? I mean, for you specifically, starting all these businesses and continuing to just like shock the world with the kind of innovation that you’re bringing to the table. Chad, what is your inside insight?
Chad Hollingsworth: It’s a great question. You could take that question a lot of different directions. I’d say for me, what drives me is I had a unique upbringing where I grew up as a son of a serial entrepreneur. And I always saw the businesses he was starting and trying to start as it always just seemed like exciting and kind of like the Wild West. And you could kind of go out and try to create your own destiny. And I always wanted to try that. Like, I kind of had that as a model and I went to Babson College and I majored in entrepreneurship and I just kind of felt like you only go around this world once. Why not try to do it on your own terms if you can? And it seemed like building businesses was a great way to do that. It sounds really glorious for you mentioned it like it, you talk about it that way, but it is not for everyone. There’s a lot of highs, a lot of lows, but what I really find gets me out of bed in the morning is like, I get to get up. I get to work with really amazing people every single day at Insight Risk. We have an incredible team and they all are better than me at what they do. I may have a vision or an idea, but you’re only as good as the people around you. And the key to being successful is surround your people who have strengths where you’re weak. And I focus on that one because it’s how you become successful, but you also put yourself in a position where you’re going to learn something new every day. And I find like, that’s a very rewarding way to go through your day. I did punch a clock nine to five for a few years right after college. So I did get a sense of what it was like working in a big corporation. And given all the trade-offs and risk profile, I would never do anything differently. And for those who are out there thinking about starting a business it is one of those things where you just got to jump in and start swimming and you figure it out. So that’s kind of my inside insight what kind of gets me up in the morning and why I do what I do.
Beau Lunceford: Well, that was fantastic. And I’m so glad that you, you do get up and do what you do because it’s making the industry a safer and cooler place. And I hope that people will follow your steps that you have laid before us. So this has been just such a great conversation. Thank you so much, Chad. Like we’ve said before, all Chad’s information will be in the show notes, you’ll be able to reach out to him and find out more about what he has going on and the world of insight risk. We hope that everyone will reach out and do something cool and new to keep your job site safe. Trevor, is there anything else we need to talk about before we go?
Trevor Casey: No, this has been great. Thank you again, Chad, for your time and for joining us on the Inside Insight podcast.
Chad Hollingsworth: Thank you guys. It’s been a lot of fun and keep doing what you’re doing, bringing awareness to the innovation in that space. I love it.
Beau Lunceford: Woo. Thanks Chad. We appreciate it.
OUTRO (31:25 – 33:50)
Trevor Casey: You might even call him a chatty Kathy.
Beau Lunceford: Ah, get it. Cause it’s Chad, but it sounds like chatting.
Trevor Casey: I hate that too. We’re moving on. Anyways, seriously, it was a great conversation with Chad. I spoke with a couple of the gentlemen that work with Chad at a conference about a year ago and started learning about some of the technology that they are bringing to market and it is incredible. I mean, some of these things are, maybe they’re out there, but they’re not commercially available. And insight risk technologies truly makes them commercially available, but not only are they available to you to use, you get a deduction on your premium and that is huge.
Beau Lunceford: That’s a game changer.
Trevor Casey: Especially in this market where tariffs are, could be, or are affecting different things, everybody’s worried about their bottom line and having the guarantee that you have a credit coming back to you from just implementing a technology that you more or less need is game changer, especially for some of these big shops where a dollar could be thousands and thousands of dollars by the end of the project.
Beau Lunceford: Absolutely. This was just such a great conversation. I really enjoyed getting to, this was my first time meeting Chad and then I had so much fun with this. This was so great. So Chad, thank you so much for taking the time to share all of this with us, to expose us to what Insight Risk is doing. And hopefully people will be able to take advantage of that. So of course, all the contact information for Chad and for Insight Risk is going to be in the show notes. We highly encourage you to reach out to them to get some more information to connect with Chad and find out how Insight Risk could benefit your company in one way or another. So we’ve got a lot more material ready for you for season three. We hope that you’ve enjoyed it so far. We’ve loved doing this. We love being a part of your weekly, monthly adventures. And we hope that you’ll keep coming back. If you guys ever have any questions, comments, concerns, we encourage you to email us. All that information is also in the show notes. We would love to hear from you guys about who it is that we need to be speaking to, how it is that we can reach out and get you guys the information that you’re looking for. So I hope that you guys enjoy the rest of your day, wherever it is that you’re listening to this. And until next time, stay covered.
PODCAST CLOSER
Thanks for tuning in to Inside Insight presented by CR Solutions. If you like anything that you heard today, subscribe, follow and rate the show so that other industry pioneers like yourself can find it. Maybe even share it with someone you think might benefit from this episode. Do you have a question that you want answered or a concept that you need explain, you can email us at info@c-r-solutions.com with the subject line “Podcast Question”, and maybe your question, we’ll make it onto one of our episodes. You can also submit a question via our website at c-r-solutions.com/podcast. There are no dumb questions, only opportunities to learn something new. Now that’s a wrap on this episode. Join us next time on Inside Insight presented by CR Solutions. Stay covered.
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