[00:00:00.71] LARRY WILSON: After looking at what was going on in technology insurance at the time, that there was a better way to do it. At the time I'd gotten very familiar with insurance, got my CPCU, but understood insurance, understood technology. So I designed a system called Policy Management Systems.
[00:00:23.23] SPEAKER: This is the Insurance Technology podcast. Where we bring interesting people from across the insurance ecosystem to discuss and debate technology's impact on the industry. Join us each episode for insights and best practices from industry stewards, and tomorrow's innovators. Now here's your host, Reid Holzworth.
[00:00:43.05] REID HOLZWORTH: Welcome to the Insurance Technology podcast. I'm your host Reid Holzworth. In this episode, I'm going to be interviewing Larry Wilson. So Larry Wilson, some could say and I would say, is really the founder of InsurTech. I mean, going back to literally the '60s and '70s, wrenching with IBM on insurance technology, Larry built the first big policy administration system, which was PMSC, which he sold to Computer Science Corporation when it had over 6,000 employees and was a global organization.
[00:01:23.82] During that, he also built AMS. Actually, some people know that acronym. It's called-- stands for Agency Management System. Literally, sold that to our good friend Dennis Chookaszian when he was CEO at CNA, which then AMS many know, became-- guess what, Vertafore And that product still lives on today from way back then. I'm not going to say what that product's name today, but some call it AMX. Surprise.
[00:01:54.96] So Larry, wow, what an awesome guy. It's great to have him on. Stay tuned. Hope you enjoy it. Larry, welcome.
[00:02:07.02] LARRY WILSON: Glad to be with you.
[00:02:09.27] REID HOLZWORTH: So Larry, you were-- your name was brought up by a number of the previous attendees as somebody that we should be interviewing. People like Dennis, David, I think maybe even Hackbarth A bunch of people have brought up your name. And so definitely part of the family, and a good group of people. So--
[00:02:35.55] LARRY WILSON: Yeah, good.
[00:02:37.44] REID HOLZWORTH: --so tell us--
[00:02:38.23] LARRY WILSON: Enjoyed working with all of them over the years.
[00:02:40.77] REID HOLZWORTH: --and I'm sure we'll get into some of that today. So yeah, likewise as well. So how did you get into insurance? How did you stumble into this industry?
[00:02:51.74] LARRY WILSON: I was going to the University of South Carolina, and when I was 19 I decided-- I was like a business major. And I decided I really wanted some more business-- some business experience. And education become much more relevant. So I went to work for a local insurance company which was near the University, and could walk to work. And worked throughout my undergraduate and graduate degree. And then started a software company after that.
[00:03:30.05] At the time, I was working for the insurance company. You could go to-- if you are an IBM customer, you could go to all their schools for free. So during summers and semester breaks, I went to virtually every IBM course they offered. And I got a good education in University of South Carolina, and a master's degree. But I got a great education from IBM, and learned about technology, and system design, and programming, and got a very good education from them and technology.
[00:04:07.25] And so I decided after looking at what was going on in technology insurance at the time, that there was a better way to do it. And at the time I'd gotten very familiar with insurance, got my CPCU. So I understood insurance, understood technology. So I designed a system called Policy Management Systems, which managed all policy transactions for an insurance company. Kept all the records of claims, and reinsurance, and billing, and collections, and agents, and just virtually everything an insurance company needed in their technology system to be able to run the business. And became very successful.
[00:04:58.67] And we go up to about 6,000 people over the years. And I decided that-- after a number of years I decided that I needed to be a little bit more relaxed lifestyle than being on planes 250 days a year going all over the world. So and having 6,000 employees to look after.
[00:05:22.79] So I sold it to Computer Science Corporation. And so-- but I still been involved on boards, and involved in other matters. Continue to do that today.
[00:05:35.55] REID HOLZWORTH: So Larry, going back to it. So you started PMS-- so you were at a carrier right out of school, and doing that the idea--
[00:05:45.18] LARRY WILSON: I was still in school, as a matter fact. I was still in school.
[00:05:47.99] REID HOLZWORTH: Oh, in school. While in school--
[00:05:49.52] LARRY WILSON: I worked full time. I went to school full time through the last part of undergraduate, and then throughout graduate school.
[00:05:57.98] REID HOLZWORTH: Wow. So and you-- and why did you start building that product? Was what was-- were they asking you? Like how did that come about? Where did you see the need? Was it something--
[00:06:11.69] LARRY WILSON: Well--
[00:06:12.32] REID HOLZWORTH: Was it a pet project? Like how did that come about?
[00:06:16.11] LARRY WILSON: Well, the-- because I went to work for an insurance company while I was going to school, and at that time if you're an IBM customer, which they were, you could go to all the IBM classes for free. So over a several year period, I went to every IBM class and learned a lot about computer technology, and how to program, and design systems. And got a great technical education radiometer. Good business education the University of South Carolina.
[00:06:46.89] And so I decided there was a need. There wasn't-- IBM had tried to develop a system for its insurance customers, but they didn't know enough about insurance to really do a good job at it. And so I had my CPCU, and COU, so I'd gotten those while I was in graduate school on the side. So I understood insurance, and understood technology. And that led me into the career of developing insurance technology.
[00:07:19.89] REID HOLZWORTH: Oh, wow. So what year did that all start? Roughly.
[00:07:24.23] LARRY WILSON: This was in late '60s, early '70s.
[00:07:28.28] REID HOLZWORTH: Wow, no kidding. That's amazing. So then you've been through all of these changes and everything. Now PMS-- was PMS-- would you call it one of the first policy administration systems that was out in the market?
[00:07:48.54] LARRY WILSON: It was the first online completely integrated all lines of business, technology platform, software system, technology platform for property casualty insurance. There have been some others from IBM, and some other vendors, but they were very limited. And they were primarily developed by people who understood technology but didn't understand insurance extremely well.
[00:08:19.06] And so because I had my CPCU and COU, I'd learned insurance very well, worked in insurance as well as technology. So I was able to understand the problems that had to be solved in insurance, and how insurance had to work, as well as the technology. And so develop the applications with a better knowledge base that would have been there before. And the people who even worked for insurance companies in the tech department, understood it but they didn't really understand-- in many cases the great details of the design and architecture of insurance, and how insurance really worked in all the various state and country variations, and the business variations that existed.
[00:09:07.83] REID HOLZWORTH: Yeah, no. It's definitely a different skill set than somebody working in the carrier, on the carrier, and then like you said, IBM or these technology companies kind of trying to dig into insurance. It takes a different type of mind to be able to really take a step back and build that architecture. Because insurance is so complex. When you want to build a system, especially like a policy administration system, or an agency management system, just the data model alone, and all the relationships, and everything that's there, it's just it's massive. And people don't understand.
[00:09:44.19] And it's funny because there's been a lot of people over the years that have tried to tackle it, and they wonder why there's only really a few major players out there, right. There's not hundreds of them like other industries. And it's because of what you just said. You really need someone like yourself that's in the weeds understands technology, and then understands the industry, but then also understands the pain that carriers, in your case carrier-- are under. And kind of how to relieve some of those problems.
[00:10:15.69] But it's interesting you said-- when I asked you about it you said, it was all in one. So talk about that a little bit. Because-- as if they were. And I know today it's still kind of like that. There's a lot of systems where you're strapping on these different modules, right, like claims as an example or rating.
[00:10:36.30] LARRY WILSON: Yeah, or even different systems for different functions. And at that time that's what struck me was that was out there was somebody would develop an automobile insurance system or homeowner's insurance system or commercial lines or a claim system or a billing system and try to sell it.
[00:10:57.79] And so it was very fragmented. They weren't integrated. There was a lot of difficulty maintaining these diverse systems when there were changes. So my thought was to have-- and in the name of the company was Policy Management Systems Corporation.
[00:11:15.00] And the idea was to manage policies no matter whether it was commercial or personal, whether it was in the United States or Canada or Europe or Australia or wherever, South Africa, and really apply the insurance principles and give flexibility to handle any kind of product and any kind of function.
[00:11:38.40] Where it was integrated there was one database of all the policies that handle claims and billing and statistics and rating and policy issue and generated all the other management reports required. And so it became one database of all the policies a carrier may have. And they may have multiple companies within that carrier set. But it would all be in one location.
[00:12:05.83] And so it became much more integrated where they could do all the functions and use the same systems-- if they had the security access-- to be able to look at claims or billing or pricing or distribution or agents results and put it all together in one overall system that functioned all the business processes support for a property casualty insurance company.
[00:12:37.92] REID HOLZWORTH: Yeah, I mean, that's massive, what you just said. And so you built this product to solve some problems, right?
[00:12:50.52] But the product is huge to do so. And for the audience-- and you're still very involved in the policy administration system space-- has that, other than PMSC and a couple of others, isn't that still an issue in our industry for these policy administration systems, that they're still detached? Because I know, like you just said, in a lot of these carriers there's multiple systems even.
[00:13:19.92] You'll have a carrier that has Duck Creek, Insurity, Guidewire, you name it within under one roof even. And what you were trying to solve was, let's bring everything together into one environment.
[00:13:36.40] LARRY WILSON: Yeah, one overall database that contains all the information required to support all functions without duplication of the data, without redundancy. And so that when you had a change to make you made one change to one place as opposed to changing multiple systems and trying to keep them in sync and have it online.
[00:14:00.42] So the idea was an online system where you could access the data, If you were authorized to make changes, endorse, cancel, renew, whatever needed to be done and apply all of the transaction processing, the billing and collections or claims, reserving and payments, and all in one system without redundancy so the data was unique for the policy.
[00:14:34.53] And all the data required for that policy, to administer that policy, was in one place without redundancy but available to those authorized who had security to access it, and to those authorized to be able to change it or updated or modify it.
[00:14:52.65] And that became-- at the time there were many carriers had 20, 30, 40 systems for different lines of business sometimes, or different jurisdictions, they might have had a separate system for Texas because that was so different, or Australia, or England.
[00:15:10.02] But this is one system that was global and particularly-- and multilingual. So when we went to Canada we could handle French speaking parts of Canada, as well as English speaking. And we could handle the needs of carriers from Scotland or Germany or the UK that dealt in Canada.
[00:15:32.43] And so it became very popular as a system. And so we grew up to 6,000 people and offices all over the world.
[00:15:45.77] REID HOLZWORTH: That's-- wow, I mean congrats on that. That's just absolutely insane to me, the size of the product, everything that's involved. And for you to start a company building the product and bringing it to 6,000 employees, that's huge.
[00:16:10.59] Now going back to the all in one, does that exist today? Are there systems out there today that do what you set out to do with PMSC do you think? Or is it still a problem?
[00:16:25.99] LARRY WILSON: I've been on the board for Duck Creek. Yeah, after I sold PMSC. Well, two things, I sold AMS. I started AMS and then I sold it to get more capital to grow the business. And I sold it for $25 million to be able to get more capital to go international with PMSC and get more money for R&D.
[00:16:50.05] And we needed to spend about over $100 million a year on R&D, so capital was important. Went public to get more funding. And through the years continued to grow it. And then finally it was getting to the size that it needed more scale.
[00:17:16.27] And so I sold the company to Computer Science Corporation. Unfortunately they didn't have the insurance focus that we did, so it didn't thrive as much as I hoped it would under them. And other companies came along, like Duck Creek, which I've been on the board of since it was really launched in Bolivar, Missouri.
[00:17:39.10] And I brought it down to Columbia and been involved with them to try to recreate that after I sold PMSC.
[00:17:52.68] REID HOLZWORTH: Let's go back real quick. Because you made it you made a quick little comment there that I think the listeners would really, like to understand, dissect. So you said quickly, you built and sold AMS. What does that mean?
[00:18:11.08] Tell the audience how you came how you came to that, and then what is AMS? Who acquired it, too? And where is that today? It will be interesting for people to know.
[00:18:23.46] LARRY WILSON: Yeah, well at the time the agency systems were on different brands of computers, many of which weren't national or international brands and well known because they were developed by agents or using some mini computers that they had bought cheaply.
[00:18:48.44] And sold the software. And other people came together and got the rights to the software to sell them. But there wasn't really an IBM system. And IBM really was a very good partner with us at large based on IBM architecture, and because that was the most universal for the carriers, but not necessarily for the agents.
[00:19:12.38] And so worked with IBM and we developed-- they came out with a new mini computer long ago called Series/1, their first mini computer to compete with some of the other mini computers that were used in agencies. And they wanted to be able to launch IBM into the independent agencies. And so we developed a system called AMS, Agency Management System based on the IBM Series/1 mini computer.
[00:19:49.57] And we launched that and developed it. And then Computer Science Corp.-- we sold it. Back before Computer Science Corp, we ended up selling it to a West Coast operation, California operation, that already had a number of agency systems [INAUDIBLE] could use AMS to really scale up and-- more modern technology.
[00:20:22.99] And about at that time, I had $25 million, which we needed for R&D on the carrier side to go international. So we used that money to invest to develop the policy systems and the carrier systems for international corporations and initially in Europe and Australia and then other countries.
[00:20:46.32] REID HOLZWORTH: Now AMS was eventually acquired by-- well, is a consortium, but essentially ended up with CNA, with Dennis, is that right?
[00:20:59.41] LARRY WILSON: Yeah, that's right.
[00:21:01.20] REID HOLZWORTH: Yeah, how'd that all work out? So how did it go-- so for the record, you're the founder of AMS. Because that was the first real agency management system. I mean, it is the acronym. Like, you founded that acronym and founded AMS, right?
[00:21:16.14] LARRY WILSON: That's right.
[00:21:17.02] REID HOLZWORTH: And sold it for--
[00:21:17.68] LARRY WILSON: We started it.
[00:21:18.37] REID HOLZWORTH: --$25 million. And what that was--
[00:21:20.29] LARRY WILSON: IBM was a partner with us on that. And they supplied the Series/1 computer. So we designed it for the Series/1 computer. And then later we sold AMS because we wanted to focus on the carriers and to go international. And so we sold it, AMS, $25 million. And--
[00:21:41.20] REID HOLZWORTH: What year was that? Was that in the '80's or '70s when you sold it?
[00:21:47.02] LARRY WILSON: Um, gosh, it's been too long. I think it was in the '80s.
[00:21:50.68] REID HOLZWORTH: Yeah OK. OK. Yeah, wow, that's amazing. So then once you sold it-- and you said you sold it to an agency, essentially, that wanted to use it and leverage it in a bunch of different ways. How did it end up coming to CNA?
[00:22:09.12] LARRY WILSON: Well CNA was a carrier. Our policy system is for the carriers and policy administration system-- or what we call policy management system. And so I got to know Dennis. And he said, you know, we'd really like to buy AMS. And we'd like to give you an offer you can't refuse.
[00:22:35.14] And used that to launch good technology in the agency marketplace. So we did that.
[00:22:46.92] REID HOLZWORTH: Wow, that's pretty amazing. And $25 million back then is a lot of money. And then you said--
[00:22:55.42] [INTERPOSING VOICES]
[00:22:56.44] REID HOLZWORTH: You said you were spending $100 million at the time in R&D. That's insane.
[00:23:05.46] LARRY WILSON: When we launched the product we had an initial license charge based on the premium volume of the carrier. But then we had a monthly license charge that entitled them to you all the enhancements and upgrades and new releases.
[00:23:21.52] And that was really what was important, was to be able to have that continuing revenue so we could constantly upgrade the product, constantly make it better. And so that's how we were able to get such a large R&D budget and go to 6,000 people because we had hundreds of insurance companies paying monthly fees to use the software that we could then reinvest back in making the software more functional and more efficient and adding more capability to it constantly, and responding to the customers request.
[00:23:57.01] And so once they licensed it, as long as they paid the monthly fee they got all the upgrades for no additional charge.
[00:24:04.02] REID HOLZWORTH: Wow, yeah OK that makes a lot of sense. That's interesting.
[00:24:09.35] LARRY WILSON: And it was based on the premium volume. So a large company like CNA paid a lot more than, you know, the Alabama Farm Bureau.
[00:24:18.88] REID HOLZWORTH: Right. Yeah that totally makes sense. So then what happened to PMSC? 6,000 people, you guys went public, literally. And then you sold it. What happened to it? Because people don't hear PMSC anymore, you know?
[00:24:39.88] LARRY WILSON: Yeah, what happened was that Computer Science-- we were a public company. And they came along and made an offer that the investment bankers and the shareholders felt like was something that they would take advantage of. And so we ended up selling it because their offer was high enough that the stock price, all the shareholders got a very large return for their investment.
[00:25:09.00] REID HOLZWORTH: Yeah, wow. So then talk about the what next. You're still very involved in the industry in some ways. What happened then? So then you sold it. Business is gone. Duck Creek, you mentioned you're on the board of Duck Creek. How did that work out? And did you know Doug?
[00:25:33.45] LARRY WILSON: I got involved after we sold PMSC. Some guys from Bolivar, Missouri came to see me and say, we've got a product we think is going to be good, and we've got somebody that's interested in investing in it. And we'd like for your experience to help us grow the business. So I went on the board and got involved with them.
[00:25:55.95] REID HOLZWORTH: Wow. Did you know did you know Doug previously? Doug Roller?
[00:26:01.73] LARRY WILSON: I'd heard of him but I didn't really know him well.
[00:26:05.46] REID HOLZWORTH: Doug's a great guy, really good dude.
[00:26:07.53] LARRY WILSON: Yeah he is.
[00:26:08.77] REID HOLZWORTH: He really is. And he's still very involved in the industry, as well. Great story there. Now you're still on the board of Duck Creek?
[00:26:20.04] LARRY WILSON: I just left the board last week, as a matter of fact.
[00:26:24.03] REID HOLZWORTH: Oh, wow. Well congrats on that long run. Man, what a successful thing.
[00:26:29.71] LARRY WILSON: I was on for 20-some years, I guess.
[00:26:32.58] REID HOLZWORTH: How long was it?
[00:26:34.83] LARRY WILSON: I think it was about 20 years.
[00:26:37.18] REID HOLZWORTH: Wow, wow. What a great story at Duck Creek, too. I mean, they went public, it was a great IPO. They're doing well. They're crushing it, doing good things. And a great team. I know those guys pretty well, good team over there.
[00:26:52.60] LARRY WILSON: Yeah, they're terrific, yeah.
[00:26:54.82] REID HOLZWORTH: They really are.
[00:26:57.47] LARRY WILSON: We moved them to Columbia. And I had already sold PMSC at the time, and so hired a lot of good people I knew in Columbia and established a data center there. And, you know, then it branched out from there to other states.
[00:27:19.48] REID HOLZWORTH: Yeah, wow. I'm just curious as a-- as I say, self-proclaimed serial entrepreneur myself-- I'm just fascinated by the story of founding these businesses that became monsters with 6,000 employees and expanding internationally and just doing all of that. And it was a lot.
[00:27:46.71] How was that for you as the individual-- as the leader, the chief, the captain, whatever you want to call it-- in building that and just going after it? Were you excited by all the growth? Was it exhausting?
[00:28:02.44] LARRY WILSON: Oh, yeah, we were excited. The whole team was excited. And we were based in Columbia, South Carolina but we had offices all over the world wherever there was insurance. And about half the 6,000 employees were in Colombia, maybe 3,000.
[00:28:20.81] And the other 3,000 were spread all over the world in offices in every major international city, Canada being the biggest initially, then Europe and Australia became very large, and the South Pacific. But you know it was-- we were very focused on customers and all we did was insurance.
[00:28:46.76] We weren't like other software companies trying to do a lot of different businesses. And we knew insurance cold and we had lots of CPCUs. And we had a great education program with a full-time faculty that everybody who came to work at PMSC got a great education in insurance, and understood it as well as technology.
[00:29:08.45] And we hired a lot of college graduates directly out of college and trained them in the insurance and technology. And they were just terrific. And so over half our employees came out of the University of South Carolina.
[00:29:25.50] REID HOLZWORTH: You had to be, at the time, one of the biggest employers there, I would assume.
[00:29:30.12] LARRY WILSON: I think-- yeah, but we also were big employers in England and Australia and other places where we had locations, Germany, Norway.
[00:29:42.99] REID HOLZWORTH: Man, it's such a huge--
[00:29:44.34] LARRY WILSON: Norway became a big operation. We had all the Scandinavian companies, and Sweden and Norway and all of Scandinavia.
[00:29:57.29] REID HOLZWORTH: That's just, wow.
[00:29:58.34] LARRY WILSON: And so we had regional centers with people from those regions, most of which spent time in the US at some of our operations learning a lot about the systems. But the biggest foreign operation was initially Canada, where we had a lot of people who loved to come to South Carolina in the spring and winter when it was cold in Canada and spend time in South Carolina on the coast, in Charleston and other places.
[00:30:29.81] And so they loved to come to South Carolina and they loved PMSC. And so we had a huge presence in Canada. Virtually every insurance company in Canada ultimately became customers.
[00:30:44.90] REID HOLZWORTH: So not many people can share your story out there, where they founded a business and grew it to that size and went IPO, the whole nine, all the way through, and just kept winning and expanding internationally and whatnot. And I'm sure you've gotten this a lot over the years, but man, congrats on that. I mean that is-- that's huge. And it's very, very hard to do so.
[00:31:12.37] Now we have a number of listeners that are InsurTech startup founders. And they may never get to where you were, or where you got. But do you have any advice for some of these younger guys?
[00:31:33.25] LARRY WILSON: I think we were largely successful because first, we viewed ourselves as being an insurance business using software to help solve insurance problems. We didn't view ourselves as a software business trying to sell to insurance companies. We had lots of internal education, IIA and CPCU. We had lots of CPCUs.
[00:31:59.20] And people that work with us and for us were well understood insurance very well and could talk insurance with anybody at a customer site very intelligently and very thoroughly and knowledgeably. So our people understood in technology and insurance, not just technology. That was important. And we also really focused on the business aspects of technology. How can this improve service?
[00:32:36.40] How can this improve risk selection, know which risk to write at what price, knowing how much to pay for a claim. Use technology to be more sophisticated in decision making, and more accurate decision making, and not just to process transactions, but use it for information reasons to be able to understand which risk to write, what price to charge on the claim, how much to pay, and do that very accurately.
[00:33:08.17] And so we not only helped the efficiency of the carriers, we helped them with the underwriting results.
[00:33:15.57] REID HOLZWORTH: Yeah, so you were driving real ROI. That seems like that was the secret to success, was driving real ROI for these carriers. And how you did that was by having a very highly educated staff on insurance specifically, and then and then staying focused-- and focusing on-- insurance.
[00:33:39.31] It's a funny thing, I actually-- yesterday somebody told me this. I didn't Google it. You can fact check it. It might be totally wrong. But somebody said the other day to me-- it was yesterday, actually, last night-- that Bill Gates and Warren Buffett were sitting down with Bill Gates' father. And Bill Gates' father said, write down on this napkin quick what made you two successful.
[00:34:05.08] And apparently the two wrote down the exact same word. And the word was, "focus." And it is, if you think about that, you guys were focused 100% on insurance, insurance technology-- carriers, specifically, once you sold off AMS-- but really solving their problems.
[00:34:30.04] Now I'm curious though, the education. Because I've tried doing some of that in my former company. We're doing that now in the current business that I run, but probably not as well as you did. How was that, setting that up? I mean, it seems like it's a heavy lift. And let's be real about it, insurance isn't the most fun subject to learn about, right? So just training the masses on insurance had to be a big challenge in and of itself, and especially to get people up at the level [INAUDIBLE] --
[00:35:12.81] LARRY WILSON: Our education department was a key part of it. Our R&D group was very good. And our education department was very good. So we had courses in every aspect of technology applied to insurance. And so our customers would come to that. And they would learn a lot, not only about the systems, but how to productively use the systems to give better service, make better decisions on which risk to write, what price to charge, those kinds of things that they weren't getting anywhere else.
[00:35:47.28] And so it became a big part of our value proposition was our whole education and training department, which was probably 100 people involved in education full time.
[00:36:02.60] REID HOLZWORTH: Wow, wow. 100-person education.
[00:36:06.42] LARRY WILSON: Both for our employees and our customers.
[00:36:08.91] REID HOLZWORTH: That's a school.
[00:36:10.25] LARRY WILSON: We had education sites all over the world, in Europe and Asia and Canada, as well as in the West Coast.
[00:36:18.81] REID HOLZWORTH: Oh, true, I didn't even think about that. Yeah, how'd you educate-- you'd educate them on these other international countries, literally insurance, too. Wow, wow. That's amazing. So what are you working on now? Do you have any projects you're working on now, anything?
[00:36:39.81] Now that you've just left-- you're gone off Duck Creek after over 20 years on the board, done a lot of things. What's going on now?
[00:36:52.78] LARRY WILSON: Right now just, I'm working on individual projects and doing some things. But still active and still looking for things to do and things to create.
[00:37:03.44] REID HOLZWORTH: That's awesome. That's awesome. That's awesome. So going back originally, because I'm just fascinated by this whole story. But what do you think about policy administration systems today, and are they still-- are they doing the same things they were doing that you were doing in the '70s and '80s with these policy administration systems?
[00:37:38.82] Are there still holes to be filled there? I still feel like I don't know if the carriers have solved the one-system everything yet, at least the bigger ones, the tier ones, right? Do you find that true?
[00:37:57.75] LARRY WILSON: Yeah I do. I think what happens is the carriers-- new technology comes along and they jump on that new technology and develop a system for it. And then they open up a new territory or new product line and they develop a system for it. And when they end up with a hodgepodge of a lot of different systems, some of which end up overlapping, some of which are redundant, some of which are hard to knit together to really see what's going on.
[00:38:28.03] And instantaneously it's hard to get all the data synced up. Some systems are hard to integrate with other systems. And so you know, to me, going back to the basics of having one overall policy system to manage all your policies and all the transactions around it-- including claims. There shouldn't be a separate claim system. There should be claims modules within the policy system.
[00:38:58.23] But the policy system should handle-- it's just a contractual obligation that needs to be handled, just like the policy has to be handled, just like reinsurance or billing and collection or many other policy changes. So the key is to having a good policy administration system that can do all the functions that are required and have it integrated without redundancy and not having multiple systems that are redundant, hard to maintain, hard to take keep in sync when you want to introduce a new product, multiple systems to change and modify.
[00:39:38.67] And to be able to get to it there ought to be one overall system. And that system should handle all the transactions, all the functions, and be flexible enough to be easily updated and responsive to new opportunities in the marketplace.
[00:39:59.59] REID HOLZWORTH: Yeah, wow.
[00:40:03.26] LARRY WILSON: And ideally, that system should be international and be able to handle multiple languages, multiple regulators, and multiple locations with different reinsurance requirements and all those kinds of things ought to be designed into the architecture.
[00:40:21.62] REID HOLZWORTH: Yeah, I totally agree. It's way easier said than done, right? I still can't believe that you did it at PMSC. But what did-- the acquirer that acquired PMSC-- it just kind of fell apart. Was it because it was a technology company that didn't know insurance?
[00:40:49.19] Did they get rid of the literal university that you had built? Did they not see the value in just focusing on that like you guys did? Because you had a very successful company. And then it just kind of-- once it was acquired it just kind of went away over time.
[00:41:09.91] LARRY WILSON: Yeah. There was no-- I don't know all the details. But there was no one there that had the vision of being able to say, this is an industry that has certain functions that need to be done efficiently, accurately, and consistently. And many of these functions are the same and can be-- you don't need multiple systems, and all the problems around multiple systems.
[00:41:42.68] You can have one system with all the data in it that can perform the things you got to do, the billing, collection, rating, policy issue, regulatory reporting. But you have to understand insurance. And you have to understand how it all interrelate. And I think that's the biggest problem. It's overwhelming to a lot of people who don't really have the insurance knowledge and understand the industry in detail. And a lot of those people are already locked into positions at insurance companies and really don't want to learn technology.
[00:42:18.46] There is sort of a dichotomy in insurance to some degree where there are people who really understand insurance, which risks to write, what price to charge, how to settle a claim, how to place reinsurance. And there are people who understand technology around insurance, how to keep the statistics and how to program various rating schemes and reporting schemes and so forth.
[00:42:44.07] But there doesn't need to be that dichotomy. It needs to be much more integrated. The IT department, I think, in some cases is too separate and needs to be much more integrated with the carrier's other functions.
[00:43:01.79] REID HOLZWORTH: Yeah I totally see it. So transitioning to other topics, personally, what do you do for fun? What are some things you like to do? What does Larry do on a Saturday? What's fun for Larry?
[00:43:20.56] LARRY WILSON: I like anything with an internal combustion engine, so I'm a car collector. I love boats. I've had airplanes. So, I like anything with an engine in it, and I enjoy cars. I've got a car collection. And I enjoy boats and I've enjoyed flying.
[00:43:45.43] REID HOLZWORTH: Any particular make that you tend to favor for cars?
[00:43:50.74] LARRY WILSON: For cars, Porsches
[00:43:52.79] REID HOLZWORTH: Porsches, yeah, beautiful, beautiful machine. I don't own a Porsche. I consider myself a car guy in a major way. But, yeah they're fun, really fun, especially on the track.
[00:44:07.35] LARRY WILSON: Yeah. The engineering is superior and they don't change them every year. And there's a lot of continuity. And so I enjoy the Porsches from the '60s and '50s and '70s and right on up to the modern ones. I've got a collection, so I enjoy that a lot, most of which are Porsches.
[00:44:28.37] REID HOLZWORTH: Nice, nice. Any favorites? Any favorite cars? I get that question a bunch.
[00:44:35.06] LARRY WILSON: Oh, they're like my children. I love them all.
[00:44:38.69] REID HOLZWORTH: Yeah. Yeah, that's the answer. That's cool. So, racing? Or just collecting, cruising, looking at the collection?
[00:44:50.14] LARRY WILSON: Well I've raced. I raced for a long time. I don't do any racing anymore. But I've done a lot of racing through the years. But now I just collect them and drive them and enjoy them.
[00:45:04.87] REID HOLZWORTH: Like, road race stuff, or rally, or?
[00:45:09.12] LARRY WILSON: Road, yeah, road race.
[00:45:10.98] REID HOLZWORTH: Yeah, I've always been a curvy road driver. The straight line stuff isn't as fun, you know? But I love rallies too. Rally's really my passion for automobiles for sure. Motorcycles, for me it's all about [INAUDIBLE].
[00:45:31.14] LARRY WILSON: Rallies can be a lot of fun. But I primarily raced at Sebring and tracks in Florida, and also up in Virginia International Raceway, and up and down the coast, East Coast, Southeast coast.
[00:45:48.69] REID HOLZWORTH: That's awesome. That's awesome, yeah. Well, we'll have to go for a cruise one of these days. We do-- a few of us get together and do track days every once in a while. We rent out of track, Dennis being one of them.
[00:46:02.41] LARRY WILSON: Well if you ever get down to West Palm Beach area let me know, and our car collection is there.
[00:46:09.48] REID HOLZWORTH: Oh, yeah, awesome, I will.
[00:46:12.05] LARRY WILSON: Well, give me a call when you get down there. We'll go drive some cars.
[00:46:16.11] REID HOLZWORTH: I'd love to, I'd love to. All right, well that was awesome. Man, Larry Wilson, what did I tell you? It was so funny how he just kind of skipped over that part of like, oh yeah, and then took AMS and we built AMS and then we sold it for $25 million. And I was like, wait, what? Wasn't that in the '80s?
[00:46:36.95] He just kind of built AMS and just sold it because he needed some extra cash, for $25 million bucks? Craziness. And you know what's just mind blowing-- a couple of things-- is literally a $100 million R&D budget.
[00:46:54.20] So that's why they built AMS and sold it for $25 million. That's like a quarter of R&D. It's just absolutely crazy. But it was interesting that they had to do that to show the product evolving, and the product driving value back to their user base, so-- guess what-- they could continue to charge those maintenance fees and continue to drive revenue on the upside. Crazy.
[00:47:21.60] And you know what else is crazy to me in this story, is that literally 6,000 employees, management changed, and it went poof, bye bye. Right? Isn't that just craziness? It's so hard to believe that that many people just kind of went away. That organization went away because of poor management. So it can happen just not at the small level but at the big level.
[00:47:46.97] That's some podcast gold there, right? And look, this guy-- not only did he sell this monster organization, global organization, did all these things, this guy is a fricking winner. He didn't stop there. He went and went down and met our good friend Doug Roller and, boom, there's Duck Creek, which he's been on the board of until a week ago of this podcast recording.
[00:48:12.02] Insane. Just stayed connected, stayed in it. Now many of you know, Duck Creek recently went public. Big story there, awesome company. They've done some really good stuff. I know a lot of people at Duck Creek personally. Great organization, good people, good crew. And again, that's top down. That's leadership. That's board that's pushing that.
[00:48:33.80] So what an awesome story. And I love that Larry is also a car guy. A lot of people know that I'm a car guy as well. And I've heard he has a very beautiful car collection. So I can't wait to get down to Florida and get in one of those cars and rip it on the track with him. So, awesome, awesome guy. Hope you guys enjoyed it. Stay tuned for future episodes.
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