[00:00:00.00] NICK ZERBIB: It's amazing to me as somebody who's been observing and kind of studying this market for 25 years, how the companies that try to leapfrog that distribution channel are now embracing it.
[00:00:13.06] ANNOUNCER: 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.
[00:00:31.76] [UPBEAT MUSIC]
[00:00:34.80] REID HOLZWORTH: Welcome to the Insurance Technology Podcast. I'm your host, Reid Holzworth. In this episode, I'm going to be interviewing Nick Zerbib. Nick Zerbib is the CIO at Stone Point Capital. CIO, not like we're used to, but chief investment officer. So we're back on that track, following Jesse Wedler at Capital G.
[00:00:53.01] But in this one, Nick. Nick has been in the industry for a very long time. He's invested in a lot of things and knows a lot, a lot, a lot of people-- imagine that-- within this industry. Nick's an awesome dude. I know I say this about everybody, but he really is. This one's going to be good.
[00:01:10.98] In this episode, we're going to get into Nick. Hey, how'd you get into this industry? Where'd you come from? It's really, really good. Stay tuned. You're going to love it. Nick, welcome. Welcome to the show.
[00:01:22.63] NICK ZERBIB: Good morning, Reid. It's great to be here. Thank you for having me.
[00:01:26.26] REID HOLZWORTH: Thank you for joining. Man, Nick, you're a legend in this industry. You've been around for a while, and you've been involved in a lot of things. And I'm excited for the listeners to get to know Mr. Zerbib himself. So you're a good dude, man, and this is going to be a lot of fun. So let's get into it. So tell us about Nick. So I don't know a lot about this. Where'd you grow up?
[00:01:50.64] NICK ZERBIB: Oh, my goodness. Do you really want to know, Reid? I mean, I grew up in all sorts of random places. I grew up in France. That's where I was born. I lived in Israel when I was a kid, and then we moved to the desert, to Phoenix, Arizona.
[00:02:03.87] REID HOLZWORTH: Oh, wow.
[00:02:04.35] NICK ZERBIB: And then I moved to the East Coast for college and stayed.
[00:02:09.66] REID HOLZWORTH: And where do you live now, Nick?
[00:02:11.22] NICK ZERBIB: So I live just north of New York City in Westchester County in a town called Larchmont, New York.
[00:02:16.93] REID HOLZWORTH: Awesome, awesome. So that-- what-- so around all those different places-- what did your parents do for a living?
[00:02:22.74] NICK ZERBIB: So my dad was a pharmacist by trade, and then he-- and my mom sort of had a traveling bug and an ideological bug to move to Israel in 1975. And we lived there for six years, and then when they were in their 40s, they moved a family of six to Phoenix, Arizona, not knowing-- well, having sort of rudimentary English, which is-- which is a hard thing to do, to start all over in your 40s and move to a new country, but they pulled it off.
[00:02:56.07] REID HOLZWORTH: So where would you say you grew up? Phoenix?
[00:02:58.74] NICK ZERBIB: Phoenix for the high school-- 10 to-- 10 to 18, Phoenix, Arizona.
[00:03:03.10] REID HOLZWORTH: Yeah, totally. High school years, that's what I consider-- when people say, where'd you grow up, that's like, yeah, kind of as you grow up, right? It's kind of funny. Some people say like, oh, I grew up here and I lived in this place till I was three. That doesn't really count in my book, right?
[00:03:16.72] NICK ZERBIB: [LAUGHS] I agree with that.
[00:03:18.33] REID HOLZWORTH: [LAUGHS] So Phoenix, Arizona. So what were you into, Nick? What kind of things did you do for fun? Were you a sports guy?
[00:03:26.02] NICK ZERBIB: So I played a lot of-- I played a lot of sports growing up. I played a lot of tennis. So I played in the heat. And I played competitively. And then I went off and played tennis in college and squash, actually.
[00:03:39.16] So that's what I did. And I was also a student. Or I pretended to be a student so I tried to work hard during those high school years.
[00:03:49.45] So not that much fun, that's another way of saying. Reid, you have a big smile on your face as if you had more interesting high school years.
[00:03:57.38] REID HOLZWORTH: [LAUGHS] Well, it's all relative. I don't know. Yeah, some would say. [LAUGHS]
[00:04:07.54] That's awesome, man. So yeah. So what else? I mean, what else did you do for fun? Other than tennis, other than that, what kinds of things were you into? Give us a little peek into the Nick's world.
[00:04:20.90] NICK ZERBIB: I was pretty interested in-- I'm a big reader so I did quite a bit of reading really in that period. Not particularly interesting for this podcast. But history, world affairs, that sort of thing were my primary interest.
[00:04:39.04] But I was just an immigrant kid kind of trying to make his way and get his footing at that point in my life. Until I moved to the East Coast, which was, I think, quite eye-opening for me. And then moving to the big city, to New York City was also a big eye-opening moment as I moved into my professional life.
[00:05:00.35] REID HOLZWORTH: So tell us about that. Give us some of the story.
[00:05:04.06] NICK ZERBIB: So the story, so I was pretty lucky in the sense that I went to a liberal arts college and I was a history major. But the investment banks on Wall Street recruited from some of those schools. And so I got a job at Goldman Sachs as a history major.
[00:05:20.29] REID HOLZWORTH: Why would they-- sorry, Nick. Why would they recruit from those types of schools?
[00:05:23.44] NICK ZERBIB: So it's a great question and it's a vestige of the past. Those schools had professionals who had gone to those schools. It's a the vestige of the Ivy Leagues and that, quote-unquote, "old boy network."
[00:05:38.65] So based on some of the schools that you may have attended, you would get access to interviews at the top investment banks. And you may not have the accounting and finance background. But they perceive you to be a quick learner and perhaps a, quote-unquote, "decent athlete."
[00:05:59.54] And so that's why they would recruit from the Ivy Leagues and in my case, from Amherst, to go to these Wall Street jobs. And on Wall Street you get just incredible exposure in that three-year period.
[00:06:12.80] And I was lucky enough to start working with our current senior partner, Chuck Davis. And so when he moved over to this platform, which was then called Marsh McLennan Capital, MMC Capital, I joined with him. But I had spent three years in investment banking in the financial institutions group at Goldman Sachs before that.
[00:06:35.78] It's been an incredible journey. Our platform was the old Marsh McLennan Capital. So it was a captive private equity business inside of MMC, the parent company to Marsh Carpenter, et cetera.
[00:06:50.24] And in 1998, we joined this platform. It was really Chuck Davis and Steve Friedman. And I was carrying their bags and still am to this day. We joined the platform.
[00:07:03.98] And it was an insurance-centric private equity business. It was a business that had been formed around the supply demand imbalance of 1985-1986 when Ace and XL were created.
[00:07:18.89] ACE being Chubb today. XL being part of AXA and the whole Bermuda insurance and reinsurance market. So Marsh McLennan was the corporate parent. But there was a private equity business inside of it. And that's how we ended up here, somewhat haphazardly, with Chuck taking over in 1998.
[00:07:43.28] In 2004, we separated, really in early 2005. But in 2004, you may remember Spitzer went after Marsh McLennan companies. And part of the issues around perceived conflicts was that we had a private equity unit that invested in insurance companies but the brokers placed business with those insurance companies.
[00:08:06.17] So part of the resolution was to separate MMC capital. And in 2005, we rebranded ourselves Stone Point. But you're right. We were involved at MMC capital with the first foray of private equity into the agency management space.
[00:08:25.05] So AMS, we acquired in 1999 from CNA. CNA was a 90% shareholder. There was a consortium of five or six other insurance companies that own the rest of it.
[00:08:38.12] When Dennis left CNA, the Tisch's decided that it was time to exit some of the non-core businesses. We acquired that business. It was our first foray into--
[00:08:49.42] REID HOLZWORTH: Dennis Chookaszian, for the listeners, it all comes back. Go ahead. Yeah, sorry.
[00:08:53.21] NICK ZERBIB: Sorry about that. Yes, I should have said that. So you're right. In 1999, we started when we-- shortly after we joined this platform, one of our first investments outside of core insurance underwriting was a vertical software business focused on automating the agency desktop. So AMS which had come together through all sorts of acquisitions, it also had comparative raters.
[00:09:17.42] REID HOLZWORTH: I want to say something real quick. For those that don't know, Dennis has been on the podcast before. Dennis is a really good friend of mine, as well as, Nick's.
[00:09:25.82] Dennis still has, in his garage, he has AMS, right? And then it says President Dennis Chookaszian. Because that is where-- well, people don't know this, AMS was a company and that company became the term Agency Management System.
[00:09:44.99] And actually, I don't know. I don't remember. Does AMS, the original one, stand for Agency Management System or was it something else?
[00:09:50.66] NICK ZERBIB: No, that's right. You're 100% right. And you and Menzies, right before we sold the business to Hellman and Friedman in 2004, renamed it. And we always thought it sounded like a fine wine. He renamed it Vertafore.
[00:10:05.49] [CHUCKLING]
[00:10:07.50] Which I'm not sure whom we paid to come up with that name. But that was the transition from AMS to Vertafore. And that was in 2004.
[00:10:17.49] But it was a fascinating time for the industry because, as you know, AMS or Vertafore was effectively utility. So all of these carriers that relied on independent agents to distribute their product were essentially investing in trying to consolidate some of the technology so that they would have one common platform.
[00:10:40.86] At one point, you may know this, and maybe Dennis Chookaszian has mentioned it to you, AMS actually provided dial-up internet services. I'm dating myself now. For the agents, it was an ISP.
[00:10:54.06] So it was part of connecting into the carrier platforms, et cetera. So that was a really, really interesting period for me in terms of seeing the transition of AMS from effectively a consortium-owned business that was losing money to a profitable business.
[00:11:15.52] REID HOLZWORTH: And to say something about that, it's interesting because a lot of people don't realize too, back then, carriers would pay for the AMS for their agencies.
[00:11:25.90] So like, hey, if you get to X amount of premium and you maintain this amount of premium with us, we'll pay for the agency management system.
[00:11:33.17] And so what's really funny about this too is, you think about what we're talking about here. This still holds true to where we are today on panel and things like that.
[00:11:44.05] Where the carriers are kind of paying for technology and getting in because they want to be part of that panel and part of that technology and be there right at it.
[00:11:52.87] It's the revolution on what was personal lines raiders, now commercial lines raiders and all of that. The same thing goes for the AMSes back then. Because those AMSes would connect to the carriers, right? Which they didn't prior.
[00:12:09.10] Because back when Doug Roller was on the show and Doug was talking about when he was an agent, they had like six computers in the office. One was for this carrier, one was for this carrier, and this carrier. And then they started putting them together, which is what really--
[00:12:25.57] I mean, correct me if I'm wrong, but just the way I think about it, Dennis, and David, and all of them started putting it together. And they said, here you go, this is a package.
[00:12:36.37] Carriers, you need to be providing this for your agencies, because it's going to make those agencies literally put more business with you, right?
[00:12:45.07] NICK ZERBIB: That's exactly right. It's amazing, all the names that you mentioned, towards the end of our investment in AMS, Vertafore, we actually provided a seed investment in Duck Creek.
[00:13:01.00] And at one point, we had an investment in Agency Port speaking of portals and--
[00:13:05.29] REID HOLZWORTH: Oh, I didn't know you were involved in Agency Port.
[00:13:07.33] NICK ZERBIB: Well, back in the--
[00:13:08.19] REID HOLZWORTH: Were you involved with Agency Port and Duck Creek at the same time?
[00:13:11.86] NICK ZERBIB: Well, at different times. But towards the end of our investment in Vertafore and I think under you and HNF, you and Menzies and HNF, I think some of those were disposed of shortly after we exited.
[00:13:26.38] But all of those businesses, the kernel of those ideas existed back then. And the concept, it's amazing, 25 years later to think about things like SEMC, the panel, all of the words that were used back when we first got involved with AMS still exist.
[00:13:45.91] As part of our closing dinner for the Vertafore investment, you and Menzies presented us with a New Yorker cartoon that shows three old white men symbolizing the insurance industry, of course, looking at a screen and it says the end of $30 million.
[00:14:08.07] We had burned $30 million trying to create an exchange at AMS called Tower Street. And it was completely-- There's no evidence of it today because it was really completely written off.
[00:14:21.45] But it was just a sign that maybe that was a little too early in the evolution of insurance, and insurance distribution, and insurance technology. But I still have that hanging in my office up here.
[00:14:33.30] REID HOLZWORTH: I didn't know you were involved in that, the exchange thing and all that. I don't know which but there's been a few attempts at it. I don't know which attempt number this was. But they always fell apart.
[00:14:44.16] And from what I've always understood-- I'd love to get your opinion on this, from what I've always understood they fell apart because not everybody wanted to play. And when I say everybody, everybody really in the AMS space is where they didn't want to play. And they were like, nope. And it really just crushed it multiple times.
[00:15:02.89] You know what's funny? Is Bold Penguin, which I know very well, and Ilya. It's funny, when Ilya was coming out, doing his thing, he was talking about exchange. And there was a bunch of people out there in the industry that were like, you can't say exchange, man.
[00:15:19.09] Because somebody had a patent on it.
[00:15:21.46] NICK ZERBIB: Oh, is that right? Oh, that's funny. I didn't realize that.
[00:15:24.13] REID HOLZWORTH: Really, and they were coaching him like, dude, you can't say exchange. Don't do that. You're going to get sued because there's some troll out there that owns it that comes after you.
[00:15:33.52] Because there's been so many of these attempts at this and they all fell apart, somebody has some investment and is still holding on--
[00:15:40.33] [INTERPOSING VOICES]
[00:15:42.55] NICK ZERBIB: But like Reid Holzworth, Ilya is uncoachable. He's too smart to get any coaching. So it definitely was called an exchange.
[00:15:52.78] And Bold Penguin was actually a perfect example of something super successful because it was narrow in its offering and it got a lot of volume by virtue of signing up some very large carriers early. So they were able to attract the panel on the back end.
[00:16:11.22] And so you're right. The exchanges never took off in part because you had the applied AMS, Vertafore duopoly. And so it was hard to get all the demand and then all the carriers on the other side.
[00:16:26.99] But there are great examples in the industry, including Ivan's, of wonderful clearing houses, and essentially, utilities for the industry that create great pipes. It's just amazing that it's taken so many years to put the WD-40 in those pipes.
[00:16:44.08] REID HOLZWORTH: [LAUGHS] That's a good way to put it. What do you think about-- do you think an exchange could exist today? Do you think the industry is now ready for an exchange, a true exchange?
[00:16:57.53] Or is it like, let's be real, I mean there's exchanges already in a way. But a big centralized exchange, I don't know? There's been so much money that people have poured into that over the years. Technically speaking, I think it's possible now. But would they want to? Would it make sense? I don't know.
[00:17:16.23] NICK ZERBIB: It's a great question. I don't know if the carriers-- for bespoke products, you could see carriers agreeing to certain standards because they need to break in.
[00:17:30.96] But when you're in an incumbent position, I guess you would do it defensively. But if you're happy with your distribution, perhaps you opt out of trying to standardize the way you interact with your agents or interact directly with the insured.
[00:17:47.82] So it depends. Look, part of the really big opportunity for all of the technology enablers focused on the independent agency channel is to continue to make that channel relevant.
[00:18:03.32] And obviously, we've had several waves of insurtech that have tried to either leapfrog the independent agency channel. Now they're getting closer to it. But the independent agents want choice. They need choice to survive.
[00:18:18.00] And so an exchange would make their job a little easier. But at the same time, some of the clunkiness of interacting with the different markets plays into their hand in a way.
[00:18:32.67] REID HOLZWORTH: It's a really good point. Totally, right? It's like their own competitive advantage in that way. So why? Yeah, that makes sense. So let's go back a little bit.
[00:18:42.51] So Duck Creek, you were early on in Duck Creek. How long did you guys-- how long were you riding that?
[00:18:49.43] NICK ZERBIB: That was a tiny investment that we made and it was exited shortly after. But it must have been towards the tail end of our investment in Vertafore, so we weren't active.
[00:19:00.60] Agency Port was interesting because that concept still applies today. That's when Agency Port had a wholesale business and a technology business attached to it.
[00:19:11.37] And the concept at that time was to create an opportunity for the CSR using AMS to effectively be able to find alternative markets for stuff that didn't make sense in the admitted markets.
[00:19:26.25] And that, to this day, as you know, Reid, is a huge, huge opportunity because you do have exchanges, like Bold Penguin, focused on admitted markets.
[00:19:35.80] But the E&S market, which is growing rapidly in this super hard premium environment, rate environment is an area where technology is still not where it needs to be.
[00:19:46.79] And so we thought about that. And this was 25 years ago. It didn't go very far. Agency Port was split between their business transactional wholesale brokerage business and their technology portal. But at the time, the idea was, can you marry that up and put that on the CSR's desktop.
[00:20:03.30] REID HOLZWORTH: Yeah. And so for the listeners that don't know, what was Agency Port's core business?
[00:20:08.43] NICK ZERBIB: Agency Port, at that-- Agency Port, when it was finally acquired, was effectively a portal. So it was effectively a portal that carriers used to try to attract the independent agents to do more of their work on the portal so that they could interface more directly with the carrier billing system and rating system.
[00:20:30.78] Obviously, it's sort of a middleware between the agency management system and the carrier system. And it's something that APIs, I think, have increasingly solved.
[00:20:40.62] But the Agency Port portal concept, I think, got a lot of traction. And it was an important growth vector for a lot of the-- a lot of the policy admin businesses.
[00:20:52.62] REID HOLZWORTH: So for the listeners, Agency Port, really, it was a company that built portals for carriers when portals didn't exist. So I couldn't go and quote the Hartford, let's just say, without a portal.
[00:21:08.59] And so back when, like you said, 15-20 years or however long ago this was, this guy, I mean they blew up. And so it's funny because-- I shouldn't really name names.
[00:21:19.80] But let's just say, some of the biggest players in the industry are still on that same portal built by Agency Port. And people that don't know, Agency Port, a lot of people came out of Agency Port actually.
[00:21:38.07] Mike and Allan from Ask Kodiak. Allan was the CTO, I think. And then Mike was the CIO. And then Agency Port got acquired by Duck Creek. And then those guys went did the Duck Creek thing for a bit. Then they went and started Ask Kodiak.
[00:21:55.62] But yeah, it's an interesting story. It's definitely cutting-edge technology and it was so ahead of their time for that. And they just blew up.
[00:22:04.02] I remember as an agent-- as an agency owner, when carriers started to bring portals online, you're like, oh, yes, I can quote this one in that way. It was so good.
[00:22:15.40] And it was funny because back in the day, a lot of them were similar. And that's because it was all on that Agency Port backbone, I guess, right?
[00:22:25.15] NICK ZERBIB: Yeah, it's amazing. So in a way, it was ahead of its time. And as you said, it was interesting that it was the policy-- it was the policy vendors-- the carrier vendors who ultimately acquired that.
[00:22:40.96] REID HOLZWORTH: This conversation still exists. I've had this conversation with carriers, in the last even six months. Some of the big ones. And literally, they're asking me. They're like, what do you think, man? Come on, be real. Should I invest in my APIs, right? And invest in digital.
[00:22:58.99] Or should I put not maybe as much budget but continue to pump dollars into my portal? Honest to god, real, having a couple of beers, real conversation. And I'm just like, dude, you know?
[00:23:15.91] I mean, but it makes sense you still need that. You need that channel. You want to continue to support that channel. But the agency, I mean, they want the things that you guys were talking about 25 years ago, the whole SEMC system. They want to live in the management system.
[00:23:32.34] They want to-- or not. They want to live in their own proprietary system is what we're seeing at the top level. And then control their own flow within their users, their agencies, and CSRs, whatever you want to say.
[00:23:45.79] NICK ZERBIB: I mean the trends speak for themselves. I mean if you think about, the independent agency industry has continued to withstand attempts to go direct.
[00:23:58.99] Whereas, the captive agency market is the one that is shrinking. And so to your point, if you're going to have one carrier supplier, then it makes sense to be a captive agent.
[00:24:14.08] But even the largest captive agent writers are now opening themselves up to independents because that's the wave of the future. You need to be able to have choice.
[00:24:22.75] And by the way, as market appetites and appetites for different risks change, it's super important, even for the captive agents, to be able to provide their agents with choice, or at least access to other markets for certain lines of business.
[00:24:37.88] So the trend is very much in favor of the independent agent. And as investors, we like that model a lot because it's a super important way to distribute-- I think it's the only viable way to distribute commercial lines today, perhaps not down the road.
[00:24:59.17] And it's amazing to me, as somebody who's been observing and studying this market for 25 years, how the companies that tried to leapfrog that distribution channel are now embracing it.
[00:25:11.83] All of the insurtechs are now moving to, hey, we like the independent agency model because it's variable cost of acquisition, instead of having to fork the money up front.
[00:25:23.09] And you just had the announcement this week that a big VC fund is effectively financing the customer acquisition cost for a large insurtech because they have such a high tack, such a high customer acquisition cost today they can't afford it. So they're trying to variabilize it by having a financing mechanism which is effectively an outsourced agent.
[00:25:46.26] REID HOLZWORTH: Yeah, that's so wild. What we're seeing-- I'd love to get your opinion on this. We're seeing now that-- I mean, we've been seeing it. But we're seeing the big captives are now moving into the IA channel, the big logos.
[00:26:01.98] And it's interesting. If you think about running that business, as an executive, if I'm running that business and I'm looking at CAC, LTV, and I'm going, where am I getting my customers from and how am I going to expand my TAM, right?
[00:26:17.64] Well, why wouldn't you tap into the IA channel? Give that option. As an independent agent too, I'll put myself in the agent's shoes, like, hell yeah, I'd love to have those logos to provide to my customers.
[00:26:32.06] Because every market is, you know this, for a specific type of customer. And that's typically how they should design the products. And that's our jobs as agents to place the right customer with the right carrier for what their needs.
[00:26:48.17] So it's interesting. It's funny, 10-20 years ago or whatever, not even, people are like, the independent agents are going to go away. Blah, blah, blah. But now, the industry--
[00:26:57.55] And then you had all these insurtechs. That's the wave of insurtech, right? Like, no, it's stupid. Direct to consumer. All this. All those guys. Man, did they get crushed.
[00:27:06.31] And I mean, I don't know. You probably have been involved in them. And it's tough. And now they're going, oh, this IA channel makes sense. And so it's an interesting time.
[00:27:19.39] That said, you're right. On the commercial lines side, I mean, it's IAs all day. They own the commercial line side. Which when you think about relationships, and big relationships, and big premium dollars, that's a lot of personal auto policies. I'll tell you what. A lot of homeowners' policies.
[00:27:38.50] And so it's a good place to be in the IA channel.
[00:27:42.64] NICK ZERBIB: You know what's amazing? You know what's amazing, Reid, is when you start talking about the agent, you're talking about wearing your old hat as an agent, which is wonderful.
[00:27:56.55] Because in my experience, the people who have had the most success on the technology side are people who have walked in the agent shoes or in the carrier shoes before they tried to figure out a way to make the processes a little bit better.
[00:28:12.86] And so the experience that you had and Ilya Bodner had as an agent figuring out where things were really not streamlined has made for very successful enabling technology, facilitating technology on the insurtech side.
[00:28:31.06] It's hard to be a pure technologist, and come in, and solve the insurance industry's problems without having that perspective.
[00:28:40.78] REID HOLZWORTH: I've had so many conversations over the years. So, so many with people that come in here guns blazing. And they're going to fix it all.
[00:28:49.33] But they haven't walked down that road. They haven't been there. They haven't interacted with these tools, and carriers, and whatnot, and hit those walls on these things it's.
[00:28:59.71] And then also, they don't truly understand the complexity too. It's not even that. So yeah, it's a monster. But it's funny. A lot of noise happens around that. And thank you for those kind words. I appreciate it. But we need more people that have walked in it to take this industry to the next level.
[00:29:18.76] But I think that's happening, man. I think that now, this generation, people are so ingrained with technology and agents. They're hiring people and you got all these no code, low code, blah, blah, blah, declarative platforms, and all this stuff for people to go play with.
[00:29:36.49] And so I think a lot of that's changing. I've always said and Applied-- and on the Applied and Vertafore side, I've always said that the big competitor that's going to come against those guys are the brokers that build their own proprietary solution.
[00:29:50.66] And it is just so good that they bring it to market. I think that's the big risk on the AMS side. And it's because of what we just talked about. And really getting it right.
[00:30:00.95] But good luck with that because now, I mean, again, because technology is so much easier these days, Vertafore and Applied, among others, are just updating their platforms to be where they need to be able to compete even with these new startups that are coming out.
[00:30:20.99] And so they're too far ahead and they're too ingrained, I guess. If I'm an investor, new agency management system, it'd be a good quick hit for a bit. Long-term? That's a tough one.
[00:30:36.49] NICK ZERBIB: Do you speak from experience?
[00:30:38.51] REID HOLZWORTH: I do. I do. I do. And people talk to me about this all the time. They're like, well, you guys had a chance. And we did. We did. And we were doing it. But I think it's changed now. It's too late.
[00:30:51.38] NICK ZERBIB: Well, I think it's changed in part because I think technology has improved. I think the BMSes, I like the fact that we've moved from the word AMS to Broker Management System because now we're wearing the Applied hat.
[00:31:06.59] [CHUCKLING]
[00:31:08.06] So the BMSes are more open architecture. And that's super, super important.
[00:31:14.32] REID HOLZWORTH: Nick Zerbib, folks. That was great. I find it interesting that Stone Point spun out of Marsh. I mean, just deep roots in this industry.
[00:31:25.57] Nick, he's been there, done that. And look, in this next episode, we're really going to get into Nick's thoughts on the industry. Things that need to be resolved.
[00:31:37.69] Surprise, there's a lot of-- well, surprise, spoiler alert, [CHUCKLES] it's a lot of the same things that people talk about throughout this podcast. But stay tuned. It's going to be really, really great.
[00:31:48.22]
[00:00:13.06] ANNOUNCER: 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.
[00:00:31.76] [UPBEAT MUSIC]
[00:00:34.80] REID HOLZWORTH: Welcome to the Insurance Technology Podcast. I'm your host, Reid Holzworth. In this episode, I'm going to be interviewing Nick Zerbib. Nick Zerbib is the CIO at Stone Point Capital. CIO, not like we're used to, but chief investment officer. So we're back on that track, following Jesse Wedler at Capital G.
[00:00:53.01] But in this one, Nick. Nick has been in the industry for a very long time. He's invested in a lot of things and knows a lot, a lot, a lot of people-- imagine that-- within this industry. Nick's an awesome dude. I know I say this about everybody, but he really is. This one's going to be good.
[00:01:10.98] In this episode, we're going to get into Nick. Hey, how'd you get into this industry? Where'd you come from? It's really, really good. Stay tuned. You're going to love it. Nick, welcome. Welcome to the show.
[00:01:22.63] NICK ZERBIB: Good morning, Reid. It's great to be here. Thank you for having me.
[00:01:26.26] REID HOLZWORTH: Thank you for joining. Man, Nick, you're a legend in this industry. You've been around for a while, and you've been involved in a lot of things. And I'm excited for the listeners to get to know Mr. Zerbib himself. So you're a good dude, man, and this is going to be a lot of fun. So let's get into it. So tell us about Nick. So I don't know a lot about this. Where'd you grow up?
[00:01:50.64] NICK ZERBIB: Oh, my goodness. Do you really want to know, Reid? I mean, I grew up in all sorts of random places. I grew up in France. That's where I was born. I lived in Israel when I was a kid, and then we moved to the desert, to Phoenix, Arizona.
[00:02:03.87] REID HOLZWORTH: Oh, wow.
[00:02:04.35] NICK ZERBIB: And then I moved to the East Coast for college and stayed.
[00:02:09.66] REID HOLZWORTH: And where do you live now, Nick?
[00:02:11.22] NICK ZERBIB: So I live just north of New York City in Westchester County in a town called Larchmont, New York.
[00:02:16.93] REID HOLZWORTH: Awesome, awesome. So that-- what-- so around all those different places-- what did your parents do for a living?
[00:02:22.74] NICK ZERBIB: So my dad was a pharmacist by trade, and then he-- and my mom sort of had a traveling bug and an ideological bug to move to Israel in 1975. And we lived there for six years, and then when they were in their 40s, they moved a family of six to Phoenix, Arizona, not knowing-- well, having sort of rudimentary English, which is-- which is a hard thing to do, to start all over in your 40s and move to a new country, but they pulled it off.
[00:02:56.07] REID HOLZWORTH: So where would you say you grew up? Phoenix?
[00:02:58.74] NICK ZERBIB: Phoenix for the high school-- 10 to-- 10 to 18, Phoenix, Arizona.
[00:03:03.10] REID HOLZWORTH: Yeah, totally. High school years, that's what I consider-- when people say, where'd you grow up, that's like, yeah, kind of as you grow up, right? It's kind of funny. Some people say like, oh, I grew up here and I lived in this place till I was three. That doesn't really count in my book, right?
[00:03:16.72] NICK ZERBIB: [LAUGHS] I agree with that.
[00:03:18.33] REID HOLZWORTH: [LAUGHS] So Phoenix, Arizona. So what were you into, Nick? What kind of things did you do for fun? Were you a sports guy?
[00:03:26.02] NICK ZERBIB: So I played a lot of-- I played a lot of sports growing up. I played a lot of tennis. So I played in the heat. And I played competitively. And then I went off and played tennis in college and squash, actually.
[00:03:39.16] So that's what I did. And I was also a student. Or I pretended to be a student so I tried to work hard during those high school years.
[00:03:49.45] So not that much fun, that's another way of saying. Reid, you have a big smile on your face as if you had more interesting high school years.
[00:03:57.38] REID HOLZWORTH: [LAUGHS] Well, it's all relative. I don't know. Yeah, some would say. [LAUGHS]
[00:04:07.54] That's awesome, man. So yeah. So what else? I mean, what else did you do for fun? Other than tennis, other than that, what kinds of things were you into? Give us a little peek into the Nick's world.
[00:04:20.90] NICK ZERBIB: I was pretty interested in-- I'm a big reader so I did quite a bit of reading really in that period. Not particularly interesting for this podcast. But history, world affairs, that sort of thing were my primary interest.
[00:04:39.04] But I was just an immigrant kid kind of trying to make his way and get his footing at that point in my life. Until I moved to the East Coast, which was, I think, quite eye-opening for me. And then moving to the big city, to New York City was also a big eye-opening moment as I moved into my professional life.
[00:05:00.35] REID HOLZWORTH: So tell us about that. Give us some of the story.
[00:05:04.06] NICK ZERBIB: So the story, so I was pretty lucky in the sense that I went to a liberal arts college and I was a history major. But the investment banks on Wall Street recruited from some of those schools. And so I got a job at Goldman Sachs as a history major.
[00:05:20.29] REID HOLZWORTH: Why would they-- sorry, Nick. Why would they recruit from those types of schools?
[00:05:23.44] NICK ZERBIB: So it's a great question and it's a vestige of the past. Those schools had professionals who had gone to those schools. It's a the vestige of the Ivy Leagues and that, quote-unquote, "old boy network."
[00:05:38.65] So based on some of the schools that you may have attended, you would get access to interviews at the top investment banks. And you may not have the accounting and finance background. But they perceive you to be a quick learner and perhaps a, quote-unquote, "decent athlete."
[00:05:59.54] And so that's why they would recruit from the Ivy Leagues and in my case, from Amherst, to go to these Wall Street jobs. And on Wall Street you get just incredible exposure in that three-year period.
[00:06:12.80] And I was lucky enough to start working with our current senior partner, Chuck Davis. And so when he moved over to this platform, which was then called Marsh McLennan Capital, MMC Capital, I joined with him. But I had spent three years in investment banking in the financial institutions group at Goldman Sachs before that.
[00:06:35.78] It's been an incredible journey. Our platform was the old Marsh McLennan Capital. So it was a captive private equity business inside of MMC, the parent company to Marsh Carpenter, et cetera.
[00:06:50.24] And in 1998, we joined this platform. It was really Chuck Davis and Steve Friedman. And I was carrying their bags and still am to this day. We joined the platform.
[00:07:03.98] And it was an insurance-centric private equity business. It was a business that had been formed around the supply demand imbalance of 1985-1986 when Ace and XL were created.
[00:07:18.89] ACE being Chubb today. XL being part of AXA and the whole Bermuda insurance and reinsurance market. So Marsh McLennan was the corporate parent. But there was a private equity business inside of it. And that's how we ended up here, somewhat haphazardly, with Chuck taking over in 1998.
[00:07:43.28] In 2004, we separated, really in early 2005. But in 2004, you may remember Spitzer went after Marsh McLennan companies. And part of the issues around perceived conflicts was that we had a private equity unit that invested in insurance companies but the brokers placed business with those insurance companies.
[00:08:06.17] So part of the resolution was to separate MMC capital. And in 2005, we rebranded ourselves Stone Point. But you're right. We were involved at MMC capital with the first foray of private equity into the agency management space.
[00:08:25.05] So AMS, we acquired in 1999 from CNA. CNA was a 90% shareholder. There was a consortium of five or six other insurance companies that own the rest of it.
[00:08:38.12] When Dennis left CNA, the Tisch's decided that it was time to exit some of the non-core businesses. We acquired that business. It was our first foray into--
[00:08:49.42] REID HOLZWORTH: Dennis Chookaszian, for the listeners, it all comes back. Go ahead. Yeah, sorry.
[00:08:53.21] NICK ZERBIB: Sorry about that. Yes, I should have said that. So you're right. In 1999, we started when we-- shortly after we joined this platform, one of our first investments outside of core insurance underwriting was a vertical software business focused on automating the agency desktop. So AMS which had come together through all sorts of acquisitions, it also had comparative raters.
[00:09:17.42] REID HOLZWORTH: I want to say something real quick. For those that don't know, Dennis has been on the podcast before. Dennis is a really good friend of mine, as well as, Nick's.
[00:09:25.82] Dennis still has, in his garage, he has AMS, right? And then it says President Dennis Chookaszian. Because that is where-- well, people don't know this, AMS was a company and that company became the term Agency Management System.
[00:09:44.99] And actually, I don't know. I don't remember. Does AMS, the original one, stand for Agency Management System or was it something else?
[00:09:50.66] NICK ZERBIB: No, that's right. You're 100% right. And you and Menzies, right before we sold the business to Hellman and Friedman in 2004, renamed it. And we always thought it sounded like a fine wine. He renamed it Vertafore.
[00:10:05.49] [CHUCKLING]
[00:10:07.50] Which I'm not sure whom we paid to come up with that name. But that was the transition from AMS to Vertafore. And that was in 2004.
[00:10:17.49] But it was a fascinating time for the industry because, as you know, AMS or Vertafore was effectively utility. So all of these carriers that relied on independent agents to distribute their product were essentially investing in trying to consolidate some of the technology so that they would have one common platform.
[00:10:40.86] At one point, you may know this, and maybe Dennis Chookaszian has mentioned it to you, AMS actually provided dial-up internet services. I'm dating myself now. For the agents, it was an ISP.
[00:10:54.06] So it was part of connecting into the carrier platforms, et cetera. So that was a really, really interesting period for me in terms of seeing the transition of AMS from effectively a consortium-owned business that was losing money to a profitable business.
[00:11:15.52] REID HOLZWORTH: And to say something about that, it's interesting because a lot of people don't realize too, back then, carriers would pay for the AMS for their agencies.
[00:11:25.90] So like, hey, if you get to X amount of premium and you maintain this amount of premium with us, we'll pay for the agency management system.
[00:11:33.17] And so what's really funny about this too is, you think about what we're talking about here. This still holds true to where we are today on panel and things like that.
[00:11:44.05] Where the carriers are kind of paying for technology and getting in because they want to be part of that panel and part of that technology and be there right at it.
[00:11:52.87] It's the revolution on what was personal lines raiders, now commercial lines raiders and all of that. The same thing goes for the AMSes back then. Because those AMSes would connect to the carriers, right? Which they didn't prior.
[00:12:09.10] Because back when Doug Roller was on the show and Doug was talking about when he was an agent, they had like six computers in the office. One was for this carrier, one was for this carrier, and this carrier. And then they started putting them together, which is what really--
[00:12:25.57] I mean, correct me if I'm wrong, but just the way I think about it, Dennis, and David, and all of them started putting it together. And they said, here you go, this is a package.
[00:12:36.37] Carriers, you need to be providing this for your agencies, because it's going to make those agencies literally put more business with you, right?
[00:12:45.07] NICK ZERBIB: That's exactly right. It's amazing, all the names that you mentioned, towards the end of our investment in AMS, Vertafore, we actually provided a seed investment in Duck Creek.
[00:13:01.00] And at one point, we had an investment in Agency Port speaking of portals and--
[00:13:05.29] REID HOLZWORTH: Oh, I didn't know you were involved in Agency Port.
[00:13:07.33] NICK ZERBIB: Well, back in the--
[00:13:08.19] REID HOLZWORTH: Were you involved with Agency Port and Duck Creek at the same time?
[00:13:11.86] NICK ZERBIB: Well, at different times. But towards the end of our investment in Vertafore and I think under you and HNF, you and Menzies and HNF, I think some of those were disposed of shortly after we exited.
[00:13:26.38] But all of those businesses, the kernel of those ideas existed back then. And the concept, it's amazing, 25 years later to think about things like SEMC, the panel, all of the words that were used back when we first got involved with AMS still exist.
[00:13:45.91] As part of our closing dinner for the Vertafore investment, you and Menzies presented us with a New Yorker cartoon that shows three old white men symbolizing the insurance industry, of course, looking at a screen and it says the end of $30 million.
[00:14:08.07] We had burned $30 million trying to create an exchange at AMS called Tower Street. And it was completely-- There's no evidence of it today because it was really completely written off.
[00:14:21.45] But it was just a sign that maybe that was a little too early in the evolution of insurance, and insurance distribution, and insurance technology. But I still have that hanging in my office up here.
[00:14:33.30] REID HOLZWORTH: I didn't know you were involved in that, the exchange thing and all that. I don't know which but there's been a few attempts at it. I don't know which attempt number this was. But they always fell apart.
[00:14:44.16] And from what I've always understood-- I'd love to get your opinion on this, from what I've always understood they fell apart because not everybody wanted to play. And when I say everybody, everybody really in the AMS space is where they didn't want to play. And they were like, nope. And it really just crushed it multiple times.
[00:15:02.89] You know what's funny? Is Bold Penguin, which I know very well, and Ilya. It's funny, when Ilya was coming out, doing his thing, he was talking about exchange. And there was a bunch of people out there in the industry that were like, you can't say exchange, man.
[00:15:19.09] Because somebody had a patent on it.
[00:15:21.46] NICK ZERBIB: Oh, is that right? Oh, that's funny. I didn't realize that.
[00:15:24.13] REID HOLZWORTH: Really, and they were coaching him like, dude, you can't say exchange. Don't do that. You're going to get sued because there's some troll out there that owns it that comes after you.
[00:15:33.52] Because there's been so many of these attempts at this and they all fell apart, somebody has some investment and is still holding on--
[00:15:40.33] [INTERPOSING VOICES]
[00:15:42.55] NICK ZERBIB: But like Reid Holzworth, Ilya is uncoachable. He's too smart to get any coaching. So it definitely was called an exchange.
[00:15:52.78] And Bold Penguin was actually a perfect example of something super successful because it was narrow in its offering and it got a lot of volume by virtue of signing up some very large carriers early. So they were able to attract the panel on the back end.
[00:16:11.22] And so you're right. The exchanges never took off in part because you had the applied AMS, Vertafore duopoly. And so it was hard to get all the demand and then all the carriers on the other side.
[00:16:26.99] But there are great examples in the industry, including Ivan's, of wonderful clearing houses, and essentially, utilities for the industry that create great pipes. It's just amazing that it's taken so many years to put the WD-40 in those pipes.
[00:16:44.08] REID HOLZWORTH: [LAUGHS] That's a good way to put it. What do you think about-- do you think an exchange could exist today? Do you think the industry is now ready for an exchange, a true exchange?
[00:16:57.53] Or is it like, let's be real, I mean there's exchanges already in a way. But a big centralized exchange, I don't know? There's been so much money that people have poured into that over the years. Technically speaking, I think it's possible now. But would they want to? Would it make sense? I don't know.
[00:17:16.23] NICK ZERBIB: It's a great question. I don't know if the carriers-- for bespoke products, you could see carriers agreeing to certain standards because they need to break in.
[00:17:30.96] But when you're in an incumbent position, I guess you would do it defensively. But if you're happy with your distribution, perhaps you opt out of trying to standardize the way you interact with your agents or interact directly with the insured.
[00:17:47.82] So it depends. Look, part of the really big opportunity for all of the technology enablers focused on the independent agency channel is to continue to make that channel relevant.
[00:18:03.32] And obviously, we've had several waves of insurtech that have tried to either leapfrog the independent agency channel. Now they're getting closer to it. But the independent agents want choice. They need choice to survive.
[00:18:18.00] And so an exchange would make their job a little easier. But at the same time, some of the clunkiness of interacting with the different markets plays into their hand in a way.
[00:18:32.67] REID HOLZWORTH: It's a really good point. Totally, right? It's like their own competitive advantage in that way. So why? Yeah, that makes sense. So let's go back a little bit.
[00:18:42.51] So Duck Creek, you were early on in Duck Creek. How long did you guys-- how long were you riding that?
[00:18:49.43] NICK ZERBIB: That was a tiny investment that we made and it was exited shortly after. But it must have been towards the tail end of our investment in Vertafore, so we weren't active.
[00:19:00.60] Agency Port was interesting because that concept still applies today. That's when Agency Port had a wholesale business and a technology business attached to it.
[00:19:11.37] And the concept at that time was to create an opportunity for the CSR using AMS to effectively be able to find alternative markets for stuff that didn't make sense in the admitted markets.
[00:19:26.25] And that, to this day, as you know, Reid, is a huge, huge opportunity because you do have exchanges, like Bold Penguin, focused on admitted markets.
[00:19:35.80] But the E&S market, which is growing rapidly in this super hard premium environment, rate environment is an area where technology is still not where it needs to be.
[00:19:46.79] And so we thought about that. And this was 25 years ago. It didn't go very far. Agency Port was split between their business transactional wholesale brokerage business and their technology portal. But at the time, the idea was, can you marry that up and put that on the CSR's desktop.
[00:20:03.30] REID HOLZWORTH: Yeah. And so for the listeners that don't know, what was Agency Port's core business?
[00:20:08.43] NICK ZERBIB: Agency Port, at that-- Agency Port, when it was finally acquired, was effectively a portal. So it was effectively a portal that carriers used to try to attract the independent agents to do more of their work on the portal so that they could interface more directly with the carrier billing system and rating system.
[00:20:30.78] Obviously, it's sort of a middleware between the agency management system and the carrier system. And it's something that APIs, I think, have increasingly solved.
[00:20:40.62] But the Agency Port portal concept, I think, got a lot of traction. And it was an important growth vector for a lot of the-- a lot of the policy admin businesses.
[00:20:52.62] REID HOLZWORTH: So for the listeners, Agency Port, really, it was a company that built portals for carriers when portals didn't exist. So I couldn't go and quote the Hartford, let's just say, without a portal.
[00:21:08.59] And so back when, like you said, 15-20 years or however long ago this was, this guy, I mean they blew up. And so it's funny because-- I shouldn't really name names.
[00:21:19.80] But let's just say, some of the biggest players in the industry are still on that same portal built by Agency Port. And people that don't know, Agency Port, a lot of people came out of Agency Port actually.
[00:21:38.07] Mike and Allan from Ask Kodiak. Allan was the CTO, I think. And then Mike was the CIO. And then Agency Port got acquired by Duck Creek. And then those guys went did the Duck Creek thing for a bit. Then they went and started Ask Kodiak.
[00:21:55.62] But yeah, it's an interesting story. It's definitely cutting-edge technology and it was so ahead of their time for that. And they just blew up.
[00:22:04.02] I remember as an agent-- as an agency owner, when carriers started to bring portals online, you're like, oh, yes, I can quote this one in that way. It was so good.
[00:22:15.40] And it was funny because back in the day, a lot of them were similar. And that's because it was all on that Agency Port backbone, I guess, right?
[00:22:25.15] NICK ZERBIB: Yeah, it's amazing. So in a way, it was ahead of its time. And as you said, it was interesting that it was the policy-- it was the policy vendors-- the carrier vendors who ultimately acquired that.
[00:22:40.96] REID HOLZWORTH: This conversation still exists. I've had this conversation with carriers, in the last even six months. Some of the big ones. And literally, they're asking me. They're like, what do you think, man? Come on, be real. Should I invest in my APIs, right? And invest in digital.
[00:22:58.99] Or should I put not maybe as much budget but continue to pump dollars into my portal? Honest to god, real, having a couple of beers, real conversation. And I'm just like, dude, you know?
[00:23:15.91] I mean, but it makes sense you still need that. You need that channel. You want to continue to support that channel. But the agency, I mean, they want the things that you guys were talking about 25 years ago, the whole SEMC system. They want to live in the management system.
[00:23:32.34] They want to-- or not. They want to live in their own proprietary system is what we're seeing at the top level. And then control their own flow within their users, their agencies, and CSRs, whatever you want to say.
[00:23:45.79] NICK ZERBIB: I mean the trends speak for themselves. I mean if you think about, the independent agency industry has continued to withstand attempts to go direct.
[00:23:58.99] Whereas, the captive agency market is the one that is shrinking. And so to your point, if you're going to have one carrier supplier, then it makes sense to be a captive agent.
[00:24:14.08] But even the largest captive agent writers are now opening themselves up to independents because that's the wave of the future. You need to be able to have choice.
[00:24:22.75] And by the way, as market appetites and appetites for different risks change, it's super important, even for the captive agents, to be able to provide their agents with choice, or at least access to other markets for certain lines of business.
[00:24:37.88] So the trend is very much in favor of the independent agent. And as investors, we like that model a lot because it's a super important way to distribute-- I think it's the only viable way to distribute commercial lines today, perhaps not down the road.
[00:24:59.17] And it's amazing to me, as somebody who's been observing and studying this market for 25 years, how the companies that tried to leapfrog that distribution channel are now embracing it.
[00:25:11.83] All of the insurtechs are now moving to, hey, we like the independent agency model because it's variable cost of acquisition, instead of having to fork the money up front.
[00:25:23.09] And you just had the announcement this week that a big VC fund is effectively financing the customer acquisition cost for a large insurtech because they have such a high tack, such a high customer acquisition cost today they can't afford it. So they're trying to variabilize it by having a financing mechanism which is effectively an outsourced agent.
[00:25:46.26] REID HOLZWORTH: Yeah, that's so wild. What we're seeing-- I'd love to get your opinion on this. We're seeing now that-- I mean, we've been seeing it. But we're seeing the big captives are now moving into the IA channel, the big logos.
[00:26:01.98] And it's interesting. If you think about running that business, as an executive, if I'm running that business and I'm looking at CAC, LTV, and I'm going, where am I getting my customers from and how am I going to expand my TAM, right?
[00:26:17.64] Well, why wouldn't you tap into the IA channel? Give that option. As an independent agent too, I'll put myself in the agent's shoes, like, hell yeah, I'd love to have those logos to provide to my customers.
[00:26:32.06] Because every market is, you know this, for a specific type of customer. And that's typically how they should design the products. And that's our jobs as agents to place the right customer with the right carrier for what their needs.
[00:26:48.17] So it's interesting. It's funny, 10-20 years ago or whatever, not even, people are like, the independent agents are going to go away. Blah, blah, blah. But now, the industry--
[00:26:57.55] And then you had all these insurtechs. That's the wave of insurtech, right? Like, no, it's stupid. Direct to consumer. All this. All those guys. Man, did they get crushed.
[00:27:06.31] And I mean, I don't know. You probably have been involved in them. And it's tough. And now they're going, oh, this IA channel makes sense. And so it's an interesting time.
[00:27:19.39] That said, you're right. On the commercial lines side, I mean, it's IAs all day. They own the commercial line side. Which when you think about relationships, and big relationships, and big premium dollars, that's a lot of personal auto policies. I'll tell you what. A lot of homeowners' policies.
[00:27:38.50] And so it's a good place to be in the IA channel.
[00:27:42.64] NICK ZERBIB: You know what's amazing? You know what's amazing, Reid, is when you start talking about the agent, you're talking about wearing your old hat as an agent, which is wonderful.
[00:27:56.55] Because in my experience, the people who have had the most success on the technology side are people who have walked in the agent shoes or in the carrier shoes before they tried to figure out a way to make the processes a little bit better.
[00:28:12.86] And so the experience that you had and Ilya Bodner had as an agent figuring out where things were really not streamlined has made for very successful enabling technology, facilitating technology on the insurtech side.
[00:28:31.06] It's hard to be a pure technologist, and come in, and solve the insurance industry's problems without having that perspective.
[00:28:40.78] REID HOLZWORTH: I've had so many conversations over the years. So, so many with people that come in here guns blazing. And they're going to fix it all.
[00:28:49.33] But they haven't walked down that road. They haven't been there. They haven't interacted with these tools, and carriers, and whatnot, and hit those walls on these things it's.
[00:28:59.71] And then also, they don't truly understand the complexity too. It's not even that. So yeah, it's a monster. But it's funny. A lot of noise happens around that. And thank you for those kind words. I appreciate it. But we need more people that have walked in it to take this industry to the next level.
[00:29:18.76] But I think that's happening, man. I think that now, this generation, people are so ingrained with technology and agents. They're hiring people and you got all these no code, low code, blah, blah, blah, declarative platforms, and all this stuff for people to go play with.
[00:29:36.49] And so I think a lot of that's changing. I've always said and Applied-- and on the Applied and Vertafore side, I've always said that the big competitor that's going to come against those guys are the brokers that build their own proprietary solution.
[00:29:50.66] And it is just so good that they bring it to market. I think that's the big risk on the AMS side. And it's because of what we just talked about. And really getting it right.
[00:30:00.95] But good luck with that because now, I mean, again, because technology is so much easier these days, Vertafore and Applied, among others, are just updating their platforms to be where they need to be able to compete even with these new startups that are coming out.
[00:30:20.99] And so they're too far ahead and they're too ingrained, I guess. If I'm an investor, new agency management system, it'd be a good quick hit for a bit. Long-term? That's a tough one.
[00:30:36.49] NICK ZERBIB: Do you speak from experience?
[00:30:38.51] REID HOLZWORTH: I do. I do. I do. And people talk to me about this all the time. They're like, well, you guys had a chance. And we did. We did. And we were doing it. But I think it's changed now. It's too late.
[00:30:51.38] NICK ZERBIB: Well, I think it's changed in part because I think technology has improved. I think the BMSes, I like the fact that we've moved from the word AMS to Broker Management System because now we're wearing the Applied hat.
[00:31:06.59] [CHUCKLING]
[00:31:08.06] So the BMSes are more open architecture. And that's super, super important.
[00:31:14.32] REID HOLZWORTH: Nick Zerbib, folks. That was great. I find it interesting that Stone Point spun out of Marsh. I mean, just deep roots in this industry.
[00:31:25.57] Nick, he's been there, done that. And look, in this next episode, we're really going to get into Nick's thoughts on the industry. Things that need to be resolved.
[00:31:37.69] Surprise, there's a lot of-- well, surprise, spoiler alert, [CHUCKLES] it's a lot of the same things that people talk about throughout this podcast. But stay tuned. It's going to be really, really great.
[00:31:48.22]