Policy and Power | Nick Tropiano's Guide to Insurance Entrepreneurship - A More Complete Beast

Episode Transcript
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Speaker 1 (00:00):
This is a more complete beast podcast where we
discover and distill strategiesto drive the needle forward on
your life.
Today we're sitting across frommy buddy, nick Tropicano.
Nick grew his business fromscratch to being sold to one of
the biggest private insuranceagencies in the world.
If you're a small businessowner, if you're somebody

(00:21):
thinking about starting a smallbusiness, make sure you listen
to this podcast all the way tothe end.
There's also some goodinformation for people who have
insurance.
They're thinking aboutswitching their insurance or
analyzing their policy.
So really, I think everybodycan get something from this
podcast.
If you do, do me a favor Leavea five-star review wherever

(00:41):
you're listening to this podcastand make sure you share this
podcast.
That's the only way itcontinues to grow.
Now let's get into this.

Speaker 2 (00:50):
So we're part of Hub 3 Rivers, but we're the Irwin
office.
So I started working there in2006, right out of college.
It's called the HDH Group.
I stayed there for four years.
It felt like a lot longer thanfour years.
So, four years, 2010,.
I decided to leave, partneredup with my brother, started the

(01:12):
business, and then that company,the HDH Group, got bought by
Hub International in 2015, Ithink, which is the world's
largest privately held broker.
So then 2023, we're now backfull circle.
Kind of funny, the full circlehere but, back full circle with

(01:34):
Hub 3 Rivers, which is formerlythe HDH Group.

Speaker 1 (01:37):
So you started off with them, took a hiatus, built
your business and then theybought you guys out.
Yes, what made you leaveinitially?

Speaker 2 (01:46):
I was young and dumb enough and crazy enough to think
that I could do it all bymyself.
I think, too, the big thingthat happened to me is that I
was 22, right out of college,and I had to build a book of
business.
But I was calling on peoplethat I think were looking at me
like this kid doesn't know whathe's doing.
I was 22 years old, so I thinkpart of it, too, was that I

(02:10):
wanted to get more into thepersonal line side of things
home and auto, smallerbusinesses because that was kind
of more my playground of what Iwas used to, because growing up
, my dad owned a constructioncompany, so I knew a lot of
people like him, and I thinkthat probably is the reason I
left.
Probably my dad was like, hey,you should do this on your own,

(02:31):
and you were like let's do it.

Speaker 1 (02:33):
Yeah, dumb enough to try it, and then it worked out.

Speaker 2 (02:36):
And I think I left.
I don't think when I initiallyleft I don't think I knew that
that's 100% what I was going todo, but I knew I wanted to do
something on my own.
At the time my dad owned aconstruction company.
He owned some real estate, so Iwas going to help out there,
get into real estateconstruction.
And then shortly after that Iwas, hey, let's do the insurance

(02:57):
thing, let's stick to somethingI've been working after the
last four years.

Speaker 1 (03:01):
So you had experience and you're like all right, I
can really scale this thing in adifferent direction.
You wanted to focus more on thepersonal side instead of, like
it seems like this HDA, it wasthe HDA group.
Okay, HDA group was more biggerbusiness.

Speaker 2 (03:15):
You wanted a more smaller business, yeah, at the
time.
And then we had to be able todo home and auto insurance at
the time, which was kind of likethe cash flow that really you
could do it.
Day one, write somebody's homeand auto insurance policy, start
getting commissions right away.
Commercial insurance takes alittle longer.
You got to plant the seed, yougot to go out and hunt, you got
to build relationships.

(03:36):
Again the same thing.
People are like who's this 22year old kid?
I'm not going to buy insuranceoff him.
He just started his businessnow.
So it's kind of like startingall over again.

Speaker 1 (03:45):
So I didn't know what made you go independent instead
of doing with like a state farmor a GEICO agency like that,
yeah, I mean independent iswhere I came from when it was
the HDA group.

Speaker 2 (03:57):
So I can't imagine being only able to offer one
insurance company because theychange so often, like what they
are looking for, their appetite,their capacity, what their
right writing this year, whattheir rates are this year, what
their coverages are like.
Things are constantly changing.
So I mean I'll give it to statefarm.
They have built up a ton ofbrand loyalty and not being able

(04:20):
to offer other products.

Speaker 1 (04:22):
Because I see them everywhere, like I see the state
farms everywhere.
Yeah, they're everywhere.

Speaker 2 (04:26):
And I shouldn't say other products, but with us.
If you come to me and I haveone carrier that carrier, you
might be a great risk, butthey're thinking nope, this
doesn't fit our model.
We don't want to write Alex.

Speaker 1 (04:40):
So you have more.
Basically, you have a wider netthat you can cast as an
independent agency oversomething like a state farm.

Speaker 2 (04:46):
Yes, Okay, 100% A lot more yeah.

Speaker 1 (04:51):
So if you're a consumer and you're looking at,
you know, shopping around forinsurance, is it generally true
that I mean if you have more tooffer?
Is it generally true that anindependent agency can offer
something better than, like, astate farm or a GEICO or one of
these branded?

Speaker 2 (05:07):
Yeah, I mean, I hate to drag them into this, you know
, because you know.

Speaker 1 (05:11):
Drag them bro.
Yeah, Drag them.

Speaker 2 (05:14):
They're.
I mean they're good and theyserve the needs of a lot of
customers.
But typically I'd say ninetimes out of 10, if you come to
me and you've been with statefarm and you're thinking, hey,
I've been with state farm for 10years, they've always been good
to me.
We're usually hammering them oncoverage and price.

Speaker 1 (05:34):
So what's making people like what's making 80%?
Do agents go with state farm?
Is it just the recognizablebranded nature of state farm?
Are they offering something toagents that an independent
agency either has to do on theirown, or something that Like
what's the advantage, I guess?
Why do people continue to go tostate farm?

Speaker 2 (05:51):
When you start at state farm, they, they I'm
pretty sure you start off with aguaranteed salary in that first
two years, got it and they'regiving you a model.
So a lot of people that getinto state farm don't even come
from an insurance background.
They're kind of, maybe theywere in a sales background,
maybe they were working for apayroll company, financial
planning company, and they think, hey, I want to get into

(06:14):
insurance.
State farm has a good model forthat and you know, it took me
four years to really get my feetunder me.
So hindsight, yeah, I see howthat would be attractive to
somebody.
Hey, I can get.
You know, I've got this big,all these resources around me.
I've got a lot of training.
We, when we started the agency,we were I didn't know what I

(06:34):
was doing really.
I really didn't.
But it's just, it wasn't for me.

Speaker 1 (06:38):
It sounds like you and I have a similarity there,
where it's it took me years tobuild up to the point where it
was like, okay, I have reliableincome and a decent lifestyle.
But I often wonder it's likewell, what if I had a franchise?
Same idea Like there's acertain recognizable nature to a
franchise.
They give you a lot ofopportunity and like systems
that when you're just whenyou're starting your business,

(07:00):
you have to create the systems,whereas a franchise will kind of
I don't want to say give youthe systems because they're
making money.
You typically have to pay afranchise fee, but I often
wonder it's like could I be evenfurther along if I bought like
a snap fitness or something likethat, or like at any time?
Because it's like they havethose systems in place.
Where it's like I screwed up solong to get to the point where

(07:23):
it's like, okay, now I havetight systems, I'm always
improving it, but it's like youdon't have that.
That I guess wealth ofexperience and resources that
you can gain and garner througha franchise.

Speaker 2 (07:37):
I think that's what they're gaining 100% Like, like
I said, the first four years ofus being in business my brother
and I I was really spinning mywheels.
I think the first year inbusiness my revenue was around
4,000.

Speaker 1 (07:49):
That's top line, that's bad bro, that's even
worse than mine.
That's bad I thought mine wasbad.
That's bad homie.

Speaker 2 (07:56):
That's real bad.
Second year was around 30.
You ate.

Speaker 1 (08:00):
X yeah 8X bro 800%.

Speaker 2 (08:04):
Yeah.

Speaker 1 (08:05):
Big time.

Speaker 2 (08:06):
Third was 60.
And then it did, it started tocompound.
But those first few years I wasthinking like what did I do?
Because I left a really goodcompany and a really good job
and I had a ton of resources andI was like, what did I do?

Speaker 1 (08:20):
What are some of the things that you wish you knew
when you started out, Like ifyou could go back and talk to 26
year old Nick?
What?

Speaker 2 (08:26):
would you tell him?
It's going to be a lot harderthan you think.
Number one.
Number two we discoveredsomething three or four years
into the business.
It was called the IroquoisGroup and it was basically a
cluster of agencies, like anagency network, that it's hard,
when you start out fromscratching the insurance
business, to get the insurancecompanies to come give you an

(08:48):
appointment and basically sayhey, you can go and sell our
product, because without thevolume they don't really want
you.
So it's like chicken and egghey, you don't have enough
volume, so we're not going togive you a traveler's contract
or a nationwide insurancecontract.

Speaker 1 (09:03):
And without the insurance contracts, how are you
going to build a book ofbusiness?

Speaker 2 (09:07):
So even in the very beginning that was kind of.
The problem is, I think Istarted with two or three
insurance companies, so peoplewould come to us and we'd have
three to shop out to and a lotof times they'd be like, nope,
we don't want to write this orwe're too expensive or whatever
it is.
So we found the Iroquois Group,which is an agency resource, a
cluster of agencies that acompany pulls together and they

(09:29):
pulled everybody's premiumtogether, all the agents under
them, and now they go totravelers and say, hey, give
assured risk advisors anappointment because they're
under our sub producer code.
Essentially, got it?
Yeah.
So we did that.
It's a game changer, gamechanger, and we became one of my
best friends through that.
His name was Kurt Keller and hereally kind of from that number

(09:56):
year number three or four.
We started really we probablypicked up five new insurance
companies from there and thenyou know two more every year
from that and then we became,you know, a really good
powerhouse of being able tooffer like 20 different
insurance companies.
We started specializing inproperty and real estate and

(10:18):
construction because we had allthe resources behind us.
So that was a big one.
The other thing I would tellmyself is that you're not that
important.
Like so many business owners metoo like you have to be at
everything, you have to controleverything.
You got to get into the weedsso much at like such a granular
level of the business that youstart to think that you're so

(10:40):
important to the business thatyou have to be in the office 24
seven.
You know you have to be a partof every decision that's going
on.
You got you have to talk toevery single customer.
Like that.
That way of thinking gets you introuble and really holds you
back.
Number three, four just findingthe right people and really

(11:02):
vetting them as much as youpossibly can.
And we found a really goodgroup of core team members that
have been with us kind of thewhole way through.
But along the ways you findsome people and you get kind of
enamored by having a body in theoffice and telling people like
hey, I've got seven employees,I've got eight employees.
So I got obsessed with kind oflike that big, bigger feeling

(11:26):
like we're growing, we've got 10now, but focus on the quality
or quantity in terms ofemployees.

Speaker 1 (11:34):
There's a.
There's definitely a balancethat you need to strike there
where it's like your hands offenough in the business that
you're empowering your people tohelp you grow, but you're not
so hands off that you're hiringpeople just to fill roles that
you yourself are best to fit.
It's true, it's definitely abalance and I feel like I kind
of tipped in one direction atone point, the opposite

(11:55):
direction at another point, andit's kind of trying when you're
in a small business.
I noticed for me I'm trying tonavigate and walk that tightrope
where it's like I'm empoweringpeople enough that the business
I can work on the businessinstead of always in the
business, but I'm in thebusiness enough that I can make
sure anything that there's noholes, there's nothing leaking

(12:18):
out, there's nothing that I can.
If I'm so removed, I don't knowif, like hey, this client isn't
really getting what they wantout of it, or this person's
about to drop off, or thismachine's been broke for two
weeks.
I got to be there enough that Ican take care of it like it's
my own, because it is, but notso much that people are like I'm
not going to do this because Alis going to do this.

Speaker 2 (12:38):
Yeah, there is a fine line there.
You also don't want to be anabsent owner, you don't want to
be totally removed.
Like you said, you've got tokind of have your nose of the
ground there a little bit, soyou know what's going on.

Speaker 1 (12:51):
I think Chris and I talked about that a lot.
That was a couple of guests ago.
He's a dude.
He owns a gym, he owns realestate agent.
He's like a taller version ofme or I'm a shorter version of
him one of the two.
But he was basically saying,like it's not bad to sometimes
have to work in the business,but you also want to work on the

(13:11):
business.
The mistake I think I made atthe beginning is like I always
was working in the business.
I was taking like 70 somethinghours of training hours.
It's like that's great, butI'll never scale past that,
because what do I have a couplehours every week to focus on?
Like creating systems,marketing things like that.

(13:32):
It was only when I could hiremore people to train that I
could work on perfecting thesystems.
Okay, this is how we bill.
Let me negotiate the creditcard processing thing so we
don't not pay in 3.5% on everysingle sale.
Right, and kind of distancemyself, not to work less, but to
work Not.
I was very efficient attraining a lot of people, but I

(13:53):
wasn't effective in my business,if that makes sense.
Efficiency is how quickly andfor lack I hate to use the word
to explain the word howefficiently you can complete
tasks.
Effectiveness to me is like thetasks that you create that you
have to knock down.
So that's, I think, the fineline that I'm still trying to
find.

(14:14):
I think everybody has.

Speaker 2 (14:16):
I think to a certain degree too, in the early stages
of your business.
That's kind of the fun part tooto get into that, because you
come from a place a lot ofpeople come from a place, where
you didn't have any control overthose things.
You didn't have a say inwhatever it is that you were
kind of fine tuning.
You didn't have a say in any ofthese things when you're kind
of working for somebody else,depending on what your role is.
So it's fun to do that.

(14:38):
Like I did have fun figuringout okay, which agency
management system are we gonnause, which phone system are we
gonna use, what computers are wegonna do.
So that part is kind of fun.
It's just not spending too muchtime in that which you talked
about.
Costs and somebody told me earlyon too, is like grow the top

(14:59):
line.
So I just we all got superfocused on growing the top line
as much as we can because youcan cut all the costs you want.
But if you don't have your topline growing at the pace that
you really need it to because ofthings that happen, you write
up a piece of business, it's agreat account, but they sell

(15:20):
their business to somebody elseand then you lose that account.
You can't start relying oncertain accounts to always be
there.
So if you're not growing thetop line fast enough, you'll
start eroding and you can cut.
You gotta keep your costs incheck for sure, but I just got
to be a big fan of that sayingjust grow the top line and new
revenue solves so many problems.

Speaker 1 (15:42):
Yeah, if you can get a bigger contract, sometimes it
can wash out.
Ideally, it washes out anyadditional cost it took to get
that contract.
Or it becomes problematic,though, is when the cost is
higher than the generatedrevenue, like that's what
happened to me last year,actually, like I had a stellar
year in 2021.

(16:03):
2022, my top line went up, butnot as much as my bottom line
went up, or not as, like mybottom line went down even
though my top line went up.
Yeah.
So when it came time to kind ofrestructure things you already
know what I'm talking about whenit came time to restructure
things with certain, like,employees, and stuff.
Yeah, it didn't make sense.

(16:25):
You know what I mean.
I couldn't continue to increasemy payroll cost when it wasn't
showing the proportionatebenefit to the increase in top
line.
And I think a lot of peoplelike a lot of small business
owners.
I agree with you 100%.
Focus on first things.

(16:45):
First big picture stuff.
Grow the top line but at thesame time like one thing that
has tremendously helped mybusiness is, my wife is a CPA
she's a controller at a company.
Now, every single month we do abalance sheet profit and loss
and we do a cash flow statement.
So every single month I canlook and over the past year I
can be like, okay, look, the topline grew 13% year over year,

(17:08):
but the bottom line shrunk by 6%.
Where is that 20% that we'renot.
It's not actually making up foryou know what I mean?
And I think like sometimessmall business owners get so
caught up in that day to daythat they can't take the step
back to analyze and be like,okay, what's working and what

(17:28):
isn't.
And I kind of had to have thatsame idea.
Dude, oh my, we have 10employees, we have 10 employees,
we have 10 employees, we haveeight.
Now top line's bigger and thebottom line is way, way better.
Like we're actually stillgrowing at the same pace and the
bottom line is proportionatelyeven better still.
You know what I mean?
Cause it is cool to have likethat number in your head and it

(17:51):
feels like shit to go backwardsLike, oh, now I and I had 10,
now I have eight.
It's like, well, yeah, but ifthe eight is what your business
needs, then why have 10?
That's an ego thing.

Speaker 2 (18:03):
It is an ego thing Cause I found myself being out
at different networking eventsand other like agency owners and
insurance company higher upsand like how many employees you
have now, that's always seems tobe the question that people
want to know, like how manyemployees do you have?

Speaker 1 (18:17):
You know, and-.

Speaker 2 (18:19):
People always ask me that.
Yeah.
So I got like, and then, as itstarted to go back down, you
started to feel a certain way.
But then, when you go back andyou look at the numbers, you're
like, no, this is what it'ssupposed to be.

Speaker 1 (18:30):
Yeah, you're making data-driven decisions and not
ego-driven decisions, absolutely.

Speaker 2 (18:35):
Which another good point too early on.
We were fortunate enough tohave somebody that had a CPA
background as well.
That would basically everymonth, you know, put our reports
together, put our P&L together,put everything kind of in a
nice format for me to look at atthe end of each month, and she
would also help me with a budget, you know, for the year, and we

(18:56):
would always you know as muchas I was growing, you know focus
on growing the top line andtrying not to get too much into
the weeds.
The numbers are.
I mean, you do have to setthose goals and set your budget
and try and stick to it as bestyou can.
And that was the other reallyfun part about it is putting the
budget together at thebeginning of the year, and at
the end of the year you seewhere you're at and you're like
man, we're on track, like whatdo we have to do to get to the

(19:18):
budget?

Speaker 1 (19:18):
It feels so good when it works, it does, and it feels
like shit when you miss.
Yeah, it does, and I wonder ifthat's why some people just
don't do it.
They're almost like hiding fromit.
They're hiding from the realityof the situation that maybe
what they're doing isn't working.

Speaker 2 (19:34):
I absolutely agree with that.
I think it's easy to hide fromthe numbers too, to not look at
it, because you know in the backof your mind that something
you're doing isn't working, butyou don't want to take the next
steps to figure out what it isand to change, because it's hard
to change.
It's hard to change what you'redoing.
It's tough because yeah, it is.

Speaker 1 (19:52):
There's so much of this is ego, and what I mean by
that isn't, like the.
I think there's a differencebetween the confidence to do
something in the machismo or theego associated with, like, how
it looks on the exterior.
It might look cool on theexterior to have a bunch of
employees and a brand new youknow storefront or whatever all

(20:13):
this new shit, but it's like, ifthat isn't really, if all that
is is a polished turd, it'sstill a fucking turd.
You know what I mean?
Whereas if it's like youactually have a solid foundation
and a solid business, that'swhere it's like, that's real,
where it's like, oh, I have this, I have this, I have this.
It's like, well, that mightjust be a drag on your business

(20:34):
instead of an actual cashproducing asset to your business
.
And I think, like you said,people get afraid of that.
And you kind of know, like Ikind of knew the entire 2022, I
knew what I was doing wasn'treally working and I think I
rationalized it in my head that,well, you know, this is just

(20:57):
temporary.
Eventually all this is gonnacatch up and I still believe
that, given enough time,everything I did would have paid
off.
But at the same time it's like,yeah, but if I had so much more
liquid over the course of thatentire year, what could I have
done with that?
Right, the opportunity costthere is real and it's very
simple.
Like those feelings that you getin business, there's a reason

(21:18):
you have them.
Sometimes you gotta analyze andbe like is this just anxiety?
Is this just me feeling a typeof way because this is new?
Or do I feel this way becausethere is something amiss?
And it's like it's as simple asif the previous year I would
check and the bank account wouldbe this high at the end of the
month and then it was this highthe same time, year over year.

(21:39):
It's like, well, that's notjust a feeling.
I might not have the hard dataNow I do with stuff doing my
books, but that's real.

Speaker 2 (21:47):
And then when we finally like broke down the
numbers and went over the yearand like went through with the
account and did the balance, shedid the profit and loss and I'm
like, fuck dude, like I'm anidiot, yeah yeah, I can't tell
you how many times there wouldbe certain times of the year
where things in the insuranceindustry kind of slow down or
pick up where and I don't knowif this is kind of what you're

(22:07):
getting at, but where I wouldlook at what's in the bank
account or what came in thatmonth and literally just go to
the worst case scenario.

Speaker 1 (22:14):
Oh, shit, what has happened?
Everything that is going away.

Speaker 2 (22:18):
Everything that just built for the last 10 years,
that's it, like we're not gonnabe able to make payroll and it
couldn't have been the furthestthing from the truth.
But sometimes but if you don'thave the data to look back to,
you could get lost in the weedsthere.
But I think ego is huge.
I think ego actually for where Ijust came from too, and me and

(22:38):
my brother, like ego almost gotin the way of kind of what we
just did in selling our business.
And I realized when I looked ateverything on paper, when I
looked at my employees, when Ilooked at my clients, the only
thing that was in the waybetween me and getting the deal
done was my ego of like I'm notgonna own my own business

(22:58):
anymore, I'm not gonna be theowner, and that was a totally
ego driven thing.
But when I looked at everything, it all made sense in every
other aspect and I know I'm kindof jumping ahead here, but just
kind of the concept of ego,cause I think ego gets in the
way a lot of small businessownership and I'm not saying
that you know every smallbusiness owner needs to, you

(23:21):
know, prepare their business tosell, but there's a lot of
things that go on with owning asmall business where ego takes
over and isn't always helped tokind of prohibit you from making
the right decision.

Speaker 1 (23:30):
And I do think that, even if the small business owner
never wants to sell, I do thinkit's a good headspace to be in
to think, if you had to sell.

Speaker 2 (23:42):
I love that and I was actually gonna say the same
thing, even if you're nevergoing to sell.
And at you know, a year ago,two years ago, I was never
thinking I'm gonna sell thisbusiness.
But at some point I got thatthought in my head of we need to
build this out as if we aregoing to sell it.
So if somebody comes intomorrow and looks at everything

(24:05):
, this is a great business forthem to buy and I think that's a
great way to operate yourbusiness.

Speaker 1 (24:09):
How did you do that?
How did you go from?
How did you go from?
I'm just working here and thisis my business too.
I'm gonna build this thing thatif I wanted to sell it, I could
.
What steps did you have to make?
What changes did you have tomake over the course of the two
years to get the business tothat point?

Speaker 2 (24:27):
A really good question, I think, leaning out
to a certain degree of you knowhey, I've got two extra
salespeople that are just I'mselling extra on my end so that
I could pay for a salesperson.

Speaker 1 (24:43):
You're subsidizing them with your own production.

Speaker 2 (24:45):
Yeah.
So I'm stressing out, I'm goingnuts, you know, and they were
great people.
It's just they weren't rightfor my business, you know.
And to some degree too, Ididn't have the infrastructure
to be able to train them becauseI was still in such a growth
mode of wanting to get therevenue up that I never wanted
to take a step back and say,okay, I'm gonna work with you

(25:06):
for the next six months, justyou and I, and I'm gonna develop
you.
I just could never do thatbecause I wanted to just grow so
much.
So put back to your questionhow did I do that?
That was number one.
So it's like leaning out andpaying attention to I know I
just talked about not gettinginto the weeds, but paying
attention to what we were doing.

Speaker 1 (25:24):
It's a balance.

Speaker 2 (25:24):
yeah, definitely, yeah, paying attention to what
we were doing from a financialperspective, from a you know
what kind of business we'regoing after we.
Another thing that's big in theinsurance business is, you know
, when you focus on differentniches, that's more desirable to
somebody.
So, if you have an expertise inlike for us for instance, we
have an expertise inconstruction, we have an

(25:46):
expertise in real estate when wereally focused on that, that
really turned our business inthe right direction and I don't
know if that was probably like2017, 2016,.
But that really took us to thenext level.
So focusing on a niche that wewere really good at really
helped us get there.

(26:06):
And just having a really goodteam of employees that I
consider my family, they're likemy friend, they're like they're
my family, basically but wegrew up with these guys and they
just they treat the businesslike it's their own.
So having the right people inplace that if you do go to sell
that, your book of business,your clients aren't gonna vanish

(26:26):
.
You know that whole team, thewhole family environment, just
kind of transfers to the nextgroup.

Speaker 1 (26:34):
So being able to provide the I guess white glove
service and maintain that,Regardless of who technically
owns the business, right, we?

Speaker 2 (26:43):
were at an appointment yesterday and you
know I told the customer that wesold and one of the four we're
at our renewal meeting.
One of the first questions theyasked was you know, are we just
gonna get transferred to acustomer service line?
Now, you know, one of thebiggest things that were
important to them was are wegetting the same team?
And so that's, that'severything.
So having that team in placeand having the right team in

(27:06):
place, it does numbers for usand for our customers, because I
know that they're being takencare of and they're gonna
continue working with us.
So it's not like, you know,when we kind of when we told our
employees that we were selling,I think their first instinct is
to think you know something yousee on TV.
When a business gets sold, like, oh, we're losing our jobs,
like that couldn't be thefurthest thing from the truth,

(27:26):
because they need this team toperpetuate the business.

Speaker 1 (27:30):
So what did they?
They came to you once before,right like the, the people who
bought your business.

Speaker 2 (27:35):
We.
We got approached by somebodyelse and I think that's kind of
what put this in motion.
We got approached by someoneelse maybe a year and a half ago
and I Knew that that you knowthe numbers all made sense.
But I knew that that particularcompany was like what people
think of when you think of anacquisition by a billion dollar

(27:58):
plus company we're gonna come in, we're gonna buy your business,
we don't really care whathappens to you, we just want
your revenue.

Speaker 1 (28:04):
So you were trying to look after the team and your
clients?
Yeah, absolutely.

Speaker 2 (28:08):
Absolutely and I'm not just saying that, I mean
it's true.
I was like I can't go to themand tell them this with this
company, because I know thatFour or five years from now
we're all gonna be gone likewe're, we might still be here at
that company, but so they'renot gonna get fired, but they're
gonna be looking for anotherjob, whereas so that put the
idea in my head because I waslike, no, this is.

(28:30):
You know, I think we've takenit to a pretty good level from
our own, on our own, and this isan interesting concept.
And the insurance industry isjust it's.
There's a lot of that going onright now People buying
insurance agencies, buyinginsurance agency, a lot of the
bigger, like Acra shore, youknow.
You see, acra shore came intoPittsburgh.
They put their name up, youknow, at Heinz field.

(28:50):
Acra shore is also one of thelargest Insurance agencies in
the country, so they're doingthe same thing.

Speaker 1 (28:58):
Why do you think they're?
Why do you think it's hot rightnow?
Why do you think that's anasset of these big I?

Speaker 2 (29:02):
think.
I think private equityeverywhere is has become very
popular, but it's also privateequity is after they really like
and the banks really like.
So like subscription basedmodel, subscription based
business yeah, residual business.
So I mean that's just huge.
If I was starting a newbusiness, I would the

(29:24):
subscription based Residual,where you got a contract, you
have somebody in place, you knowLike you talked even from the
gym standpoint snap fitness,your business, yep, people sign
a contract, you know whetherit's month to month or not.
There's a like high likelihoodthat a lot of them are going to
stay on With a high level ofcertainty so they can predict
out what their numbers are gonnalook like that cashflow.

Speaker 1 (29:46):
That Recurring monthly payment that I have for
gyms for the gym is like a totalgame-changer.
When I first started mybusiness it was all about like
just selling a package, mm-hmm,because I started out just with
personal training and I wouldjust sell a package and it was
like at the end I would have totry to close that sale again,
and close that sale again, andclose that sale again, and that

(30:07):
became Not only exhausting, italso became, I Guess it didn't
allow me to focus on serving thecustomer as much.
I always had to think aboutlike okay, I got a, they got two
sessions left.
I got to try to close the sale.
Yeah now it's like it's assimple.

(30:28):
As somebody comes in, hey,these are your sessions.
At the end of it it just recurs.
No big deal.
If you ever don't want it torecur, you just got to let us
know.
That's the training section andthen the open gym.
It's like a recurring monthlypayment.
You could do it for 12 months.
You could do it month to month,it doesn't matter, but there's
more predictability there.
Yeah, and like Not only do Inot like to have a conversation

(30:49):
about people all the time about,like you know, you owe money.
Yeah yeah, anyway, you can getsquared up.
I don't like that conversation.
The customer doesn't like iteither.
Right, you know what I mean?
They just want to do I don'tknow the last.
Like I just know, my homeinsurance comes out, my car
insurance comes out.
It just comes out and it's likeall right.
Yeah, it's just coming out.
It makes it more convenient forme too, Sure.

Speaker 2 (31:10):
Well, and we really worked hard when we were
starting out and as we continuedthrough the business to make
you know insurance same thing itrenews once a year.
You know your price changes,you know things can change.
We focused on really makingthat a non-event.
You know this, your insurancerenews.
It's part of the business.
But we're kind of doing thework that we need to do

(31:31):
throughout the policy periodbefore it renews so that you
kind of Don't have to worryabout it, you know, and so that
takes that, that subscriptionbased model and makes it even
more attractive to you.
Know these larger companies,the banks and people who are
lending money and private equity.

Speaker 1 (31:47):
So definitely, and it smooths out a lot of the
cyclical nature of it.
Not Try to think about the bestway to say it, not because it's
like you want to get one overon a customer.

Speaker 2 (31:57):
That's not it.
No, no, no, it's just it's just, it just simplifies the process
.

Speaker 1 (32:01):
Yeah, where it's like , hey, it just comes out.
It's like, well, somebodyreally pushes me on it.
They're like, oh, you know, I'mnot gonna put a bad taste in
their mouth, but yeah, bro,let's just cancel it.
Yeah, refund you what you haveleft.

Speaker 2 (32:14):
Like.

Speaker 1 (32:14):
I'm not gonna crush somebody, but at the same time I
Find way more success.
The customers don't even.
I've rarely ever have acomplaint of all the, the, the
payments that we take everymonth.
Nobody really complains, itjust happens, you know.
Yeah.

Speaker 2 (32:31):
And I think too, if you have a good relationship
with your customers, theythey're getting what they want.
There's not a big reason forthem to change you know, so
that's, that's the whole ideathere.
So if you you're doing right bythem all the time, then yeah,
people are gonna call on themand say, hey, we can save you
$150.
They're getting at all thesethings in the mail, you know,

(32:52):
from the state farms and theGeico's.
But you know who do they wantto deal with?
Who do you want to deal with?
Do you want to deal with theteam that you're used to, the
guys that you know that you knowwhere they're at and if
something does go wrong, youknow cuz claims happen.
You know, even you know in yourbusiness certain things happen.
They have somebody they cantalk to.
It's gonna make it right.

Speaker 1 (33:12):
Yeah, that makes it, because even if somebody was
like, hey, I'll, I can save you150 bucks, it's like, honestly,
the time it's Like it's not.
I had to say it's almost soundsarrogant to say this, but it's
not worth my time.
No, it's, it's, it's literally.
I would rather it just recur,yeah, and just continue to get
the service that I'm happy with,yeah, instead of always worried

(33:32):
about like Well, maybe I got tolook at this and then you spend
a whole day looking at it.
Yeah, and it's like, when youactually look at what your time
is valued at, yeah, probablywasn't worth it, right?

Speaker 2 (33:42):
At least for me.
Well, conversely, though so Iwill agree with you a lot on
that, but conversely, it issomething that People should be
checking up on, because thereare a lot of changes in the
insurance industry to people'spolicies rates.
The market has Hardened updramatically.

(34:02):
Where carriers don't want itlike we talked earlier with
capacity, they don't want towrite the same policies they
want to anymore.
Rates are higher.
You're seeing a lot ofcompanies that Will just send
out something in the mail youprobably won't see, and they've
said hey, by the way, we'rechanging a deductible to a 2%
wind inhaled deductible or a 2%deductible on Any losses that
you have.

(34:22):
Well, if your house is worth$500,000, your deductible just
went from a thousand to tenthousand dollars, and you have
no idea.

Speaker 1 (34:31):
So perfect, let's segue into that.
Yeah, how often should peoplebe looking at their policies
Like is this something thatpeople should keep a close eye
on?

Speaker 2 (34:40):
yeah, I think so.
I mean, if you haven't reviewed, if we're talking home and auto
on the personal line side, ifyou've been with the same
company for five, ten years,like you should really Be
wanting to sit down with whoeveryour agent is.
You know you doesn't need to bein person but on the phone or
just hey, can you, can we reviewthis, can we check into this?

(35:01):
Because I'll tell you a lot ofother things that happen.
People buy stuff that theydon't realize isn't covered by
insurance.
It's covered by insurance butyou have to maybe schedule it,
whether it's jewelry or we got alot of people that go out and
buy trailers and you know, don'tput it on the policy and
there's a potential that thetrailer side swipes somebody
because not listed on the policy, there's no coverage for it.
So maybe you got a swimmingpool and you didn't think to

(35:24):
call your insurance agent.
Maybe you got a pit bull andyou didn't think about it.
You know there's a lot of stuffthat happens, that you should,
and you know you should want totake a look at what you have
scheduled, what you have that'svaluable to you, what the value
of your home is.
Cost of construction has goneup tremendously and and there's

(35:44):
a lot of things built intopolicies, like there's an
inflation guard.
You know that justautomatically increases your
coverage every year.
So for the most part you'reprobably okay.
But that's another thing that'shappened is carriers just have
arbitrarily said cost ofconstruction is up, inflation is
up.
We're adding on 10% to everysingle policy in our book of
business in terms of what it'sthe house is insured for, which

(36:07):
makes the cost go up.
So just having a discussion isprobably a good idea, like you
should have a decentrelationship with your agent.
You should be somebody that youcan call and you know that you
can have a conversation with.
So if you don't know your agent, you're the guy.
Yeah.

Speaker 1 (36:25):
Perfect, no man, that's.
That makes a lot of sense,because so basically don't
ignore those letters when theycome in.

Speaker 2 (36:31):
You should not ignore the letters because you know we
all do it.
But yeah, sometimes there'ssome pretty important
information there.
Right now, another one that'shappening.
Roofs have historically beencovered on a replacement cost
basis.
So you know, this happened alot in like 2008, 2010.
Everybody had, like, their 25year roofs.
Storm comes through, hail storm, oh you're even though you're

(36:53):
about to replace your roof intwo years because it's too old,
insurance companies replacingthe whole thing at the
replacement cost.
Well, insurance companies arelike you know what.
This is not a good modelanymore.
So if your roof is over 20years old, it's an actual cash
value Provision on the policy.
So if your roof was 20 yearsold and you have a claim, we're

(37:15):
not giving you the five or tenthousand replace it.
We're gonna give you like threethousand minus your deductible.
So that's happening a lot like.
I bet a lot of people listening, a lot of people with
homeowners policies Probably gotthat letter in the mail
somewhere in the last six monthsand if it hasn't come yet, it's
, it's coming, it's on the twig.
Yeah and you know that's a,that's a surprise and, like in

(37:36):
insurance, we hate surprisingclients with anything like that.
So having a conversation, is agood idea.

Speaker 1 (37:41):
So basically, like, don't ignore that stuff.
I just want to go on again.

Speaker 2 (37:45):
Yeah, yeah, you should definitely be reaching
out to your agent to talk aboutwhat's covered, what's not
covered.
What kind of provisions are inthe policy right now, because
it's getting bad.

Speaker 1 (37:55):
So let's talk, let's let's start breaking this down
based off of, I guess, whatpeople have.
Okay, so I just I was lookingthis up before you and I started
talking about 30.
Some percent of America Existsin the income level of 35,000 to
75 thousand dollars a year.
Okay, let's say you havesomebody that they own a car,
they have a small house tointegrand and no dependence.

(38:18):
What are some of the thingsthat?
What are some insurancepolicies that they should have?
What are some insurancepolicies that they might not
need, that somebody will try tosell them and take them for a
ride?
I think it's pretty much yourstandard.

Speaker 2 (38:29):
You're.
You know your auto insurancepolicy making sure you've got,
I'll tell you.
I'll just take a quick secondon that.
We see a lot of people withauto insurance policies that
don't have adequate limits.
They might have 50,000 ofliability coverage.
That's just not enough.
That means if you get into anaccident you hit somebody else
at your fault the most.
That policies paying out to theother party that you, you know,

(38:50):
destroyed their cars 50,000dollars or from a liability
perspective there you know, needmedical, all that stuff, 50,000
dollars is just not enough.
So coverage limits veryimportant.
On that a A standard homeownerspolicy very important.
We're seeing a lot of coveragesthat got added over the past
couple years, within the pastfive years or so.

(39:10):
The service line coverages.
That covers them.
If your outdoor utilitiesrupture and you need to call a
plumber to come in and pay thefive or ten grand to excavate
and and replace it, that's, youcan get that coverage added.
I don't, we don't just tryingto think what else on that on
the homeowner side.

(39:31):
So life insurance I mean that'snot historically we were not a
big life insurance agency.
We now have access to some ofthe best professionals in that
space of life insurance and likeestate planning, things like
that.
I do think if well, you said ifyou have dependents or not
dependents, you should probablystill get some term life

(39:53):
insurance, at least cover yourliabilities.
But I'm not an expert in thatfield.
Yeah, but still something tothink about.

Speaker 1 (40:00):
So if you're going to buy, let's say the people that
are.
You know that's the workingclass, slash middle class
America.
Take a look at your actual Imean honestly fifty thousand
dollars.
I'm thinking about it likethat's not even to cover most
people's cars.

Speaker 2 (40:11):
Those cars yeah.

Speaker 1 (40:12):
Like you can't even buy like a used forerunner.
I was looking at them.
They're like forty six thousanddollars, no.

Speaker 2 (40:16):
And yeah, you just don't want to get into that mess
where somebody's trying to comeafter you to what would be a
good coverage level.
I mean, we typically won't doanything less than a hundred
thousand dollars of liability.
I think two hundred fiftythousand dollars of liability
there's not much of a pricedifference between the two.
So really, two fifty.

Speaker 1 (40:32):
So they'll give you peace of mind.
Just to bump it up a little bit, we should probably look at
yours.
Yeah, I'm sure Now let's talkso.
So basic homeowners insurance,vehicle insurance, check the
liability.
And then you were bringing upsomething with the homeowners
insurance that I kind of want toemphasize.
You were saying exterior lines,like that's part of the

(40:52):
homeowner insurance that youcould add that maybe some people
don't have.

Speaker 2 (40:56):
Right.
Add that on.
A lot of people were seeing alot of policies that don't have
the water backup of sewer drainto cover their basement.
For you know Western PA, ithappens a lot.
Sewer drain backs up, destroysthe basement.
When I first got into thebusiness we were slapping them
all on there.
It was like five thousanddollars was the coverage, five
thousand dollars for waterbackup of sewer drain, that is

(41:16):
just not enough anymore, youknow.
So if you've got a finishedbasement, even if you don't have
a finished basement, you got toget sewage pumped out.
Yeah, you know it's probablygoing to be twenty five hundred
bucks.
So look at that.
Scheduled jewelry, scheduledvaluables.
A lot of people don't do thator remember to do that.
We've had somebody call onceand you know they just bought a

(41:36):
watch at the from the jewelerand the guy at the jewelry store
told him the call is agent andthen he didn't.

Speaker 1 (41:43):
And you know so how does that work with jewelry,
like if you lose?

Speaker 2 (41:47):
your ring.
If you have it scheduled onthere, mysterious disappearance
is covered.
So you lose your ring, you loseyour earrings.
It's valuable.
You have it scheduled on thepolicy that's going to be
covered.

Speaker 1 (41:58):
See, that's tough.
I don't know how, how would?
How do you verify that?
Like if somebody is like oh, Ihave this fifteen thousand
dollar engagement ring and Ilost it, so yeah how do you have
a good point?

Speaker 2 (42:09):
How do you do?

Speaker 1 (42:09):
that Do diligence?
Does somebody have to like comein and like sweep the house and
like?

Speaker 2 (42:13):
there's no ring here.
Yeah, I mean, we turn that intothe claim, the insurance
company, the claims, just getsinvolved and they take it from
there.

Speaker 1 (42:20):
OK, yeah, cool, you can add all that.
Yeah, I'm trying to think I'msure we added lines on to mine.
Yeah, policy, yeah, maybe weshould get some of the jewelry
stuff.

Speaker 2 (42:31):
All your toys and things like that, people with
like side by sides.
A lot of people don't think toget that covered on there.
Little you know, the littlePolaris is motor motorcycles,
things like that, so that likestreet bikes, I'm saying like
the dirt bikes, things like that.
You can all add that for verylittle cost.

Speaker 1 (42:46):
You hear that calling yeah, you got to get that, you
got to get that dirt bikeinsured man.

Speaker 2 (42:51):
I mean, I know that the particulars of insurance
aren't super exciting, but youknow.

Speaker 1 (42:56):
I think it's important.

Speaker 2 (42:57):
It's like one of those things that are really
important that for the pricethat it costs to do that, it's
well worth it.
The other thing is the valueson homes right now making sure
that you have the guaranteedreplacement cost.
You have extra coverage forthat to make sure, if something
does happen with the way cost isright now that you can rebuild
and not have to come out ofpocket.

Speaker 1 (43:16):
Right, so just check that.
It's a nominal amount.
You just add a little bit toget way more peace of mind.
Right, right, how does thatchange?
So we went to like the workingclass kind of entering the
middle class America.
I think once you buy a houseyou're in the middle class.
Yeah, that's, that's the way Ilook at it.
You're a homeowner, you're amiddle class person.
What about people that have alittle more money in the bank,

(43:38):
let's say the I don't know 75 to$200,000 income range?
They got some assets, they havea bigger house, they have some
toys.
Now they have some actual cashproducing assets.
Let's say they do have abusiness.
Let's say they may have somerental properties.
Maybe they have like a largepool of liquid assets, whether
that's stocks, bonds, mutualfunds.

(43:59):
How does their insurance kindof look compared to that?
I guess?
Working class entering middleclass individual.

Speaker 2 (44:06):
I think you're seeing more of a financial planner
getting involved and making sureand you know, a lot of times
financial planners refer us in,so they're kind of doing all the
due diligence with the clientto make sure everything that
they have is properly covered,making sure they have the right
amount of life insurance.

(44:26):
So we really go and put thatonto the financial planning, the
estate planning people todetermine how much value they
have, what insurance they needfrom a life insurance standpoint
.
You know we do the duediligence on the home to figure
out, hey, how big is the home,we put it into our system, how
many beds, how many baths,what's the construction, and

(44:47):
that our systems tell us howmuch it should be insured for.
But when it comes to somebodywith more assets, we typically
get a whole another teaminvolved, which now we have
resources for we have a high andultra high net worth team for
personal lines insurance that webring in and kind of go through

(45:07):
the due diligence process.

Speaker 1 (45:08):
So you're working with financial planners once you
start getting into people thathave some change in the bank,
absolutely.
What about?
So let's let's talk about.
You know my situation inparticular, rental properties.
You know I have 10 doors now.
We have a policy like a like apolicy for each property, but

(45:28):
then there is another policythat you and I had talked about
before, which I'm thinking aboutadding is an umbrella policy.
You've seen a lot of those withpeople that have like different
assets.

Speaker 2 (45:38):
Good thought, and I wasn't thinking of that when you
were asking the other question.
But that's exactly what.
Yeah, we want to make sure thatwe've got umbrella policies to
sit over top of all of yourunderlying liability.
So that will sit over top ofyour auto.
So if you get into a bad autoaccident and that $250,000 we
talked about before isn't enough, that million dollar umbrella
policy is going to sit down anddrop down over top of that and

(46:01):
be there in case there's areally bad accident.
And same with the rentalproperty.
So we always add those on or atleast present them to the
clients.
For, you know, maybe for yourrental property, if it's a
single family, multifamily homeand you want an extra million
dollars of coverage, it might be$300 a year.

Speaker 1 (46:17):
So well worth it, yeah small change to help you
sleep at night.
Yes, so do you.
When you have an umbrellapolicy that you said that sits
over top of other policies.
Let's say I could put let'sokay, here's an example.
Could I put an umbrella policyover this home?
So, for instance, let's say Godforbid, ruger breaks out mall

(46:41):
some lady.
I mean, I don't mean to laugh.

Speaker 2 (46:46):
But it does happen.
It happens, so will that, willthat.
It's bad when it happens.

Speaker 1 (46:52):
Ribs are hand off.
It happens Crazy.
It doesn't take much.

Speaker 2 (46:55):
For that to happen and for that to turn into like a
$500,000 claim is very easybecause you get scarring.
You get somebody who can't dotheir job the same, their
appearance is different,attorney gets involved.
You're talking yeah, this is acouple hundred thousand dollars,
maybe a million dollar claim.

Speaker 1 (47:10):
Okay, so you can get a policy on top of your home,
then the rest of your assets aresafe.
So like, let's say, ruger bitessome lady's leg off, please.
He's a mix.
Okay, yeah, mix, yeah, yeah,yeah.
You know what?

Speaker 2 (47:25):
that means yeah, because a lot of insurance
companies, yeah, they don't liketo write if you've got a pit
bull, if you've got an Akita,yeah, aggressive Rotweiler, and
I know people don't like to hearit because they all you know
your dog is so nice.

Speaker 1 (47:39):
Oh, my baby is so sweet.
He'll never do that yesterday,it's just the numbers.

Speaker 2 (47:42):
It's just the numbers .
This is what it is.
But yeah, we would suggest anumbrella there as well.

Speaker 1 (47:48):
I mean, would that protect the other assets?

Speaker 2 (47:50):
Yeah, yeah.

Speaker 1 (47:51):
Okay, so like, let's say, they can't get to my
business then, because theywould have to pierce through the
homeowners, pierce through theumbrella and then get to my
business.

Speaker 2 (47:58):
Well, you would want.
So your personal, your personalhomeowner's carrier would not
want to typically sit over thebusinesses Some of them will but
we would typically have anumbrella on the business policy
and then an umbrella over thehomeowner.
So this is more your personalassets.
That that's protecting, got it?
Yeah, so your corporate, your,your businesses, should

(48:21):
essentially be protected by thenature of the LLC.
Just the corporate structure.
Yeah, just the corporatestructure.
But we would always suggest anumbrella on the homeowners as
well.
Even if you don't have a, anaggressive dog breed, or just
any dog, there's things that youknow that just can happen at
your home that require you toget an umbrella.

Speaker 1 (48:41):
Yeah, like there's a friend of mine who just got his
steps rebuilt and he went andmeasured the steps and like one
of them was like a couple inchesoff or something, so he made
him redo it yeah they'll get youon that.

Speaker 2 (48:53):
Yeah, he's like, I don't want a mailman coming up
here, they'll get you Droppingoff mail, slips and falls?

Speaker 1 (48:58):
Yeah, and then they some you know attorney or some
adjuster comes out and measureup.
Well, this is your fault,because it was two inches.

Speaker 2 (49:05):
Well, and even even if he, just somebody, slips and
falls on your property, even ifit's not any negligence of your
own, there are coverages in thepolicy the medical policy, the
medical expenses, just the kindof good faith, take care of
their medical bills because ithappened on your property.
But then if attorney does getinvolved and you know they try
and sue you.

Speaker 1 (49:22):
They could get ugly.
They could get ugly.
So umbrella policies aresomething that, once you start
getting some wealth, you want tostart thinking about how to
protect that wealth.

Speaker 2 (49:30):
Yeah, and they're relatively inexpensive on a
homeowner's policy Another $150,$200, $250 a year.
So nothing should definitelyconsider that, yeah, okay, I
think people tend to get reallylike put their costs of
insurance under a microscope andwe always recommend these

(49:50):
things and and really try andpush them, because everybody
always forgets the conversationthat we have when we're going on
a spring meet to anotherthought to of what coverages or
what certain endorsements theyhave.
You're going to forget aboutthe $150 versus.
You know, five years from now,you decided not to take
something and something badhappens and it's going to get

(50:13):
ugly.
And another one of those whichI'm thinking about right now is
on your auto insurance veryimportant limited versus full
tort.
A lot of people will save the$150, $250 to go limited tort,
which basically restricts yourability to sue for pain and
suffering, versus the full tort,which allows, if you're injured
in an auto accident fromsomebody else, to go after

(50:34):
somebody.
For you know your lost wages,your pain, your suffering and a
lot of people will say, well,I'm not, I'm not the one to sue
for things like that, but you'regoing to want to be able to be
made whole by having that extracoverage and that's one that
people do forget, even thoughthey sign the applications.
We're going over it in detail.
We've had situations where, twoyears go by, somebody gets into

(50:59):
an auto accident and they wantto sue the other party for pain
and suffering and they can'tbecause of the limited tort.
So that's really important.
Makes sense.

Speaker 1 (51:08):
That's on the personal side of things personal
auto, yeah, and I know that yousaid you're not an expert on
this, but you you say term lifeinsurance.

Speaker 2 (51:18):
Term life insurance.
Yeah, yeah, I mean there's,there's, I think there's
Definitely space for whole lifeinsurance.
When it comes to estateplanning, there's different,
definitely, reasons where thatwould make sense, I think once
you start to get to that likehigh net worth.

Speaker 1 (51:34):
Yeah, I think so, yeah, and you're trying to
figure out hey, where can I havesome return at a tax
preferential basis?
Mm-hmm, I agree with you, but Iwill say this there there are
people I know that will takesomebody that's making 40 grand
a year and try to sell them theWhole life insurance policy.
Yeah, it's like I don't thinkthat makes sense for a lot of
people that are just, you know,paying their bills and don't

(51:57):
really have assets.
Yeah, you know what I mean.

Speaker 2 (51:59):
If you had a whole life guy on here, he probably
Strongly disagree.
Yeah, you know we would butlike.
But I tend to agree with you, Ithink, that whole life there's
probably a yeah, there's a spotfor it in terms of estate
planning.
You know it's tax-free at thetime of death, so there's
probably.
If you're ultra high net worthindividual, there's definitely

(52:20):
space for that.
But I tend to stay more on theterm life side.

Speaker 1 (52:25):
And I think most people should stick with the
term life size.
Like.
There's a guy that one of mymentors he was telling me that
he's like, oh, I just bought awhole life insurance policy and
I was like, why would you dothat?
Why wouldn't you just buy aterm and then you can just take
that difference, invest it inthe market and you'll be way
better off?
But for him it was like well,no, I can overfund this policy.
Yeah, I can take a loan thenagainst this policy.
I could then buy real estatewith that loan at a rate that is

(52:46):
lower than if I went to an openmarket.
Yeah, he's like so I'm gettingbasically a loan where I don't
really have to pay taxes onliquidating the, the asset.
I don't have to pay capitalgains tax.
Instead, I take a loan againstit, put it into another cash
producing asset and that cashproducing asset then pays me.
So it's like he's getting, he'smoving his money in a way that

(53:09):
I don't think you're.
You know most.
I mean, it's just the truth.
Most Americans arehand-to-mouth, they are yeah,
and they don't really have toworry about that.
And so I get the term that youneed to cover your loved ones,
your expenses, all of that wherethat whole policy Maybe makes
sense with.
You know, that was the nextquestion.
I had people that are super,you know.

(53:31):
I mean they're making $300,000plus in Western PA, california's
, like half a million plus rightlike you're making 300,000 plus
a year.
You got you know a milliondollars in real estate.
You got you know $500,000 inliquid asset.
You got a hundred and fiftythousand dollars in the bank.
So that's when I think likethose kind of creative financial

(53:51):
instruments make sense there.
It's like partially insurance,partially an investment, where
it's like I don't know if a lotof people I think a lot of
people get taken for a ride bylike slick salesman that might
be financial advisors, that Quas, I sell this life insurance
that I think a lot of peoplefall victim to.
I'm one of them, bro.
I'm one of them like when Ifirst started my business, I

(54:13):
didn't make a lot of money.
And then by year three Before Idid okay, I didn't make a ton
of money.
But I went back and I looked ata policy I bought on year two
in my business I think I madelike 60 grand or something like
that.
And then I was doing the mathover COVID and I was like, okay,
I've put $500 a month in thisevery month for X amount of
years and there was a cash valueto it.

(54:34):
But I looked at the cash value.
I was like I've put I don'tknow what it was like.
$18,000 into this policy.
The cash value is five grand.
It's like now.
Yeah, at some point in thefuture there is an inflection
point.
Oh well, it's guaranteed threeand a half percent.
You don't have to worry aboutthat.
But it's like I was at thestage then where I should have
just been playing offenseBecause I didn't have to worry

(54:55):
about all these like tax, this,do that.

Speaker 2 (54:57):
It's like yeah not a good guy.
I was kind of sold.
I was set up.
Yeah, no, that's my fault,that's my fault.

Speaker 1 (55:04):
I'm not blaming him.
He's got to make his nut too.

Speaker 2 (55:06):
Well, that's the way they were trained, so they fully
believe that that is they bestinvestment vehicle for you at
the time.

Speaker 1 (55:13):
I, I, definitely, I, I think and I'm just gonna put
the the invite out there I wouldlove to have a whole life
insurance.

Speaker 2 (55:19):
I think, I think that would be a really good invite,
because and I'll give you adifferent perspective.

Speaker 1 (55:25):
Definitely, and like I'm not gonna try to be like.
What I'm not gonna do toanybody here's is try to get
gotcha moments, yeah, but I amgonna be honest here, dude, like
I feel like I was taken for aride on that policy should bring
them in.

Speaker 2 (55:37):
Yeah, I'll bring it, dude, I'll bring it.

Speaker 1 (55:39):
Feel like I was taken for a ride and I feel like a
lot of people are taken for aride, like my you know family
member.
I don't want to get toospecific, but a family of member
of mine's girlfriend has awhole life insurance policy and
it's like it's better thannothing.
But it's like you have no kids,you don't really pay that much

(55:59):
taxes, you don't have a 401k,you don't have a retirement.
There's so many more financialinstruments or insurance that's
gonna give you a better peace ofmind.
Well, this whole life insurancepolicy.

Speaker 2 (56:12):
Exactly.
I think the peace of mind thingyou just talked about is, you
know it might cost me $700 amonth for $300,000 of whole life
, where it might cost me $150 amonth or less for a million,
which is really the like purposefor me right now about a life

(56:32):
insurance policy.
I want to make sure that myfamily's perspective protected
right now.
You know so, if something wereto happen, yeah, it's there.

Speaker 1 (56:41):
It's so.

Speaker 2 (56:42):
But like you said, I think there's different
Instances where whole life makessense from a financial planning
perspective, long-term estateplanning, you know, kind of.

Speaker 1 (56:55):
Resource.
But for the most part, that'swhen we're starting to talk
about that.
Yeah, super high net worth.
Yeah, high high income.
Yeah, high skill.
Yeah, pan, a shitpoll of taxes,top to marginal tax rate.
That's when you start to playthe game a little bit more.
And if people hate the game,well, yeah, I mean, I don't know
what to tell you, that's justthe way that the the cookie
crumbles, right, try to changeit at the voting booth, but

(57:17):
that's how it currently exists.
Now, yeah, I agree, people tryto do what they can.
Yeah, not to of, not to avoidtaxes, but to play the game
Appropriately so you pay less ofthem, right?
Like these people that are thatthat's the funniest thing that
people oh, we need to hire75,000 new IRS agents.
It's like there is already adivision in the IRS that that

(57:38):
monitors the super high networth individuals exclusively.
They're not.
They can't get away with thisillegal stuff.
People like Trump didn't payany taxes.
He's like that's cuz, I'm smart.
Well, the reason is because it'slike there's these instruments
in place for these super highnet worth worth individuals,
where they're using the wholelife insurance there, they're
using depreciation on theirrental properties, they're doing
all these different things totry to again not avoid taxes but

(58:01):
play the game that was put inplace by Congress, by the
president.
Everybody knows it exists andthe super high net worth
individuals hire professionalsto help them play the game.
Yeah, not to hide from taxes,but to follow the tax law as
it's written.
Yeah, it's a wild thing.
Besides that whole lifeinsurance policy, which may have

(58:21):
a Place in somebody that's,like I said, that high net worth
, is there anything else that,like you know, the the super
high, top 5% income earners,maybe top 1% asset individuals,
is there anything that theyshould be looking at from a
insurance perspective?
Or is you just scale it up from, like, middle-class to

(58:43):
upper-class?
I?

Speaker 2 (58:43):
think you just scale it up for the most part and make
sure that you're working with areally good financial advisor,
that's in a good estate planningattorney and a tax attorney.
That's got it all wrapped up,and then that will usually bring
us in on the insurance side ofthings.
But no, I can't think ofAnything else.
I hope I'm not missing anythingelse on that front, but no, I
don't think so Okay, I don'tjust scale it up to the scale it

(59:06):
up, yeah yeah, perfect.

Speaker 1 (59:08):
Yeah, man, we definitely got a look at mine,
cuz you know I start to.
I'm not getting nervous, butyou know you get tenants in
there and you're like, hmm, whatare they?
What are they gonna pretend tohurt themselves on?

Speaker 2 (59:19):
Yeah, yeah, I think from a business perspective, to
make sure you've got the rightcoverage From an underlying
standpoint in terms of you knowhow much it costs to rebuild the
place and then Liability-wise,having the extra umbrella on
there is key yeah is thereanything that Obviously, my
opinion is well out there?

Speaker 1 (59:37):
whole life insurance, I think, for most people, I
think, is BS.
I'm just gonna say yeah, andI'm totally cool with having
somebody.

Speaker 2 (59:43):
I think a lot of people would agree with you.

Speaker 1 (59:44):
And that's fine.
If somebody wants to come on,this is a.
This is a rolling invite toanybody that sells a whole life
insurance policy.
You can come on my show and wecan talk about it.
Doesn't have to be adversarial.
I'm open to being corrected,but as it currently stands, it
doesn't make sense for mostpeople.
Is there any type of insurancethat people are buying that
might not, they might not need?

(01:00:05):
I know that you're.
You know you're an insuranceguy, so obviously you're like,
oh, but I mean, is thereanything that you're like?
Okay, you know what?
There's a lot of people buyingthis that might not need it.
Or Insurance, because you kindof touched on this insurance
that people should have, butdon't.
Here's a, not here's a.
The reason I asked thisSomebody hacked into my

(01:00:27):
Instagram, right, and like.
They went on and they're likehey, congratulations to myself,
I bought a Tesla.
I did all this Bitcoin shit.
Reach out to my coach, she'lltell you about Bitcoin.
Couldn't get into my Instagramfor days.
Yeah, finally, get in.
This motherfucker is literallymessaging DM and my friends,
like this girl from high schoolwas like hey, al, you know I was

(01:00:49):
thinking about getting intoBitcoin money.
He's like yeah, totally getinto it like this guy.
So I'm yeah, he was pretendingto be me.
I messaged him from my otherInstagram account.
I was like hey, bro, glad tosee we're doing well.
He's like yeah, bro, we'redoing real well.

Speaker 2 (01:01:03):
I was like are we rich.

Speaker 1 (01:01:04):
He's like yeah, bro, real rich.
I was like sweet, I'm, at leastwe're rich here.
Is there like so, is there a?
The reason I asked is becauseI'm like is there a fraud
insurance that I can have?

Speaker 2 (01:01:15):
or something like that.
Liability yeah, I'm gonna needthat.
You're gonna get some cyberprotection.
They're on the personal side.
It's available.
On the business side.
We're still seeing a ton ofbusinesses that don't have cyber
liability, that don't haveemployment practices liability
insurance.
So on the cyber side, you know,like you said, they get hacked.
They've got to notify theircustomers.

(01:01:36):
There was a, you know, a databreach.
There's so much, so many coststhat get that build up so
quickly on the cyber side.
So cyber liability is hugeright now and also the
employment practices liability.
So you've got employees, youwrongfully terminate somebody,
you know age, sex,discrimination that's happening

(01:01:57):
a lot and a lot of companies donot have the right protection
there.
So that Employment practicesliability, cyber liability,
directors and officers,management liability, kind of
the whole usually comes as a bigpackage.
That's really important.
So but we can also add it onthe personal line side, for a
lot of companies or a lot ofInsurance companies will offer

(01:02:17):
that as well.

Speaker 1 (01:02:18):
That's something that I think I need to start looking
at it's really on the personalline side, it's very cost
effective.

Speaker 2 (01:02:24):
It's very affordable, yeah.

Speaker 1 (01:02:25):
I mean, that's what I was thinking.
I was like man, what ifsomebody were to sue me for this
?
Because, like, conceivably,this dude took some of my
friends for a ride?
Yeah, you never know how youget wrapped into that.
And they, they hooked the rightguy because, like, everything I
put up is like hey, businessthis like invest in this.
They're like this is the dudeand it worked.
Yeah, now Luckily like yeah.

Speaker 2 (01:02:46):
Nobody's.
They're not really getting intoanybody's shit, but right.
But if it does happen, thenit's like damn.

Speaker 1 (01:02:51):
I want to make sure that I'm protected from that
perspective.
Is there anything that thatPeople will add on to a policy
that maybe somebody just doesn'tpay attention to, that they
might not need and they shouldstart looking into?

Speaker 2 (01:03:05):
That's a tough question question because I
don't really think so, becausewe typically are not Getting
into or seeing a lot of thingswhere we're removing coverage.
You know it's usually we'readding coverage, yeah we're not
seeing a lot of things that, oh,you don't need this, this
shouldn't be on here, so now Idon't think so, got it, I'm not
missing anything, but I reallydon't think so.

Speaker 1 (01:03:24):
Here's.
Here's another question.
This is a selfish question, butit's my podcast so I'm gonna
ask it.
It's good podcast if I, if Iwere to.
Is this just a math equation?
Like I have my rentalproperties and let's say I have
a million dollars of coverage,would it be more cost-effective
for me to just bump that up tothree million or add an umbrella
policy, or is there adifference between the two?

(01:03:45):
Does that make sense?
Like, will the umbrella policybe better for a reason other
than total coverage?
Then me just bumping up thecoverage of that addition, of
that actual policy?

Speaker 2 (01:03:56):
typically no, and a lot of times the Insurance
company will not have theability to add on more to the
underlying liability on rentals.
Now there are Some businessowner coverage forms where the
it starts at two million singlecurrents, four million aggregate
.
So yes, then you don't need anumbrella because they just do it
all cost effectively on theunderlying policy.

(01:04:17):
But most of the propertyhabitational, the next thing you
know, single family,multifamily, rental type
insurance companies will nothave a higher limit than that
million.
So you can.
You have to use it an umbrella.
That way got it.
Yeah.

Speaker 1 (01:04:34):
That answered pretty much all my questions from an
insurance perspective.
Just another question about thebusiness.
So you sold the business.
How did you know it was time Tosell?
I know we're jumping around,but we're gonna wrap it up here
soon Like what made you?
Because ultimately, my goal IWant whether or not I sell is
beside the point.

(01:04:54):
I want it to live past me.
Yeah, if that makes sense,whether that means I pass it to
you, know a kid, or I do sell,there is gonna come a time when
I have to make that decision.
What was it that made you makethat decision where it was like
this is the time to sell?
I understood you know who tosell to right like.

(01:05:16):
These people are gonna preservethe culture, yeah, they're
gonna keep my employees, they'regonna keep my customers happy.
When did you, when did you knowit was time to sell, not who to
sell to right, when to sell it.

Speaker 2 (01:05:28):
I think it was a perfect storm that kind of came
upon us recently.
So number one the insurancemarket has become very difficult
to navigate through from acapacity standpoint, meaning
what we were easily able to dofour years ago.
A customer comes to us and says, hey, here's my risk, I needed

(01:05:48):
it covered.
There might have been teninsurance companies that line up
, you know, at the door sayingwe want to take that policy.
Here's the pricing, it's verycost effective.
Here's the coverage.
We went from that to that samecustomer comes to us and maybe
out of those ten, one of them iscoming to the table with Terms

(01:06:08):
and conditions that are lessthan favorable than they were
five years ago.
So the capacity there from aninsurance company standpoint
started to get in the way of.
We weren't feeling it yet, butI kind of saw the writing on the
wall where the the industry isheaded.
That's number one.
Number two our ability to goupstream for Different customers

(01:06:32):
that maybe have out-of-stateexposures.
Their businesses are growing.
Maybe they're out in the UK nowwith one of their facilities,
or they're in Canada and they'readding tons and tons of
employees and they're coming tous and saying, hey, can you
ensure this.
Well, we've got a feels likereinvent the wheel and make a
million phone calls to try andfigure out how to do it.

(01:06:53):
We're now surrounded with thebest, smartest people in the
insurance industry and on top ofthat, you know, somebody would
come to us with those that samecompany and say, hey, can you do
our health insurance?
And we're turning it away andoutsourcing it to somebody else
At a fraction of the commissionthat we could do it for, and
we're not bringing that liketotal approach to our customers.
So from that perspective, thatwas a big one for us, being able

(01:07:16):
to Serve a lot more needs ofour customers through different
channels.
That was that was a big one forus.
The other one was we were grown.
We've grown a lot.
So it was how are we gonna takeit from where we're at to the
next level?
It was either throughacquisition or I was gonna go

(01:07:37):
out and have to hire a lot morepeople Sales people, service
people to take it to the nextlevel at a time when Labor costs
are skyrocketing through theroof.
My competitors, that are, youknow, these billion dollar
organizations can afford to Paythem a lot more and just the
resources that they have, and itjust I Didn't feel like I was

(01:08:01):
growing anymore either from anintellectual standpoint, a
knowledge standpoint of theindustry and what was happening.
So now I'm surrounded byliterally the best people in the
insurance industry that havebeen doing this for 2030, 40
years, that literally thesmartest people in the room it's

(01:08:21):
not me, you know.
So I'm not having to come upwith all the ideas.
I don't know how, if there, foranything that comes up, there's
a person for that thatspecifically Focuses on that for
the last 20 years, whether it'scaptive insurance and
alternative risk Strategies forclients, whether it's health
insurance, whether it's humanresources, just anything that

(01:08:43):
comes up I literally amsurrounded by the best people in
the industry.
So it was.
It was just being able to Offerthat where I couldn't anymore.

Speaker 1 (01:08:51):
So you took it.
It was time to sell when youtook it, as far as you could I
took it as far as I could.

Speaker 2 (01:08:56):
I I mean, I could have kept going, but not at the
cost of, you know, maybe notbeing able to provide my
employees and my customers withthe best possible scenario.
And I felt that a lot with myemployees they, my guys are, I
feel, the best, and ObviouslyI'm saying that because I've
worked with them all these years.

(01:09:16):
But I truly believe that and Ifelt like they could take their
career to grow Exponentially bydoing it this way, versus me
having to figure it out for them.
That's.

Speaker 1 (01:09:27):
Exactly when I want to sell mine, when I take it as
far as I can.
It's time to pass the torch?

Speaker 2 (01:09:34):
Yeah and yeah and that's.
That's a great Position to bein.
You know, when you feel likeyou're there and everybody
everybody's better off becauseof it.

Speaker 1 (01:09:45):
Yeah, you're not just like cash, which is nice, I
mean, you get paid, which issweet.

Speaker 2 (01:09:48):
Yeah, right, I mean of course that's like that's a
really cool part of it.
The dollars and cents have toline up to a certain point and
the dollars and cents make sense.
Right, I can't like leave thatout of the equation.
When you get to a certain massas a business, the dollars and
cents do make sense there too.
Yeah, but not at the expense ofyour employees and your
customers.
So I think that is a big partof the decision.

(01:10:10):
Yep, it's the biggest part ofthe decision.
I.

Speaker 1 (01:10:13):
I Hopefully one day I'll get there.
Well, you will.
So, nick, that was great.
We've been going for almost anhour and a half now.
How do we get a hold of youragency if we want to have
somebody look over our policy?
What's the best way to get ahold of it?
What's it called?
How do we get a hold of you?
What's the next steps if wewant to contact your agency?

Speaker 2 (01:10:30):
So our agency is called a short risk advisors, a
hub international company.
Now phone number seven, two,four, three, nine, two, four,
five, eight, six, my cell phonenumber, put it out there for two
seven, seven, nine, five, five,nine, seven.
So basically reach out to me orany of our team team members.
We do 99% of our business onreferral basis.

(01:10:54):
We're not cold-calling, we'renot really pounding the streets
in that way.
We're working through referrals.
So If you hear about us, youknow through your friends or
family or fellow business ownerswe can definitely help.

Speaker 1 (01:11:04):
All right, nick, I appreciate you being a guest man
.

Speaker 2 (01:11:06):
I think that way.
Thank you very much, Iappreciate it.

Speaker 1 (01:11:09):
So let's wrap this thing up on three, one, two,
three Again, guys, this is amore complete beast podcast.
If you got something from thispodcast, make sure you leave us
a five-star review and sharethis podcast, because that's the
only way we continue to growagain.
Guys, we'll see in the nextepisode and thanks for listening
.

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Policy and Power | Nick Tropiano's Guide to Insurance Entrepreneurship

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Policy and Power | Nick Tropiano's Guide to Insurance Entrepreneurship