The Future of Insurance Podcast - Kate Terry, Co-Founder & COO, Surround Insurance

The Future of Insurance Podcast – Kate Terry

Co-Founder & COO, Surround Insurance

Season 1, Episode 21, August 14th, 2021

Guest Bio

Kate Terry is Co-founder and Chief Operating Officer at Surround Insurance. She takes great pride in designing beautiful insurance products. Kate held senior roles in insurance product management before turning to the insurtech space, most recently as a Senior Vice President, Commercial Product Management at Liberty Mutual. She has had profit and loss responsibility for both personal and commercial lines books in her time at Progressive, Plymouth Rock, and Liberty Mutual. Kate is a licensed producer and a Chartered Property and Casualty Underwriter.
LinkedIn: Kate Terry
Twitter: @kateterry

Surround Insurance
Surround Insurance is the first insurtech startup redesigning insurance products for modern lifestyles. Our initial product is an insurance starter pack that fills the insurance gap between college graduation and the purchase of a car or home. We distribute our products exclusively through our network of preferred independent agents.
LinkedIn: Surround Insurance
Twitter: @SurroundInsure
Instagram: @SurroundInsurance
Facebook: Surround Insurance

Highlights from the Show

- Surround was co-founded by Kate and Jay Grayson, who are both Insurance people
- They saw a gap in the market where young adults buy “things” less than they used to, making insurance as we’ve known it a tougher fit for their lives
  - Young adults are delaying purchases of cars, home, engagement rings, etc due to changing economics, shared economies, etc
  - Surround built a starter pack of insurance to bridge the gap between coming off your parents’ policies to when you start acquiring those assets that young adults are delaying the purchase of
- Their solution is 4 minutes, quote to bind, for multiple products across personal and commercial lines
  - Personal lines non-owned auto
  - Renters
  - Miscellaneous Professional Liability for side gig work
- We talked about how limits and deductibles have been marketed as “customizing” coverage, but it really isn’t
- Being in the commercial and personal spaces gives Surround the ability to add in other lines of business from partners easier than if they only played in one side of that equation
- Bundling these historically low-premium products that were hard to sell on their own due to the economics, but bundling the products helps Surround overcome the hesitation of the market to want to sell these products to this buyer
- This is about giving better tools to the agent channel
- Agents haven’t gone away, despite the war cries that they were going to, nor will they
  - Agents still place about half of the Personal market
  - 7 out of 10 consumers name their agent when asked who their insurer is
- So many direct customers were agent customers at one point when they were on their parents’ policy, so Surround is working to keep those customers part of the agency as they graduate to their own coverage
- With Kate and Jay both being Insurance people, there are benefits (like knowledge) and costs, like the tech and flexibility side of what outsiders can bring
  - They were able to find people with skills to round out those non-Insurance pieces of the puzzle with their Insurance expertise solving for the product and Insurance-specific customer experience pieces
  - There does seem to be a wave of Insurance founders stepping into the space rather than just outsiders
- Surround setup a unique product as an MGA rather than just looking at distributing an existing solution
- Margins are thin for MGAs, and the more commoditized and competitive your product space is, the thinner those margins are
  - Surround picked products and a market segment that had room to compete, but it is still a far more difficult path to navigate than some may think to setup a successful MGA
- Some early InsurTech carriers were effectively MGAs without a fronting carrier because of how much of their book was reinsured
- The presumption is often that disintermediating the channel is cheaper than selling through agents or brokers, but you end up having to do what the intermediary did, and that isn’t free
  - Surround saw this early on in designing their concept
  - Outsider founders may have gravitated to direct because it’s what they knew from their tech experience
- Kate left us with a call for people with ideas to start something to pursue that idea
  - It has been very hard and scary, but well worth it