Exploring the Data Network

Starting with a brief history of carrier data connectivity, a much-needed network, and where we've come in 40 years, Reid Holzworth talks candidly about building automation, digital evolution, and more. 

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Sandy
Welcome to the Leader’s Edge Podcast. I’m Sandy Laycox, Editor in Chief of Leader’s Edge. In this episode, I talk with Reid Holzworth, CEO of IVANS. IVANS is a network for carriers and MGA’s to connect all of their policy data into broker agency management systems. As the former founder and CEO of Tech Canary, Reid has extensive insurance and technology experience, and he brings this to our lively conversation on connectivity carriers, data evolution and how AI is really being used in the industry. Give it a listen. 

All right, I am here with Reid Holzworth, CEO of IVANS, which is a part of Applied Systems. Reid, welcome. 

Reid Holzworth
Thank you. Thank you for having me. Happy to be here. Excited. 

Sandy
Great to have you. A fellow podcaster. Just a quick shout out to your insurance technology podcast before we get going. 

Reid Holzworth
That’s awesome. Thank you for that. Yeah, it’s been a lot of fun. Been great. 

Sandy
Yeah, it’s very exciting. Great podcast. Highly recommend it. So we are going to talk about data today, sort of looking at where we are and then going forward what might be happening due to what we’ve accomplished so far. So let’s start with just a brief explanation from you on IVANS just for our listeners to catch up. Anyone who doesn’t know what IVANS is? 

Reid Holzworth
I would say that probably most people don’t know what IVANS is. They know the name. I mean, a lot of people do know us, don’t get me wrong. But I love to give the kind of the history lesson on IVANS, just so we can kind of help build a foundation around this conversation. A of people don’t realize IVANS was started 40 years ago. It’ll be 41 years this year, actually. And it was originally started as a nonprofit by about 25 or so insurance carriers. And so what happened when technology started to become mainstream in the enterprise and insurance was no different? Carriers quickly realized in order for them to get the most out of their investment within technology, they really wanted to connect up to the brokers, to their distribution. And so why does that matter? 

Well, the carriers realized that if they could connect to the brokers, simply put, it would make the brokers lives easier, so therefore they would put more business with the carrier. When the carriers looked at each other and said, well, wait, yeah, why don’t we just start connecting up to these systems? And by the way, it’s also applied systems 40 year anniversary, and they weren’t even the first AMS out there. So there was amss coming on the market, even some little raider stuff that was happening so a lot going on there. But the problem was for these carriers to connect to all of those systems and to all those brokers, it’s thousands of agencies, hundreds of carriers, many systems. It’s just this labyrinth of complicated connectivity. And so they said, do you want to do that? No, I don’t want to do that. 

Who wants to do that? We’re in the business of insurance. So they founded IVANS. It’s actually an acronym, or it was, we rebranded about a year or so ago, but it stands for insurance value added network services. So, lot of words, we don’t do a whole lot of that anymore, but what we are is a network. And so speed that up today. Today, IVANS connects almost 700. It’s like 680 or so carriers and MGA’s down to 38,000 agencies. Now, I like to think of that, call it 700 carriers and MGA’s that are out there. People will say, but there’s thousands out there. Not really. When you really break it down and you look at all the codes and everything, this, these are all the tier ones and three to always fours and whatnot. 

So most of the independent channel, carrier wise, is connected up to IVANS and then the 38,000 agencies, those are accounts that we connect to. We just went through a big revamp at IVANS. IVANS went for profit many years later, went through a couple of hands. Applied systems picked it up seven, eight years ago or so, and it really sat on a shelf collecting dust, frankly. And a few years ago, in 2023, I’m sorry, 2022, applied systems Taylor CEO now really decided to double down and make a big investment in IVANS. So at that time, actually IVANS had about 400 carriers connecting down to about 28,000 agencies. So if you look, from then till now, we’re almost 700. But it’s really like the universe, I like to think of PNC. So those are real agencies we’re connecting to. 

So what is it? It’s all their information. So if you’re an agency and you bind business with the carrier, all that policy data is flowing through our pipes. We have pending cancellation for non renewal. That flows through our pipes. First notice a loss. All the claims information that flows through our pipes, electronic documents, some snail mail that’s going to go to you, that runs through the IVANS pipes. All the commission statements, and I like to talk about commissions, is so important. The thousands of pages of individual transactions, especially for you large brokers, that all flows through our network into your agency management system. So when I say runs through our pipes, it runs through our pipes and then connects up to these individual, typically agency management systems. I like to call them distribution solutions. So that data connects up to there. Why? 

So guess what? I, as an accountant, let’s just say I don’t have to look at a hundred page commission statement and individually key in every single one of those individual transactions into my bottles, my management system. The data goes in, the management system, does its job, kicks off workflows, does all this heavy lifting. Again, going back to the original thesis of IVANS carriers now. So we just had a very large, what was captive insurer now going independent. Right. Well, we’ve known about this for a couple of years here at IVANS. Why? Because they were our first call. Because when they started doing research on saying, hey, if I want to tap into the independent market, the IA said, well, that’s cool, but you have to connect up to IVANS in order for me to write business. 
So it’s become kind of table stakes at this point. So we have a lot of data, a lot of information that runs through our pipes. 

Sandy
Yes. Before we move on from that, just a couple clarifying things. So if I’m an agent that’s connected through IVANS and using that system, am I only working with carriers that are in that system? Essentially. And then when I turn on my agency management system on my end, what am I see, am I able to, like, look at a client and see all of that information sort of laid out for me in a dashboard? And then I can sort of wrap my head around what that client is doing? Or is that kind of from the broker experience, 100%. 

Reid Holzworth
Once you configure agency management system, and this is another crazy fact, people don’t believe this. People think there’s five agency management systems out there today. We connect up to over 50 of them. Okay? And so what we do is, so say you’re an InsureTech, say you’re a digital broker, say you’re a technology company that owns an agency management system. You connect to IVANS, we connect them up. When somebody purchases that said solution, it’s pre configured, you just turn it on. So now I write a piece of business with travelers, Hartford, Chubb, whoever, name them, right? Liberty, and so on and so on. Next, insurance is coming on live like all these guys, right? When,I bind that piece of business on the carrier site. 

So I go through the quoting side. And I can get in that too, because we play in that world too. I’m not going to get in that for this example, but I bind the policy with next. Let’s just say all of that policy information comes directly into my agency management system. Okay, so why is that important? Well, you could have your end users key that in manually and do all that. Well, then you have that whole fat finger thing. Maybe the data’s not right. Things change over the duration of the policy. Hey, let’s go. Personal auto policy. I just went from a Honda accord to a Maserati. You need to have that in the system. Now here’s my current vehicle. Here’s what’s really going on. 

So we’re connecting that and now actually real time with these carriers so that your system is always up to date with what that carrier has for that policy. So when you start to think about analytics and things like that, and we’re going to get into some of this data stuff, as agencies brokers are getting so much smarter around data, they’re starting to look at it and go, well, wait a second, can I trust the data that I put in or my people put in, or do I trust the data that’s coming directly from the carrier system, which is that rolls through our pipes right now? 

Sandy
Do you find that they are often doing both? 

Reid Holzworth
Oh, 100%, yeah. And look, there’s things that we don’t have. Like we don’t have CRM ish information about a client, right. There’s other things like sales type stuff that we don’t have. Right. But we have the core information of that. And so really it’s kind of just keeping those systems in line. And then when you start to think about commissions and other things and all this stuff, it’s when that, so say I’m living on an island and a policy is penny cancellation for something, right. That transaction is gonna flow and hit your system, and then that system could have workflows. You could build custom stuff, whatever it is that’s going to kick off a process. Maybe it sends a text message to the client or something. I don’t know. I’m making. That’s a little simple, stupid example. 

But you can start to like, think about all the things and all the automation that you build as changes are occurring. Renewal, hey, renewal comes down 90 days prior to renewal. What’s the premium? Oh, the premium is the same or a little bit more. It’s 5% more. I’m not going to rework that. We’ll just auto renew that thing, right? Or wait. Oh, the premium is way up or way down. Now I’m going to kick off a task of the CSR to go out to market and actually see if they can do something better for this. Maybe certain coverages didn’t come in, maybe they bound a policy and they want to verify that the information that they bound is actually correct. And on the policy now, same kind of thing. So there’s all this stuff you could start to build around it. 

And the problem is the complexity. So many people like out there in the industry, like, well, everybody should just have APIs, and carriers just have APIs and like, okay, are you going to go and build that? You’re going to go and build that and go and connect into that? And here’s the thing, those APIs are different, every single carrier, right? They’re all different if they even have them. And then the systems that you’re connecting to are all different. And then the proprietary thing that you want to do is different. And so a lot of work to do all of this. So, like in the industry, when technologists want to get into our world and they want to connect up to carrier, Ibn’s is their first call, because I’m talking just what’s considered download. 

We have other products as well that’s connecting into the ecosystem of carriers so that therefore, technologists or digital brokers, whoever it may be, don’t have to go and do all of that heavy lifting. And by the way, I want to say one other thing before we move on. Our customer, a lot of people don’t know this. Our customer at IVANS are the same as those founders. They are the carriers. The carriers pay IVANS and so the carriers pay us. And then we connect to the agency systems all the way down to the agency manager, to the agent, right on their dollar, okay? Now, certain systems may charge for download, may charge for IVANS, whatever that’s on the system. 

But for us, we only get paid by the carrier, MGA, and they do it going back to 40 years ago as a value add to get more of that agency’s business. 

Sandy
As an agent, you just gain access to that at no cost or does that come through correct? 

Reid Holzworth
Yep, yep. 

Sandy
All right. 

Reid Holzworth
There is, and I’m not going to names, there’s a couple carriers that are out there still folks that do charge for IVANS, but that’s because they’re not an IVANS customer. And so we have some agreements where they’re like, we don’t want to do it, but our customers want to do it. They’re willing to pay for it. And so then we just pass through the cost, which is very nominal but by the way, those guys are going to be coming on live soon, too. So that’s hopefully we’ll sign that contract after that, after they hear this.

Sandy
You know who you are. All right, so you touched on this a little bit just now, but I think there’s probably more here. We’ve talked about the current state of data collection. We’ve talked about the integrity of it a little bit. What do you think you’ve talked about a little bit? How brokers might be able to use this in the future as they look at their client profiles, get ahead of things. What’s next for carriers in this situation or what do you see as sort of the next evolution of this next. 

Reid Holzworth
Evolution in what way? Like how are they going to leverage the data? 

Sandy
How are carriers going to leverage the data if their brokers are going to be leveraging it, do you think, in more ways than you just described? 

Reid Holzworth
The thing is that I’ll just touch on this. Carriers are just, carriers.Have been dealing with data and been playing around with data for quite some time, right? We all know that they’ve been going through this whole digital evolution and become more of a digital shop, moving to systems like Guidewire and Duck Creek and Surety and just kind of rebuilding their tech stack. They have data. They have their own data and they’re very smart about their data. Now they’re connecting to third party data sources out there to get even smarter on it. I was on a call this morning, good friend of mine, Lod Saar, I actually interviewed him on my podcast at one time. Super smart guy. I hate these buzzwords. But he’s the real deal. He’s a true, true AI guy. 

He started Einstein and built Einstein at Salesforce, literally. Anyways, he has an insurtech startup, super smart stuff. Here’s an example. What he’s doing is he built an underwriter workbench. I literally just had a demo of this morning. Awesome. Underwriter workbench for the carriers. What does it do? It goes out to the Internet and it finds all kinds of stuff based on a risk. All you need is the business name and the address. Right? Business name, address. It brings in everything like Google reviews, hey, what type of business is it? Gets really smart on the classification of it, right? So basically think of an underwriter who just got presented this risk. Right now they have their third party data sources that are like, okay, like, we feel it’s this type of business. 

It should have this type, this many employees, that kind of stuff. But what about everything else? Like, he’s pulling that, too. How does this business show up in. I’ll give an example. He used the example of: it’s a restaurant, but do they have a fryer? Now, the customer may say no. Well, with AI, they’re going out and they’re finding and trolling through these reviews and looking for keywords. And it says, I love their fried chicken. It’s the best, oh, the french fries are awesome. So the underwriter can get smart on this and go, well, wait a second here. No, they are doing that. And it’s way deeper than just that. This is just high level stuff. 

Sandy
Yeah. 

Reid Holzworth
So the underwriter starts to get very smart about that risk in real time. And so therefore, they’re like, well, wait, what does that do for you? One, they may deny it. They may not want it, right? But in a lot of cases, they reclassify it up in the premium, helping your loss ratios, helping overall. Now, I bring this example up because he’s like, hey, Reid, this would work for the brokers, too, because even on the front end for the brokers, one, I could go out and I could find all this information on these clients with a few bits of information, which gives me all of this information. It gives me everything about them. I don’t have to ask the customer. I can be very smart when I get on the phone with them. And I could properly classify this risk in that way. 

It’s literally the same solution that the underwriter uses, giving it to an agency right on the front end. And so it’s, the point is, data is being used so differently now. Yeah, actually, it’s kind of funny. And I’m giving this guy so many props because I was just on a call with him this morning, honestly, and he was, like, showing me all this stuff, but even cool stuff, like one of, I mean, he’s connecting it to probably 20 of these language models. I mean, this guy’s super legit. And one of them, they use chap GPT. You could write a script. He has, like a client, I forgot if they wrote a script or they just type it in, but they basically go through, they analyze the risk. 

They find out if this is a barber shop that serves alcohol, whatever, it’s cool, blah, blah. At the end of it, they print out this whole PDF of all the information that they send to the customer and then he actually has ChatGPT actually write a poem about the company to the customer. 

Sandy
Oh my God. 

Reid Holzworth
And it’s like cute stuff. It’s razzle dazzle. But that’s pretty cool. 

Sandy
I have a question, right, that’s a little much, but so here’s my question. And I know that AI is going to get smarter and learn how to sort of cut through some of the false things out there. But in the fryer example, right? Like what if, for example, that restaurant actually didn’t have a fryer, they had just a really good toaster oven that made their fried chicken really crispy and they cooked it a different way and it actually wasn’t a risk. Is there ever an opportunity, if we’re going to move to this more automated is there ever an opportunity for the broker or client to pop in there and be like, wait, wait, that’s not correct. Like where’s that safeguard when we start using all of this AI? 
And I know this is far away from where we started, but I just have to ask that.

Reid Holzworth
Oh, there’s a confidence score to this kind of stuff. And this is the thing, it’s all editable. If you put this in the, on the csrs and on the agency side, on the distribution side, it’s all editable. It’s not like it’s law. Right. And so then basically you have to ask the customer the question: you have the fryer. Well, I see here. 

Sandy
Yeah. 

Reid Holzworth
And then think about loading that to the underwriter. Hey, no, they don’t use a fryer. They use a whatever turbo oven instead. And and you can front load that, therefore saving the underwriter all the legwork as well to verify. 

Sandy
Broker can get ahead of that as well with the tool. You may. Yeah. 

Reid Holzworth
And then you think about. So then, okay, where does that go? Now you start to put this in front of the commercial lines, comparative raters. Right. So you’re gathering all the information upfront and you’re getting kind of a better quality bit of information as you’re verifying it with the customer, right. Because you’re still going to want to have the conversation with the insured. And so now you get all of that information and now you can ship that to the raider and now you can go bring it to market. You’re saving a lot of time and you’re coming out the back end with what should be in theory, a much cleaner risk going over to the underwriter and then you can load the information back to the underwriter to help get it through. 

Therefore, obviously, what’s important a lot of people don’t realize is having that great relationship with your underwriter because underwriters know who sends them bad business and this kind of stuff helps that solve those issues. So, yeah, I mean, it’s all editable. I mean, it’s nothing. A lot of people talk about AI and all this stuff. I always talk about this, but I was up at ITC, I don’t even know, a number of years ago up on stage, and I’m not going to names. There’s up there a bunch of tier ones. And this is like when AI was becoming a thing and we’re spending millions of dollars and investing in this and we have this whole team and this, that and the other. And I was kind of representing the distribution at the time. 

That was my role. Reid, well, what do you think? What do you think about all this AI and how’s that going to relate to the brokers and all this and that? It’s going to change the world and nobody’s going to have jobs and this kind of conversation. And I’m like, you know what? This is all great water cooler conversation, guys. But here’s the reality. We’re still communicating via accord forms in this industry. Let’s solve some real things before we bent out of shape on this kind of stuff. If you think about the accord form, you think about what we’re just talking about here. What’s the truth?

Sandy
Well, that’s the question, right? 

Reid Holzworth
Yeah. But that’s where AI is coming into our industry. It’s actually helping with things. It’s starting to help solve some of these problems. And it’s interesting because kind of going back to your initial conversation, everybody’s been going through this whole thing and they’ve been wrenching on their core systems on the carrier side and building these APIs, by the way, just to allow the ability to rate small and micro commercial. Even. So, now that they’re getting past that and they’re getting over that hump, now they can start to think about really cool stuff and these types of things that actually impact our industry and help streamline the overall flow. We are now seeing that start to happen. It’s still early days, but it’s now starting to happen, you know, so it’s pretty cool. 
It’s a good time to be in this insurance technology world, no doubt. 

Sandy
All right, one more question for you. You talked a little bit about how this changes the possibility of changing the quoting and the comparative raters and that type of thing. So taking that a little bit further, what does it potentially mean for maybe individual risks, small risks or medium sized risks for the future of those markets? 

Reid Holzworth
Yeah. So right now, like I said, everybody’s been really focused on micro and small, right? And I believe that a lot of it was pressure from the small commercial lines, comparative raters. And so I’m not going to names in that space a lot. There’s been, that’s been going on for a while. But you saw a big demand from the big brokers on this in the last few years. And so everybody out there broker demand will cause carriers to make changes, okay, period. Okay. I’m not even talking about just technology. So anyways, so they were all rushing to build this connectivity into these platforms because they wanted to be on the panel. I’m on Google flights, like Southwest, not on Google flights. Some want to be like Southwest, but most don’t want to be Delta anyways. 

So a lot of those guys have pushed in the micro and small while doing this whole digital transformation of these core systems. Okay, now that a lot of them, especially the big ones, have checked off that box, now they’re saying, well, hey, the front end information is the same for micro small. I love this. People use this Schmidt Schmittel mid. It’s kind of a joke, but not really mid and right. And then, and then what could be large? So now we are actually connecting on the IDP side. We have, I don’t know, three or four carriers. We’re connecting in on the mid market side and we’re connecting up into solutions like indio, which is really smart ingestion form filling for mid to large commercial. 

And so it’s like I gather all this information and now it’s in a neat little box, like PDF wise, I want to ship it. Well, if I could take some of that data, structured data, and ship that into the core carrier system, well, doesn’t that make that carrier much more efficient too? And so, and that’s a very long drawn out process as you get into the large, more complex risks. And so carriers are now looking at, hey, this can help us streamline in that, so that kind of stuff. So it started in micro small and now it’s moving up market. You’re going to see it go into large and we’re seeing it middle now, but it’s going to continue to happen. So I mean, hopefully that answers your question. 

Sandy
Yeah, no, it is. It’s really interesting and I, it seems like there’s a lot of opportunity out there. 

Reid
There is. For the first time, like first time I’ve seen it and this is just me and my story. For the first time last year, I saw carriers and the big ones, the big names where they are truly looking at technology to give them a competitive edge at the distribution level. That is. I mean, like they’ve been doing that for 40 years, IVANS and stuff, but not like what I’m talking about now, building proprietary things in house for individual brokers or even just fast brokers bringing different products to markets in crafty ways. And so they’re starting to get there and they’re just dipping their toe in the water there. I mean, this year you’re going to see a lot of this come together. You are. And so it’s an exciting time, no doubt. 

Sandy
Yeah, absolutely. And you know, I interview a lot of folks on the carrier side as well and I do hear a lot more new sort of opinions on use of data versus just, you know, we need to get the data. It’s more now like we have all. 
This data and we’re gonna do something with it, so. 

Reid
Yeah, absolutely.  Holzworth

Sandy
Definitely echoes what you’re saying. Yeah. 

Reid Holzworth
Yeah. 

Sandy
Well, listen, Reid, it’s been so great talking with you. I’ve learned a lot. I feel like we could go on for a lot longer, but I’m sure you have other stuff to get doing. Thanks again for joining me. It’s been a pleasure. 

Reid Holzworth
Thanks, Sandy. It was great. This was fun. Thanks for having me. 

Sandy
That was Reid Holzworth, CEO of IVANS. I hope you enjoyed our conversation.

For more Leader’s Edge Podcasts, go to leadersedge.com.