Digital Focus Drives Growth 

Next has been one of the insurtech leaders. From that perspective, what trends are you seeing today?

Traditionally, agents—at least in commercial—have preferred to work with bigger and more complex accounts where the commission is worthwhile. However, there’s been a shift. Now agents also want to use and leverage technology on the smaller accounts as much as they can because it saves them a lot of time. By leveraging technology, I mean to be able to sell in a digital way. The servicing on a small commercial [account] is a very daunting task because businesses need a lot of servicing, certificates of insurance, etc., but technology simplifies the process.

Agents are eager to embrace technology; they want to move into the 21st century. And obviously AI—you can’t start a conversation today without AI being mentioned—there’s a big movement to use more artificial intelligence tools. All of the insurtech companies have been using AI for a long time. I don’t think it’s new, but the new capabilities have allowed Next to do servicing and claims and other things in a more advanced way than it used to be in the past. So it’s a big jump in terms of what’s happening today with generative AI.

What differentiates Next?

We start with our culture. We are very innovative. We’re trying to not take what has existed for many, many years and say, “This is how it is.” We’re trying to see how we can take things that have been done for many, many years and make them better. There’s a lot of knowledge in the industry and a lot of smart people that developed this knowledge over the years. We are leveraging this. But there’s also an opportunity to do things in a new and better way.

The second thing is we were founded and continue to have a philosophy of being 100% digital. The 100% is a big deal because, if an agent comes to Next, or a customer, they can always either get a decline or the option to buy, but it’s never going to be referred to an underwriter. It’s always easy to say, “Maybe we write it, maybe we don’t, let’s give it to an underwriter.” We don’t do this. We are very straightforward. It’s always 100% digital.

It’s not just the purchasing process that is digital; it’s the post-purchasing that is digital, too. Most of the things that the agents want to do—changing the address, changing the payment method, adding the policy, removing a policy, changing settings, etc.—can be done online via our portal. An agent or a customer can do it directly, and they don’t need to speak with anyone. Obviously, if they want to speak to someone, they have the option to, but they don’t have to.

We recently launched what we call Copilot, a tool that allows agents to effortlessly generate a personalized quoting link through our agent portal for prospective clients to obtain a quote and policy 24/7. An agent can give their personal link to the small business customer, who can then fill out the application, and the agent will get a notification once they’re done. Customers can work with their agent and do it together or buy it themselves; the agent will still get the commission.

Underlying all of this is the fact that we build our own proprietary technology ourselves. We built this modern technology from the ground up to support everything that we do for agents. And because we own the technology, if an agency has something that is important for them, like a specific feature or tool crucial to their operations, we can easily develop a solution for it. If we see a trend in the market that needs to be addressed, we can easily develop a solution for it.

We want to be very tailored. You know, if we are focusing on restaurants, we want to be great for restaurants…speak the restaurant language, customize the policies, the servicing, etc. There are thousands of different businesses. Every business gets a very tailored and customized experience.

Some insurtechs focus on the direct channel, some on the embedded channel, and some on the broker channel. Why has Next taken a multichannel approach?

We started with direct only, but then we thought it doesn’t make any sense not to allow our customers…to use an agent to give them our product. So, fairly early, we said we want to offer a product to agents, because many, many customers want to use an agent to buy the insurance, to help them, to advise them, to walk them through it, to make sure they are confident in what policies they buy. If we are not delivering our product through agents, then we are hurting our customers. And then, embedded was also a natural progression, because it’s a good acquisition channel. There are a lot of companies that have small businesses using them as a software as a service, and those customers need insurance. Because Next is digital and all the partners we are working with are digital services, it was a natural integration. It’s a natural integration to embed Next within Amazon, within Intuit, within Gusto, within LegalZoom, Toast, and many others.

But it’s the same technology across all channels. We give them the same product and customize the experience and tools for each. We’ve done this for agents by building an agent portal that is very easy for them to use and manage all their customers. For embedded partners, we built tight integrations so that we can innovate quickly while the back-end system remains the same. We want to ensure all small business owners can access Next coverage no matter how or where they purchase insurance.

What opportunities does the agent/broker channel offer for Next?

There are agents that are very, very good in personal lines but might not have the expertise in commercial. They are mom-and-pop shops, small agencies. They don’t feel they know all the lines and what exactly businesses need. What we give them is a product that they can sell. They don’t need to be an expert. We make it easy. So, for those types of businesses—and there are tens of thousands of them in the United States—they give us a lot of business that we didn’t have access to.

The other types of agencies in the market are much bigger agencies. Their people are experts in commercial. Either they sell only commercial or they have a big team in-house that knows how to sell commercial. For those agents, as I mentioned before, they’re losing money when they sell a thousand-dollar policy. The commission is too low. The amount of time they need to deal with it is too much. For them it’s better to say, OK, for those businesses that are very, very small, I’m going to sell it on Next. Basically what the agents give us—we’re getting two things. One, obviously, business. We want to get customers. We want to grow. But two, we get a lot of knowledge, because they are experts in knowing what their customers need. They have many years of experience, and they say, “You know, your policy is missing this or this. I know it from my experience. I know my customer needs it.” So we get a lot of knowledge to get better.

Why did Next move from MGA to full-service insurance company?

First of all, the product is exactly the same. Then, it was just kind of which carrier we used. But it was always, always, from the beginning our own product, our own product design, our own pricing, our own underwriting. The difference between carrier and MGA is more of a financial difference for Next. It didn’t change the product by any means. Financially it is better for us, and it allows us to move faster.

Next last year reached half a million customers. Is the pace of growth sustainable, and where does the new growth come from?

We are growing in all the channels—our direct channels are growing fast, in addition to embedded—but we have huge growth in agents. We are signing more agencies, and agents are selling more and more Next. They really like the product—the quotes we get from agents are excellent, like, “I haven’t quoted commercial so easily in the last 17 years,” or, “Welcome to the 21st century.” They really love the product, and they start speaking with each other and sharing this feedback, and more and more agents are trying us. So we have massive growth from agents.