The Future of Insurance Podcast S3E05 – Sean Burgess, Chief Claims Officer, Lemonade

Sean, it's great to sit down with you and talk about your journey, the big transition, and what you guys are building at Lemonade.

Yes, yeah, you're properly branded. All good. The best I can do is red, but it's got white in it, so I figured on average that's more pinkish, but not quite the magenta. You're on your way. You're on your way there.

I am, you know, just like a basic, for people who don't know you, although I'm sure most people in the industry do and would have seen the news about your move, but who are you and what do you do?

And you were part of like what was gigantic, but relatively speaking, a pretty fast-growing insurance company. I'm a member, I was a USAA insured, we've talked about that. I'm not anymore, but you know, love for them. But you know, from when I first signed on as a member to where they're at today, USAA has grown dramatically as well. So it's not a startup, but also, you know, fast-growing, a lot of change, a lot of technology being pushed, you know, in your old world as well.

Well, so talk to me about that. What would you, like, you had the dream job, you know, for any claims professionals, like you're at this really well-respected carrier, you know, you're at the top of the claims org. What is it that draws you out of that? So what, you know, what brought you into Lemonade and what is it that you're trying to do?

I want to dig into the tech piece of that, because tech's something that's always been difficult for our industry. It's got a lot more democratized, and with moving to the cloud and API-based tools, that you know, even if you've got an old-school legacy like mainframe solution, you can actually still do a lot of really flexible things on top of that. So on the one hand, we've got an industry that struggled with this, but now there are ways for us to get moving on a number of fronts faster. And so for someone from the outside, it's like, well, I see the insurtechs doing these things, but why couldn't we do this? Or, you know, we can do this because we've got all this stuff at our disposal. But then you get inside of an insurtech, and I was talking to Rick McCathery last season, and he was like, you know, I understood, it's like to a new parent, people like the sleep deprivation, you're like, oh, I understand what that'll be like, I'll be tired, and then you live through it and it's like, no, I didn't understand it. Sort of felt like that with Rick, is like once I got in, I was like, no, this is completely different. The way they engage with tech, the way they deliver it, the skill of the developers, all that kind of stuff, the engineers, it's not the same. Is that sort of what you've experienced? That like, yes, there's all kinds of tools that anyone in the industry has access to, but you come inside and it's like you have a whole different level of understanding of what being kind of tech-forward or tech-first or tech from your core really means?

There's a counterbalance to this that I want to get your opinion on too. And I expect, in a good way, that you'll be biased on this, but let's talk about it. Next was another company that was in one of my books, and they made a very conscious decision to not exclude insurance people, but not to put insurance people in the key insurance roles, like product managers of, you know, their GL product or workers' comp or whatever. They were intentionally bringing in non-insurance people everywhere, and then they had insurance advisors and, you know, worked with Perrin Knight or whoever to get that expertise where they needed it. As you look, as you know, tech-centered outsider kind of mindset, you get to a point where you do start bringing in insurance people for roles like yours. What happens there? And you're sort of, and this is why I think you're biased, because you're one of the people who came in, you know, and Rick would be too because he was the old-school insurance person who came in to, you know, the tech-first company that was Hippo. What's your view on that in terms of being able to respect what you need from that, like, insurance talent, but also not have it put the historic kind of, you know, the bounds of what's possible and, you know, we can't do this because of this constraint or that, and all the things that people bemoan about us, like old-school insurance folk. How do you balance both of those, like having the expertise but also still the freedom to rethink, you know, what could be done and how we go about it?

Yeah, I totally agree with you. And yeah, you're not the only insurance person in the whole business, it's not all resting on your shoulders, but it is a tricky thing to navigate. So one of the key timing around you joining is this push into car. And yeah, get it, part of that product graduation to start to envelop more of your customers' lives and align to the things that they need. That's a huge build-out. Is like, what is it that you're going about as you embark on that? Because obviously it's small right now, it's one state at this point, or maybe there's more, I don't know.

Two, okay. Yeah, building out into something that I imagine has no bounds, that it's going to be as national and maybe international at some point as anything else that Lemonade does. So that's a huge build. Is that consuming most of your time, focusing on building the car claims proposition?

Yeah, I suppose 9% would as well, but you're not talking about that.

Yeah, and the early days sort of swearing off offering an auto insurance product, I was like, it's going to be hard not to say you can't. And obviously, like Hippo is a pure play on the homeowner's side, Kin is, there are players to do that. But to really have that rounded-out experience, you have to think about those major assets that people are going to get insured. And the auto insurance space is such a hot, you know, highly advertised and competitive space, to not play in that and expect to grow in the other stuff is even tricky. So when that announcement came out and people like, well, you know, however many years ago they said we'll never do auto, and now they're doing it, and so they're changing their minds, well, you have to be dynamic, you have to shift. And I think that's, you also have to recognize, well, where is the market and how do we evolve in this way that we're talking about? So that strategically it's about that holistic view of the customer, then meeting them at all the places where they need coverage. Is that the driver behind it?

Yeah, I'm glad you mentioned that, and I'm curious about, from a claim standpoint, you know, a lot of times people think telematics and they think it's about marketing, pricing, underwriting, it's a way to get access to customers and price them out. And I still feel like as an industry we're not really looking at the claims implications of that. Is, what if you had all this data, especially as you get into connected cars and you can see, you know, everything going on contextually around them, are you also thinking about that there's a claims implication for this and what could we do because we have that telematics data? Or is that like, yes, but we're not ready for that yet?

Yeah, it is. It's really interesting how, like, it's just diametrically opposed people are to, you know, I've done like webinars on telematics and you see in the questions, the comments, like, 'I am never giving my insurer all that data on how I'm driving.' There's other people are like, 'I think I'm a good enough driver and I'd like to get better, so if it's going to benefit me, you can have all of it.' And I find that myself, where, you know, maybe it's a couple years ago I wasn't for it, and then of course we stopped driving in early days of the lockdowns, but yeah, let's do the telematics thing and save some money. But now actually I'm thinking about it more holistically, pricing, you know, what kind of guidance could I get that I might be missing something about, you know, how to be safer, but also think about the claim side of it. And I think that's, we've talked about being proactive and, you know, when you can't avoid the loss, being more responsive. This is one of those moments where we have a tool to do that. And it's interesting to me to still see people who say all that but are not for telematics. It's like, well, here's one way to get access to that vision you have.

Yeah. I have a lot of other questions I want to ask you. I do want to think about the future a little bit. And you know, you made a big leap in your career, you're at something fast-moving and lots to build out. How are you thinking about what's coming and the future? And where do you think, you know, whether that's for personal lines, for Lemonade, for the industry, for claims in particular, I'll let you pick the context, but where do you see things sort of shaping up in the next few years?

Can I cast your follow-up question? Go for it. So since you're living in this kind of like bionic adjuster advocate world that we all talk about, is like when we have these tools and our people will be free to, you know, engage in the meatier part of the adjusting process and not the busy work or, you know, whatever the repeating and sort of administrative side of it, what is it like for them? Because that's, if you're closer to that future or living in it than many of us in the industry, what does that mean for staff? Because that's the million-dollar question, you know, in all the conferences it was like, when do I lose my job to the AI? You're living at the balance of the two, so what does that look like for your people?

Yeah, that's really good to hear. And it does sound like that advocate that you talked to, it's not like she was asking for it to be 60% so she had more justification for her existence. It was like, and if it could be 75%, that'd be even better. Because, you know, it sounds like, weird as a positive, she had the biggest smile on her face.

Well, I think that's a great, from a claim standpoint, that's a great place to leave it, is remembering why we got into this work was to help people at the worst moments of their lives and the reward that you get from doing that. And it sounds like, especially for that advocate, she feels free to be able to focus on that instead of the parts of the job that just keep you from getting to that moment. So maybe something we can all strive for. Sean, it's great, it's great to sit down with you and hear from you since you made the move and hear about the things that you're building. And yeah, it's just great to get the firsthand perspective from inside Lemonade.

Now it's great to sit down with Sean and to hear that firsthand perspective from someone who came from, you know, very much legacy, successful carrier, well-established, growing, but, you know, around for just 100 years, to the insurtech side. And what it's like to not just view it from the outside, but to get inside and see, you know, is it what the promise is, is the excitement there, what makes it different, how are they going about things in a different way. And you do pick up there's some really material things going on there in terms of how they're working day to day, what the people feel like about the work that they're doing, and how they're empowered to do it. You know, this build versus buy discussion, like obviously they're a build kind of shop, that makes sense being born out of tech and the capabilities and engineering skills that come with that. But what are you building for and with what mindset, what freedom, and what sense of what you're trying to achieve. So that all really stands out. And, you know, that advocate saying like 70% of the claim is done, giving her the space to get into what she really wants to do to help someone get back into it. And that is why we exist, that is why this industry is here, and why, you know, I always used to say to my claims team, like this is what we signed up for originally and why we get up in the morning. It's not for that first 70% or whatever it is, the procedural kind of stuff, it's to help people put their lives back together. So always exciting to hear when that's something you can focus on. So very thankful to Sean for sitting down. I said to him after we recorded, like Lemonade is at every conference, they're talked about everywhere, but they're not usually at the conference with anyone. And, you know, I haven't heard a ton from them from the inside. And so getting some time to sit down with Sean and hear firsthand, so valuable. So hopefully you take that in. And, you know, with all of the companies that bring on the show and are out there in the industry, it's really important regardless of whether they're successful or not, or what you think of them or not, there are things we can learn from them and take inspiration from. And Lemonade's a great example. It's one that has been, you know, divisive with some people who love it and some who don't in the industry and say it's not sustainable, and others who say, you know, just watch and that they're building. And I don't know what's right and what isn't, but what I do know is they have done a number of things that have resonated. They have done a number of things that customers really want. And like Sean said, like not everything's perfect, there's lots they can do better, and no doubt they're engaging that too. But there's something for all of us to take from that. And that's what I would leave you with, is find those points that you can say, well, you know, regardless of anything else I think about them or don't think about them, this seems to be going well. What can I learn from that? How can I bring that into my work? How can I take that inspiration and maybe that excites me or reminds me why I signed up for this work in the first place. There's a lot of people who are in Sean's shoes that, you know, you started this work decades ago, or 20-something years ago, or even 10 years ago. Have you reconnected with that purpose, that reason why you got into it or why you were drawn in? And it's a really important thing to do to keep us focused on that path of helping people put their lives back together, standing by them at those really difficult moments. And, you know, I do like that notion that Sean talked about for Lemonade, thinking about the entire customer and all of the points in their lives where they need protection and help, and getting to that place of trust and letting trust be the driver of what company they choose to work with. I think that's really something for all of us to take in. So thank you to Sean, thank you to all of you for tuning in, and I will see you all next time. Take care.