Are You the New Expert the Next Great Innovation Needs?

Joey Giangola: Mr. Mark Geoghegan. How are you doing today, sir?

Mark Geoghegan: I'm doing really, really well. It's great to be on the show.

Joey Giangola: Mark. Yes, thank you. It's a lot of fun. I got to know this before we really get into anything too serious. What is a very misunderstood responsibility, in your opinion?

Mark Geoghegan: Well, what about the responsibility of a journalist to the readership and to tell the truth? I think that's an interesting one. Particularly, this has probably never been more in focus in these very divided political times all over the world. That responsibility for a journalist to tell the truth, and probably knowing that there is no such thing as the truth. There's always going to be a subjective. Your subconscious mind is always going to be slightly subjective. But to get as close to it as you possibly can in a cold and as impartial as you can way.

Joey Giangola: Yeah, we're definitely going to get back to that in just a second. But for me, Mark, I'm curious if there's a continental divide here. But for me, a very misunderstood responsibility here is people that quote you take out times for when you place an order at a restaurant to go pick up. I don't think they fully understand the power that they hold over your enjoyment of that food. It's just something that I think maybe needs a little bit more training, a little more education, and maybe just a little more communication as to what's going to go into that.

But Mark, you definitely led me right down the path that I sort wanted to go to always kick this thing off. The idea of, like you said, journalists, and you would probably fall into the more professional realm of things. But with the new wave of insurance media where people inside the industry itself just sort of taking arms and communicating out to the people they want to talk to, is there any maybe misunderstood responsibility that some of this information that's going around? Do you think that we're fully understanding that back and forth dialogue that we've now created over the last decade or so?

Mark Geoghegan: I suppose. The funny thing is that with social media now everybody's a journalist. But of course, none of them have had any training. And the amount of copyright violation that's routine or the amount of just defamatory behavior on Twitter, it's crazy that people chat all sorts of things and accuse people of all sorts of things that are completely defamatory and they have no understanding that they're actually liable. They could be prosecuted for some of the things that they're saying, if you're making unsubstantiated claims. It's just simply saying something nasty about someone. If I said something nasty about you that would, in the mind of a judge, lower you in the opinion of a right thinking person, there you go. I've defamed you. I have defenses, it could be true. Truth is a pretty good defense. But you might then argue that what I said about you was completely confidential or it was in the matter of a national security.

And I was just re-watching the great movie, The Post, great journalism movie, and very apt for our times, as I was saying. I think there was probably a really good reason why Spielberg put that movie out, and why he worked on that movie during this more difficult, this very divided political times that we are living through now. I think people don't understand the responsibilities they have to understand that they're going to be held to the same standards, that they could be held to the same standards that a journalist is held to, and they should probably think more carefully. My grandmother would've said, "Mark, think carefully before you open your mouth and before you say something that you might later regret." And it's so easy just to, now you've got them on your cell phone, you can just fire off a couple of things when you're angry or you've had a couple of drinks or you're in a bad mood, and you could spend a lot of time regretting those.

And there's some great cases of people kind of sending a couple of tweets and then taking a long flight. And by the time they've landed, there's been a Twitter storm and they actually have been fired and they don't have the job that they had anymore through some moral outrage that they've caused or something. Anyway, cautionary tale there, cautionary tales for everybody. Be careful what you say in public because you're being held to a public standard at that point.

Joey Giangola: Mark, nobody's ever in a bad mood interacting with insurance. That doesn't happen.

Mark Geoghegan: Is anyone ever in a good mood? And obviously, a great cliche of insurance is, who wakes up in the morning and says, "Hey, I'm going to buy some new insurance today, I'm going to make me look good"? It's a grudge purchase. No one buys insurance because they want to look good or be cool.

Joey Giangola: So I'm curious, being somebody that has existed in the traditional form of journalists, to now you've moved yourself into, we'll say the new wave of media, podcasting, all that fun stuff. Is there a big difference that stands out? Is there a liberation that you have somewhat felt? Or how has that sort of transition impacted the way that you're able to communicate?

Mark Geoghegan: Oh well, I'm really enjoying it. It's very different because while I was working, I was the editor of the Insurance Insider. The Insurance Insider is a subscription model, and that doesn't really work for podcasts. Podcasts probably need to be free to air, need to be free for the subscriber to just download, stick them on their phone, listen to in the car or whatever. It works better with a sponsorship and an advertising model, so I've got a few advertisers. I've certainly found, at The Insurance Insider, that we would look through everything of the lens of, will this drive more subscription revenue? And that was quite high priced subscription revenue. And also, the reason why we could charge such high prices is because we were doing investigative journalism, we were coming up with exclusives. We were saying, this company's going to take over that company. This person's left that company. This company's going to have a bigger outsized loss from this hurricane than this other company. And it was all sensitive and valuable information to the right people, to people who are willing to pay for that.

And so with a podcast phenomenon, when that came about, we were scratching our heads. There wasn't really a good way of leveraging that because we could say, "Oh, we'll put it behind our paywall." And we'd say, "Is that a really good way of stopping people from lapsing their subscription?" Or we could use it as another bit of leverage to say, "Hey, we're going to put the price of the subscription up because look at all the new stuff you've got included in the subscription." But in the end, it doesn't really work. And you'd say, "Well, that's not really good use of Mark's time. Mark's time is probably better spent doing something else."

And so the other big change for podcasts is, it doesn't really work. It's not like an investigative journalist medium, in the way that I can't door stop someone. I can't just knock on their door and say, "Hey, I've just heard that you've pulled out of doing this type of insurance. What do you got to say for yourself?" In the way that I would do as a news journalist, say, "Hey, we've got this story. It's going to run tomorrow morning. What do you got to say for yourself? It's your chance to correct it if it's wrong. But at the same time, we're pretty confident. We've been to three different independent sources." That kind of stuff. So you're kind of battering someone's door down with a story.

Whereas, with the podcast, you can't do that because if I asked you Joey, "Hey, what about this?" And you said, "Well, I can't talk about that." Well, that's the end of the conversation. I can keep badgering you and pestering you. But actually, it's not much of a podcast. A podcast is a consensual medium. You asked me to come on the show and I've agreed, and then we've agreed to talk about whatever. But what I've found liberating and surprising, it's to go from, I operated a lot off the record where I'm talking to people on their condition of anonymity, informing me probably about other people, and I'm verifying bits of information usually about their competitors or their peers. And now, we are actually consenting to talk about something. And now actually we're going, because we've consented to talk about something and say, I can talk about this and I'm happy to talk about this, we're going to so much more detail.

And my job is the job of really listening and trying to be the mind of the listener and trying to think what is the listener about to ask? To anticipate what questions now are forming in the listener's mind. So I would do all the questions in advance. I would never do that before. I would have all the questions in advance. I want to get people really comfortable. They can also have another listen back. So it's very, very soft compared to what I was doing before. But what's really surprised me is, once someone is prepared and they are ready to talk about something, how much more detail that you manage to get into, and that they're really happy for that to stay on the record.

When I send it back to them, I think, oh, they're going to want to withdraw half these things they've said, they're going to think I tricked them, I've lulled them into a false sense of security, and they've probably said too much. And actually, most of the time, they never ask to withdraw anything apart from, maybe it's something where the legal department says, "That thing we can't say about you opening your office in Singapore because the authorities haven't approved it yet, or we haven't even announced it internally," which is usually the biggest problem because then the CEO's going to have half the people in their business saying, "Who's running Singapore?" Because they haven't told anybody yet. But those kind of things.

So it's been really pleasantly surprising to go completely on the record in what would seem to be a softer medium. It's so much more detailed and really, really going to the Nth degree. And people are really enjoying that, and people finding a lot more value in that because, I suppose it's the spoken word. When we would run a glossy magazine feature with a CEO, you've only got 1,500 words or 2,000 words, 3, 4, 5 pages, lots and lots of pictures at the same time. But in a half hour podcast, you're going to be doing 5,000, 10,000 words easily. So you can get a lot more in there.

Joey Giangola: I was going to have you grade the quality of information, you kind of slipped into answering a little bit of that for me. But if you want to assign a grade to that, what you feel like the quality of information that you're getting now is, I would be interested. But more importantly, I think it's what do you think is happening because of this, maybe, level of detail that hasn't been unlocked before? Do you think we're seeing any sort of tangible changes or results in the industry as a result of being able to pull back the curtain in a way that was maybe never accustomed to?

Mark Geoghegan: Oh yeah. And it's really for junior members of staff who are ambitious. Whereas before, I was in the insurance industry and I was working for the London Lloyd's broker subsidiary of the biggest broker in Spain, which has now ended up being part of Aon. But it took me years to get a holistic view of what the insurance industry is and to say, oh well, the underwriter that I'm placing business with has bought some reinsurance and therefore that underwriter's being affected by the reinsurance market, or that they've got a binder or they've got this or they've got their own worries. And you can have a bigger understanding, much quicker understanding of how everything is connected.

And so I'm rather jealous of those 20 somethings who can devour all these podcasts. And they really get to understand what makes the CEO get up in the morning, what worries the CEO, what's worrying the industry, and get a level of detail and understanding, a nuance that we would never have been able to get 30 years ago. I mean, completely impossible. And we would've had to pick that up through osmosis and just by asking people at the right time, or just working it out for ourselves. They're very lucky in that sense. And I think there's going to be a big benefit to them because these people are going to be able to accelerate their careers and they're going to be able to produce innovative insurance solutions, they're going to understand how things are all put together and how they might have to go straight to the capital markets.

Before, we were all kind of isolated. Your listenership, being insurance agents and brokers in a local place, would be connected to London via a chain of wholesale brokers and a Lloyd's broker. But now I think you can really understand, you can say, well, I can see what's happening and I can get a flavor of what's going to happen and what I need to be prepared for for my upcoming renewals. Before, it was more reactive, you would sort be taken by surprise. Well, of course, the Lloyd's underwriters would be taken by surprise. The famous one was Hurricane Betsy in the '60s. They renewed all their book and it was midway through the year that the Hurricane Betsy losses from the year before were coming through. And they suddenly realized that they weren't as solvent as they were, they had to quietly try and withdraw some of the lines they had already put down.

And that would never happen today. Today, everything is so much more connected. Everyone's got an idea of exactly what Hurricane Ian is going to cost within a few weeks of it happening. And there are model outputs, that's PCS. There's so many things to go on, and everyone knows how that's likely to affect reinsurance pricing and the knock on effect that's going to have to the local markets, to your insurance markets and to your specialty markets, and how the war in Ukraine is going to affect your specialty markets. Everything's connected. But people, more importantly, understand the connections so they're able to anticipate those so they can just be better at what they do.

Joey Giangola: You mentioned that younger agent, the person just getting into the industry. And I guess, what would you maybe say to that 20 something agent that's a couple years into the business in Des Moines, Iowa, that maybe has no idea what goes on across the pond? What sort of misunderstandings would they possibly have, and the impact that it has on their sort of day to day business? Is there anything that you can help de-cloud for them?

Mark Geoghegan: Well, I think the most important thing is to know that anything that you can insure, if you're in a small town where there's only one, you have a client, they have a lot of really nice vanilla risk that you can place locally and that you know really well. And then suddenly, they've got a helicopter and then they're going to get in touch with you guys and then you guys are probably going to get in touch with someone who's got a binder. If it's only one helicopter, maybe it'll be a binder thing you can put through an MGU, that's maybe by a Lloyd's syndicate, or if it's a fleet of helicopters that are used for really nasty things like firefighting or dangerous stuff or for fish spotting in the Pacific.

But somebody, somewhere can become an expert in helicopters and can aggregate them together into a book that's a meaningful couple of hundred million book of business. And then that'll be enough for them to pay big claims and also for them to learn to become a real expert in make and model of helicopter, what type of turbine engine, how many hours the pilot really needs on that make and model so they can become a better risk, and any other risk management practices that go with it.

So the point is to say, it doesn't matter how weird or wonderful it is, someone, somewhere, through the distribution network that we all have through brokers, through wholesale brokers like yourselves, who are all connected around the world, you can aggregate almost anything. Obviously, I'm saying you can solve any problem. But also, you can go and find new products. And that's to know that you are connected to a distribution chain that's completely global and is licensed in your state. So if you are a real go ahead kind of insurance broker who wants to have something that the guy next door doesn't have, then go for all this new stuff, learn about cyber cover. Become the expert. Learn about new cover.

What about intellectual property cover? That's still just about to happen. Covering all the intangible risk on your client's balance sheets that, 80 years ago, when it was your granddad's time, all the assets were pretty physical and you could go and touch them. They were a property. And then there was liability and other things. But now, a lot of these assets are intellectual property, they're bound up in sort of electronic coding. How do you insure those? It's much harder to insure those. But we will work out ways of doing it. And if you are one of those people, then you're going to do so much better than the guy who's still insuring what if autonomous vehicles happen? And then they suddenly become a product and then they're more of a product liability and a program as professional indemnity risk. They're not actually a property risk anymore in the same way because people probably won't own them, they'll probably rent them.

50 years time, if there really is driverless cars, is anyone actually going to insure their cars? So what happens to the auto line of business? So I'd say, get yourself ahead of the curve, go and connect. And there is a solution to every problem. And there are new products that you've probably never heard of. Go and find out about them because if you can become one of the people who can sell that locally, you're going to do so much better than the guy next door to you.

Joey Giangola: Yeah. You mentioned cyber, IP, you covered a lot of big ones. And then you got to self-driving cars. Is there something aggregating now besides maybe those three that really has you excited or that you think is maybe the next big opportunity?

Mark Geoghegan: There's so much stuff that you would not believe what's going on. And in London we're really lucky because it's a crucible of this kind of stuff because it's a visible market that's a physical market. You can see it, you can touch it. It's one of the only places in the world, there's actually an insurance district where everybody is an insurance guy. And the same happens on Bermuda. It's a tiny place with 60,000 people, but 60,000 people who all do insurance and reinsurance. And it's amazing. So you can physically see all the people. All of the whole market is there and they kind of own the island in many ways. They're the biggest employer on the island. You go and get a taxi from the airport in Bermuda, and the cab driver knows about reinsurance because their children work in reinsurance or it turns out they're retired and they used to work in a reinsurer.

And London's a bit like that as well. So it's one of these physical places where, for example, there's an innovation center in Lloyd's of London called the Lloyd's Lab, and it's on about its sixth cohort. And these are specifically rooting out interesting, often what we'd call InsureTech businesses, but not all of them are. But just anything that's innovative, they've got an innovation facility where a lot of syndicates have pooled capacity to say, "Let's back some things that are a bit weird where we wouldn't have any experience. We can't go to experience rating, there's no actuarial table to tell us what to charge for this. So let's do the old fashioned way, let's just suck it and see."

In the way that Cuthbert Heath of Lloyd's famously insured the Wright brothers. Someone's got to be the first one to have a go at aviation insurance. And now aviation insurance is kind of a core line. Everyone knows roughly what to price. But when people were just inventing flight, then it was quite difficult. And I'm sure it was the same, was original in the 1880s when the first motor cars, when the Daimlers were being invented, they were crazy things. They were like space rockets. And of course, now we insure space rockets as well. And of course, space is actually quite a standard line of specialty business. It sounds crazy, doesn't it? And you can insure satellites in orbit, you can insure launches, you can insure all sorts of things.

There tend to be things where insurance works the best when it adds a real multiplier effect to capitalism. Insurance is the really good bit of capitalism. There's a new business within the Lloyd's lab called Keita, for example, that is insuring carbon capture. But it's allowing more of it to happen, so it's almost insuring the carbon credit. Say a bank wants to lend some money to someone to build a wind farm somewhere. And obviously there's going to be carbon credits on that basis, but if they can get the insurance, if they can get a particular type of insurance to guarantee that the credit will be valid, then they could lend more. So it means you can get more wind farms built, and there's a lot going on in the parametric sphere. So this is a parameter, rather than having indemnity insurance, say, if you have a loss, I'll come and fix it. If a parameter is exceeded or a binary thing, if this happens, if this parameter is exceeded then we'll pay out.

So there's a lot of good stuff happening with flood. A lot of really good stuff happening with cargo. There's a business called Parcel that's got these sensors that freight forwarders or the owners of the cargo can just put into the packaging. This is for temperature sensitive cargo. It's a tiny little sensor. They only cost a couple of bucks. And so it really works. Obviously, you don't have to have hugely expensive cargo for it to go in there. You can just chuck a couple of these little sensors in there and you can just interrogate them. The cargo arrives completely spoiled at its destination, and it'll show you the history of what temperature it was every hour for the last three months. And it'll show you that, actually, as soon as it got to, I don't know, one of the freight forwarder's offices, it was the wrong temperature. And you know it wasn't actually your fault. And you know straight away whose problem it was with the cargo, for example. So cargo going long distance.

Again, that's fantastic technology. And that's just simply parameters, did it go over this temperature Fahrenheit or not? And there are thousands and thousands of applications in that way. There's a great business called FloodFlash, which is actually coming to the states. They've got a sensor, a kind of tube that they put on the wall of the kind of place that's always getting flooded, or in a flood area where it's difficult to get onto different programs, and carriers are really nervous of giving you coverage. Well, this can do it in a completely different way. You just put it on the wall at a certain height that you've agreed, and if it gets wet. And it's tamper proof, of course. If it gets wet, you just get a payout and you have a pre-agreed payout.

So it's just a pure pre-agreed benefit that's built in with a lot of technology also to do a lot of preemption of that loss to say, "Hey, those insureds." When they get the cash straight away, often they get the cash before they even know they've got a loss. So that's good insurance, and great insurance where you don't have to make a claim. I mean, that's wonderful. Who likes making a claim? So there's a ton of stuff going on, and the penetration's just starting. And some of those things have been proven, those concepts are now proven and now they're in the distribution phase. So watch for some of these things coming near you. But there's so many more interesting ones as well, and they're being cooked up all the time.

Joey Giangola: All right, Mark. I've got three more questions for you, sir. And the first one is, what's one thing you hope you never forget?

Mark Geoghegan: Oh, I don't know. Yeah, that money doesn't grow on trees. I think capacity is never infinite, I would say, in insurance. It comes from somewhere. It's a human marketplace. We've got a really interesting situation in reinsurance where reinsurers have not made any money for ages or they've barely made their cost of capital. And they used to have a playbook where you'd have a big hurricane or something, a big loss like after Hurricane Andrew, like after Katrina, Rita and Wilma in 2005 where you could go and set up a new insurance company, you could get venture capital to back you to say, "Hey, the price of reinsurance is going to double and we're going to have a really good chance of making really good returns," obviously with the caveat that there might be another hurricane next year. But the probability is that we won't have a hurricane.

But now we've had a situation since 2017, since Irma, the investors don't really believe the story anymore because people went, they ponied up more money in 2018. They lost it. They ponied up money in 2019, they lost it, '20, '21, during COVID, and they lost it. And now they're almost on strike. And so to say that, don't forget that it's humans who make these decisions. And even though the theoretical price is very, very good and it's going to probably be much better. Theoretically, their returns are going to be fantastically better than they have been before. In practice, people just feel that there's a psychological effect. They're human. They don't want to be the guy who ponied up the fifth time in a row and lost his shirt five years in a row. It's funny, that underwriter, they don't want to lose again and they don't want to be seen to lose again.

Joey Giangola: Now on the other side of that, Mark, what's one thing you still have yet to learn?

Mark Geoghegan: Oh, I have no idea. I suppose, yes, to find out what else I could do, another way of making a living that I would enjoy as much as this. I've been very lucky. I got into insurance because I wanted to speak Spanish all day, and I worked for a big Spanish broker and I was able to live in Spain. And then I got married to Spaniard. And then Pat Ryan's business took over the business I was working for and then I went off to become a journalist because that was this other thing I really wanted to do. And then it was hard to be a bilingual journalist. So anyway, I had the logic that I had Spanish at home so I could speak Spanish all day at home when I got home so I didn't have to speak Spanish all day at work, so I could do an English speaking job like a journalist where you really need to be working in your mother tongue. And I've absolutely loved that. That completely took off.

And then I learned that I had five years being a journalist, having absolutely nothing to do with insurance. And I didn't get out of insurance because I found it boring. I got out of it because I wasn't very good at renewing the same thing every year. I got bored of renewing the same thing every year. I really found it interesting solving new problems. So I should have only ever been on everyone new business because once it got to renewing the same thing, it was just arguing about money and coverage and that kind of stuff. And I wasn't actually as good at that as finding solutions to new problems.

And then I had a chance to become an insurance journalist. And I thought, well, hang on a minute, is that going backwards, writing about insurance? But it turned out that was the best thing I ever did because I was bringing together my journalistic experience of about five years, and this had been nine years as an international insurance and reinsurance broker. And suddenly, I had something special that was this kind of being a generalist and then bringing two things, there were very, very few journalists who had ever worked in insurance. And then you suddenly felt like that gave you a superpower and you could talk to people in a slightly different language. And so that helped turbocharge my career. And so I'm wondering what else I could do. And now I'm an insurance podcaster and one of the only ones who's sort of doing it on their own. So, I wonder what else I could do. I don't know. I'll tell you in about 10 years time.

Joey Giangola: Fair enough. Last question to you, Mark. If I were to hand you a magic wand of sorts to reshape, change, alter or speed up really any part of insurance, what's that thing? Where's it going? And what's it doing?

Mark Geoghegan: I would digitize everything from the first moment it exists and get rid of paper completely because this is where all the solutions are going to come from. And getting rid of that frictional cost. When I interview someone like David Howden, this is a UK broker. It's a big, big, big brokerage in the UK called Howden, big international brokerage, not an insurance broker in the States, but more on the wholesale side. And you can see a future in which, oddly, this is quite scary for all of us, in which brokerage might tend down to zero.

But when you bought stocks 30 years ago, I don't know what you used to pay, $30 a trade. And then the internet came along and it went down to $10, and there was Charles Schwab and whatever else. And now there's Robin Hood and it's free, and they're being paid for deal flow, maybe we should all be looking forward to a world in which there's no brokerage, there's very little frictional cost. But of course, there's a huge amount of added value that we can have. The transaction is not the added value. The transaction is nothing, it's just bread and butter stuff. The value is in the knowledge and the advice and knowing how much insurance is available, how much the client actually should buy, what would be prudent, and roughly knowing how much it's going to cost and what are the ins and outs of the coverage, and know exactly what coverage to get and to go with this policy, not that policy because that clause is better than that clause and all this other stuff. And having that time to actually really work with that client.

Because if everything's digitized, it could be really genuinely global at that point. And you could be talking about a really global, really competitive marketplace where you can access you in a very small town, in a state in the US, you could be accessing some incredibly sophisticated tools and policies and solutions for your client that you wouldn't have been able to imagine before. And that's a really, really good thing. Who knows? We would end up with insurance day traders. It could be completely crazy. I mean, there'll be so much stuff happening and things will move a lot faster, I think. But it will only be good for clients in the end, that they'll get much better coverage, much more appropriate levels of coverage at the right price.

Joey Giangola: Mark, this has been fantastic, sir. I'm going to leave it right there.

Mark Geoghegan: Thank you very much, Joey. I really enjoyed chatting to you.