Electronic Chat with Ty Harris, Founder and CEO, Openly
Laura Mazzuca Toops | August 11, 2020
Founded in October 2019 by Ty Harris and Matt Wielbut, Openly is a technology-enabled managing general agency (MGA) for homeowners insurance that has built its products, processes and technology specifically to serve the independent agency channel. Agents are already live on its platform in Arizona, Illinois, Pennsylvania, Tennessee, and Kentucky, and the company is currently on track to be live in 10 or more states by year-end, including Massachusetts, Indiana, Ohio, Georgia, and South Carolina. Openly also has plans to launch complementary product lines, such as auto insurance.
Last November, the firm announced a $7.65 million seed round of funding led by Gradient Ventures, Google’s AI-focused venture fund.
In the past, insurance agents have been concerned about insurtech as a threat to their existence. Is this concern justified?
The last 20 years of insurance have been about building giant direct brands, so I don’t blame agents for being worried. However, that model is not good for consumers in the end. What they need and what the next 20 years are about will be transparent choice. For instance, people searching for airfares don’t go to a single airline, but to a comparison site for increasingly transparent choice. That could be a human or a digital travel agent. Similarly, independent insurance agents are seats of that choice.
Independent agencies have an amazing value proposition, but they must keep up with other trends to stay competitive, such as being more digital and meeting with consumers the way they want to interact. Consumers want agents who are increasingly convenient and digital to work with.
If an agent sees his role as waiting for a consumer to call or write asking him to do a basic transition like make a payment, that’s not a winning value proposition. But there is plenty of evidence that shows consumers with moderately complex needs very much value a human touchpoint on more complex advice about coverage -- or just to touch base on whether they’re making a good decision. I know I want that option when I have any kind of financial need.
Agents need to make the transactional stuff feel like a modern experience for customers while retaining for themselves the ability to give advice and expertise on questions they have. And that’s what we help them to do.
How does Openly’s business model differ from traditional insurance?
My background is as an actuary at Liberty Mutual, where I helped build products and personal lines business for them. Our cofounder was VP of tech at Goldman Sachs, where he built software, and at a tech-enabled retail agency in Massachusetts.
Our combined backgrounds helped us create a new homeowners insurance MGA that is highly tech enabled, delivering the first product aimed toward the mass affluent segment of the market, and bringing tons of transparency, speed, and ease of use.
When customers go to an agent, they should know that actual coverage is innovated in ways that are unique. We’re the only carrier in the industry that doesn’t have a limit of coverage A on homeowners’ insurance. Customers don’t select a limit; the coverage is priced based on the home’s characteristics, and we insure the risk for up to $5 million. This removes a lot of hassles, especially at the time of a claim.
Openly’s coverage is also fast and easy – with just the customer’s name, date of birth, and address, we can provide them with a bindable quote in a proprietary, economical way.
From there, agents can customize coverage through a simple slider interface that’s very intuitive.
Finally, we were custom built for independent agencies – everything from traditional local agents through digital/call center agencies such as Gabi or Young Alfred. Openly works particularly well with these because we’re accessible via an API, not just a portal.
We’re also very proud of the fact that we have an over 85% agency net promoter score, so agents are giving us great reviews.
What are the main tech advances that drive your business?
One is the ability to source the information used to underwrite homeowners very rapidly, and have a machine to sort through the messy data. When we quote, we go to dozens of sources of information about location, the buyer, etc. Not all sources agree, some information is missing, but algorithms intelligently sort through all the information to arrive at reasonable picture of what the risk looks like. Otherwise, the agents would have to ask a thousand questions or research it themselves.
Other parts are literally using modern methods of communicating between servers using basic UI paired with a complex under-the-hood algorithm
We also use AI, but not in the sense of a chatbot; doesn’t feel to agent but machine learning models that underlie all this to get an accurate quote quickly.
Has the COVID pandemic affected the availability of venture capital to insurtechs?
We just closed a Series A round in the heart of a pandemic. Our experience was that there are certainly investors that are still there. While not specifically related to insurtech, there is a general theme of uncertainty now, but it seems investors have quickly adapted since deals have bounced back pretty quickly.
Has the role of MGAs changed since the advent of insurtech?
MGAs historically were used largely in the commercial space or for very niche needs. Insurtech created the ability to put up a business model without having a huge balance sheet. This is invaluable for testing a new market without having to raise $100 million. We would not have insurtech without the concept of MGAs, but there are pros and cons. Some MGAs are literally just putting a website on top of existing products and algorithms and packaging it; others are doing more of a stack with predesigned products and teams. So not all MGAs are created equal.
Is Openly looking to expand beyond homeowners insurance?
While agents using Openly can provide an amazingly fast quote, good coverage and price, the best thing about them is the human side. They have an expert team of trained, licensed service staff and underwriters who will actually pick up the phone or chat through a platform within 20 seconds of customer outreach. That level of responsiveness has been what has won us real respect. We’re proud of both the tech and the human side.
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
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