Transcript

Video/audio transcript

Meghan Warby

Welcome to Digital Disruptors, I’m Meghan from Say Yeah and this episode of industry experts features Marcus Tzaferis, the CEO of Cannect, which is a FinTech organization based in Toronto. Today’s he’s in conversation with Say Yeah CEO Lee Dale.

Marcus knows real estate. He’s been featured on national media as an expert and a leader in mortgage in home financing. Today, we’ll touch on that. But the really interesting part of this discussion involves how technology can strongly impact and even transform a legacy industry. A bit of context, only two years ago back in 2017, Marcus launched Cannect as an online offshoot of his traditional mortgage agency, more can direct. Since then, he’s essentially become an advocate for Canadian homebuyers and their access to affordable loans through a uniquely automated and unbiased online service. You’ll hear Marcus describe his journey and learn how he leveraged decades of experience in the mortgage and finance industries will follow his path from VP sales and marketing at more can growing a portfolio to over $2 billion becoming CEO, and now finding a path to disruption through technology. Let’s jump right into the conversation with Marcus. Lee, Take it away.

Lee Dale

So, thanks very much for joining us today. We’re really pleased to be here with Marcus from MorCan and Cannect. And we’re going to get into the kind of technology that’s driving and more can and and kind of shaping next phase in your business with Cannect. But let’s get started just talking a little bit about your background kind of what brought you to the place you are now with your career and your motivation and what you’re passionate about.

Marcus Tzaferis

Sure, yeah. I started in mortgages about 15 years ago in November. It’ll be 15 years that I’ve been doing this. And I come from a very short background in investment banking. And I got into mortgages because I liked dealing with people. I liked the finance aspect, but I really liked the real estate and, and helping the consumer. And there’s a huge opportunity in the industry because, you know, our biggest competitors are the banks and clients are definitely underserved. In the 15 years that I’ve been doing it, there’s been, you know, kind of constant change from, you know, regulatory changes to underwriting changes to you know, real estate price changes and different types of borrowers entering the market. And so it’s, it’s, it’s, it’s a constantly changing landscape, which makes it interesting.

Lee Dale

Yeah, I think one of the things that that we talked about off the top there was the idea of the technology side of things as well. And I think 15 years is a good amount of time. That’s longer than say the iPhone has been out. Right. So kind of pre everybody being connected on smartphones and mobile devices other than just cellular conversations. That, I would imagine has had a significant impact as well on on the business.

Marcus Tzaferis

Yeah, it’s, it’s really changed our borrowers and borrowers in general and how they, how they digest information, how they ask for information, how you communicate with them. And, you know, I think that like in any industry, if if you can use the disruptions to your advantage, especially when, you know, as mortgage brokers were relatively small in comparison to these massive banks that we compete with. So anytime this disruption starts entering into any industry and you can use the technology and faster and better than your larger competitor

It’s a huge advantage. You have brick and mortar, your customers you’re dealing with with physical space, you’re dealing with property. But the ecosystem around that is is all about how can we quickly learn and provide service and have data and understand how we can use technology to better connect with customers and to have better insight into the types of funding that you do. And I don’t know if it fully levels the playing field with the Bohemians. I think maybe it levels the playing field in the eyes of some small percentage of our target market. But it’s more than enough for us. And I think that you know that the two major trend trends we saw happening in our industry where, number one if we can communicate better and use technology better, to identify what the needs of our borrowers are, and communicate our value proposition better to them. Better than our competitors, we knew that we would be winning and if we could plug in our own funding mechanism into our brokerage and our value proposition to our consumer, we knew that we’d be ahead of the pack.

So we raised a $50 million fund at, you know, kitchen tables, where we didn’t use a broker, we didn’t use a bank to raise that money for us. And I think without technology, doing some of the heavy lifting. I don’t know if that’s possible, you know. So how did that come to be that idea of the heavy lifting? What did the technology provide you that you may be worried about access to? So we have a what’s called a mortgage investment corporation at named Cannect. And and what we saw in the landscape of other mortgage investment funds, when we started, there weren’t very many of them was that there wasn’t a lot of transparency. So typically, a mortgage investment corporation make is what they’re called. There’s a special preferential tax treatment for these corps

And what we saw was it was, you know, these kind of base Street firms that would hire an investment bank, or and a broker of some kind, they pay them between three and 7% to raise a bunch of money for them, a bundle all that money together, they would put it into their fund, and then they would solicit mortgage brokers to lend the money out without really an eye towards the, you know, desire of their investor, just other than to provide them with the yield that the investors asking for, or to really pay close attention to the deals that they were originating and funding. So what we did was we created a robust portal for our prospective investors that in real time shows all of the transactions that we’re doing. So you know, if we’re lending on 10 deals in a week, and we’re using the money of our investors to lend on we Immediately upload those deals into our portal that all of our investors can do.

And in addition to just the characteristics of the deal, so where the property is located, who the borrower is, they get a more holistic view of why we lent that person like, what what, what documentation did we get? What made us want to invest in the person or the property that we lent money to. And by opening up that level of transparency, we found that we didn’t need to advertise to people. We couldn’t advertise to people because of our risk certain restrictions under the OSC and, and we didn’t need to because our investors who were already known to us and we were known to them, were simply introducing it to their friends and family. So it grew rather organically because of the transparency. What we’re doing with Cannect.ca together, and is we’re applying that level of transparency To the borrower. So, you know, the landscape in Canada, I mean, I’d say the landscape in the world for borrowing money has always had certain reputation, especially when you get into more high risk lending. And this kind of macro micro situation that we’re experiencing in Toronto and Canada as a whole, in that, you know, we’ve got our really, you know, highly valued real estate market. And we’ve got underwriting rules and regulations being introduced, that are separating borrowers into bankable borrowers and non bankable borrowers. And nothing can ever be that cut and dry in a market. And if you find yourself in the non bankable category, and too many people, it’ll be a surprise. You know, they qualified for their mortgage five years ago, and they don’t now.

So what we’re trying to do is we’re trying to say Listen, this non bankable category has no transparency It is, you know, a couple ads and late night TV from jewelers or whomever, or ads in the newspaper or like this, you know, historically these have been where people go for this, this amount of kind of non bankable, high risk money. And they’ll make a phone call and they’ll hopefully soon realize that the person on the other end of the phone is gaming them, right, like, you know, how quickly do you need the money? How much money do you really need? And not only is it not fair to the borrower, in an in an environment where more borrowers are falling into this non bankable segment, it’s important to introduce a product with transparency to at least collect the high value non bankable clients.

Lee Dale

Do you have a sense that there are other people even in the industry that are focused on their level of transparency in lending?

Marcus Tzaferis

I hope so. I think so. I mean, I think like the market is growing. And I think that the more players Identify that there’s a real opportunity in not only introducing transparency but introducing more fairness and a more efficient risk return offering to both their investors and their borrowers. And I think that the more people understand that that’s it’s profitable to do it. It’s not like we’re not a non for profit company. We’re a company that one of our tenants is fairness. So, and that helps us attract more customers, I believe it helps us attract more customers more effectively than our competitors. So at a certain point, you know, I’m sure that we may not make as much money on a per transaction basis, but that may manifest itself in allowing us to acquire more customers far cheaper than our competitors.

Lee Dale

You and I have talked a little bit about what’s how happening now in Canada, where we’ve got a significant percentage, almost half of mortgages are up for renewal this year. And this idea that changing regulations are leading to people moving out of this bankable bucket into the non bankable bucket. And that surprise that might be coming for some people. What’s the challenge that you see for consumers right now, given this possibly unexpected scenario that they’re going to face

Marcus Tzaferis

50% of Canadians are find themselves in a position where it is time for them to renew their mortgage. And they find that the options available to them now are seriously limited in regulations that have been introduced more recently with you know, forcing borrowers to qualify for mortgages at 2% above whatever the contract on their loan agreements are. And but more Importantly, a change that happened, you know, almost two years ago now, where the federal government abandoned portfolio insurance product that allowed what are called mano line mortgage lenders or mortgage finance companies not at to compete with the banks. So basically the banks offered these lenders, an insurance product and said, Listen, we’ll allow you to compete with the banks, you can ensure the mortgages that you’re providing people with the Canadian government’s guarantee, and as a result, they were able to offer really nice cheap rates to Canadian consumers. They use technology and customer service to get ahead and they built loan books like first nationals.

One example as a loan book of 100,000,100 billion dollars. m cap financial probably has $80 billion when portfolio insurance gets removed and portfolio insurance is for a segment of the market where most Canadians falling where they have an equity position have in their home so they own or they have at least 20% equity in their Anyone that has a relatively stable equity position in their home and is looking to refinance their home is now not only subjected to more rigorous underwriting standards and higher income requirements for the same mortgage they would have previously had, but they’re also not going to get the same interest rate that they would have got. And although interest rates are increasing, you need only look at the difference between a five year fixed rate and a government of Canada bond yield five year Government of Canada bond yield five year fixed rate mortgage should have a relationship of you know, between one and one and a half percent. We’re seeing that those spreads are now widening. So the banks have realized they don’t have competition. So they’re increasing interest rates to their customers and they’re reaping the benefit in their net interest margin. Canadians fine now they’re, they’re probably even willing to pay the inflated rates that are being offered from the banks but they can’t get them anymore. And the banks are happy with tighter under Writing rules because in their earnings calls to weary investors in Canadian banks, they’re responding to questions like, you know, are you overexposed to the Canadian Real Estate Market? And what how did your loan origination increase?

And have you reduced the cost of your underwriting like they their constant looking for these efficiencies. So by having introduced first, a program that eliminated a lot of their competition, and second, a program that forced more rigorous underwriting standards on the majority of the market, the banks are now able to respond to those earnings calls and say, our net interest margins are higher. We are not taking on new as many new loans in our portfolios. And our underwriting costs have decreased because we don’t need to replenish our portfolio with as many mortgages because not as many our department right we if you 50% of all mortgages are renewing in 2018. And 35% of those people probably don’t qualify for the same mortgage they already had. So they’re just going back to their bank and saying, Please, can I have the same loan that I had? And what’s the rate you’re going to give me because I can’t go anywhere else. So it’s it’s a triple win for the banks, right? They’re reducing the costs because they don’t have to solicit as many new mortgages to replenish their books. They’re reducing their underwriting costs, and they’re making more net interest margins for the consumer, it leaves more of them. In this non bankable position, there’s costs associated with any move you make. What we hope to do with the technology, and you know, we believe it’s resonating with the consumers that we’re speaking to, is simply show them what the options are.

Lee Dale

When we look at the technology with Cannect, there’s the online component of that which is backed by the expertise that the brokerage has. But the online component there’s an interesting facet, as we’ve talked about transparency, but we are you also talk a lot about being unbiased. And this idea that when you’re a consumer, and you get on the phone, especially with secondary lender, they’re trying to gauge your level of need your level of urgency. And there’s that there’s that gaming aspect of it. Whereas…

Marcus Tzaferis

It’s not just secondary lenders, banks do the same thing. Right? The bank has a posted rate right now and a five year fixed, that’s probably five and a half percent. And if you can negotiate and play hardball with them, and the bank identifies that you’ve got other options, you’re going to get 3%. Right? So like, that’s a two and a half percent game on a mortgage. That should be a commodity, right? If it’s,

Lee Dale

Well, probably several hundred thousand dollars, which is now a massive amount of right. It’s different, right? Yeah. segmentation is another thing that’s enabled by technology. You’ve been working on a CRM as well behind the scenes so that you can start to obviously build relationship, relationships through touch points and communication and so on, but I think part That as well as just starting to build a profile of that customer, that then allows you to have a more direct conversation with them about what will best meet their needs from a financing. Right. So how is it that that the CRM component, the kind of behind the scenes component that enables those conversations happen? How did that come into play as to be something that you rolled yourself rather than look at an off off the shelf or

Marcus Tzaferis

The origination of Cannect.ca is the CRM, it was never our idea to create a fully automated loan tool for the Canadian consumer. It was our idea to simplify the mortgage process for our employees, the Genesis behind the CRM was, I want to continue to hire whoever I want to hire, regardless of what their knowledge in the mortgage space is. So why don’t I try to create a really great technology a really great tool, not only for coming Education with the borrower, you know before and after a mortgage is closed, but also a tool that will provide as much information as possible to the mortgage agent when they’re speaking to the borrower.

After a couple years of working without Excel spreadsheets, we started working on creating a tool to communicate with our borrowers and to to better arm our mortgage agents when they’re speaking to people. And this grew to a point where, you know, now it manages our entire business, you know, and it’s cost way more money than I thought it was going to cost but it does far more than we ever anticipated that it could do. And, and we realized maybe it was a time to start introducing it to other mortgage brokers. The problem we found was that the way that the mortgage brokerage landscape is set up in Canada, it is dominated by a few very large very powerful Super brokers they’re called the one key thing, like I said that, you know, has to connect everyone that works with any of the companies is that their alignment is to be motivated with the motivations of the borrower. So that that once you have that key tenant, everything else falls in line.

Lee Dale

And therefore the more than you can learn and understand the world’s needs, and start to, to find products and services that align with that, right, this is this is the opportunity, right?

Marcus Tzaferis

The technology once we kind of hit that roadblock of Oh, now I’ve got to convince a super broker to let me sell it to a sub agent. And then there’s, you know, discussions where super brokers want to have equity position in the CRM, or they want a piece of what their agents are paying or a discount, or we figured the technology works, why not work to just deploy it directly to the borrower. And the most logical first place to start was we’ve got our own bag of money that we’ve you know, got from our investors. We know the underwriting criteria that needs to be met in order to take money out of this bag and give it to these borrowers. Let’s find the best borrowers we can to lend money to let’s do it online. And we don’t have to ask anybody for any permission.

Lee Dale

Yeah, this is the novelty of, again, technology allowing this right disruption is this this cemented industry that isn’t going to budge until consumers demand something change, or the close partners or brokers and in a sense, demand something to change. And in this case, by enabling the consumers you’re going to start to be able to enable the players within the industry who aren’t mobile or can’t be mobile because they don’t have access to their own data even have their own customers to look at this, these other opportunities through technology

Marcus Tzaferis

Yeah, like I was never really looking to change an industry I’m I’m really just looking at bettering the alignment of motivation. Of the people that are involved in this small space. So you know, if you can align the motivation of the borrower, with the motivation of the broker and the motivation of the lender, you’ve got a perfect, elegant little solution for borrowing money and for lending money, the investor wins because they’re not going to have as many default, the borrower wins because they’re going to get a great rate. And the broker wins because they’re going to develop stronger relationships with their investors and their borrowers.

Lee Dale

Do you have a sense of what the next three to five years might look like?

Marcus Tzaferis
So yeah, I think with where real estate is growing, and with the regulations that we’re seeing, we’re going to continue to see more non bankable borrowers. What we would look to do is probably expand to other cities, and not necessarily even just in Canada, to offer a similar fully automated home equity loan product in the space that we’re operating in as effective. as we can to the consumer Cannect will never be a company that power of sales people’s properties. Cannect is a company that helps people improve their finances and fit back into that bank segment. So, you know, I think that any company that can, like I like the scene, right, like continue to align yourself with the motivation of your borrower, a borrower wants to pay back the money that they have borrowed. a borrower does not want to feel like they’re getting ripped off. And when you enter in a market like this, where it’s really what a lot of people are feeling, and you offer something that’s fair and honest and aligned with their motivations, you can build a ton of goodwill. And you can people that work for Cannect are happy, the borrowers that borrow from Cannect are happy, and the investors are happy.

Lee Dale

Thank you very much for sharing that.

Marcus Tzaferis

Yeah. Thanks for having me. Thanks for all the great work you guys are doing.

Meghan Warby

We hope you enjoyed our digital disruption Industry experts episode featuring Marcus Tzaferis. Be sure to check out our digital insights section at sayyeah.com for event recaps, videos and more transformation and disruption stories.

Transcript

Podcast/video transcript

Meghan Warby

Welcome to Digital Disruptors, I’m Meghan from Say Yeah, and in this episode of Industry Experts, we’re talking to Mark Dowds.

Mark’s the co founder of Trov, a disrupter in the insurance world. While he’s back in Ireland now, Mark’s best known work was in the US. He was part of a series of groundbreaking venture initiatives, including early seed investment in Uber and Twilio. After selling his last company mark to kind of cool new challenge, he created the first on demand insurance platform, this Trov project could completely disrupt one of the most traditional conservative industries in the world. Let’s jump into our conversation about digital transformation and insurance with Lee Dale Say Yeah’s CEO, and Mark Dowds co founder of Trov.

Lee Dale

We’re really pleased to have you here today, Mark, thank you for joining us.

Mark Dowds

Good to be here.

Lee Dale

And actually, if you’d like to just introduce yourself quickly to our audience, tell us you know your role at Trov

And even a little bit of background on how you got to become co founder of Trov. And what led you to that position.

Mark Dowds

My name is Mark Dowds. I’m the Chief Strategy Officer at Trov, and which sounds very fancy until you bought a time to what I’m really accountable for, which is ultimately revenue for the company. So I’m responsible for pulling together the partnerships and sort of longer term revenue and our long term sustainability. So it’s, so it’s fun. I get to work with lots of interesting incumbents, distribution partners, all of that sort of stuff i

Lee Dale

In the insurance space

Mark Dowds

In the insurance space. Yes. So we’re, we’re an insurer tech company. So a lot of my responsibilities is working with underwriters, like we we’ve partnered with Munich on the digital partner side of things also with a sample when Japan with accident the UK with suncorp in Australia. So I’m we’re sort of growing that list at the moment. And, but also on the distribution side, which could be a technology company, a bank, or somebody who’s setting up a digital insurance wing or, you know, part of their business model. So we’re finding that there’s lots of companies today that have clients, short customers, and, and data and what they’re looking for is a platform to deploy interesting insurance products to either for their customers.

Lee Dale

Yeah. So let’s talk about that idea that, that you’re working with a lot of incumbents and so they have a legacy business model, that legacy processes.

I don’t think I’m going out on a limb and saying that you’re looking to disrupt that.

Mark Dowds

Yes. And we didn’t we didn’t go out initially to disrupt we were not Well, I suppose there was an aspect of what we thought if we bring new data into that world that could certainly enhance the disrupted whatever way you want to look at that. What we have ended up doing and as we built and deployed our initial products is that we realized that the insurance companies, the large incumbents, and didn’t really have the technology systems behind them to deploy these new initiatives. So they, these old systems weren’t able to process and dynamic data, or they weren’t able to process information like by the second so we, so we ended up building a platform to deploy these new products that calculates risk dynamically at prices that by the second, you know, it can bill in any increment to any party. So this all the flexibility at which the legacy systems lock in these big insurance companies.

Lee Dale

Right. And this idea of disruption, maybe sometimes seen as a dirty word of people are trying to avoid being disrupted, but in your case, you’re looking to partner with the incumbents in the underwriters and yeah, and form. There’s a value proposition there that you’re bringing to the table that says we’re better together. Yeah, exactly.

Mark Dowds

Right. So what you find in the ensure tech space is that a lot of ensure tech folks that are emerging in there, no clear mission is really to say, okay, we’re going to try and eat the lunch of the big insurers, we’re doing the opposite. And we’re partnering with folks that are not insurance, but we’re also working with the insurers to say, we can take you into the next century here, or decade or wherever they got stuck. And so they’re we’re enabling them to compete with ensure texts for lack of a better term.

Lee Dale

And you said where they get stuck. Yeah. Is there a sense for you, I know that Trov is a global organization is touching in different markets. Is there kind of a consistent theme that that that relates to that idea that there maybe it’s technology, maybe it’s process, maybe its business model, where this opportunity is has come to the fore for you guys?

Mark Dowds

Yeah, pretty much every country that every insurer that we’ve worked with we’ve realized that their systems are archaic, and and they’re really giving off old sort of annual policies to strike heavily paper based behind the scenes. So the idea of digitizing what currently exists as a very expensive or impossible feat. So we’re coming alongside them, you know, almost like a satellite to be able to enable them to play in a new digital space without having to transform everything from the inside out. We’re helping them to sort of test, learn, build, grow in a digital way. And our hope is that that can be the platform that can displace some of the older systems that exist today.

Lee Dale

When you look at this idea of there’s a technology limitation, there’s a data limitation and working on the software side of things. That’s not all about automation, or what’s happening behind the scenes. I think you spend a lot of time with Trov on looking at what is the customer value? Let’s talk a little bit about that.

Mark Dowds

Yeah, we’ve looked at what is the customer volume where the trends were things moving and shifting. If you look at casually ensure like a retail ensure well aren’t like a known brand, the mid sort of somewhere between for the majority 40 to 50% of their book of business is auto as an example. And that world is changing rapidly as we all know, you know, you’ve got Uber left, you got waymo and autonomous vehicles and every OEM basically emerging with all with new with new tech and data. And so we’re also that world of mobility is going to completely change what car ownership means and what mobility means, in a sense and then I’m where does insurance then begin to play? So that not so not since we’re, we’re getting into that world, along with the sort of looking at what the customer needs, where the customer is going, and and then beginning to say, how do we then systematized that new process, gather the data in and then iterate continuously on product add to match their lifestyle and their needs. So the And there’s been a lot of talk of in the insurance world of profiling people, but it’s normally been negative in the sense of profiling their risks. So they it’s quite punitive. And what we’re doing is trying to find new data sources to basically enhance the user experience. So rather than saying we’re gathering data, they’re busy limit what you can do. We want to gather data so that we can customize what you know what you can receive. So we’re trying to turn that on its head.

Lee Dale

How does that process come about? As far as you know, you’re looking for practical solutions for changing market? How do you investigate

Mark Dowds

We’ve done a lot of research. But also we’ve got companies that come to us so God, innovators will, I’ll use waymo as an example, alphabets autonomous vehicle company. And in that environment, they’ve already done the research, they know where the world is going and or they have a belief set on that so and not not environment when we get engaged where we have conversation with them. They They’ve already done the research they they see, they see where the world’s moving, and then we get behind them. So there’s so the benefit of working and doing this stuff in partnership is we find those partners that are already thinking about where the world’s changing, and who are who have customers, that some of the old protection stuffs not working any longer. So then they come to us as an innovative partner, and as well as an insurance platform.

Lee Dale

So is there a process of experimentation or process of kind of validation that you’re going through testing out different options for consumers?

Mark Dowds

Definitely. So yeah, before we get the build will do lots of lots of testing. With a lot of design thinking, you know, we’ll do all the workshopping that most companies today are maybe not most, most should be doing but some of the leading companies are doing today. So we’ll, we’ll test iterate a lot around you know, screens and user experiences and and stories and to see what to see Hi there. The potential customer engages with an that’ll help enhance what we build. So it’s one of those worlds today, if you have an idea and you go out and build, it can be quite costly. And you’re almost guaranteed to fail when you launch. So we try to find get as much information from our customers get enough feedback. And before we really, you know, build and when we build, we build as lightly as possible. So we can deploy iterate change, because I don’t think that anyone can get it right on the first go.

Lee Dale

Yeah, I think that includes process right? How do we adapt? Quickly? How do we connect with consumers and gain value out of that process? You can bring customers or partners, the comments that you’re working with into the types of workshops that you’re doing as well.

Mark Dowds

Yeah, very much. So yeah, we do everything in collaboration with like, we got various subject matter experts in in the company, obviously, but we also have sort of master facilitators. So we’ll bring them in fact today and at head office. We’ve got a you know, one of the large banks that you know we’re working with, and to help them think through a new proposition in the market. And so it’ll be like a three day long design thinking workshop on unruly so we’ll just apply some of the lead them through processes they’ve never been through before, which then they’re more than ready to go back into their own companies and the new skill sets. And

Lee Dale

So that might even be a, that’s not even necessarily a pre sales exercise. It’s a let’s uncover the strategic opportunity here and then see what fit.

Mark Dowds

Yeah, yeah. And quite often in those workshops, there’s so many other ideas or thoughts, that surface that may not be our focus, but there’s other people internally within their companies ago, actually, that’s a hot opportunity for us as well. So yeah, we end up surfacing a lot more than just a project or product that we’re working on.

Lee Dale

And this isn’t just about travel. It’s about the idea that, you know, you’re going out to work at a cafe, and you’re, you’re in a sense, mobile all the time. Yeah. Especially the gig economy is is increasing this as well, where you’re not even going to the same job place every day.

Mark Dowds

Yeah. And the gig economy is a fantastic one to think about. Because you’re going, you mean you can be traveling with your laptop. So what’s your personal laptop? And so then if you’re, technically if you’re caught working with that, or if you were to be honest on disclosure, saying, Well, I was working in the coffee shop when it was stolen. So then it’s a very fine line or a blurry line today, especially with the rise of this freelance generation or the gig economy. There’s just, it’s growing so fast that again, the lot of people just using their personal kit for work, and then a some sort of not really insured, or if you think about a wedding photographer, when I was what you have to know by insurance, if you’re taking you know if you’re going to be doing this professionally, and bought if you’re using the kit personally, do you really need that expensive insurance or do you only need it for that day? You know, so there’s there’s a lot of New nuances that are emerging at the moment.

Lee Dale

You’re steeped in these ideas around lean methodologies and and being quick to fail, and understanding how to get to that sooner so that you can make a smarter decision rather than even the idea of waterfall development. You’re saying, well, we started with a strategy. Do we keep hammering at that? Or do we let it go? And because the markets taking us in a different direction? Yeah. How easy is it to have those conversations with legacy businesses who don’t have your risk tolerance? And don’t have this experience that you have?

Mark Dowds

Yeah, it’s tough. I mean, that’s not even a legacy. There’s, I mean, I said, it’s a difficult conversation to have externally with partners unless it was a difficult conversation to have internally as an executive, or as board or with investors, you know, so you’ve got or just are with the wider team because you rally behind a particular you know, idea or strategy for a long time. takes guts to look at something and go, you know what, it’s not fully formed or there is a better way or a smarter way. And it takes a little takes some political management and wisdom. And some patience. I’ve, you know, I used to come from the years ago would have been if there was a significant change that need to be hard. I just did it. Right, right. We’re now you’ve got a pause, and you got to think about the ramifications, you got to think with the strategy of what it would mean, the implications and think it through from a business model perspective. So I think there’s just a little bit more wisdom and patience that comes with it. And internally, at Trov we, we are we basically say that what we lead with is humility, wisdom and courage. You know, so we try to remember who we are and what we’re not, you know, borrow from the wisdom says, not just those in leadership, but from the company itself. You know, learn from what, you know, successes and failures of the past, but then having enough courage to Go on. Because you know, there’s a, there’s a lot of things you don’t know all the information on, on it just takes a little bit of risk and go for something every so often.

Lee Dale

Well, and it’s even interesting to know, knowing the history of Trov, how much you’ve shifted product based on this exploration of the market, which is really exploring insurance. And where does that lead you? You’ve been down many paths

Mark Dowds

And insurance is a it’s a big, big world. You know, when we entered into it, I don’t think we we saw the numbers behind the market share, but it’s not until you get into it until you realize how complex it really is. And what it means from like learning. cost of acquisition within a within an insurance market is completely different from cost of acquisition and social media and other other businesses have been involved in and or learning that is not just the acquisition of a customer, but it’s the acquisition of the right customer. You know, if you acquire all the wrong ones, it’s problematic as well. It’s probably Yeah. You know, your underwriters wouldn’t like you if you did that. And so there’s, there’s a whole new world to be explored within insurance. And, and I think a lot of insurers themselves are unaware of the origins of their business. So for us a sort of going back to think on why does insurance exist? You know, you know, why is it a, you know, is it an important pillar of our society? And will the longer term disruption completely eradicate it? Or will it always be there, you know, and so on. And so in that, in that sense, we recognize that is an important color society because it enables society to take risk enables us to do things without without fear. You know, if we had no insurance on the home, we own or on the car that we drive through the certain amount of fear would enter as you know, as you any day you get into the car itself.

Lee Dale

Well, as a homeowner, You say this is maybe a significant part of my retirement. Yeah. Which could go up literally in smoke. Yeah, at any moment.

Mark Dowds

So, so enabling that. So that peace of mind and the say the risk taking or the ability to leverage rather than stockpiling all your wealth enables you land to be able to span that and other things. So there’s, there’s a lot there’s a lot of benefits to insurance because insurance can come across to a lot of people almost like a dirty word. It’s one of those grudge purchases format for most. But the more I’ve got into it, and realizing Actually, this is an important part of our lives. And if framed correctly, it could be something that we can embrace over time.

Lee Dale

And I think that’s a great point of the idea of framing it correctly means looking at how the market is shifting, looking at behaviors changing and understanding how do we adapt the models to that or come up with a new model that serves the changing environment right how much of the discussion is around risk and data and how technology mitigates risk.

Mark Dowds
Yeah, there’s a lot of conversation around what we’re doing is really, that’s, I think a lot of our partners are doing this, because we’re getting into gathering new data, data that know that it’s one of the competitive advantages that we bring a partner is that we’re going to bring them data that they can’t get anywhere else. So I’m for, there’s an old saying is that there’s two times to plant the tree. It’s either 20 years ago or today, you know, in some ways, we can look in 20 years time, you know, everyone’s going to want this data, but who’s willing to plant the tree today, and to be patient with that as it grows? So our our hope and what we’re doing is that we’re say planting a tree we want to grow, we want to gather the data and you know, 510 20 years into the future, you know, we can look back and go we were the ones that wise enough to see that this was coming and that that theatre would change the world.

Lee Dale

Can you share a little bit of an example of what it is that you’re bringing to the table from a data point of view,

Mark Dowds

From a from a data point of view. And if I think about the mobility space, and we are, we’re going to be launching a new product in the market. And that really focuses for for car owners on non car owners alike. And what we’re doing and you know, with partnering with those individuals is helping to understand how they move in life. So with the use of something like the accelerometer, within the phone will tell whether you’re driving, whether it’s your splicers driving or a friend, whether you’re on a ferry, whether you’re on a train, whether you’re on a bicycle, and we can begin to map those patterns and understand really, who you are and what’s the you know, what sort of persona you know, are you you know, are you a single moment of your power shopper or you know, are you know, do you do you have a full time job, you work from home. You know, there’s a lot of these things what we can do because if and build This new rich, Dear Ryan, that we actually can get the point where we understand you, then we can say, well, we can cater new protection on new lifestyle coverage around who you are. So I think data like that is can be extraordinarily valuable, as long as it’s for the benefit of the customer. And as long as they’re opted in, you know, because I think that’s the, the fine line that we have today, we’re, as long as we’re focused on customer value, then customers will continuously let us in and analyze that data.

Lee Dale

We talked a lot about digital transformation. And this idea that we’re leveraging technology for all the benefits around speed and data and being able to learn very quickly from behavior. But process is so much a part of that transformation. Yeah, the digital is is the is the new piece of the puzzle that isn’t being leveraged as well as it can be, but it requires a change in culture. It requires a change in process. So, when we talk about the idea of policy or regulation being in the way, that’s if you even mentioned the idea that your sales cycles are, you know, could be 1218 months plus, that’s an easy problem changing policy can be, you know, 3648 months long. But I think it’s a necessary part of probably some of the work that you’re doing as well as to have these conversations with the people who are the regulations in place to say this is no longer applicable. What do we do about this?

Mark Dowds

You know, we have this conversation this morning. Because, you know, we think about mobility and how that’s changing. So within Ontario that I mean, there’s there’s high levels of regulation, what you can and cannot do with a motor product, you know, so there’s some of that will could and we we understand why the regulation is there, you know, it’s to protect the people. But we’re but nice new data comes in as a sort of new opportunities arise with this. It’s going to really turn things upside down. So there’s going to be benefit or need to start engaging, you know, from regulatory and from the Department of Finance to sort of get them involved in the conversation so that they can recognize the benefit this, you know, the benefit of need there is at the moment to change. So one of these things

Lee Dale

Well, the best way to do that is to bring data. So the more that we can gather that information around behavior, we can then provide that as a tool in and of itself, to help innovate. So you’ve shaped Trov and reshaped over the course last five years around a shifting market. Where do you see that trending

Mark Dowds

Yeah for us as a company, we see that trending into beyond the products that we have under our own brand in the market. So we’re starting to leverage the platform of which we built the was necessary to to deploy these innovative solutions tonight, so our, you know, our future looks like you know, many, many products powered by tros. So, you know, you can imagine going you know Launching, you know, a product for folks who rent homes a product for folks, folks who own homes, a product for people who don’t own cars or product folks, they own cars. So we start to like, work with partners with their data with their customers and build and deploy these new digital initiatives. And then start bringing those to global a global audience. I would say it’s very similar to what happened in the FinTech world. Once in the financial sector, you had these break offs of payments sectors, your little, you know, different pieces, you know, components that were then taken away by other folks that will see the same in the insurance world. And our hope is that we can work with a lot of these folks to digitize that experience, and bring it more seamless opportunity. But ultimately, for us, it’s Trov as a platform is the way forward.

Meghan Warby

We hope you enjoyed this episode of Digital Disruptors featuring our industry expert Mark Dowds, Check out sayyeah.com and visit the Digital Insights section for event recaps, videos, and more transformation and disruption stories.