Mike Shanahan, Chairman, President and CEO of HM Risk, joins Broker Buddha CEO Jason Keck and host Dean Gemmell to discuss key moments in his own career, how technology increases productivity, and a time when his efforts made a big difference for a client.

You can hear the conversation on Apple Podcasts, or Spotify.

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Dean Gemmell: Hi there, Jason. It's time for another episode of our podcast, The Enlightened Agent. This was a great conversation we had with Mike Shanahan down in St. Louis. He's got lots of experience, good background, and, like he says, a real, normal guy.

Jason Keck: Yeah, Mike's got a ton of personality. He's one of those guys who's been in the space a long time. He's clearly been incredibly successful, and he's also got a good vision for where the industry is going.

DG: Yeah. He touched a bit on tech - we found out he was an early Blackberry adopter.

JK: Super-advanced.

DG: Yeah, and he even misses that now, but he certainly talks about how technology is really pushing a lot of his business decisions right now.

JK: He's got a really great story that I think everybody will enjoy about being a fantastic agent, helping somebody secure their future by protecting something that mattered to them and having a great outcome. It was a really fun conversation.

DG: All right, let's get to it.

It's another episode of The Enlightened Agent, the podcast that brings you conversations with top insurance professionals and tries to make sense of where the industry might be headed. Today we are joined by the chairman, president, and CEO of HM Risk, Mike Shanahan. Welcome to the podcast.

Mike Shanahan: Guys, thanks for having me, and happy St. Patrick's day.

DG: It is St. Patrick's Day. Of course, we're joined here as well by Jason Keck, the CEO of Broker Buddha. Hi, Jason.

JK: What's going on, Dean? Glad to be back.

DG: Yeah. So, Mike, we'd like to start and get a little backstory on you - get the human side. Tell me a little bit about how you entered the world of insurance. I know you also worked for the St. Louis Blues at one time, so how did you wind up in the world of insurance and end up in the current position you hold?

MS: I did work for the Blues when I was in college, and I was amazed at how many people would call me and ask me, who's going to win the game that night?

DG: Like you knew!

MS: Yeah, exactly. I said you have to buy some tickets and find out. It was great experience during school, and then, right out of school, I worked for my dad in the defense business for five years. I sold military ground support equipment to the military. It was a very mundane job because the people buying it really didn't care because it wasn't their money, but obviously, the military had to have it.

Then, one of the guys who I was fraternity brothers with at SMU in Dallas was a guy named Steve Lockton, whose name might resonate.

JK: Sounds familiar - I've heard that name.

MS: His father, Jack, had recruited me for a few years, and I wasn't making any money in the defense business. I said to my dad; I'm gonna give it a shot, knowing that I couldn't come back if I failed. It was a lot of pressure to leave, but I'm six months into the business, making twice the money I was making before, and I really enjoyed it. I haven't looked back. I've been on commission since 1994.

JK: Wow. So sports, government, and then insurance and insurance is the one that stuck. Good for you.

MS: Exactly.

JK: You guys have had a pretty significant transition here recently. Big news came out at the beginning of the year. Is there anything you can tell us about the merger and the future of the business? What do you guys have in store?

MS: I met Mike Sullivan, who's the co-founder of One Digital, a little over a year ago. We were down in Jupiter, Florida, met through a mutual friend, and he said, Hey, you know, we have a $600 million benefits company. You guys do property casualty. Would you be interested in doing a deal and merging? Before he even finished the sentence, I wanted to scream yes.

It's a $600 million benefits firm with no property casualty. I don't know if you've met Mike or Adam Bruckman, the two guys who started it. They're really good guys, and they're normal - if you know what I'm saying. I want to be affiliated with people that are normal.

DG: That's your business strategy, normal people.

MS: Yeah. People you can have a beer with and shake their hands. We did this entire deal. I talked to Adam Bruckman last week, and I said, can you imagine selling your life's work to a guy that you've never shook hands with? But I've never even met in person due to the pandemic.

JK: All digital.

MS: All digital, yes. Very trusting, but it's a great collaboration. They're good guys, and the sky's the limit.

JK: It's funny you say that. I worked in tech for 20 years before joining the insurance industry. It turns out tech people are kind of quirky. Insurance people are actually surprisingly normal. There are some odd characters out there, some with more personality than others, but the reality is, I've worked with some fantastic people in this space.

It's one of the reasons why we decided to do this podcast. People who are not in insurance don't know a whole lot about it. It's not a hot topic at cocktail parties; nobody likes to dig into premiums, limits, and coverages. But the reality is there are some great people in this space, and I've met a ton of great people. What does this mean for you, HM Risk and One Digital? What does the future have in store?

MS: They've got 3000 employees - 600 million in benefits business throughout the US and internationally. We've got brokers that work for One Digital, regional presidents, everybody calling and saying, Hey, will you talk to my client? They're interested in property casualty. You've got people bringing ginormous deals in and people that are bringing in super small deals, but they don't understand how P&C works. It's cute, the questions that they're answering, but then you want to say, this is only 1200 in premiums, so how much commission do you think it might be?

They say, Yeah, I didn't think of that, and I say, You didn't think of that? But then the next one they bring in is a good size and something to chase. They're relationship people like we are. I know you know, Jeff Walters, we have been spending way too much time together and just working up every deal imaginable. It's been great. It's really energizing.

JK: Jeff's from Louisiana if I remember correctly? We share a Southern bond. I grew up in New Orleans, and we had a lot going on there. A lot of fun is happening in the South.

MS: He could occupy your entire podcast just with his family period.

JK: We should get him on here.

DG: We'd have to be able to understand them all, though. Jason probably could.

JK: I can translate for you. It's completely fine. Congrats on that, and I see a lot of opportunity for you guys there. I think that's going to be a pretty powerful event for you, and I'm excited to work with you guys in helping make that happen.

MS: We're super excited for sure.

DG: You've been in this industry for a while. I don't want to call you a veteran, but I guess that's what you are. Looking at it now, what's changed since you first started, since you first took that first job? And what do you think still needs to change?

MS: You're going back to 1994. The one thing that changed my life, and I thought about this, was the Blackberry. I was one of the first guys that had one. I didn't do the beeper one, but the handheld one. People thought I was in the office when I wasn't in the office. I've got four kids. Now, they're 27, 25, 21, and 19. But at the time, they were really small, and some weren't even born yet. I was in every recital, every game, every tea party; I didn't miss anything. The whole time, I was always on my Blackberry, but at least I took pictures. I was there. That really got it going for me.

Then you've seen, over the years, how the remote played out during the pandemic, but the technology piece. I would say the insurance business has probably been the slowest to move to technology. It's this gargantuan business that's very stodgy and slow to move. We've always tried to be more on the cutting edge because it's just another advantage for us, but technology has been the biggest change since I've been in the business.

JK: Since I've been in this space, there seems to be a groundswell of energy towards technology, technology enablement, and all the tools that agents are getting comfortable with. Was there not that demand ten years ago? Was there less appetite for it, less interest in it, or just less ability to engage with it? Why is it just happening now? Do you have a perspective on that?

MS: I think there's a lot more money in it now, whereas before, there was only Applied. Applied was your only choice for your software. The Applied of 1994 versus Applied today is pretty much the same. No offense to Applied, but they are in my book, because they don't help you do anything special. They show: Hey yeah, we made money last month. Hey, we didn't make money last month. Hey, you know, the premiums went up, they went down. That's all it tells you. It's nothing intuitive. You just load into it. Now, in the last five, ten years, you've had Zenefits come in. With some cooler technology, but they didn't have the relationship side.

What we're trying to do at One Digital, and we try to do at HM, is let's marry the relationship side of people (sales) with technology. You've got people that have relationships, and then you have people that have technology, but nobody has them both. When you have them both, it's a really powerful tool.

JK: I will gladly talk all day about technology if you want to. Is there something you're looking for in the technology space? Applied gave you their platform, and you use it every day. Is there something more you're looking for from them or from others? What is it that's missing in the tech world?

MS: The tech world, from my standpoint, is - I want some piece of technology that's gonna make my A-players (my A-producers, A-salespeople, or my A-servicers) more efficient and be able to service more business in the same amount of time. Applied never did that. It was just an accounting tool, and I don't mean to bash them, but again, they never did anything for me. If you can utilize technology to where you've got your top people, filling out applications, and can take that off their plate? Where I can have an account executive who is working on $3 million or $4 million in business versus 10, 15 years ago when they could only max out at $800,000, and they were working 60-hours a week.

JK: Yeah, that's awesome.

DG: When you were using the Blackberry, you were building relationships with your Blackberry.

MS: I stuck it out for a long time, too - the Canadian roots! But man, oh man, did the iPhone change things! Blackberry was here, and then the iPhone came and just went everywhere. I tried the different Blackberry - the touchscreen one. I remember sitting down and thinking, how long am I going to kid myself? It was terrible. I always rooted for it. The encryption was better than iPhone.

JK: It was a tragic loss. Their stock shot up recently in the recent buzz happening around GameStop and everybody else to get a little bump there. I don't think that had the same impact the technology did 15, 20 years ago. Times have changed, for sure. On the tech side, we were talking before we started here about Patrick Kinney and some of the carriers that we work with. What have you seen come out of the carrier world from a technology perspective in terms of collaboration, coordination, and communication? They have their systems, you have yours, and the two systems rarely talk to each other. Are you seeing anything in that world - at least on the P&C side - that's got your attention?

MS: For sure. That's how we met. The Broker Buddha side is, what can we do to make our people more efficient, that is intuitive, that they want to use it, versus, Hey, you have to use it. They want to use it, and it's making their job and their life easier. If we can use one application that will go to Travelers, Zurich, and Safeco, all at once when you hit a button, spending seven minutes instead of seven days and getting the quotes back within 48 hours (which is what the carriers are trying to do), that makes things work so much better. You can make money on small commercial when you use technology. It's not all about making money; it's about servicing the clients, but if you can give your best people more time, why not?

JK: The goal wasn't to get a plug in there. I appreciate that. We talk a lot with the carriers about what they're doing and the tools that they have. They're coming along as well in the same way that broker software is coming along. I think things will get better, and there seems to be a lot of push to get better, faster.

MS: There's a lot of push, but, like an Applied, they need help. They've got their own goals in mind because they still have a bunch of shareholders that they have to keep happy. I think we're getting a lot closer than we have been in the past, and it's starting to work now. Travelers have been on the cutting edge because they're trying, and they've been trying. I've stayed really close to them over the years. They spent a lot of money on technology, and I think we're getting there. It's just taken longer than probably most would've thought.

DG: You're obviously a believer in tech. Have you seen it be a competitive advantage for your agency over the years with clients?

MS: Back to the One Digital merger - and we call it a merger because it makes me feel better. I was competing with One Digital and Zenefits; I'm competing with Marsh Willis and all the big boys and girls. They're spending hundreds of millions of dollars a year on technology. I'm kicking, screaming, and yelling when I've got to spend 35 grand on a new server. Or spend 15 grand to upgrade Applied while these guys are just dumping money into it.

That's why it was natural for us. Let's take our relationship-driven organization. Let's take our people that I think are damn good at what they do and marry them with technology and see where we go. We're only three months into it, but we're talking exponential returns as far as people, technology, and new business. It's been a great fit.

JK: One Digital doesn't sound like an insurance agency - they sound like a tech company, which is probably encouraging for you as you look for those efficiencies. What have you seen them doing on the digital or technology front that was impressive for you when you came in?

MS: Well, for one, we were a client of One Digital for two years. They were handling some of our smaller business that we can't make money on - five or ten groups. They were putting forth these awesome-looking proposals, and everything was at the touch of a button. I thought, okay, I appreciate what they're doing. Can you marry that and take it, take it to the larger accounts as well? They've done it really well.

The other thing I've noticed is that they're not like, Hey, we've got it all figured out - we don't talk to anybody. They invite people in, they collaborate. They're trying to take all this AI and cool buzzwords and figure out how to make this good news for the client? How do we get better at what we do versus, we spent money on this technology, or we've got this great exchange; shove everybody in it. They're always trying to figure out a better way to do it.

JK: Change management in this space is hard. Figuring out how to use the technology and being open to better ways of doing it are super important.

DG: Hey, Mike, we're talking to you, and like most people these days, you're in your house, we're somewhere else and not in an office. You've been busy during this pandemic, but what sort of changes do you see for the business and for how you work, coming out of it?

MS: I will tell you that the one thing that happens anytime I have a Zoom call is that everybody comes to my front door - FedEx.

JK: During that call?

DG: The dog barks.

MS: It doesn't matter. Today, we said we're going to get on at two, and my daughter told me that a baby bed is being delivered at two. I thought, of all the times… I've a little grandbaby, I'll do a plug for baby Georgia. We were always working remotely, so we had technology. We have a lot of young moms on the team that want to work from home a couple of days a week, and that's great. We were fortunate that we were already set up, but I've said the word relationship a thousand times. We're a very touchy, feely relationship group of people, and we're all dying to get back in the office. Now the moms probably would like to still remain remote a lot of the time, but the dads with little kids at home, can't get to the office fast enough.

You just have to kind of balance that. I see it being a combo. We're still going to be there, and everybody still wants to be together, but to have that ability to work from home for a couple of days, weeks, whatever, we're cool with it, as long as you're taking care of your clients.

JK: Smart. That's the right way to look at it. We're still debating the back to work - the hybrid, the all in, all remote. I haven't settled on anything yet, but that's a question I'm going to be asking everybody going forward: hybrid, remote, or all in? It sounds like you guys are cool about a hybrid right now.

MS: Yeah, we're hybrid right now, but I think what's interesting is a lot of people have really thrived during the pandemic. You've seen it. There are people that have just been rockstars, and nothing's changed. And then you see some people that were doing a great job that have almost disappeared. The other day, we were setting up a meeting, and she didn't get back to me until the next day. She said, sorry, I was out yesterday. I thought, you've been out for twelve whole months. I haven't asked you to do anything for six weeks. It was just one thing, and I got a response a day later! She needs to be in the office because she needs that discipline of being there.

I don't care if you're the person who, when you leave at five and we don't see you until the next day. In the service business, if you're in sales, you gotta be on all the time, and there's no, hey, we're unavailable or, I'm going on vacation and won't have access to my phone or email for a week - we can't do that anymore.

DG: You know what she needs? She needs a Blackberry - that's what she needs.

MS: She can have one! I've got six or seven of them!

JK: Mike, you talked about your team, remaining personal, and being good service providers. A big part of this podcast is about understanding the agents and hearing their stories. We titled the podcast, The Enlightened Agent. Enlightenment is defined as a state of having knowledge or understanding. I wanted to ask you if you have any special knowledge, or does your team have any special knowledge that sets you apart? What makes you guys enlightened? Do you have any stories to share with us about that?

MS: I do. The first thing I wanted to tell you - I don't know if you guys have ever read a book by Lou Holtz, but he calls the insurance salesman the most noble profession you can be in because we don't sell insurance - we sell security. You can say that with a softness to your voice - it's very convincing. You should try that.

DG: I just bought a policy from you! Count me in!

MS: He really did. The book was really easy to read - it had a lot of pictures. It was probably back in the early 2000s, my uncle, Ray Barrett, who was a serial entrepreneur - he had restaurants and all kinds of things - inventor of the triple track golf ball by Callaway. He won a $75 million judgment against Marquette Medical. We don't have to get into the reasons why they sued each other, but-

JK: Was that from the restaurant business?

MS: Funnily enough, it was from biomedical, so prenatal.

JK: Got it.

MS: That's my mom's older brother, who's 87. We were at a family barbecue, and he said he won this judgment. I said, I can insure that. He said, okay, we'll talk about it next week. Then he circled back about two minutes later saying, No, really. Tell me how you can insure it. We put a policy in place, and there was due diligence. Attorneys had to look through it from an underwriter standpoint, but he ended up with a $10 million premium with AIG - it was a $300,000 commission for those of you who are wondering. That's not 10%, the last time I checked, which I thought was standard. I insured the $75 million judgment, which was being appealed at the time. It was money in the bank, and his company wasn't that big at the time. It was a big, big settlement and judgment.

He would tell me, and he still circles back now and just says how much it changed his life. Just having the security, and knowing that that money was going to be there, no matter whether a judge or appellate ruled, was life-changing - as it would be for anymore.

JK: That's amazing. So he had a $75 million judgment, and it was you who helped him insure it. And it was appealed. Did he win the appeal in the end?

MS: It was not overturned. The process was interesting, and they spent over $500,000 at a law firm in Chicago for them to take a look at it as part of the underwriting process. I think, at the time, it was the largest single premium that AIG had ever done for a loss mutation. At least I was number one for maybe a year - it may still stand.

JK: It's still something!

MS: I keep telling everybody it's never been broken. I've got insurance records, maybe not a lot of sports records, but insurance records are more important. They stand the test of time.

JK: That's amazing. He ended up with the security of knowing that, regardless of whether they won or lost the appeal, he was going to get the settlement either way. I can imagine that changes the game.

MS: We've had probably 10 or 15 other people look at it, and it's always been overpriced from their standpoint. They can insure a million dollar judgment for 750,000, and it's because of that whole appeals process and how long it takes. I don't know if we'd be able to do that same deal today, but loss mitigation was really new back at the time.

JK: It's an amazing story with an incredible outcome for both you and the family. Those are exactly the kind of things that I think are special about agents. It sounds like you were just creative on the spot, being a normal guy, as you said earlier.

MS: I don't read a whole lot of policy forms, but at least I remember buzzwords and who to call when we need something - that's the producer mantra.

DG: Mike, this has been terrific. It's been a normal conversation, and I've appreciated that. It's been a pleasure to talk to you. If there's anything else you want to add, this is a good opportunity to do it. Anyone that you want to thank or whatever else? Otherwise, thanks so much for joining us.

MS: I want to thank you guys for bringing so much notoriety to the insurance business because I would imagine there's not a whole lot of podcasts that cover the topic. All I can tell you is anytime anything bad happens - if there's a fire, death, or whatever, the first people everybody calls is their insurance agent, and then we're cool. Then they really love and respect us. Other than that, they just bitch about premiums. So I appreciate you guys letting them know that there's more than just dollars and cents to this whole business that we call insurance.

JK: Thanks for being that guy who takes a phone call - for having your Blackberry on you all the time, taking that call, and being there to help. And for being on the podcast with us today. We really appreciate your time.

MS: Thanks for having me. Take care.

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