Relevancy in Insurance: A Conversation with Karl Wiley, CEO of Allstate Protection Plans

As a creator and designer of insurance solutions, I spend a lot of time discussing relevancy in insurance. As I have written and spoken in the past, no one wakes up wanting to buy insurance. There are no RVs in parking lots tailgating or camping out to be first in line for a new insurance product! Even when we voluntarily provide our email addresses to new insurtechs to notify us when they arrive in our state, what sort of emotion goes through us when that email finally does arrive?? Do we act? Probably not. Why?

We don’t act mostly because even though the insurance company is ready for us…we won’t be ready for them! We will be ready when we need to be ready and not before. It might be when the bill arrives for renewal, it might be when our lender or property owner asks us to update our insurance info. It might be when my wife reminds me for the 100th time to get more life insurance. Unlike the new iPhone or when tickets go on sale for a concert or sporting event, it is usually an outside force that directs us to reserve a bit of mental energy for risk management.

This is relevancy. This is marketing a product or solution at the moment when the consumer is most likely to be thinking of the problem and/or most likely open to the solution. Warrantying another product at the point of sale is the ultimate form of relevancy. When I buy a product from Amazon or any other retailer, I am envisioning the product, how I am using it and when the warranty offer pops up, I am envisioning scenarios where I will no longer have the product (because it was damaged or lost) and it is at that moment that I am most likely to buy protection or not.

In this episode of The Coverager Podcast I spoke with Karl Wiley of Allstate Protection Plans, which has become a market leader in warranty protection for retailers globally . We discussed the mission, the history and the economics around this type of insurance class (moral hazards and adverse selection exist, but technology can be a very powerful ally to the insurer). We also discussed the importance of relevancy. Relevancy in the insurance transaction (if you don’t get them at POS, the likelihood you will get them begins to decay rapidly) and also the relevancy for the retailer and how important a proper warranty program can be the the retention of existing customers and the competitiveness of their differentiation for potential customers.

 

Watch here:

Connect:
Karl Wiley (LinkedIn) – https://www.linkedin.com/in/karlwiley/
Allstate Protection Plans (Homepage) – https://www.squaretrade.com/

 

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Transcript

Nick
Hello, everyone. Welcome back. My name is Nick Lamparelli. This is the Coverager Podcast. Today we're gonna mix it up a little bit, we're going to step away from some of the common topics that we've been talking about and get into going a little bit different angle, which is going to be always really interesting. I have Karl Wiley, who is the CEO of Allstate Protection Plans with me, Karl, welcome.

Karl W
Thank you, Nick. Great to be here. Thanks for having me.

Nick
Karl, I start all of these podcasts by allowing you to give yourself a proper introduction, and a little bit of an elevator pitch. Karl, who are you? What do you do and why is that important?

Karl W
Right. Well, so as you said, I'm the CEO of Allstate Protection Plans. So you may ask what is Allstate Protection Plans? So look, we were originally a company called SquareTrade. We are a venture-backed company that was founded really, with a mission to disrupt the sort of sleepy traditional extended warranty and device protection industry. It was an industry with a relatively poor reputation for customer service, pretty devoid of innovation. And we saw an opportunity to change all that with a very customer-centric, technology-forward approach. That was a very, very different business model based around a branded product, right. So that product SquareTrade, that approach got some traction with some of the major retailers in the US and we caught the attention of Allstate. About four years ago, a little bit more than four years ago, Allstate was looking to expand its offerings beyond traditional home and auto, it's really protect a broad range of things that were important to people's lives, including their technology, which is obviously in today's day and age, really, really important to people. And so they approached SquareTrade. And a marriage was consummated relatively quickly, about four years ago. And since then, our businesses, the combination has been incredibly successful. And we've really pretty steadily taken over the device protection market here in North America, we rebranded our product from SquareTrade, to Allstate Protection Plans, that's my current title. And, you know, we now serve pretty much every it's a who's who of the major retailers in the United States, everyone from the Home Depot, Walmart, Costco, Target, Sam's Club, Amazon, and so on, and so on, providing their device protection products in their stores and on their websites. And we've been steadily expanding abroad as well. So we're live in Canada, we have a big European market, and most recently, Australia and Japan. And so we, we've now grown, as part of Allstate to have almost 140 million global customers and policies enforced. So we've really become one of the top two or three players in device protection in the world over the last five years.

Nick
Okay, Karl we're gonna get into a lot of the details around that, specifically, I'm extremely fascinated with how that works. But I couldn't help but as I was casually researching you, and all the things that you've done in the past, you don't have you had you didn't have an insurance background. You were more on the tech side. So I'm always fascinated with how that transition occurred. What did you see? Or was it as simple as like, hey, the customer service and the offering over there just really stinks. I think we can do a better job. How did you make that transition?

Karl W
Yeah, it's it's a good question. It's when my wife asked me a couple of times, I think to we're going through it a few years ago. I think it comes down to two things. Your right, my background, you know, since I graduated from Business School in the late 90s, it's really mostly consumer technology companies. And I was attracted to the tech industry a couple of decades ago, because, you know, it was it was disruptive, right? I saw all these companies doing incredibly cool things, ways, finding ways to use technology to change traditional methods of doing things and make it better for consumers. And so that that's always been my kind of bread and butter as an individual. And so when I was looking for my next adventure, when squaretrade came across, the first thing that was obvious to me is that it was a disruptor just like all the technology disruptive companies that I've been working with, and as I mentioned in my elevator pitch, it was really doing the same thing. It was how do you take technology and innovation and take an industry that really was in need of disruption and turn it on its head and I'd say when I was talking to SquareTrade you know, again about three and a half years ago. We almost four years ago, we, you know, we were partly on that path to success, right, we had landed some of our big customers, but it was clear that there was a ton of runway still to go, both domestically and globally. And so that was the first thing is that this is another disruption opportunity. They really felt like it wasn't my sweet spot, even though I didn't have that insurance background. But to that point, the second thing was I actually don't, even though yes, we are a warranty company, and technically an insurance company. Obviously, owned by Allstate, I don't think of us as a warranty company, I actually think of us as a consumer technology company, because at its heart, we've built technology, and we've innovated around process and service over the years, to make customers' lives better. By building that, that technology, we create customer choice, we're able to deliver service that this industry has never seen before. And, you know, as our heart culturally, we're a tech company, and we're a startup. And so, for me, even though on paper, it looked like a little bit of a leap. It really wasn't in you know, when it came right down to it.

Nick
Yeah. From a warranty standpoint, which what kinds of products generally lend themselves very much to having warranty protection? What do you look for?

Karl W
Yeah, well, you know, it's interesting, because that definition is, is broadening actually, every day, you could simplify it and kind of say, Originally, it was almost anything with an on-off switch, right? Anything, anything electrical would be something new, covered that, obviously, the traditional products are well known, you know, your cell phone, right, your laptop, your TV, any kind of consumer electronics device is kind of where we got our start and our sweet spot. But since then, we've now gone very big into major appliances, which, obviously, their electronics now, and many of them are, you know, smart devices, just like our phones are. But that requires a different set of capabilities to service and repair than it does to repair a phone or a laptop. So that was an expansion that we've gone big into now with Home Depot and other clients. But interestingly, now we're turning our attention to things that don't have on on-off switches, but still benefit from consumer protection, things like furniture, for example. So we provide policies that cover accidental and mechanical failures on furniture. And there's actually a very large sort of incumbent furniture protection business that's out there that looks very much like the CE (consumer electronics) business did 10 years ago, it's at that kind of sleepy not great customer satisfaction phase. And so we feel like a lot of what we can do, that we've done in CE is directly transferable into that market. So that's been a recent growth, focus for us. But we even cover things like optical, you know, you know, eyeglasses, jewelry, almost anything that can be damaged or fail or break is, is, you know, a good opportunity for protection.

Nick
So how do you as an insurance professional, of course, I'm always sensitive towards adverse selection and moral hazard? This seems like one of those areas, like at first glance, as a, as a non warranty person, I'm looking in like, that seems scary, like, how do you? How do you know you're dealing with I'll call an honest customer, like, how do you delineate between those two, you know, to prevent consumers from filing claims that, you know, are not fitting to what it is that you're trying to do, as well? How do you work through those aspects?

Karl W
specifically? Yeah, I mean, I think there are a couple of things. So first of all, fundamentally, most, the vast majority of the policies that we sell are sold at the time that the product is being sold, or very shortly thereafter, there's usually maybe a 30 day window where somebody can come back and purchase a product. So you know, you start by saying, like, Look, if you're, if you're, if you're starting coverage from day one, then you don't have the moral hazard problem with people, for example, buying coverage on devices already broken, right? Yeah, it would be that would be one example. So part of it is just in the setup, right of when you sell the policy, and then making sure that when you work with a partner you're covering, you're pooling your risk, right, just like any other insurance, business, right? So we're covering the broad swath of products that are there, not just not just the ones that are likely to break the most right. And so in doing that, you can kind of manage that. So that's, that's one piece, which is just sort of the structural part of the product and how we manage that. But the second is there are bad actors, as you said, you know, insurance fraud is a thing everywhere. This is actually one of the real benefits to us being part of Allstate and one of the things that makes us different from from other folks is that we have the benefit of AllState's Center of Excellence on fraud detection, which is like imagine hundreds of data scientists, technology experts, fraud experts, partnerships with third parties, internally built algorithms developed over the years to try to find and root out fraud in there. For businesses. So we combined a lot of that with homegrown systems to identify fraud on the back end. So there's a lot of things that we can check. Once we know a little bit about who you are and various patterns, particularly on mobile phones, where probably fraud is a bigger risk. You know, if you're covering loss, for example, somebody can say, Hey, I lost my phone, you know, and we'll send them a new one. So, I think the key is using technology again, to be able to pattern recognize, either hitting people against databases of known fraudsters or looking for patterns that, over time suggests that maybe there's something funny about this, that will then lead us to take additional steps to double check if that claim is legitimate. The challenge is, you don't want to do that too much. Right. So you'll dolphins in the tuna net problem. For us customer experience is paramount. Like we want the claim filing experience to be smooth, easy. And so we don't want to have to make people jump through a bunch of hoops when they honestly just lost their phone, even if they bought it two weeks ago, right? So is the power of the technology and again being part of Allstate that, that allows us to do a lot of that sight unseen to the customer behind the scenes, and only intervene in the cases where we really have a red flag that's been tripped that says, you know, there's something kind of fishy about this. So we might need to talk to you or we may need to have you answer, you know, provide a picture of your driver's license or something like that. But if you don't have that technology, you're going to have to intervene a lot more. Because the fraudsters will find you and they will, they will take advantage of you. And the only way you can solve that is by kind of intervening in almost every situation and you get a bad customer experience.

Nick
How does the insurance coverage work? Are their deductibles? How our claims settled? I'm thinking of, you know, older phones, you know, just the temptation of losing, losing? That's older versus one that's newer, you know? Yeah, how do the coverages work?

Karl W
So yeah, there's a variety of different things, I would say there's two fundamental types of coverage that we offer, there's, you know, coverage against generally mechanical failure. So this is more of what you would consider to be an extended warranty, or it's the manufacturer typically will cover a device for the first year. And then beyond that, we would say, well, we'll provide the same or even better coverage, if the device break, if it just fails, right? That is available pretty much across the board on everything we cover, then there are some products where we cover what we call accidental damage. And that's generally going to be available for things that are portable, like like your, like your cell phone, your laptop, and your colloquially, we call that drops and spills protection, right, you know, you drop your phone, you spill your coffee on your laptop, something like that. And so that's the first distinction right is, is you've got different types of coverages based on the different type of products. And then there's all sorts of parameters underneath that there's, you know, how many years you cover a product for, we also have, you know, plans where you pay up front for two years, we also have monthly subscription programs, there's lots of different flavors we can dig into, if you want. But and then how the claim is resolved is back to you know, what I talked about the technology platform that we built, that's really what it's all about. So we've built a pretty, you know, I would say intelligent engine that takes in all the information we have about the customer, their device, their problem, and crunches the numbers to figure out what the best resolution options are. But one of the things that we really pride ourselves on is giving people choice, a lot of other providers will just try to funnel you into a particular option, we'll try to we'll try to say, Hey, here's a recommended what we think you should do. But then there's two or three others, if you prefer it, that's better for you. But those options at a high level are repair. If possible, we always like to repair as long as we can do it quickly. Because that's because customers would generally rather keep their device, right, they would rather fix what's broken, you know, if I have a cell phone, I don't want to have to transfer my data to a new phone. And so you know, there we've really invested in being able to get their phone fixed the same day, right. And we provide solutions where you can get that taken care of. But there's also bigger device repairs, where we have to come into your home, schedule an appointment, there's mail-in repair. And then there's replacement. If we can't repair, you don't want to repair the device, it doesn't make sense. We'll work with you to get a replacement, which is oftentimes a slight upgrade to what you had originally. Because you may have bought a TV three years ago, that same model may no longer be available in the market. But we'll work with you to say, hey, for the price that you paid for that we can actually get you a better TV today. And we'll do that. And then ultimately, if none of that works out, we'll send you a check. You know, we'll read your check for what the item was originally worth.

Nick
So there's a there's been a lot of conversation in the Insurtech Circle about embedded insurance which is that's what this is. You had mentioned earlier that at the time of the purchase these these options become available. You had also mentioned that, for some products like the warranty offer becomes available, like after the purchase? What's the what's the decay in take up of the insurance between getting them when at the point of sale when they're actually buying it? And then, you know, having, you know, a bit of time, drag on, do you? Do you see a decay? Do you see a significant decay, which would be my expectation that capturing at the point of sale is the most optimal, most optimal upsell for to have to offer the warranty service?

Karl W
Yeah, you're 100%? Right. I mean, that really is the trick and the power of this is being able to offer at the right time. And, you know, I think there are two things that we bring to the table there that are kind of special. The first is the brand, right? The the Allstate brand is such a huge motivator at that time, because it's oftentimes a kind of a split second decision, right? You know, if you're at a mass retailer, like a Walmart and you're checking out, you know, you're going to have an opportunity where that's offered, you got to make a decision. And one of the big ways that a customer will make that decision is if they see that this is from a product from Allstate, right, the good hands brand that has been around for nearly 100 years that they know and love and trust, they know who they're going to get service from. And that will cause them to have that peace of mind versus somebody who isn't a branded provider. And frankly, there are no other branded providers in the market. That's one of the big, the big differences. And the second thing is we really work because we work with all the retailers, for the most part in North America, we're able to really capture the best practices of how to make that offer, both from a sales training perspective, but even a technology perspective, right. So we worked, for example, with Walmart to implement a customer facing prompt on the little pin pad reader right that you have when you're checking out. So we're not reliant on making sure that the person operating the register is offering the product, we make sure that that offer is front and center. So the customer can make their decision, you know, with a little bit of information there. So that's just one example of the types of innovations that we've been able to bring to bear as we work with our retailers. But you're 100%, right, like, once once the customer is left, certainly we try sometimes to be posted, you know, post purchase marketing, and you get a little bit of take up, but really it's in that moment where where you've got their attention. So you have to make the most of that offer.

Nick
It's I think it's one of those areas that a lot of noninsurance professionals when they come in, they don't realize that insurance is all about relevancy. If you don't hit them at the right time...no one eagerly wants to buy insurance. You know, I always I always make the case. Unlike like concert tickets, no one's gonna camp out. Right,the buy to buy the next iPhone or get concert tickets?

Karl W
We're not we're not required either. Right, you know, autoinsurance.com, and insureds, you have to get in. So it's just a matter of who am I going to choose it from? This is truly a discretionary you know, discretionary purchase?

Nick
Yeah. So in regards to the to the point of sale, and how you engage with retailers, can you talk a little bit about that engagement. So, you know, a retailer that might be listening to this that says, hey, this is this is an interesting thing that I could potentially bring in what does an engagement with APP, Allstate protection plans look like? In terms of getting them, getting the product, your product, your warranty product, to tag along at the point of sale with some of their products? What's that engagement look like? And how, how do you expect the interaction to go between retailer and APP?

Karl W
Yeah, I mean, look, we try to make it as turnkey and simple as possible. So we built a lot of technology to make it really easy to integrate, if you think about it, a high level what it what it is between a retailer and us is that there needs to be a way for them to sell products, and tell us what they've sold, right? So that we can then create those warranties in our system. And then we handle all the claims after that. And so that can be both a retail point of sale, integration, and it can be online on their on their website. And so, you know, we have a set of API's, you know, integration tools that have been created, which, you know, pretty much any IT department can can program into in a matter of days, it's pretty easy to do. Our business development teams will work to help you with pricing, because we've got obviously all the experience, the detail of how to optimally price against different price bands and different product categories, so that we can maximize attach rate. And, you know, the only work you really have to do is figure out how to set those SKUs (stock keeping unit) up in your POS system and make sure that that there's you know, they fire and that there's there's an ability to add them at that time of purchase. But, you know, again, we really it's it's a, it's kind of a turnkey value added service, because we'll then provide you an ongoing account management, we've got a Field Sales Team that's nationwide that can help train your salesforce. If you need that, in terms of how to sell the product, we really try to think of everything and take a very consultative approach to it.

Nick
So when it when it comes to the what's the what's the what's the typical cycle between if eager retailer wants to add this to, you know, the time it takes to actually have this either on their, you know, online system or POS system in one of their retail shops? What would be like a typical duration cycle to get up and running?

Karl W
Sure. So I'll expand on that a little bit? Because I think that the the answer depends a lot on the retailer. So you know, if I'm a Walmart or Home Depot, I tend to have fairly complex systems. And I'm going to want you to integrate into me, right? Like, I'm not going to rewrite the way my files work or the way my POS system works. And I'm going to have online, I may have multiple POS systems that I got lots of different SKU systems, all that stuff. So those tend to be more complex, because they they're by nature, custom, right. And so they may take, you know, they may take four to six months, for example. But you know, we recently launched this service called Allstate Protection Plans Express, which I wanted to mention in this context. Because, you know, even though we've grown by, by standing up these mega retailer programs that are somewhat complex, you're what we sort of realized is because so much of our growth has been focused on that, but there are a lot of smaller retailers or manufacturers who sell direct that and maybe didn't feel like we were an appropriate service for them, right, because we were only working with the big guys. And that's actually not true. Our doors have always been open to people of all sizes, but we realized that we hadn't really rolled out the red carpet and made it simple. And so what APP Express is, is basically a streamlined version of our integration technology. On the back of this thing we call the Falcon API, which is really just a simple standard set of integration calls, that as I said, can be set up in a matter of days. Simplified pricing, simplified contracting, straightforward version of our service, you get the benefit of the Allstate brand, the benefit of our technology platform. And really something like this could be up and running, you know, if people are focused on it, it can be up and running in a week, you know, no problem. So it really runs the gamut. If you're a small retailer, and you you're ready to work in this kind of standardized fashion, it's actually really simple.

Nick
Yeah, I think that'd be very valuable in this day and age where it's so easy for a retailer to get up and running. Right. So, you know, I would, I would also guess that from a benefit standpoint, excuse me, from a benefit standpoint, the there's a, there's a higher probability of retention. So for smaller retailers, like this is an interesting value add that can be, you know, implemented fairly quickly. But the retention of that customer like it's something that really could differentiate one retailer from another. Can you talk about that aspect, and what you've seen with the customers that you've worked with, in terms of how that changes the dynamic of the potential retention of that customer?

Karl W
Yeah, I mean, I think that's really what it's all about these days, you know, retailers competing really aggressively with each other for their customers, right. And so once you've, once you've, you've won that battle, and brought a customer in, you want to do everything you can to elongate that relationship with the customer. And protection plans is a great way of doing that, right? It's a way to basically say, look, my relationship with you is gonna continue beyond this transactional point where you purchase something from me, right? And so that's super important. But at the same time, who am I going to hand my customer over to? Because if I'm creating that ongoing contract, if you will, with my customer, I've got to know and no pun intended that the customer is in good hands, right? And, and so it is a huge deal of saying like, do I, from a customer standpoint, you know, I want them to know, because it's a it's a branded product they can trust versus a no name that I don't know who's going to get the service and if they're going to stand behind it, but then for me, I can't risk that long term customer relationship. And when you think about the customers that we've taken over the bigger retailers, like a target, for example, or a Walmart or almost anybody who we've gone into over the last 5/10 years as we've kind of dominated this market. One of their biggest issues is customer complaints and escalations. And we see that over and over again, that a poorly run, a poorly administered program that doesn't have great service comes back to haunt the retailer because the customers, they're gonna come back to the retailer, they're gonna come back and say, Hey, you sold me this product, this service stink, do something about it for me. And that noise that gets up to the boardroom level, it gets up to the CEO level. And it's not good. Retailers hate it, right. And they see that the damage to the relationships they have with customers. So for us, you know, a big part of what we have invested in with our tech platform is the ability to manage the service from end to end, right. So unlike a traditional model, where you get a claim as a provider, and then you basically farm it out to service, you throw it over the wall and say, hey customer service provider, you guys talk to get everything taken care of right? We actually do it differently. We think about it as a managed service, where because of our tech platform, we are integrated with all the providers who provide service for us. And we have, we can see any moment in the time in time where a claim is and where that device is. And therefore we know if it's going to go off the rails, right. And we have reports and tripwires that basically catch things before they become issues and a dedicated team that says, How can I manually, proactively intervene now, hopefully, to head the problem off at the pass. But if you can't do that, at least communicate to the customer, tell him what's going on and talk to them about how we can make it better because that's the worst part is customers just feel like they're in the dark, right? My warranty provider doesn't know where my device is, the device repair person won't answer my calls. And I just feel like this stinks. And so for us, that's been how we manage that very differently. So every retailer we come we take over their escalation rates plummet, right to you know, tenths of a percent of claims, resulting in some kind of customer escalation that's actually related to service. So it's a huge piece of it.

Nick
you kill two problems by doing that you not only resolve that but you know in any at any retailer knows this that if disgruntled customers treated in a particular way where they get their problem resolved. They almost feel like indebted. Like there's there's the opportunity to flip the script and turn a disgruntlement into fuel for retention.

Karl W
Yeah, it's really interesting. We internally have always had this this kind of curve, we used to draw on the whiteboard, it was called the sort of the happiness curve from a customer perspective. And so the moment that, that something goes wrong, your happiness dips, right? Like, you know, my phone's broken, my laptop's broken, and then your expectation is like, Okay, I'm going to go after the warranty and see if it works. And your happiness tends to go down, right, because you're anticipating the rigmarole, you're gonna have to go through it. But then when you come into contact with an Allstate Protection Plan, you know, claim resolution, it delights you, right? And we've we our internal motto that "we turn bad to good". And so what's interesting is you do you get this, this boomerang effect, where from from the depths of negative expectations, you're like, wow, that was really easy, and really great. And all of a sudden, your happiness goes above it was where it was before your device even broke. Right? And it's that capital, if you will, that that has been created. And certainly for us, you know, as a branded provider that creates trust enough so that when you see our product and other venues, you know that it's good, but you're absolutely right. It also says, hey, my retailer sold me this. They sold me a good product that took care of me. And so you know, I'm going to be inclined to go back to that retailer.

Nick
Yeah, I, but I almost took for granted, you know, before having this call, I was thinking I hadn't pieced together that part of it. But that could be like a very interesting element to a retailer strategy for their business model is, you know, it'd be one thing to just offer it to say, I'm going to offer this because I can differentiate myself. But if you do that, and you don't do it, right, you cause more harm than good. But if you do it and you do it exceedingly well, you can solve other a whole other set of problems beyond just like what we're what we're talking about that this product was meant to solve.

Karl W
That's right. I mean, traditionally, before we came along, retailers offered extended warranties and protection plans because they made money on them. Right. That was basically the motivation is that they're relatively high margin products compared to, you know, relatively low margin electronics and a retail environment. And the problem with that is that if making money is the sole motivator, it creates all these negative incentives, right? The warranty providers are incentive to make money. And the easiest way to make money traditionally, is by making it very difficult to file a claim, right? If frequency goes down, my costs go way down, right? And if I do have to accept the claim, then I provide slim service because it's cheaper and it's not going to come back to haunt me. So that helps me increase my margin so I can increase my retailer's margins. But then the problem is that to sell that product, in the retail store, it's like selling a used car, right? You're putting credit you're using high pressure sales because you want the margin. The product doesn't stand on its own. And so by flipping it on its head and saying, we are a branded transparent researchable customer centric service that is used technology to reduce our costs as opposed to bad service to reduce our costs. You can sell on features, right? You can you can say this is a good product that has guaranteed service, things like our Home Depot program that we launched in February, we guaranteed nationwide that if you need a repair appointment for your appliance, you'll get it within three days. And in the top 100 Metro metros will guarantee it within two days. Nobody else in the industry has ever done that. And nor is able to do it because they haven't built the technology and the service innovation around that technology to figure out how to how to make that happen.

Nick
Yeah. Allstate is one of the preeminent brands, in insurance and one of the biggest writers of auto and homeowners. There seems to be, it could be I don't know, I don't know if this is in your roadmap or whatever. But this seems like a natural fit as well for specifically their homeowners product where some of this stuff lands anyways, we're talking furniture, appliances, in generally, you know, malfunctions are not covered in those things (homeowners policy). And that that seems like a natural fit. Am I wrong?

Karl W
You're not wrong. I mean, again, if you go back to, you know, the original rationale for why Allstate approached SquareTrade and made the acquisition, it was the early days of what if you follow Allstate in our, you know, earnings releases, we talk about our circle of protection strategy, right. So one of our big strategies is to provide not just the best, lowest cost home and auto Service, but to provide all of the protection needs that our customers have today, whether it's device protection, or identity protection, and roadside all these services, right, so that we can create a sort of single one stop shop and one stop hunt for all of your protection needs managed under one roof by a brand you trust and service you trust. So like, you basically just stated, our strategy it is 100%. what it is. And in fact, we squared Allstate Protection Plans is rolled out a product that we call a whole home protection product, right, which basically is a monthly subscription, where all of the electronics devices in your house are protected. Right and in a blanket coverage. And so yeah, I mean, I think whether it's whether it's co marketed, whether it's bundled with special pricing, whether it's something whether it's a rider, you put on home insurance, I mean, there's a variety of different ways we can bring it to market, phone insurance, as well is very relevant add on to a lot of, you know, to to to a lot of our customers in different venues. So I would say that this specific tactics of how we roll this into the circle of protection we're still working on in testing and learning. But that is the strategy because there's tons of synergy across these products.

Nick
Yeah, relevancy to right, like not dissimilar to the point of sale at the retail, when they're making that decision or having the annual review on their homeowners policy. Like that's the time like, you know, would you like to have add this endorsement? Oh, yeah. Did you know, you know, like, yeah, it just seems like a natural fit. And, and you're starting to see, you know, some, some homeowner companies in the Insurtech area, add other types of warranties, they're not warranty or maintenance, real level stuff under the similar under a similar vein, right, where it's home, while individuals and homeowners have probably a broader range of exposure, like the exposure set that they're getting exposed to the hazards, and the exposures are increasing, like one of the ramifications of a digital environment is just the constant instru of new products that do new things. And so there's a, there's a consistent roll over of this stuff. And I feel as though individually, the digital environment was supposed to make our lives easier, but it's almost made it more complex because our exposures are bigger, broader, but also evolving faster, that 10 years from now, our exposures will probably be significantly different than what they are today. And today's a departure from what our exposures were 20/30 years ago.

Karl W
Yeah I mean, another flavor of that dynamic that you're describing is just even how do you define device protection more broadly, and this is something we've been really thinking about a lot. And again, I think something that makes it different working with Allstate than with somebody who is a mano line device protection provider is we can expand that model so as you mentioned, it can be overwhelming all the new tech these days, you know, getting getting your you know, Smart TV to talk to your Smart Home hub, talk to your doorbell to talk you know, all that stuff. It's hard. And so one of the things we've rolled out over the last few years very successfully is premium tech support, oftentimes bundled along with our patients. Action Plan. So not only do you get protection if your device breaks, but if you just can't get it to work, you can give us a call, right? And we'll we'll take care of that for you. You know, so so we're we're constantly tracking all the the newness straight coming in only a because we need to be able to understand how to repair and fix these devices for people, but also because we realize that their problems aren't just when the device goes wrong. And the device breaks, right.

Nick
Yeah, it's so interesting, Karl, I was wondering how Allstate would manage the purchase, when they did it. And so now I get it, it makes complete sense. And as we've seen, I see the roadmap to like the the ability to leverage all state all states brand and assets, the resources they bring to the table, it is a significant differentiator, compared to probably your competitors. But it's also puts you on a different roadmap, I think, then what anyone can do I haven't heard of anything like this.

Karl W
Yeah, I mean, I agree. And I think that that's been why you've seen the curve kind of accelerate since that acquisition is that SquareTrade did a lot of great stuff, building great technology on its own. But, you know, the SquareTrade brand was never going to be a brand with the equity of Allstate, right? We were never we were going to be transparent and researchable. But you know, people didn't, you know, we would never have the capital to invest to build a brand that you can do overnight, yours, right. You know, and then as you say, just as you know, access to the scale, the credibility, you know, we talked about the fraud tools, even just only our own insurance, a lot of other device protection providers actually doesn't insure that their their administrators and so they've got a go rent paper, from an insurer to underwrite. That's all fully vertically integrated with us now, and owning our own insurance not only reduces our cost structure, but it also gives us incredible flexibility from a product creation perspective, right? It's much we can move much, much faster.

Nick
Yeah. So Karl, this is the part of the podcast where I make a CEO look like a human being. Over your right shoulder, you have a little critter there...

Karl W
I do!. Yes, my, that's, that's my dog Alby. He's, he is my constant companion. I don't know what he's going to do when I go back to the office at some point. But he's, yeah, I've just been sitting here praying that he doesn't start barking during this interview. But yeah, yeah, he's, it's, it's always nice to have him in the background here keeping the company.

Nick
Well, it's very fitting in this digital environment where we use technology to be a warranty service that Alby is there guarding the door. He's your warranty and security service. So Karl Wiley, CEO of Allstate Protection Plans. Thanks for coming on, and educating us on a different line of insurance and how it works. I'm always pleased to have someone like you come on and educate me.

Karl W
Thanks so much for the opportunity. I love telling the story and, you know, I hope your listeners love it and, you know, happy happy to have you come back anytime.

Nick
You can. Well, I will put on Karl's and the APP information on the show notes. So if you're driving, you don't have to pull over or get distracted with your cell phone. It's on the show notes. So everything will be on there, Karl. Thanks again. Thank you Have a great day.