Episode 2: The Future of Claims Processing with Paul Stachura

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The Claims Profession and Paul Stachura's Personal Journey

Sean Merat

Hello everyone. And thank you Paul for joining me on this podcast. Very gracious to offer your time. As you know, for the record, Paul is a trusted advisor to Owl.co. And I always take up his time and always pick his brain with everything from strategy to product and go-to-market motion.

His background has been in claims, I believe for a very long time. I'm not going to butcher your background. I'll let you give your background for those who don't know. And maybe also if you don't mind telling us what drew you into the claims world in the first place. I'm always fascinated.

Paul Stachura

Certainly. Well, thank you, Sean. Thank you for the opportunity to be with you this morning. I'll start with what drew me into the industry. I do believe that the claims industry, the claim profession, is one of developed service, if you will. I believe that absent our brave men and women of the military, first responders, there isn't a greater service profession that someone can pick.

And so if you can be passionate about something, you will typically excel at it. The same philosophy applies as you're recruiting people to come into this industry, which is getting harder and harder. And we may talk about that later in this conversation. I appreciate the fact that you prefer to try not to butcher my history, but I'm over four decades as a claims professional; led numerous claims organizations with some of the most significant carriers such as Chubb and QBE, Fireman's Fund, State Auto Insurance.

And, you know, the opportunity presented to impact not only the consumer in a positive fashion, because you're always battling against the reputation of the industry when you're in insurance and particularly when you're in claims. But it also gave me the opportunity to do a couple of other things. Develop individuals, have them see their true potential, and explore how and why and what technology could bring to that process that would enable some of that other focus to be available to us. If I can take tech as an example and use it as an efficiency, but an efficiency where I can redirect focus, where I can redirect resources to other things, that's exactly what I'm going to do.

Sean Merat

Absolutely. I'm actually very curious. So I couldn't agree with you more with what you started about—claims just being a very sacred profession. So, I mean, did you want to go into claims from a very young age? What was the inspiration there in the beginning?

Paul Stachura

Well, this is where it becomes a little more…it was fun. Let me explain why I'm struggling with how to approach this.

My first foray into insurance claims was in the state of Michigan and I was involved, I was in my early 20s, and I was involved in doing dram-shop investigations. Dram-shop investigations are liquor-liability investigations. So that if a bar or if a bottle shop, a liquor store, you know, sells to somebody who's underage or they sell to someone who's already under the influence and likely very under the influence and they go out and cause harm to themselves or others, I had to investigate on behalf of those bars, on behalf of those restaurants and bottle shops. And you can imagine as someone in their early 20s, you know, work that took me into those facilities in the evening.

I didn't have to get up early in the morning to conduct those investigations. It was, you know, I met a lot of people. But, what's interesting about it is I did attend law school very, very briefly, post my degree from Michigan State. And I stepped back from it with the intention of returning.

And when I entered the claims profession, what I found with the claims profession is that it was a different approach to obtaining knowledge of the law. I didn't get a degree in the law, but it was a different approach to obtaining a knowledge of the law. And to me, it ended up being a much broader knowledge of the law. Most attorneys will focus on one particular area of the law. When you're in the claims environment, you are absolutely having to broaden that, whether that's looking at the property arena, into the work-comp arena, into the casualty arena, directors and officers, you name it.

And so, that allowed me to build a strength that prohibited me from being intimidated by members of the bar. And I hopefully brought that same type of approach to those I was responsible for.

One of the things I think that happens within our industry and our profession, we do battle a reputation.

I think regrettably it was a somewhat earned reputation over many decades of carriers just not doing the right thing. In some instances, shortcutting an outcome that wasn't necessarily the appropriate outcome. And I think that that behavior has improved over time. I don't think that it's been completely eliminated, but your best carriers are going to be those who want to do the right thing the right way, always, for the policyholder, and even for those third parties who get involved in matters involving the carrier that they're representing.

You know, a long way of responding to, you know, why I got into it. But it was a fun start. And, you know, it just opened my eyes to the analytical approach that's required of the profession because it is, I mean, you're looking at coverage, you're looking at the circumstances of the loss, you're looking at whether it's a liability situation or some other sort of coverage type of situation, you're evaluating what that financial outcome should be. You're involved in negotiations.

You're everything an attorney would do and more.

The Value of Empathy in the Claims Journey

Sean Merat

Yeah, no, it's fascinating to me. I agree with you, although I got to say for someone like me who, you know, my background is in tech. Owl.co is my first endeavor within insurance. And so my perspective, and you know, I kind of feel a similar perspective from people who are not in, the industry.

When I first came in, the perception I had was what's really out there. That carriers want to cheat claimants, that they want to deny claims, they want to maximize every bit of profit, which they do like any other company.

That's besides the point. Being now almost six, seven years—doing a crash course—it's glaringly obvious to me that, well, I shouldn't say all, but let's say most, if not all, are striving to be as fair as possible. I mean, it pays to be fair. It's a very challenging situation where you're dealing with so many different policies and claims at such a scale, to have that consistent, equitable approach to every single policy and claim.

But the north star with every carrier is to be as accurate as possible, to reserve and allocate as accurately as possible to build, you know, an equitable process. But, you know, and, this is why I think, you know, it really resonated what you said at the beginning, you know, the claims profession being, you know, such a worthy, you know, it's just like military where people going in there, you know, truly believe, want to help people.

But it kind of bothers me that the perception out there is not this, probably. Right, like if I pulled 100 people from the street who know nothing about insurance and ask them about the claims profession, I'm not sure if we would get the same response. And that's bothersome now that I'm so close to it, because I do agree with you.

I do work with these folks all day long and they are special people. And I would argue that they're probably the hardest working people within the insurance, you know, landscape. They do need to be a jack of all trades. They need to understand, like you said, legal, you know, they're reviewing policy documents, which are essentially legal documents, they need to know a bit of actuary, they need to know a bit of everything. And they're on the front lines on top of it all, dealing with claimants at their time of need, trying to not only execute these equitable processes, but also doing it in an empathetic way.

Yeah, so do you agree with that sentiment? Do you see this, you know, varying perspectives out there also?

Paul Stachura

I do indeed believe that that's the case. I think that the intent and the behavior of most individuals within the client profession is absolutely that, you know, this is a…. It was once described to me as an honorable profession. And if you think about it in that perspective, then I believe that's what you bring to the job.

You know, never refer to someone as a claims adjuster anymore. I refer to someone as a claims professional. When you elevate the individual, when you get them to recognize that they are in a profession, they are professionals, they have a responsibility, etc. I think they do exactly what you just referenced. Because consider this: the consumer population that we serve, insurance is, yes, people want to protect their assets, right? I think people would rather spend their money on a really, really nice, expensive dinner or a Broadway show or something of that nature, until, of course, something happens.

But what we have to recall as claims professionals is this, that when that consumer receives their insurance coverage and they get that policy, whether it's through the post or whether it's electronically—if it's through the post, it's going into a file cabinet or some drawer, junk drawer probably, and if it's via email or other means, it's going into a folder and it's sitting there, never to be read, never to be seen. And so the claims professionals have to bring, you talked about empathy.

Empathy is critically important to the right approach to these things.

I used to hire people based upon this, Sean, come to me with a servant's heart because I need people who recognize service as the most important aspect of this because you can't teach service. It's an innate quality and characteristic that someone has. I said, bring a servant's heart and I will teach you the technical knowledge that you need to excel in your role.

And then if you combine those two things of that service mentality, that servant's heart, and strong technical acumen, you have exactly what this industry and this profession represents with and helps to battle that reputation that we were talking about from the consumer side of the house. Then quite interestingly from the statutory and regulatory perspective as well.

Challenges Facing Claims Professionals

Sean Merat

Yeah, no, that's, it's so true. Everything else can be learned. So if you think about—and this is not to focus on any one organization, because I mean, we have to keep the conversation general—are organizations that have, you know, are doing, you know, excelling at this aspect. But my question is just industry-wide.

You and I both agree that, you know, claims professionals, I love that. I actually—after talking to you, I loved it so much, we started using claims professionals and claims experts throughout all of our languages also. It is a lot more fitting too, since, so we agree that claims professionals are getting into this, you know, because just the core concept, helping people.

And they are those types of people. They genuinely are. I have not yet met any claims professional who's in this for, I don't know, money or, you know, there's, and so we also agree, even though we haven't talked about it, but I'm sure we agree that, you know, they are given a very challenging, if not impossible task, right? Very large scale of claims that seems to be growing year after year. A finite number of professionals and experts that have to deal with them. And they're getting stretched thin. I call it an impossible challenge.

So what is broken to have this perspective out there? Because by large, again, industry-wide, insurers do want to be equitable, and they want to be fair, and they want to do right by the claimants. And claims professionals also, they're pouring their heart. I mean, they're doing everything. So what is broken for this perspective to exist, you think?

Paul Stachura

Now this is going to sound probably too topical and too current, but it's…media has a lot to do with it. Media has a lot to do with it because most media that the insurance industry receives is either from a natural catastrophe or from a high profile claim of some sort. And typically the coverage is skewed to a negative viewpoint.

The insurance industry is—pitiful is too strong a word—but reluctant to get into a media dialogue. You know, they won't go back and forth. Most of the time you'll see a “no comment” from the insurance industry when any of these things, you know, come to light. And so you're battling that.

And so your only real opportunity, I mean, certainly you can get into marketing and things of that nature. I'm sure it has some impact. And I'm not trying to diminish the carriers that spend time advertising about the importance of that claims experience, etc. But, you know what I mean?

I think what it requires then is every claims professional has to recognize that every individual that they speak with is their opportunity. It's their opportunity to change perception because it's no different than what we used to talk about decades ago. If I treat Sean well, Sean's going to relay that experience to his family. You're going to relay that experience to your friends.

There is still that person-to-person type of, you know, “spread the word,” “spread the gospel” type thing that occurs. And so we've got to be very, very mindful of that. Social media, as an example, has the opportunity to enhance that. It also has that immediate opportunity of taking something down, you know, a very wrong and difficult path.

And again, you can't get into a, you know, I said, you said type of a discussion on social media because there's no way you can put the entire context of a matter there for others to take a look at. So one additional reason why, you know, every interaction has to be, I'll say a perfect reaction. We're never going to achieve perfection, but we can achieve excellence. And so let's try for every one of those interactions to be perfect.

And the question that you asked earlier, we're the experts, Sean, you referenced that. We're the experts. And because we're the experts, we bring that empathy, we bring that service, and we bring that technical knowledge to explain to someone the entirety of the process. Something has happened to that individual, to their home, to their business, to their body, to someone that's been harmed, and they have no idea what to do.

We do. We need to imagine as though we are sitting next to them on the couch, looking in their eyes and walking them through, here's what's going to happen. Here's what you can anticipate. Here's what I'm going to need from you. But here's what I'm going to do for you to get us through this so that you can go back to the way things were before all of this happened.

Sean Merat

Yeah. Yeah. I mean, that that makes perfect sense.

I am curious, though, if I want to, like, double-click on this point, you know, there's a discussion of causation versus acceleration. Right. I take your point, certainly that media, social media, is like a major acceleration catalyst. When something goes wrong, it's going to broadcast it.

On the causation front of why things may even go wrong in the first place, is, like, what is your thought there? Do you think that it's, are you suggesting that the media and, the spread, let's call it virality of these negative experiences, unjust, or do you think that, there is just, what is it? What is it about it that it spreads? Or if the media is giving too much attention to this? Why do you think that is?

Paul Stachura

I don't necessarily say that it's unjust, but bad news sells more than good news does. And know that looking at any form of media today, what you're listening to, you're reading, etc., is going to be skewed to more of, here's everything that's wrong with the profession, the world, what have you.

I, you know, what I don't want to say is that there's some sort of earned reputation. I know I talked earlier about what this industry used to be like, but it has worked very, very hard to climb out of that hole. So I know, and I, you know, I think it goes back to what I was saying before. There has to be context associated with these things, and the inability to bring that context to those forums, you know, for a variety of reasons, some which are privacy reasons, you know, don't enable a fair fight, if you will, right?

The Impact of Technology on Claims Processing

Sean Merat

Yeah, no, perfect sense.

I think that when, again, an outsider's perspective coming in, on the early days, it seemed very apparent to me that compared to the size of the industry for sure. But just as a timestamp of things, it was very apparent that as far as technological advancement, this industry, I mean, everyone knows it's been laggard, right?

And what I think that a lot of people don't realize is how challenging this whole process is. Because just like any other company in the world, of course, insurers like profits to increase. I mean, there's a race for growing the company, you know, and obviously increasing profits. Sure, that's every company out there. But I think what makes it exceptionally hard for carriers is the fact that they have to do this.

Scaling insurance operations is such a difficult task because, you know, going from, you know, ingesting a thousand claims to two thousand claims, your troubles don't just double, right? And it's on top of which you have a whole onboarding and retention challenge, which in this industry is, is really hard. Like there are not that many people that, you know, wake up and want to get into claims or even understand what claims is. So you have, you have the scarcity of talent.

Then on top of that, you have, of course you have the folks that want to abuse the process, albeit they're not that many, but let's call it, even if it's a small percentage, single digits, dude, maybe 10%. But if you allow such a small number of folks to abuse the process, it's going to hurt everyone, one-hundred percent of folks.

So the process that you have to now create has to take that into consideration. And short of having a perfect process, you kind of have to approach every single claim as if, as that it could be abusive as that. And then on top of all this, you have to deal with regulatory regulations, right? So, you have to adhere to such a high bar of explainability, which makes it just so much more challenging than many other companies, right?

Paul Stachura

Very interesting, Sean, because you just talked about the potential of fraud and abuse and having to approach each claim with that anticipation. That's a very, very fine line. Because what you want to make certain of is that as a claims professional and being responsible for claim professionals, that that approach isn't one that has them looking at every claim with cynicism and skepticism.

It’s absolutely something they need to be considering, but they need to be considering the good intent first and foremost, and then make certain that they are bringing appropriate oversight to that claim, so that things like fraud, etc., are addressed.

You know, you talked about the slow roll of technology within the profession. And that's spot on. It's absolutely spot on. And it's probably been even more so, the industry as a whole was better. The client's profession kind of laggard. And part of that is because most organizations, the investment in technology doesn't first go to claims. It goes to, as you talked about, growing business, right? Creating opportunity to assess the profitability of that business, etc. And so, and I get it, right? Claims is not a profit center.

That being said, a lot of money rolls in and out of the claims organization. The opportunity to impact the consumer, to impact the regulatory agencies is probably much more significant with claims than it is other parts of the industry. So what we do is critically, critically important.

The Talent Gap in the Insurance Industry

But I reference the technology piece for you because it's, you, there's a comment, because you also talked about, you know, retention and acquisition of people into the profession. It's a struggle for the client's profession. And what do I mean by that? You know, for literally the last 20-plus years, our profession has talked about the fact that we are losingthe tenured, experienced people. It's a generational talent that's leaving. And recruiting those younger minds into the profession has been a struggle. It's been an absolute struggle.

You know, do I think that the industry has done much to address that? They've done a lot of talking about it over 20 years. I don't think they've done a tremendous job to address that, to talk about the sexiness of that work, right? And I think because, start by talking about the industry. Start by talking about how insurance underpins the entire economy of the world.

I mean, if you can't sell that to somebody as something that they want to be involved in…. But what also has to happen is now that you do have the people on board, you're probably for outcomes having to shift the more complex work to the more seasoned and tenured individuals. What help do they need? They need some efficiency help. They need to have some time given to them. How is that time given to them now? Through technology. They need the opportunity for technology to take the myriad of data and information that is out there and bring them a Cliff Notes version, right? They need to have that information summarized for them. It needs to be the most critical information that will help them with their workloads.

What will that do for the lesser experienced? Well, for the lesser experienced, it ultimately will give them a form of a tutorial. Because as we recruit now, Sean, you know, the lesser non-complex claims of many types are being dealt with straight-through processing. There's a very limited human touch to them. And so bringing people into the industry used to be, and into the profession, used to be, you know, they started perhaps even in the call center, just taking the claim reports. And then they, you know, gradually over time, you know, took on that next opportunity. So you were able to educate them in a, in what I would call, and of course I'm old-school, in a normal process. That has to be expedited nowadays. It's more about an immersion process than it is that gradual education.

And so, you know, that technology today that we bring is going to enable someone to come in, what I'll call, you know, mid-cycle into that claims profession as opposed to starting at the beginning. And because technology brings them that capability, it should help and enhance their ability to compete and deliver the outcomes that you're looking for.

Technology's Role in Claims Processing

Sean Merat

Absolutely. Couldn't agree more. I mean, we've looked at, we mean, this is a universal challenge, right? That your number of claims is growing. The number of claims per claims professional is increasing, to a point where, you know, I would argue, like I've actually done, personally, try to maintain context on just a handful of claims, until to a point where I feel like I can do it justice, maintaining the context and being able to speak intelligently about the claims. The number for me was like seven or eight claims. Whereas we have claims experts who are expected to handle 100 claims per month. That's talking about a very large challenge.

To your point, you know, we're obviously, not to plug out, but you know, that's where our focus is. There are many other great vendors who are, you know, thinking about this cycle of, you know, throughout the claims.

But I think, where, you know, something you said, I couldn't agree more with is that the, you know, when we actually looked at some of the decisions that were made or some of the summaries and conclusions created by some of the experts, some of the newer folks who were just getting onboarded compared with some of the senior and tenured members, there's such a big gap. The senior and tenured claims experts were able to pinpoint what they need to review within 20 minutes. And we're talking about an average of, you know, 1,000 pages of documents. Whereas it would take someone newer on the job hours, right? And within 20 minutes, the claims experts, the tenured ones, were even, had higher accuracy, both higher accuracy and completion.

So that confirms, you know, your point. I mean, it's got to be such a challenge, when you think about having to build that machine where you're onboarding, maintaining a consistent and equitable approach, but also how do you—knowledge transfer from the tenured folks to the new folks—without the technology in house? It begs the question, right? It's such a challenge, it must be.

Paul Stachura

Yeah, Sean, actually, I think that technology is going to have to step in for that knowledge transfer from the more experienced individuals. This perhaps, again, demonstrates where I'm the dinosaur in this conversation. Although I'm still a dinosaur that can reach what I need to eat, right? I'm not going anywhere.

Knowledge Transfer and Training Challenges

But when you think about technology needing to educate, and why I say I'm old-school here is, post-COVID, with the vast majority of carriers moving to remote environments, the learning opportunity and the knowledge-transfer opportunity was dramatically impacted.

It's interesting to me because no one will argue when we talked about our school-aged children that when they were held out of attending class in classrooms, etc., that there was a loss of knowledge. No one will argue that everyone, you know, and certainly test scores, etc., of youngsters, you know, throughout the U.S., we'll back that up. Fewer people will accept that that argument applies in the work environment as well. Because those tenured people that, I used to have the most seasoned and experienced people, they were the, you know, they were the guru within a group and you know the teammates that sat around them were able to go over and say, “Hey Joe, this is the kind of situation that I'm in with this claim right now and I've not experienced this before. Have you had this happen and can you give me some guidance on what to do?” That is not going to happen in today's environment.

Quite simply isn't, there'll be some I'm sure that'll challenge me on that. Human behavior is inherently lazy around a lot of things. And so when that individual used to just be able to get up from their desk and go over and talk to the tenured people at another area within the group, nobody's going to pick up a phone and do that same thing today. Or they will do it less frequently.

And that also impacts even not just the knowledge transfer, but it impacts the culture of the organization. Because now you have people trying to figure things out on their own, and you can have five people approaching things five different ways. And those outcomes could be markedly different, and none of them could ultimately reflect what the culture of the organization is trying to drive.

So I do believe that the technology piece here is huge? I mean, it is so dramatically important to step in for that loss of training. And I think one of the things, and you and I've had this conversation with reference to Owl.co as an example, there's so many fine things that all it brings.

I want more. I want more. And that's not to imply that what's there today is not sufficient. It absolutely is. But the best environments are always going to be the continually developing environments. And if that continuing development is, all right, we're helping with the claim outcome.

Let's see what more we can do to educate. How do we become part of the training process for individuals instead of necessarily doing the work for them? Part of that will occur, but then what do they do with it? Because we can capitalize and put all that important data in front of them. We need now to teach them how to think about that.

And I don't want anybody getting that process to avoid that accountability and responsibility. Because you also used a word that I just, and I know we'll talk about this, or hopefully we will, you use the word vendor. I never liked referencing vendors when I was working full time in the profession. And the reason I didn't is I think it's kind of like adjuster. There's just not enough importance attached to it. And I always conducted business with partners. Y’know, they became, y’know, whilst they weren't employees of the organization I was representing, they were an extension of the organization that I was representing. And because of that, was—very important that the relationship—demonstrated that respect, right?

You know, every relationship is a “trust but verify” relationship. It doesn't matter whether that's external or whether it's an employee. And so that approach is similar. But I think it's critically important for a carrier to team up with those that are bringing them the opportunities and abilities to do things that are different, to do things that haven't been done before or haven't been done in this way before. And to try and fill in the gaps and whether those gaps are training gaps, whether those gaps are creating efficiency so that time can be utilized to address and attack other things. And certainly, efficiency in some instances is quite simply going to be a headcount conversation.

Sean Merat

Yeah. So certainly this was, you know, one of the main topics I wanted to bring up, and, y’know, anyone who knows you would, would agree that. You're unlike, I mean, compared, compared to the industry and to other claims leaders, you, you certainly have, you know, your background speaks to this, but you've always had, you know, such a strong relationship with vendors and you were very pro technology, way ahead of the curve on that front.

The "Build vs. Buy" Dilemma

And you and I have talked about this and I've always been fascinated, but what is like, this struggle, and this is a very industry-wide, very topical, this “buy versus build” topic. Because we have to understand, obviously, insurers want to maintain their IP. Just like any other large corporation, they want to keep their costs low. There are legal ramifications to this, you know, for every large, let's say, a process that they have to do a change management or transformation.

There's always, it feels from where I'm sitting on the vendor side, there's always, this is a common hurdle that we have to go through with every carrier because they obviously all maintain large teams of data-science teams and technology teams. And I can talk about this all day of, why it's important to partner. How did you think about this? One. And two, I think just as importantly is, even with your bias for being ahead of the curve and working with some partners, how did you push it through?

You know, because it's really tough to do, from, if I'm wearing your hat as a chief claims officer. Like what was your strategy? Not to spill all the beans, but….

Paul Stachura

But that's fair, Sean, but let me start with, I was a buyer and I would still be a buyer today. You know, why? Because I believe that a sense of urgency is always important no matter what profession you're talking about, because you want to continue to be on the cutting edge. You want to continue to lead rather than follow. And within most carrier environments, and I can't speak to all of them, if you go the build way, you're going to run into a couple of things. You're going to run into resource constraints. You're going to run into budgetary issues and you're going to run into timing. Right?

I want everything yesterday. If I'm going to lead the profession and lead the industry, I want everything yesterday. And guess what? I lead claims organizations. My expertise is how to handle claims in a way that drives the best outcomes for the organization that I represent. I am not a technology expert. I'm going to let those technology experts bring their ideas to me. Find out if it fits, right? Because I can address what my issues are.

I know what my problems and challenges are. I need someone who can help me fix those. So typically, you know, so let's start with timing and timeliness. The build route internally, I'm getting back into the queue. And as I said earlier in this conversation, the queue isn't typically going to put the claims organization at the front. You know, it's going to, you know, we're back there.

And, so, the timing issue is problematic. I want it. I want it now. How soon can you deliver it to me? Now you may come to me with a half-baked, half-thought-out idea and I'll dismiss it. Right. But you might bring it to me where you think you're 80 % there. I'm really interested at that point.

I'm going to have that conversation because I want to know what that 80 % is going to do for me right now. And then how we can, again, using the right word, partner to address that following 20%. And then what do we do to make certain that we are both remaining in front of the challenges? Whether that's trying to be predictive of them. But certainly if it's, if I'm only talking about being responsive, which I'd rather get out ahead of it, but if I'm going to respond, I want to be able to respond quickly.

The resource constraint that I referenced kind of fits together with some of the budget issues and what have you, because the technology resources are typically, again, I'm going to be enterprise-wide. So trying to get a carve-out for claims is less popular. I want to make sure that these comments don't suggest that in every organization, that claims doesn't get the investment that it's due or that it needs to do the right things for the organization. But organization by organization, that's going to differ.

But I will speak from my own experiences as well as conversations I've had across the industry over my tenure to how similar is it to others. And it was more often than not very similar to others. So I'm a buyer. I think that the way to go is to be a buyer. I think first-to-market. You know, everybody wants to put that on, you know, first-to-market with product. There are limitations to product because of, you know, statutory things that happen within that. And so I want to be first-to-market with the ideas of how to create the best outcome on the claims side of the house from a service perspective, from a financial perspective.

Sean Merat

Yeah, that certainly puts it all in perspective. And I couldn't agree more. I think the core competency is everything, right? That, on top of focus, right? So as a tech company, like at Owl.co, we're focused on one specific thing. We hire the best, as many other vendors do, ex Stanford graduates, they all come from, like, some of the biggest companies like Google, Facebook, etc.

We have very high standards and everyone comes in and we all try to solve this one small problem. Go to sleep thinking about it. We wake up thinking about it. Whereas no internal team is able, I mean, you have to deal with so many different aspects of the organization. So I don't even see it as a competition.

Building Successful Vendor Partnerships

I agree with you. I think that, the core common, like the same way that, you, no vendor is ever going to start an insurance company. It's very similar. So just in your experience of having dealt with, I'm sure you have some successful experiences and probably some failures in those, like what separated them from the implementation of successful vendor relationships and failed ones?

Paul Stachura

Dialogue, dialogue.

You just, as you talked about bringing into Owl.co as an example, your Stanford grads, etc., but they're coming in with a completely different expertise, right? I sit in front of you and your team a year ago, two years ago, and I know what I'm gonna hear from you and your team is we know technology, we don't know insurance, right? Teach us about insurance.

And so every relationship that you have in the claims profession, trying to bring technology into play, the dialogue has to be robust. When I said to you earlier, I know what my challenges and my issues are. Well, yeah, that's at a high level. Can tell you, here's Sean, here's where I'm struggling right now. But I have to be more granular than—I have to tell you the whole story. I have to tell you why that's important. I have to tell you when it first manifested itself. I have to tell you the impact that it's ultimately having either on the employees or on the customers or on the organization or all three. And so, that robust dialogue, again, goes back to defining what a partnership actually is.

We're talking about this in the business environment, you know, people want to translate this their personal environment, you know marriages or what have you unless you have very very strong communication that relationship is going to be, uhhhh, challenging.

Sean Merat

Right. There's going to be a lot of guesswork and. No matter how competent you are, if you don't know what you're solving for, it's going to be very difficult.

Paul Stachura

Right. Right. I don't want, as an example, I don't want to because it’s personal, a lot of people will say, “well, if they're married, you know, the easiest way is just, you know, happy wife, happy life,” you know? But that's just kind of saying, “yes.” And that's the last thing that I want in a relationship in the business environment. Right. With you as my partner, I want you to know what those challenges are. But I'm not going to curse, but you need to be able to call b.s. just as I need to be able to call b.s.

So when I talk about robust conversation, it's got to be transparent. It's got to be honest. Sometimes it's going to be incredibly blunt. We're all in this to do things for a reason. Listen, we want profitability. You want the organization that you're providing that technology to, wants that as well.

So there's a mutual goal, but there are other aspects that are outside of the financial realm. And we've talked about many of those this morning. And so I think the more we have that conversation, the better that outcome will be.

Sean Merat

In your experience, what was, I mean, without naming names, but the vendor that stood out to you, that maybe had a catalyst for this communication and made it much easier to deal with, that built a much more, strengthened this relationship?

Was there anything that stood out in the process that you could share?

Paul Stachura

Probably one thing stands out. We talked about dialogue and everything else, but environment's important. And what I mean by environment is, you know, I invited them, just as I would invite you, into the claims organization, into whatever company that I'm working for, understand the culture of my organization, understand the culture of my department.

What was different with one of these partners historically is they did the very same thing. They invited myself, members of my leadership team, to be present in their environment, to show me how they operate with some of their challenges, etc., are. So again, I think that level of transparency was really, really important.

The Future of Claims Operations

Sean Merat

Right. I know we're coming up to time, I mean, I could talk to you for hours. I always take up your time. But I do want to ask one question. If you think forward, like let's say three years from now, what do you hope will, like what changes do you hope we'll see in claims operations?

Paul Stachura

I hope that what we will see is the marriage of human interaction and technology as opposed to a continued imbalance of that, right? I think that, you know, technology should always be used as an enhancement to the human piece.

If I look at, you know, the claims experience as an example, I think most individuals don't want everything handled by technology. They don't want everything handled by some artificial means, whether that's artificial intelligence or something different. They want, because they've had a human experience and an emotional experience, they want someone who can share that with them. And so to me, it's about creating that right balance and then many other things that we talked about, which is technology has to, even when I talk about the most tenured and experienced people and what the knowledge transfer used to be, technology, I want it to surpass what that tenured group used to have. Because in so doing, it will continue to bring the human piece, you my staff, it'll continue to improve their knowledge base. And tech is always gonna be, tech's always gonna lead the way on that. It's just, can't describe why, but it's the fact of it, right? It's just quite simply the, you know, it has an edge. And so, you know, it's got a bit of a head start and we're always going to be following it. And I just want to follow it closely. You know, I want to be a fast follower to what technology can bring to the learning aspect of things. So, it is about, you know, it's about that marriage. It's about the balance of that marriage. It's about open communication that preserves the integrity and the happiness of that marriage.

Sean Merat

Yeah, I mean, this, I couldn't agree more. I think that, are you optimistic of this balance in the next three years?

Paul Stachura

I'm very optimistic of it. You know, and you referenced this early on in our conversation, me, claims moved at the speed of molasses for so many, many decades. I'd say over the last ten to 15 years, the movement has been radically different and significantly faster. So that's cause for optimism is that I think there's a recognition, move fast or get left behind.

Sean Merat

Yeah, I think, I share that with you. I'm very optimistic.

I always say, you know, when we started this business six years ago, when we were talking to carriers and this is like six years ago, maybe like closer to seven, we, the conversations we were having was about, you know, pushbacks on adoption of the cloud, which was, you know, 20 years behind of this time.

But I think, looking at it now and being in the trenches, insurance is at the forefront as an industry, the forefront of AI. And because of the dramatic practical improvements that can be made with it at such a large scale, and it's very motivating to be even part of the mix in these discussions because, you know, any, even small improvements you can make is going to affect, you know, millions of people. And it's very encouraging. It's very exciting. I think it's, I always tell the team just the same way that you have, what you told your claims teams, if that doesn't excite them, why would they like, if it doesn't excite you to be in a, you know, AI company at the forefront of one of the largest industries, dealing with some of the largest carriers, I don't know what will excite you. And I think that's certainly, see this shift and it's very exciting for us. It's very exciting.

Just even if I was, you know, watching from the sidelines, it would still be exciting for me to see this transformation.

Paul Stachura

I'll agree with that, Sean. I really appreciate our time this morning.

Sean Merat

Really, really, really thank you for joining. Always a pleasure to talk to you and to share all these experiences. Thank you, Paul. Thank you.

Paul Stachura

All the best.