We Fixed It. You're Welcome.

Aaron Wolpoff [0:14 - 2:03]: All right, here's how this works. In each episode, we pick a company we all know that has something going on right now. Then we put ourselves in charge and see if we can fix it. You'll be hearing from Melissa in Operations Channel, Gino on people and culture, and me on marketing. My name's Aaron. As always, a quick disclaimer. We are going into this somewhat cold and nothing we say should be construed as legal advice, financial advice, or anything that would get us in trouble. These are our views and opinions. We're here to ask the kinds of questions everyone's thinking, have an engaging conversation, and maybe come to some conclusions that we feel are worth exploring by the end. If We Fixed it, you're welcome. All trademarks, IP and brand elements discussed are property of their respective owners. Welcome back to We Fixed It. You're welcome. As always, we are your fearless fixers. This is episode seven, so if you missed any episodes, please make sure to go back and also join us from the beginning. A note. On this episode, we'll be talking about the LA wildfires which are still going on as of this taping. And we I'm start over. Welcome back to We Fixed It. You're welcome. We are your fearless fixers. This is episode seven and if you missed any episodes, please make sure to also go back and join us from the beginning. A note. On this particular episode, we'll be talking about the LA wildfires, which are still ongoing as of this taping and they will have repercussions long after they're put out. And our intention is not to make light of the situation and those affected. This is not only Palisades billionaires with third homes being impacted, which we feel bad for also, but there are lots of communities surrounding and we personally know people who have lost homes that have been displaced. We'll be putting some resources in the show notes if you're able to support the recovery efforts. So as fixers, we're here to look at the companies involved and the decisions they're making. And as always, we'll see if we can leave things better than we found them. So, Melissa, what are we specifically here to discuss today?

Melissa Eaton [2:03 - 4:35]: Today we're going to be talking about the crisis in insurance and we're going to actually be focused on State Farm for this example. State Farm and other major insurers have significantly adjusted their approach in response to escalating natural disasters such as wildfires and hurricanes. In California alone, wildfire risks have led insurers like State Farm to stop selling new home policies and to non renew policies for 72,000 homes and apartments, including 69% of insured homes in the now destroyed Palisades area. So that's pushing tens of thousands of homeowners into the state's limited fare insurance plan or leaving them completely uninsured. Meanwhile, in North Carolina and South Carolina, talking about hurricanes, hurricane related risks prompted State Farm to non renew policies in high risk areas such as approximately 1600 homes on North Carolina's barrier islands as part of a broader risk reduction hurricane strategy. So wanted to showcase that it's not just wildfires, but it's all of the things that are these climate related catastrophes. The financial toll is so is, is devastating. Obviously the claims, 117,000 claims were filed following Hurricane Helene across the southeast. And these California wildfires are just going to be as terrible with similarly strained resources prompting changes like how they're going to reallocate their funds. Because I'm certain as expert in the insurance world, I've been in that world for 20 years, I'm certain that their catastrophe funds and reserves are not what can support these types of, you know, devastating fires. So this is a growing crisis for homeowners just as much as for these insurance companies who have put everything into their home. And we really need to understand what can somebody like State Farm do to save itself and what can the customers do in these climate driven catastrophic events. A lot, a lot for us to talk about. So I don't know who wants to start. I know that Erin. I thought it was interesting that we, we chose State Farm like a good neighbor. State Farm is there, that's their brand and doesn't feel like it.

Aaron Wolpoff [4:35 - 5:14]: Yeah, no, good point. It's an interesting slogan to hang your hat on at a, at a time like this. Right, right. Especially because it's not only in the aftermath, but my understanding is a lot of preemptiveness happened where a wave of policies were canceled, covered, not available or non renewed. And it was the perfect storm for something like this to happen where when it did that Good neighborness hasn't been all that apparent. And I forget which event, but there was a, which there was a sporting event in la. Just what was it?

Melissa Eaton [5:14 - 5:15]: This Rams game.

Aaron Wolpoff [5:15 - 5:50]: The Rams game was this past week that State Farm sponsored and probably one of the worst timing marketing blitzes in history. They sponsored end to end, I believe and they, you know, it was in their stadium, in the stadium and just radiating that message that State Farm is, you know, is here for you, the good neighbor. But the glossy side of that, you Know, not, not that we're digging deep in the community side, which we definitely should talk about, but the glossy side of the advertising and people said no, there was a immediate backlash on that. So.

Melissa Eaton [5:50 - 8:45]: Well, and I think that's what also drove them to pull all of their ads during the Super Bowl. So they have said that they will not be placing their ads and utilizing that money, reallocating it to these catastrophe funds, which makes a lot of sense. And we have no idea even yet what that catastrophic number will be because you know, it's, it's crazy. And then now the state of California has instituted a, a law saying that they cannot non renew those customers that were, were in those areas now. But that's after the fact, after they already did not renew 69%. So I mean it's, it's kind of a little. Okay, thanks but no thanks. You know, I personally live in the mountains and we had the Marshall Fire in Colorado which was a significant similar with 80, 100 mile an hour winds and just devastated entire communities and neighborhoods. So similar to what's happening in the Palisades. And since that event a couple years ago, three years ago, we have now had significant, significant issues with homeowners insurance. So that is kind of what we, we're feeling what those folks were, we're going through too. My husband, as the president of the hoa, which I would not recommend to anybody, don't do that is, that's all he's been doing is trying to fight for insurance. I just heard from a neighbor who said her neighbor was trying to sell their home and could not sell their home because the new person could not get insurance. Where we live. They were like. And it's interesting because you see on next door and you see on this community forums where people are talking about insurance and who do you have. And we currently for a condo insurance have State Farm. But we don't want to try to get other insurance because we're sure we won't be able to and we're afraid that State Farm is going to drop us because State Farm is not insuring new homeowners in our, in our area, even though these homes are old, older and so we have to pay the huge premium increase. So we did our as a condo, you know, as, as and so just it's devastating because the options are really not out there. And these, you know, to supplement it with the government, the government is going to have to step in and do some of the things that they're doing right now with the FAIR act and and what they're doing with flood insurance and things like that. But if you look at it, it's so little, it's not going to cover a rebuild.

Aaron Wolpoff [8:45 - 8:46]: Not at all.

Melissa Eaton [8:46 - 8:47]: That's a problem.

Aaron Wolpoff [8:47 - 8:48]: Yeah.

Melissa Eaton [8:48 - 9:21]: Problem for State Farm, you know, that's a problem for them is that homeowners oftentimes, you know, you buy your house and then you update it and you do all these things and you don't even realize that, you know, you're trying to go for the lowest premium. I mean, come on, let's be real. For homeowners insurance. And you're not even realizing that the rebuild is for the basic, basic stuff. And I don't know anybody out there, even my college student, who doesn't have like granite countertops in their kitchen.

Chino Nnadi [9:21 - 9:21]: Kitchen.

Melissa Eaton [9:22 - 10:01]: Right. That's not covered. Right. All I, I mean, I didn't even know they. Whatever, you know, tile or whatever. Formica, I don't know what it is. But for all the basics, that's devastating. And even them saying that they're not doing renters insurance and they're not, you know, for your personal items, I mean, I don't know how they're going to rebuild. And I hope State Farm doesn't collude with some of these equity firms that are already trying to throw cash at homeowners and just developers who, who will ultimately end up developing those neighborhoods and rebuilding them how they see fit.

Chino Nnadi [10:01 - 11:47]: So it's a really interesting situation because if we pull back what insurance means kind of at a basic level, right. It's a through company, meaning everybody pulls their money in, creates a fund so that when these things happen, you can cover those people. Right. But it's, you know, not to say a Ponzi scheme, because that's not the right answer. But in a similar way, you know, you're putting everybody's pooling their money so that if one or two people have a problem, they can get bailed out. And that pooled money is what the resource is there for. The challenge happens when seeing more of these catastrophic events happening more frequently. It isn't just one or two people or, you know, 10% of the community. It's now 80%. Right. And so as an insurance company and as a business, how do you mitigate that? And I think the answer really is government intervention, which feels anti American for a few reasons. But the reality is climate change is happening. Whether you believe in global warming, you know, or you don't, at the end of the day, climate change, the change in our climate is something that has happened for years and years and years. And with that we are seeing more of these catastrophic events that are impacting people's homes. So without some sort of government intervention to help prop up these businesses, these insurance businesses, you are going to fall flat. So what that will do is again, just like you were sharing, Melissa, people buying homes. If you can't get insurance, people are not going to buy homes. So they're going to be moving away from these areas.

Melissa Eaton [11:47 - 15:08]: Right? There will be no, there will be no bank that will support that, no escrow. So I mean I, I love what you're saying Chino, about like, you know, it's this pooled resource. You know, when you think about insurance companies and yes, you know, we had catastrophe reserves, but you think of like one or two big events and your catastrophe reserve is depleted. And when we think of bigger, bigger events, we're not talking about entire like all of Manhattan being decimated. I mean when you look at the, the square footage of what has burnt down in la, it's bigger than San Francisco. So like what we weren't thinking about that, we were thinking about, okay, you know, you have a wildf there and maybe you know, a neighborhood of, I hate to say this like as if this is less important, but like 15 homes burns down, right? Your exposure is, you know, 15 million. Right. It's not the same thing as like this like entire city blocks and entire businesses and things like that. I do know that one of the things that was an issue when we talk about like having government step in and help with regulations is that in Boulder when they, after the fires, Louisville specifically this, the town, half of it burnt and they had instituted a climate friendly building zoning. So like every, so you had to use the right types of materials for. You had to have smart homes and all the things. But after this devastating fire, they couldn't do it because they couldn't regulate it that way because it was too costly. Because to build a home like that is four times as much as just replacing it with, you know, track stuff. So it was very interesting. So they had to go, you know, go back to the city council, go back and say we're going to be lenient on this so that people would try to rebuild homes. And again, you know, one of the things that I've seen on some interviews is that, you know, insurance companies want you to mitigate risk. I mean, that's what their job is, right? So what you can do to help is really important. And the question is what kind of, you know, what kind of subsidy or break are you going to get, you know, everyone I think that doesn't live in California right now is, or in North Carolina or South Carolina is like, gosh, our premiums are all going to go up because of what you just said, Chino. It's a pool. We all know it's all going to go up. So that's, it's a tough situation. And you know, the data that past years has always said that like only about 15% of people actually ever file a claim. So to your point, you know, you feel, feel comfortable with what the pool of reserves you have. But in today's world, when it's something like this, it's just really, really scary. And I know there's reinsurance and there's other things that are involved, but it looks like there's going to even need a need for a bigger disaster recovery fund than just fema, right?

Chino Nnadi [15:08 - 18:37]: Yeah, absolutely, absolutely. Again, like going back to like the climate change piece, like this is happening and if you're in these areas, right, scientists can share with you, you know, 50 years in advance we're going to be getting, and we're going to be seeing more of this, which is scary. It's a scary thought, right? You look at, you know, hurricane torn areas where this is not just, you know, once every 10 years, it's happening every three or four years where people have to rebuild constantly. And so as an insurer, what do you do? Well, the first option is, yes, raising premiums. So that kind of the pool at least can cover some of that. But in such a massive loss, there needs to be more. Right. And again, this is where I say government intervention is, it's needed in these specific pockets. Right. Not everybody is prone. Like I live in Toronto, thankfully, I'm actually in California right now in Palm Desert. You know, there's, there's pieces of that and I think, you know, you brought on a really good point, Melissa, of like mitigation. So my brother in law and I were talking about this, about what can homeowners do to help mitigate it. Because you have seen stories where people had concrete buildings or homes where, you know, everybody but their house is burnt down. Eucalyptus trees are like gas on a fire and they're invasive in California and they were all over the Palisade. So not only is it dangerous for a fire to happen and you know, burning timber, but you have a eucalyptus tree, it's literally putting gas and making larger problems. And so, you know, as a homeowner, if you can remove some of these things and Try to, you know, fireproof your home in the best way possible. Is it possible for insurance company to look at that and say, okay, what are these? You know, here's a recommendation of like, 20 things you can do for the home. It's going to be costly, but long term, you might have more access to a claim, right? Like, we need to make it work. We cannot say that there can be no insurance. You have to just have the money in your back pocket to rebuild. Because like we said, it's not just billionaires that are losing their homes. Like, I know people personally who are regular people. There are communities that can't just get up and leave and have the, you know, opportunity or privilege to be able to just move across the country and pick up. Right? So it needs to work. And so we need to figure out a way to make it work. Like, we need to fix this in a way because people's livelihoods, families depend on this. And so I think for me, the answer is, you know, government funding, like us Rich company, Trump, Biden, I don't care what side you sit on, this cannot continue to happen where people just lose their homes and it's, you know, hey, this is whatever. And I get that the insurance and State Farm is tied where they say, hey, we only have a certain pool. You know, there's been so many disasters across America, we need to start cutting corners. The government needs to step in and say, like California government said, well, you can't deny any more claims. So one, but two, how can we interject money into these companies? And I think that's the only way, right? Because there's no other pool. There's no other people. There's, you know, there's only a few companies. And as an insurance company, you're going to see more and more of them go out of business. So if you only have like the State Farm or the really big ones, what are we going to do? Because there's no way. You cannot have insurance. Like, there's. That's not an option.

Melissa Eaton [18:37 - 21:35]: Well, problem is that. Sorry, that's the problem right now. Chino is exactly what you said. So people are pulling out. And when I, for a while, when I was, I was, I've been at the all states of the world. I've been at Mercury Insurance. These are all California Insurance. And one of the things that the reasons Allstate was like, we're out is, is because of the catastrophes. And, and I remember that utilizing the data like Mercury Insurance was great about utilizing the data and saying, you know, These areas, like we're using, utilizing the maps, and you're really close to, like, open space where there's not burn. You know, there's a lot of brush and things that fuel wildfire fuel. So these neighborhoods we're not insuring. Right. But, like, if they're not insuring them, who is insuring them? And if people, like you said, are all pulling out, then that's when the government has to step in and provide an option that isn't just like the crappiest option out there. Right. But has to be a sincerely good option. And so that's one of the things that needs to happen or have a partnership. I think you're right. I think partnering with these larger companies and saying, we will give you subsidies, we will put money into catastrophe reserves so that you will be more comfortable, you know, insuring these folks and then having them make sure that the risk mitigation is being done. So if it's in a, you know, hurricane zone, making sure that all of our customers have US flood insurance, you know, have water pumps, have all, you know, have access to sandbags, all the things have hurricane shutters. Right. Like, a lot of people are like, am I going to do that? So making sure that you have all those things. The same goes for what you said with fire mitigation. Like, you know, you need to have 10ft from your home. You need to have, you know, no brush, no. No nothing. If you do have a pool. You know, they were talking about this at people after the last wildfire, which I was out there for, you know, at the beginning of November, they said people went to Home Depot and got water pumps for their pool. And that was one of the things that helped save some homes. Right. In some areas, you should be able to get a credit for that from State Farm. Right. A guy said. He said, I saw what happened in Ventura County. I just went to Home Depot, and I mean, I wouldn't recommend it. I don't know if this is really something that worked. It worked for him. He just put those sprinklers up on top of his roof and turned him on and then left. And it worked. Like, you know, again, those are just things that, like, people can do. And you save a $3 million house, like, I think it's kind of worth it, right?

Aaron Wolpoff [21:35 - 23:15]: Yeah. Yeah. Well, I like to talk about preparation and preventativeness and from an insurance side that, you know, educating your customer base, that's just smart business, Right. If you're running risk tables and, you know, the risk factors and you can, you know, maybe some things are unpreventable, they're just catastrophic. But, but everyday occurrences that lead or preventativeness that lead up to, or cut things off before they get out of hand, that's, that's just good business. If we, if we go back a little bit. I mean, years ago, I've never been with State Farm, but I had an insurance agent that would periodically or annually call me. We knew, knew each other by name. She knew my family. We walked me through options. That's good business too because there were upsell opportunities and things like that, but making sure that I had the right coverage for me and that I was protected for catastrophic type events and all those things. She retired and you know, it's in the intermediate time, there's a call center now. You're lucky to get ahold of somebody and there's such a power imbalance that before we get to, you know, if we look at the Maslow hierarchy of needs or before we get to the point of great, let's do some preventative education. We're going to hold workshops, we're going to do whatever, just that basic level of coverage or understanding, you know, how to best serve your customers. I think we start there, right. And then grow into. Now we're going to teach you, you follow these 10 steps, you're automatically insurable, right? Yeah, that's, that's the kind of partnership that I'd be looking for.

Melissa Eaton [23:15 - 23:43]: Yeah. And I, I think that also kind of getting to where we are today from like insurance companies have been around for a very long time. And so are we using the data and predictive modeling the way it could be used more, you know, regularly, like right now I know that, you know, you used to have like an insurance guy come and like inspect your house before they gave you insurance.

Chino Nnadi [23:43 - 23:44]: Right.

Melissa Eaton [23:44 - 26:26]: You know, and it was really funny because they would also like climb on your roof and do things like that. Like now of course you have drones, which is great. Like, let's not have somebody climbing on my roof, but let's have a picture of it. Let's do all these things. You know, one of the things that insurance companies should probably do more of is pushing people to take videos of everything in their house. So do a walkthrough. That's like on my list right now. Because after this I was like, oh my gosh, right. You need to do a walkthrough so that. Who has an inventory of everything in their house? Right? Nobody does. So do a walk through, walk through your kitchen. Do all that Your garage, all the things that matter to you, Those are the things that. That are important. When I was actually there, there was. There was talk about this. And this is because this is before hurricanes. While hurricanes were always a big deal, but before wildfires became such the thing that they are today, hail storms used to be a big deal for auto insurance companies, right? Like, hailstorms just kill you, right? All the cars on, like, think about it. On a dealership, in a parking lot, at the airport or wherever. You know, those are spat. But you can use AI and you can use data to actually kind of figure out, like, there was a company that was talking to me about this, and I love this idea of where it can, you know, use, like, weather maps and say, oh, my gosh, you're in Oklahoma and you're in Tulsa. It's going to. You're. You're in line for the biggest hailstorm or tornadoes coming. And it could send a message to all of its policyholders in that area and say, cover your cars, get to safety, get your family to safety, get in your basement or in your bathtub or whatever you need to be doing, but go do these things. And especially if it's a hail storm, those are the kinds of things that, like, yeah, if you have. You have maybe 10 minutes before, you know, you may have an hour before, where you can get people to get their car into a covered space. So I do think that there's ways to utilize data analytics things to be more real time, and that's probably something that the insurance companies need to think about more, is that how do we effectively, you know, like, as soon as they saw what was going on, right. Have they reached out to all their policyholders in the area, Right. Saying, please, we just want to make sure you're safe. This is what we have set up for you in hotels, whatever, whatever, right? I mean, you think about those kinds of things.

Chino Nnadi [26:26 - 28:34]: I think that's a brilliant idea because, you know, it's an Amber Alert, essentially, from the. For insurance company. And I think what's great about that for them, you know, no one wants to be paid out. Like, no one. Like, they don't want to pay you out. That's the whole problem. That's why they were denying so many things prior to this. But also, people don't want their houses to burn down or to flood or to have the Hailston as well. So it's a mutually beneficial solution there. And I think, you know, again, it comes into questions on, like, data and, like, you know, do you want it to get sent to you where as an insurance company, I want to incentivize my people to say, yeah, when there is these things, you know, we are going to automatically opt in. You have that. You get, you know, x percentage or $10 off your insurance every month. Right. To keep people doing that. Because at the end of the day, no one wants their house to burn down. The insurance doesn't want to pay you out. So how can we prevent all of these things? That said, not all of these things are things that are predictable, especially with these LA wildfires. The problem was the unpredictable winds that made it a lot harder to manage. And it's still something that is ongoing currently after days. Right. Which is, again, it's been unprecedented, the amount of fires happening. And so in that case where, you know, people didn't have video or coverage of their homes, even just being able to say, take what you can, you have 10 minutes and you need to get out. Because we do get. Like, I was in California, you know, we did get an Amber Alert from the government saying, hey, just be mindful of the air quality. This is happening. Winds are gushing. But if the insurance company can share that with you, I think that's another big benefit because it also shows they're. They are trying to do everything they can to help you. Again, like a good neighbor, State Farm. Can you let me know ahead of time a little bit? Because again, there is predictive analysts, there is weather, storms, there are things that people can do to hopefully protect them, their families and their possessions. Right, right.

Melissa Eaton [28:34 - 31:42]: I think that this is actually like an interesting, you know, intersection between what Aaron was talking about with an agent that knows me versus what you're talking about, which is like this education and like for, you know, forewarning and all of these kinds of things. Because honestly, part of insurance is now that there's so much data. They have all this data about you, about where you live, that you have pets, that you have kids. Right. You know, how many cars you have, you know, where, you know, they have pictures of your house, wherever. And how are they utilizing that to be proactive, you know? Right. Like, how are they. I mean, so, Aaron, I don't know about you, but, like, I know that when you have an agent, they are, they are reviewing your policy. They're reviewing. And they're like, oh, you know, you have a child that is turning 15. So they, you. I need to send them out a like, you know, welcome to kind of driving. And. And you need to know that you're driving your auto Insurance is going to go up three times because you have a male and he's, you know, just because he's a male, so. Or son or whatever. And I loved having, like, where we had initiatives where we would say, you know, make it feel like you really care. And like, one of the things that we had was where we would say we would like to talk to the new driver without the parent there to tell them about, like, what the risks are of driving and what, you know and why we. Why you have insurance and explain, you know, so this whole education process and, like, developing that relationship. But if you know that about your person and know that this was their family home, know that they're, you know, a concert pianist, know all these things, you would say, I want to make sure that you're insured, your personal items and belongings. I want to make sure that, you know, in this world, digital world, you've downloaded all the things that you want so that they're in the cloud. You don't have to worry about it. Fire safe. I. I think this is one of the funny things I've been seeing on Tick Tocks, how the fire safes didn't really work. And, like, everything burnt in the middle of the safe. It's too hot, I guess. But again, like, you know, I love this idea of being proactive and being like, hey, here's a fair warning. And this is how we would like to educate you on your Go bag. Right? This is what you should have, your Go bag. Like, people, you know, also don't think it's ever going to happen to them. So, I mean, my husband and I have a Go Bag, but it's like, get us to Target, you know, is what our thought was, you know. You know, that kind of thing. Well, I. My friend's house burned down in Altadena, and she said, you know, I went to Target. The shelves are empty. Yeah, because everybody's here. Right. You know what I mean? Think about those kinds of things. And you think when I hear that people, like, didn't take their medications or didn't take, you know, whatever, it's just, like, heartbreaking because you don't know. You're panicking. You have Aaron, you said it. 10 minutes. What are you going to take?

Chino Nnadi [31:42 - 35:03]: And it's such a daunting thing. Like, I, you know, I'm chronically online, and I was a huge fan of, like, the Hills and Laguna beach back in the day and Spidey. Spidey, Spencer Pratt and Heidi Montag, you know, went on, and I just remember Listening to Heidi just share like, you know, my house is burning down. I am in an absolute, just kind of free state, right? Like I can't imagine your, your entire place you built with your children. You're all those memories and you have 10 minutes to figure out what you need to pick. How do you pick that? Right? And picking like her, you know, because again, there's physical things that you can take, there's monetary things and then there's things that are so priceless that nothing could ever replace us. Right? And so having a go bag and I think going back to the business and saying, listen, you are in a prone area. So whether this is a 10 minute warning, because I think even then I would panic. I don't know what I would take my dog, you know, take my, like bring my husband with. I don't know what I would like in that. Your passport, like what do you do? But if the insurance companies can say, hey, you are in one of these areas, you need to have this prepared. You should have a fire safe in this specific area of your home, you should have this. And guess what? When you do this and you can take a photo of it because I remember when I had to get new car insurance and again, I'm in Canada, heavy snow, winter tires are a huge thing. You get a discount if you have winter tires. The newer, the more of a discount. I had to go and take a photo of them. Right, let's prove it. And I love this idea of this proactiveness, but I do think, you know, in a perfect world, Aaron, we can have like a special agent that you know, talks to you. The reality is that's not going to happen. But guess what? We have AI, we have automation, we have tech. Why don't you have as an insurance company like State Farm, you build a team of people who are on like the proactive team that say, okay, yeah, when someone turns 16, here is the little video that they send. It's like a generated AI because again, the data is there. Use that to prompt people and to automate and remind people, you know, once a year. Okay, great. Have you updated, made sure that there was batteries in the light bulb or like in your flashlight that you have in your go bag? Right? Make it automated. We live in a tech world and I think if people can, if insurance companies can do that again, it's not going to solve the problem of house fires and hurricanes, but it will allow people to be more protective, more prepared for when these things do happen. And I do think going back to last week's episode. When we talk about what's a business's moral responsibility, I do think it's the insurance's responsibility to make sure that people don't use their claim and not to do that is to make sure that they're prepared. So make your people, make your clients prepared so that in the case of this, they, you know, they fireproof their house as best as they could. They have all the notifications and Amber alerts during the time, but more so throughout the year, you're providing reminders, you're giving them the education that they need so that they can be prepared in these situations.

Aaron Wolpoff [35:03 - 36:41]: Yeah. Okay. Yeah. And, you know, from a brand perspective, if you're really going to own your brand and own everything about it and you're a good neighbor, what does a good neighbor do? You know, the good neighbor doesn't always say, doesn't come in and say, your, your car flooded. Let me help you, you know, bring out your, your floor mats. They say you left at the top open. You know, I noticed you left the top open. Let's, let's fix that. Or, you know, I, I was watching out for you and I, and I like this idea of being proactive, you know, and I don't know if it, we shifted to an app or I haven't seen the State Farm app lately. But let's say they share, you know, that there's no shortage of like, you're, you know, you know, Melissa, you're saying that the personal data and the amount that they know about their, their, their customer base, why not share some of that information and distill it down to a number or a serious, like, here's your risk factor. You're at a 62. Here's what that means. Here's what you can do about it. Here's what we're going to do about it. And here's your gaps. Right? And, and be, be, be, you know, have, have. And then you can have other, you know, ways of engaging other content, other, other value adds to it. But if I knew my insurance number and that's all I ever needed to know, I would have a really good sense of what my responsibility is, what my insurer's responsibility is, and the steps that I could be taking and maybe it would force them to play a little bit more fair and not drop policies and, you know, and, and actually follow through on the, the brand promise that comes from those endless advertising messages that go out.

Chino Nnadi [36:41 - 38:24]: Yeah, I, I think too, like, you know, it's in, in a natural disaster, it really is no one's fault. I don't know how you, you know, you can prepare as much as you can and then there's things that happen that are not there. But as you know, if you have that basic kind of going back to that Maslow's hierarchy of needs or that basic, basic care, and that's what the good neighbor does for you, making sure that, you know, your roof was covered so maybe you weren't home and they, you know, put a little tarp there to make sure that you were, you were good. Right. Or you were aware of what you could do to do that. If I choose not to do that, you know, tell me, if I choose to build eucalyptus all around my house, knowing that there is, I'm in a fire, you know, area, fire prone area, then yeah, that's a little bit on me. Like, let's get rid of that eucalyptus. Let's put some other, like maple tree. I was looking into, like, what are things that you can do? That's not going to solve the problem. And I think at the end of the day, they're beyond putting the onus on the people because I think there's a piece of being prepared and mitigating what you can in your house. But the reality is the true way to fix this is having some form of government intervention, that crisis fund for this. Because there's only going to be more of these events. The pool is getting smaller and smaller, if not as depleted. And you know, as a government, as America as a country, you can't have like, people can't just not be, can't cease to exist in these areas anymore. That's not going to happen. So how does the, you know, insurance companies realize that and say, hey, I need help? Yeah, we need a government handout here. We need to back and subsidize this.

Aaron Wolpoff [38:26 - 38:27]: Go ahead.

Melissa Eaton [38:27 - 38:28]: No, go ahead.

Aaron Wolpoff [38:28 - 39:45]: I'd put a big old asterisk on that with a stipulation. I hate to say it as, you know, a marketer, but put caps on your marketing. You know, you're. I don't know if it's, if it's, if we're able to do that, but we're, you know, if we're the government, you have a limit and it's going to be an industry limit and you can't overspend on marketing. You can put out fair messages about your value proposition and, you know, but you cannot blanket the world with your marketing messages as a way to cover the fact that you're, you know, doing other things under under the surface and executive compensation. So you know, let's re tailor the industry around, you know, reset, reset the power, power balance. Right. There's such a power imbalance now between those who want to be insured and those who are insured and the companies. That's I think maybe the role of the government in this would be recalibrate the industry, reset the power imbalance and then see where we go from there and build out to the apps or the things that actually are preventative are positive and reinforcing when there's not a catastrophe happening. That's where I'm pushing for a little bit in terms of how we fix the situation.

Melissa Eaton [39:46 - 40:01]: Yeah, I think how we fix State Farm and the insurance crisis in insurance right now is really a combination of what you've talked about and the way to say it more broadly is around partnership and collaboration.

Chino Nnadi [40:01 - 40:02]: Right.

Melissa Eaton [40:02 - 42:39]: So you know, having a balanced approach, you know, disaster disaster funds, community initiatives, partnering both privately and publicly to have kind of a blanket way to ensure for these catastrophic events as well as partnering with the customer and the actual client, utilizing and partnering with your smartest folks with AI companies with predictive modeling, you know, like parametric insurance, all the digital platforms, all the telematics, all the things that they have available to them and utilizing that in partnership to actually be proactive, also be quickly reactive in scenarios where they could get a warning out that could save a lot of claims. And understanding that there is onus like Chino, you were talking about that accountability by the client and if you choose, choose not to and we're going to do, you know, we're going to do a Google Maps drone view of you review once a year and we see that you haven't cleared out all that brush, then your, your premium may go up. Whereas your neighbors who we see now have sprinklers on their, on their house and rebuilt their fence and it's all cement or whatever what it is, may be getting a subsidy, may be getting a break. Right. And I think those kinds of ways to look at how you partner, how you kind of can get the pre disaster education going as well as making sure that I think that, I think that the insurance companies have a good way of handling post disaster. Now I'm not going to say that it's going to be easy because there's so many, but they always, you know, send claims teams to the, to the space. But like again having that partnership with hotels, like if they would have had that, they could have just said anybody who's a State Farm like we have 100 hotel rooms at, at these Hiltons, you know, because we have a partnership with them and you don't have to worry about paying because we're, we'll know, right? You know, who's, who's going where. So again, I think that, you know, you guys have both brought up really great ideas about how to, how to get State Farm and these other big insurers thinking. And I'm, I know that they are thinking about it. I know they, they have people that do this that maybe are smarter than us, but I think that right now in the public eye, they don't look that smart.

Chino Nnadi [42:39 - 45:37]: So they're not, they're not being good neighbors at the end of the day. Like they're completely going against their brand, which is really interesting. And, and I want to go back to your point just about like the marketing budget and that. And I think yes, to a degree, like obviously going at a Rams game and supporting this at this time, not great. I do think marketing will be important about kind of re educating and saying, hey, here's what we're doing new. And it's interesting to see like what that marketing budget is compared to the design. Like, is it that much of a difference? Because you do need top talent to help come in and hopefully revolutionize and to build these things. Like you need strategists, you need incredible app people. Because if you build an app and it isn't user friendly, people aren't going to use it. And so you can do all this and invest all this. I do think, you know, it takes money to help prevent that, but it's not necessarily about the money. I think going back to your point, Melissa, it is fundamentally about how do we help people. Like, these fires were devastating. I don't care if you were a billionaire or if you were homeless. There are many people who are displaced and homeless. Like as an insurance company, how do you help? Right? So whether that's the prevention, whether that's the education, whether that's making sure that new developers are coming in and using fire safety proof help, building materials for when you're rebuilding so that this doesn't happen again and you're thinking about all those measures or when it's during these disasters, like you said, hey, here are all of the hotels that we've partnered with that you can go to, no questions asked, you share your name, you share your number, that's it, you're in, right? Automatically do that. Here are food banks, here are animal shelters, here are supplies and help. Because if they you know, it's going to take a lot of time. I don't know if anyone's ever submitted a claim for anything. It's a lengthy process. And while your house is burnt down and you have literally nowhere to go and some people are by themselves, they're probably like, we need to help. And I think it is the onus as an insurance company in these spaces where they're prone for these natural disasters. You need to start thinking like that. And that's the only way you'll be successful. More people, more customers will come to you if you do these things right. And hopefully you can take the market share State Farm is positioned because they are, they have the brand equity and name, but they need to do all of these things to get there. Otherwise, again, like, there's no world where you cannot have insurance. Nobody has $5 million extra, plus all the memorabilia, all the things that you literally, there's no monetary value to that, like pictures and you know, all of the things that you cherish. Right. No one wants their house to burn down. How do we fix kind of the insurance problem? I think government intervention and all of these things that we've mentioned.

Aaron Wolpoff [45:37 - 46:05]: Yeah, yeah. And I think from an advertising perspective, we're going to see, you know, cutting the, cutting some of those glossy ads and do real people and real stories coming together to help each other. And then the State Farm logo, you know, with some subtle music at the end. And I just, you know, I, and I hope that's not it and call it a day. And then a year later or however much later it's, it's business as usual and we all forget it's what it, you know, let's, let's make some sweeping changes here.

Melissa Eaton [46:05 - 46:15]: Well, you know, from a marketing perspective, you know, from an operations post sale perspective, I can say that like the easiest way to grow your business is not to lose business.

Chino Nnadi [46:16 - 46:16]: Right.

Melissa Eaton [46:17 - 48:21]: So them not renewing means that they needed to grow their business so they non renewed a significant amount of folks. Right. Means that they need to grow their business elsewhere. And so I think, Erin, that's the whole point of like, you have to, you have to invest money to make money sometimes. Right. You know, and so it'll be interesting to see if they can market it in the right way and take advantage of the situation. And also think, you know, they may have to rethink their strategy. I mean, the state of California is forcing that on them, saying you can't non renew these people who've lost their homes. Right. Well, the fact of the Matter is maybe they need to think about these like to our, what we were saying about partnerships and collaboration and having more flexibility and insurance tiered segments. So like if people can't afford, you know, the highest level that they'll try to subsidize it with the government or whoever else. But again, I think it's going to be interesting because it will be the, the tone and understanding what people really want to see. You know, they do have that brand so they have a chance to go in and show that they are being a good neighbor right now. Right. You know, taking care of people, even people that maybe aren't even insured with State Farm. Right. But if they're seeing that out there, they will, that will have a lasting impression. And I would think from a marketing perspective, sometimes those lived experiences and seeing those things go viral are the things that will really have an impact. Because like you said, all three of us know people who have, had, have been impacted. So there's got to, you know, when you think about that across the whole world there's a lot of people that have been impacted by both the hurricanes, by the wildfires, by all sorts of different things. And it really needs to be something that's addressed and, and it's not going away. I mean it's, it looks like it's only, you know, the winds are always coming back.

Aaron Wolpoff [48:21 - 49:10]: Yeah, yeah. So we, we bring the government in to provide some reserves. Right. We trim the fat in the areas that that can be cut and put the focus back on the subscriber. We let the subscriber give have more choice when we restore that power balance where you're picking between companies that not which ad you like best, but which one really is going to serve you the best. You don't necessarily need a phone call and a one on one account review. If there's an app that is friendly enough and shares the information that's been collected about you, including your risk factors and including the steps you can take, that app maybe turns into a disaster relief recovery messaging platform in the cases where it's needed. Chino, did we fix it?

Chino Nnadi [49:10 - 50:00]: I say if they take our advice and really focus back on the people and the help and being the good neighbor. Yes. And doing all the things that we've mentioned. Yes. I think that State Farm can come away from this. If they don't, they're going to lose a lot more customers. Because if you're telling me I can pay for something and you can just take it away like that without any government interaction and I'm just left for nothing. Then I'm not going to, you know, become insured by them. So they have to take this advice. There's anyone from safer listening, you know, you need to focus on your people again and the customers and to keep your business moving. So I do think we gave some great solutions there. There is going to be more. But so I would say in this episode, we did fix it.

Aaron Wolpoff [50:00 - 50:01]: How about you, Melissa?

Melissa Eaton [50:01 - 51:33]: I think there is a need, and we talked about that, for them to innovate their way of thinking and to be very well aware, and I know they are, but that these are not going to get less. It's just going to become more of an issue and to really think about who they are serving. And I think, you know, Chino, you've really kind of hit that on the nail on the head there. And I think that I personally, you know, being in insurance for a very long time, it is really hard to sit in meetings and, you know, look at the data and, you know, talk to underwriting. And, you know, you kind of forget that there's a story and a life and a lifetime of things behind each customer. And I think this is a stark reminder of that. And it's very unfortunate because these people have lost literally everything. And so, again, this is kind of a chance for, you know, State Farm to be a phoenix and kind of rise out of the ashes, so to speak, and kind of become the hero in this. And I think that there's an opportunity for them to lead the way, to lead the way with strategic partnerships, whether that's the government and other entities, you know, the Red Cross, whoever it might be. And also, like I said, I think optionality is important, but it's also educating the customers and making sure that the insured understands what they have in front of them. So.

Aaron Wolpoff [51:33 - 52:24]: Well, thank you again for tuning into we fixed it. You're welcome. And for every heavy topic, we'll have some lighter ones. We also have some guests coming up on deck for some upcoming episodes. This was an important one. And as mentioned, we'll be posting some resources in the show notes for those who want to help the individuals in the affected areas. In terms of our podcast, thank you to everyone for getting the word out. I did a chart check earlier this week and. And we're ahead of the TED Talks Business Podcast. We jumped ahead of Market Watch and ahead of the Goldman Sachs Business Podcast. So pretty cool for our new little show. But these things change all the time. So tell your friends. Talk about us at dinner parties like Rate subscribe all those good things. And if you have something for us to fix, be sure to connect@wefixeditpod.com we'll see you next time. This podcast is produced by Straightforward Media Group.

Melissa Eaton [52:24 - 52:41]: All rights reserved. If you'd like to learn more about how a podcast can help your company establish authority and generate leads, please email us at eric@forwardforwardmg.com or go to straightforwardmg.com for more information.