BTV: Can you give me a little background on Heffernan Insurance? 

JPJ: We were founded in 1988 in Walnut Creek, California, out of a desire to build a privately owned insurance brokerage. We serve individuals and businesses, providing comprehensive insurance including business insurance, personal insurance, employee benefits, and financial services. Since our founding 35 years ago, we’ve built a national presence and are one of the premier brokerages in the country. 

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BTV: Why is technology advancement important to your business model? 

JPJ: I would say that there's a few reasons that we are interested in technology and insurtech in general. 

1. Our industry can be old-fashioned in the way we do things. There are a lot of workflows, processes, and more that technology can dramatically improve, creating better customer experiences as well as making us more scalable, more profitable, and our teams more productive. So we have been striving to engage with opportunities that will accomplish those things.
2. With the dramatic growth of direct-to-consumer players and digital agencies over the last 10 years, we needed to stay ahead of it as much as we could and continue to evolve with new technologies. Changes in the industry can be disruptive and technology in the industry can disrupt the status quo. Staying ahead of new technologies and helping to pioneer new processes helps us stay ahead of the curve.  
3. As time goes on, our customers are developing specific expectations of how they engage and collaborate with us and the client experience expectations will continue to evolve. We want to be on the front side of that. For example, currently the lion’s share of our customers aren’t interested in going to a portal to self-serve. From their perspective, that’s why they’re using us as their broker. But we expect to see more change as younger business leaders are taking over these businesses. That doesn’t necessarily mean that everyone wants to self-serve, but they may want to consider better ways to collaborate with us, better ways to work with us, and be more productive in a more modern way. 

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BTV: Can you tell me a little more about the relationship between Heffernan and BrokerTech Ventures? 

JPJ: We’ve been a BrokerTech Ventures partner since 2019, when BTV was established. What attracted us to BTV was the template of collaboration and enhanced investment strategies. 

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The model of continued collaboration between brokers, carriers, wholesalers, and insurtechs struck a chord with us. Prior to joining BTV, we were very actively involved in the insurtech space, including investing in, piloting, evaluating, and engaging with startups. What we found was twofold: First, we were only looking at insurtech initiatives from our own point of view. We discovered that when we started talking to other brokers like M3, we’d share ideas and found that we could be much more productive talking to a startup together than separately because we bring different perspectives. We have different needs and pooling those needs together gets more accomplished. For example, the startup is more willing to advance specific technologies if multiple potential partners are asking for that technology in terms of modifying or changing their platform. So when Holmes Murphy and M3 started BTV, we were very interested in being a part of it. An added benefit is that this collaboration isn’t limited to experiences with insurtechs. Through BTV we’ve been able to build relationships with other brokers and companies within BTV and we get on the phone with each other and when we’re trying to solve the same problems and share where we’ve had successes. 

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The other side of our partnership is from the investment perspective. Prior to our partnership with BTV, we’d been focused on investing in insurtechs where we knew we’d use their product and could have a fairly significant impact on them succeeding or getting over the hump just by Heffernan using them and being fully integrated with them. We found, over time, that we just weren’t big enough to have a large enough impact. Having a collective group of agencies that are willing to engage and pilot with the startups leads to more probability of the startups’ success – partly because of collective revenue from BTV partnerships, but also because they have access to multiple partners that are working with them directly to help them improve their product and build revenue streams. And, of course, the collaboration to uncover new insurtech solutions was also very attractive to us. 

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BTV: So, tell me a little bit about your integration with Comulate. How did you first engage with them? 

JPJ: We find insurtechs in all sorts of ways. Some reach out to us directly, we have firms and influencers in the industry who will refer an insurtech to us, and others we've encountered via selecting and evaluating through BTV. We had talked to Comulate prior to their entry into the 2023 BTV accelerator class, but we hadn’t actually engaged with them. Once they joined the 2023 cohort, we realized how much they had grown since our previous conversations and we decided to pilot with them and built an engagement.  

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BTV: Let’s talk a bit more about Comulate. Who is Comulate and how has Heffernan engaged with them? 

JPJ: Comulate is an insurtech startup company. Comulate automatically extracts and reconciles commissions from carrier statements to policies in our agency management system. It takes what used to be a very manual process that we would outsource or leverage companies in India to take care of for us, Comulate instead leverages machine learning and artificial intelligence to automate the process. 

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Right now, we are using Comulate purely in the employee benefits space. With an employee benefits direct bill statement, we used to have members on our accounting team collaborate with our India team to go through every single statement, see what the income is, look it up in our agency management system, and then apply the amount in our management system manually, every single month on hundreds of statements. Instead of going through that manual process, it's now automatic; 40% of our statements are automatically completed without any human intervention and we expect that to reach 80% later this month. For us, it has been one of the most successful insurtech onboarding initiatives that we’ve had yet. 

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BTV: Can you share a little more about the effect this engagement has had on your business operations? 

JPJ: Our engagement with Comulate has created a significant level of efficiency and additional accuracy in what was a very manual revenue reconciliation process. It has provided relief to our teams, especially in accounting and service. It is an incredible internal operational improvement in the metrics of efficiency, revenue recognition, accuracy, and resources. As an example, in our manual process, around 50% of the statement transactions were recorded incorrectly. When the outsourced reconcilers were looking up policy numbers, they would find policies that would look correct on the surface but would actually be expired. When they applied the revenue to the expired policy, we would eventually need additional intervention to correct the inaccuracy. This technology has reduced errors by 80%. So not only does it automate a manual process, but it has increased accuracy allowing revenue recognition to occur correctly the first time enabling us to recognize revenue in our financial statements more quickly than we were able to prior to engaging with Comulate. 

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BTV: What other technology solutions is Heffernan looking for? 

JPJ: We are looking for insurtech and technology solutions in three basic areas of our business – operational efficiency, sales and business development, and customer experience. One of our biggest challenges with all the various insurtech solutions that are starting to bring value is that they all stand on their own, and as a result, if we engage with them we have these isolated platforms all over the place and they become very challenging for our teams to engage with, so adoption tends to be low. Our focus now is building a road map for a Producer / Account Manager single pane of glass for work to streamline the customer lifecycle from lead to renewal, with many technology solutions seamlessly integrated. Additionally, we will continue progressing our data program with more metrics, KPIs, using trusted AI with additional reporting and dashboarding.

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