Ep 308: Tim Welsh, President, CCC Intelligent Solutions

Speaker A: Foreign. Welcome to the FNO InsurTech podcast, a place where movers and shakers from all points within the insurance ecosystem gather and discuss all things insurtech. Here are your hosts, Lee Boyd and Rob Beller.

Speaker B: Hey, everybody. Welcome to this week's edition of your favorite podcast and mine, FNO InsurTech.

Speaker C: Not what I thought you were gonna say. It's not what I thought.

Speaker B: What did you think I was gonna say?

Speaker C: I don't know. All the podcasts I listened to on my way to Dallas last night. Uh.

Speaker B: Oh, there's so many.

Speaker C: You know, I think this podcast thing is, like, catching on. I think. Yeah. There's a couple of other ones out there now, and it's. It's kind of. I think it's going to catch on.

Speaker B: Do you?

Speaker C: Yeah, yeah, yeah.

Speaker B: I think. I think you're right. In fact, I had an interesting experience yesterday. I saw a post of our previous guests.

Speaker C: Oh, yeah.

Speaker B: Benjamini from Firedome Fire Dome.

Speaker C: I talk about Firedome all the time.

Speaker B: One of the weirdest, most interesting insuretechs we've ever touched. Wouldn't you agree?

Speaker C: It was at such a pivotal part when the wildfires were going, and it was awesome. I talk about it all the time.

Speaker B: Yeah. If you haven't ever looked up Firedome, do that sometime and see what they do.

Speaker A: It's.

Speaker C: Yeah. We have a podcast.

Speaker B: Very unusual. And we have a podcast to listen to, and I saw a post from him that they're launching in the US in the Sacramento area, and I live in the sac.

Speaker C: It's a play on words.

Speaker B: What are the chances of that?

Speaker C: There's a few cities in the world, so I would think that's not a very high chance, although it is California and there's wildfires, so maybe that's it.

Speaker B: Uh, I'll tell you something else about Sacramento.

Speaker C: What's that?

Speaker B: Sacramento has a massive amount of development going on in the downtown area where I live near. Right.

Speaker C: Yeah.

Speaker B: And a big part of what's going up are these ginormous tall apartment buildings that have, like 200, 300 units where there used to be, you know, old buildings that they've taken over.

Speaker C: Yeah.

Speaker B: And one of the things that they're doing is they're not building parking. So they're not, like, digging down.

Speaker C: They just think there's enough parking.

Speaker B: They just are building the apartments. So where you have to park in Sacramento pretty much is on the streets. So the streets are becoming increasingly crowded with cars, and parking is increasingly difficult. Not to mention it's expensive because there's meters everywhere.

Speaker C: Right.

Speaker B: So anyways, so I'm parking the other day.

Speaker C: Okay.

Speaker B: And I'm a pretty good parallel parker.

Speaker C: Okay. We'll see how the story ends up. We'll see.

Speaker B: I said pretty good.

Speaker C: I didn't say pretty good. You got a camera in your car that helps you.

Speaker B: I do have a camera. I have a backup camera.

Speaker C: Okay. I just want to make sure that you had all the features that help you park the car so that the audience knows that you have those things. Please continue with your story.

Speaker B: You're doing this to hurt me, right?

Speaker C: A little bit.

Speaker B: So. Because you already know how this ends. So anyway, I do. So I'm parallel parking it. And I have to tell you, like I said, I'm pretty good at it.

Speaker A: Right.

Speaker B: Because I get a lot of practice. If you live here.

Speaker C: Yeah.

Speaker B: And I'm backing in. And there had been big winds in Sacramento a few days before. Some tree limbs that have fallen around. So it's a little tricky. It's not impossible, but a little tricky because there's some tree limbs that are down that I had to swerve around. Um. And I don't look at my backup camera, which you asked about, Lee.

Speaker C: Yeah. Or probably hear the beeping.

Speaker B: No, I don't have that feature. Doesn't.

Speaker C: Okay, well, see, that's good. Thank you for that information.

Speaker B: I wish it existed because guess what? I wouldn't have done what I did. Lee. Okay. The payoff here, I backed into the car that was parked behind where to park.

Speaker C: Yeah, that's terrible.

Speaker B: Tapped it. I mean, literally, a little, uh.

Speaker C: Just a little love kiss. Little love kiss.

Speaker B: Right. And I get out immediately and I go and I look and their car is as if nothing had occurred. And my car has two license plate bolt based holes now in my rear bumper that are both about half an inch or three quarters of an inch wide. You know exactly where I backed into their license plate. So.

Speaker C: Yeah.

Speaker B: The point of the story is is that now I have this repair on my back bumper which is going to cost some money. Fill in the blank.

Speaker C: $2,000, I would say. Yeah. It'll be a pretty penny.

Speaker B: Oh, Rob, there's gonna. We're gonna have to paint and we're gonna have to.

Speaker C: You gotta blend it to the others. We have to blend and, and calibrate once it's done.

Speaker B: And I'm like, what a dragon? And I'm thinking to myself, wouldn't it be great if there was an insuretech?

Speaker C: Yeah.

Speaker B: Huh. Uh, you like where I'm going?

Speaker C: I like what A good circle here.

Speaker B: Wouldn't it be great if there was an insure tech that could help me to do this and to make the experience a reasonable one? Because like everybody who's listening to this podcast, most of us have been involved in an accident one way or another, and we know that there's pretty much nothing good about it.

Speaker C: No, it's never, uh, convenient and it's never enjoyable.

Speaker B: No start to finish. And so can that change? Well, yeah. Day, our guest is a guy who's, uh, out there trying to make this happen and he's not doing it from a platform of obscurity.

Speaker C: Right.

Speaker B: We have Tim Welsh, the president of CCC Intelligence Solutions. Most of you know and are very familiar with ccc, but we got him and he's with us today.

Speaker C: Yeah, and Tim's going to come on today and he's going to tell us all sorts of things. Tim has been at the company for about a year. He's going to tell us how he got there and he's going to tell us what he's been doing for the past year. And I'm going to tell you right now, a little look behind the curtain. He's passionate. He is passionate about helping to make what Rob talked about a seamless experience. There's nothing good about a wreck. Nobody can stop that from being a bad situation. But as long as you have people like Tim, CCC and the company working to make the repair as good as possible, I'm a happy camper because he is passionate about that. And I can't wait for everybody to hear. We're so lucky to have him today.

Speaker B: So look, and this is an interview that both Lee and I looked at each other after it was done and said, that was a really good one.

Speaker C: That was a really good one. We don't always say that.

Speaker B: We don't always say that, but we do today. So please join us and listen to our interview with Tim Welsh, president at ccc. Hey, everybody. We are here with somebody who I literally consider a special guest. We have Tim Welsh, the president of CCC Intelligence Solutions, joining us today. We've had CCC on a few times and we're thrilled to have another guest from the company. Welcome to FNO Insurtech.

Speaker A: Welcome, Tim, Rob, Lee, you guys are so kind. I couldn't be more excited and honored to be here. Thank you so much for hosting me.

Speaker B: Well, we of course don't believe you, but we'll see what we can.

Speaker C: They all say that. They all say that. Don't be worried.

Speaker B: You won't be saying that when we're done. Anyways, let's jump right in for those people in the insurance industry who don't touch the automotive side at all.

Speaker C: Mhm.

Speaker B: Give us a minute on what CCC is and what you guys do.

Speaker A: It's such an important question. Rob. Thank you. And I have been. The simple way that I try to explain this when people ask me is, is I asked them back, have you ever had a car accident?

Speaker C: Okay.

Speaker A: And what almost everybody says, because more than 80% of people have had a car accident. Oh yes, I've had a car accident. And what I describe it as, I say what likely happened with your car accident was that your, uh, insurer, there was a pretty good chance your insurer used our systems to help manage your claim, that the body shop where repair facility that you went to probably wrote an estimate, uh, using our software, and that many others in the system, perhaps the tow company or others, were all connected to the CCC system. Because that's what we've created is an interconnected community, all with the purpose of helping people who have had a car accident move their life forward, get back to normal as quickly as possible. That's. So that's how I try to explain it to folks who are not in this world realm.

Speaker B: And because we're an insurtech podcast, uh, we touch all areas of the ecosystem of the insurtech ecosystem, many of which, as you can appreciate, is other than auto. Uh, that said, I would consider your company one of the grandparents.

Speaker C: Yeah. Of.

Speaker B: Of insurtech. Wouldn't you agree with that?

Speaker A: I think what most people would say is that we were insurtech before insurtech was a thing.

Speaker C: Yeah, right. I agree.

Speaker A: And huge credit to Getesh Ramamurthy, who's the CEO now for over 30 years or so, really seeing the power of technology to do good and to help improve this whole ecosystem and make it work better for the insurers, the repair facilities, those involved in the casualty operations. Getesh saw all of that and had the amazing ability to build the technology over several decades and that everybody found compelling to help link those groups together so we could all work together for the insurers, the repair facilities, the OEMs, cash to market, all in the benefit of the consumer.

Speaker B: We want to talk and dig into what's going on in the industry too, but we'd love first to touch on how you got here.

Speaker A: Yeah, yeah.

Speaker B: Because in the world of automotive repair, there are a lot of auto people, or as we might call them, auto guys who are Running around who've been playing with cars and involved with cars their entire career and their entire life. Your path isn't exactly that, as I understand it. Can you share with us where it is you came from and how you uniquely found your way into this position?

Speaker A: I am glad that you are asked this, Rob, because you're not the only person that's confused. A lot of people have said, how did you get here? People say to me that, Tim, your background is very unusual. You were a consultant for a very long time, then you worked at a bank in consumer and small business banking. And now you're at an insuretech in the middle of the automotive space. And most people say, tim, that doesn't make any sense. There's no rhyme or reason how you would connect all those things. And I say a couple of things. First of all, it would be helpful if you had known me when I was in college, because what you would have known, what you would have thought when I was in college if you had known me then, is that I was going to be a Catholic priest. And the reason you would have thought that is because I thought that I was doing all the things that one would do if you were going to be a Catholic priest. I was going to seminary. I was president of the Catholic Student association, taking classes at the divinity school. The whole world saying, this guy is going to be a priest. Okay? And I decide in my senior year that is not the right path for me. So then I am stuck because plan A was lifetime employment, right?

Speaker C: Right, Right.

Speaker A: And plan B did not exist. So when you're a senior in college, this is a problem, right?

Speaker C: Yeah.

Speaker A: So I'm in one of the many examples of God's grace in my life. I'm walking across campus one day, I bump into my roommate. He says, you have to come to this presentation. It's about McKinsey. I said, what's McKinsey? He said, it's consulting. I said, what's consulting? Because I was gonna be a priest. Why would I need to know?

Speaker C: You don't need to know all that.

Speaker A: Yeah, I don't know any of that. Right. So he says, just put on a tie. Come to the presentation. So I meet him there, and the head recruiter stands up and says, all you have to do to succeed at McKinsey is like helping people.

Speaker C: Okay?

Speaker A: I said, well, I don't know anything about this, but I wanted to be a priest because I wanted to help people. And Lee, Rob, against all odds, I get a job at McKinsey and I get the good fortune of spending 27 years serving my clients, helping them, uh, most of my clients. Turns out I like insurance a lot. Insurance is the part of the world where we all come together to help each other out. That's the basis of insurance. I have the extraordinary privilege of working with Gitesh Ramamurthy in that he's one of my clients. Right. Wow. So that was part of it. I. I then go to a bank at US bank where purpose was we invest our hearts and minds to power human potential. I must have said that five times a day, every day, because that's about helping people. And now CCC, we help 50,000 people a day who. 50,000 people a day have a car accident. Right. And I've been out asking people, I asked them three questions. Do you remember, have you had a car accident? 80% of people say yes. I say, how vividly do you remember the car accident? And what happens is people literally spontaneously start telling me about their car accident. Of course, that's how vivid an experience this is. And then they say, boy, what can we do to make it easier for people who have had a car accident? Right? Because it's this really traumatic experience. And so my purpose at CCC's organization is trying to help those 50,000 people every day move their life forward. Right? So the theme in all this craziness of consultant banking, CCC is trying to help as many people as possible move their life forward in some way. That's what I'm trying to do. So that's. Hopefully that makes that a little bit of a crazy background a little bit more explainable.

Speaker C: So we'll call you the mayor of Venture Tech. We'll call you the priest of insuretech.

Speaker A: People have said that. They said I'm priest in different forms.

Speaker C: I would say there's all sorts of forums and helping people. Right. And you can bring.

Speaker A: Exactly.

Speaker C: You can bring things into all sorts of conversations. I love that. And so you joined CCC recently, right? Maybe about a year ago, is that right?

Speaker A: Just about a little over a year ago. Exactly right.

Speaker C: And so tell us, as the president at ccc, what do. What is your. What are you tasked with?

Speaker A: What do you.

Speaker C: What are you focused on?

Speaker A: So I have, uh, responsibility for parts of the organization that are primarily focused on our clients or our customers. And so what I have spent the first year doing is going out and listening. And I've heard a lot of really interesting things. So the first thing I've been listening to is I've been listening to consumers and wherever I go, whether it's a big conference like we had a couple weeks ago, whether it's a one on one, it's a friend or family, I ask people if they've had a car accident. My wife tells me I'm a little bit of a buzzkill, but I ask people about this. And so I've been listening to what the experience of having an accident is. And it's really powerful. Right after people tell me spontaneously that they've had this accident, because they'll tell me, I was, uh, on Interstate 75, I rolled over my car. It's like people have it really vividly remember.

Speaker C: Yes.

Speaker A: And then I say to them, I say, you don't have to answer this question, but I say, do you remember that accident as vividly as you remember your wedding or the birth of your kids? The point is, it's up there. It's a really powerful experience that people vividly remember. So the first group I've been listening to, Lee, is I've been listening to consumers because I really want to understand what that experience is. The second thing I've been listening to are our insurance, repair facilities, OEMs, all the people who are part of our ecosystem. And I've heard a couple of themes that they have said. The first is they've said, boy, we now live in a world where everything associated with cars and insurance is expensive. Right. A new car now costs plus or minus $50,000. Insurance premiums are up 50% in the last five years. And people have said, this is really hard for those consumers we're trying to help. It's really gotten expensive. We know that there's more. People are not reporting claims as much because they don't want to incur the premium increases, et cetera. So we're seeing all of that. You see the product's really expensive. And the other thing they're saying is AI seems like a really powerful tool that could potentially help us create a whole new experience for the consumer that's a lot better than what it is today. And frankly could be better for the adjusters, it could be better for the shops. Everybody sees this potential in AI and they're saying to me, what's CCC going to do to help us on this? Because we see the potential, we know that costs are really high. And so we'd like to figure out ways to manage costs effectively using AI and can you help us think about that? And so that's what's been really fun in my first year, Lee, is to hear all of that and Then start to help our organization evolve to saying, how do we build on this amazing platform that we've got to use AI and other tools to help consumers have a better day and to help streamline this whole system.

Speaker C: That is exciting. Because the other thing is you're not starting from ground zero. You didn't walk into an organization who is like, know what to do. We don't know what AI is. I remember some of our past conversations. I can't remember the phrase we were told, but it taken my senses to this whole new way of doing AI. It was a surrounded ecosystem. You're not just looking at AI from point one, you know, a point B. You're encapsulating the entire relationship with the insurer, with the crew, with whatever using AI. And so, so you walked in to an exciting place who probably continues to want to see more direction. And that sounds like what you're doing. You're saying, let's do more, let's even go bigger.

Speaker A: So we have an unbelievable platform. Lee.

Speaker C: Right.

Speaker A: Like we've been test started investing in AI more than a decade ago. Yeah, Right. So we can take pictures of cars, write estimates off of that. We have AI that does in, in literally a minute or two, will assess casualty claims and subrogation claims. So all kinds of AI. And what we're now trying to do is stitch this all together in such a way that has that end consumer in mind. And then something very important you said, called ecosystem.

Speaker C: Ecosystem, right.

Speaker A: So how does the whole system work together better so that when we have, we've created a consumer that we call Ava. Okay. And we think about Ava as having this traumatic accident she's going to remember it's very powerful. But you could imagine a world, Lee and Rob, where the minute that accident occurs, a combination of AI and humans, because we're not trying to take people out of the loop, this is about adding to it all of a sudden begin to help Ava. And you could imagine on her phone saying, ava, is everybody okay? Is anybody hurt? Because that's obviously the most important thing. And hopefully everybody's okay because. But you could then imagine photos being taken, an estimate being written, her shop visit being scheduled at a time that works for her in the shop. You could imagine parts being ordered. There are lots of different things that AI can do to help orchestrate this whole ecosystem. And what we at our conference talked about was, in fact, this is a vision that we can all imagine and is achievable from a technology perspective. And, and this is the part that really I think is so exciting is that we can do good for Ava and in the process everybody along the way can make a little bit more money. And we've actually quantified that too. We've been able to say insurers could make two to four more points of combined ratio and shops could potentially improve their margins 2 points to 6 points. Uh, when you're only making 7 to 10 points on a shop, 2 to 6 points of improvement's a lot.

Speaker C: Yeah.

Speaker A: Right. So we've actually mapped out this whole thing and said the technology could work and we could all benefit. Our businesses would thrive as a result of this too. You go, that seems like a no brainer. Ava has a much better day than she was otherwise going to have and we're all working together in new ways. So that's what we're really excited about is that kind of opportunity.

Speaker C: Well, I love you're saying there, it's so easy when you're designing new processes and technologies to say how are we as companies going to do better? How am I more, uh, connect the other companies, how are my margins working? All these. But what I'm hearing you say is that the center of it all is the insured, is how do I make their life better while getting everybody else to also be better. It wasn't an afterthought. It's not a very heavy lift. Yeah.

Speaker A: We're designing it around the consumer, the insured. Right. But and then thinking about everybody involved. So let me give you a very specific example of this. Let's imagine that our insured Ava has an accident that looks like it might be a total loss.

Speaker C: Mhm. Right.

Speaker A: So think about Ava in that she's really shaken up. This is a bad accident, car is really damaged. You can imagine the human misery associated with that. So then all of a sudden on her phone we start, we make sure she's okay, she's all right. We start giving her a little bit of guidance. Say, okay, take a few pictures if you can just walk around. And we're going to quickly write an estimate to figure out if in fact the car is a total. Now in today's world, what might happen, and it happens 40% of the time, is that her car, if it's a borderline total, goes to a shop, right?

Speaker C: Mhm.

Speaker A: And it sits in the shop for a couple of days holding up a bay because we got somebody's got to write an estimate on and it's complicated, et cetera. So all of a sudden imagine a world where we can use AI to Help Ava take the pictures to write an estimate. We can say, oh, it does look like it's a total loss. So we can avoid it going to a repair facility unnecessarily. But to make it more interesting, imagine that it might be a total loss because the two headlamps on her car have to be replaced and they're very expensive.

Speaker C: Yeah.

Speaker A: So we could imagine a world where in real time, that parts manufacturer, you know, or an OEM or another supplier has the opportunity to say, oh, my goodness, right now we're going to lower the parts price from X thousand dollars to 0.5x so that Ava's car is not totaled and it therefore goes to the right shop. We get to sell the parts at a discount, but we still make a margin on it. Yeah. That shop has a repairable car now. We know it's repairable. It's not going to sit in the bay for two days wasting their time, and all of a sudden everybody's done better. Right. Ava didn't have a total loss, which is the worst experience. She got the estimate right away. We knew how much it was. It went to the right shop. The parts manufacturer was happy because they got to sell the parts and the shop had a car that they could fix and they knew exactly what the damage was. So that's all possible today. Lead to your point with AI to link all of those things together. Ava has a much better experience and everybody else does a little bit better along the way.

Speaker C: Yeah.

Speaker B: How is that more affordable?

Speaker A: So this is a great point. Great point. Right. Because Rob, if it had been a total, would have been by definition more expensive. Right, Right. So now we've made it her more affordable for the overall system. So her insurer was going to pay X and they're now paying something less than X. Yeah. Right. So they have done better. Their combined ratio will be better than it otherwise would have been. And they can then choose to either keep that money for their shareholders or probably what they're going to do is put it into pricing, which makes their product more affordable.

Speaker C: Right.

Speaker A: So it hopefully, if you lower the cost of the claims by handling them efficiently and accurately, I want to be crystal clear, this is about accuracy of the claim. Yeah. Not not paying the lowest. It's not at all what this is about. But by focusing on accuracy and simplifying the process, you take costs out of

Speaker B: the system, you're uncovering opportunities that might have been foregone or never seen.

Speaker A: Precisely. Really well said. Right. We're making the whole system. There are opportunities that wouldn't have been seen, just as you said that we can now see and we can orchestrate across the whole claim system because AI allows us to do that. In a way, it was much harder for humans. It would have had to been phone calls and all that stuff. AI will help us to integrate these things.

Speaker C: And so does it work? I mean, this is kind of a no brainer question, but it works when everyone's on the system, right? It works when you have the data. Is that, is that part of the play too? Is that part of your. Your is to also get more and more players on the system so that you can do better and better.

Speaker A: This is really important, Lee. We want everybody to be connected, right? And we are trying to be as open and to all kinds of partners as we can be, right. At our conference, we had several of our partners on stage. Kai Marley, oec, these were folks who we say, look, we're inviting you in. We want the tent to be really big, right? And because the only way that this works, the only way that we uncover the opportunities Rob, you described about is all of us working together, right? The theme of our conference was together on purpose. The reason we had that theme, and we're probably going to have the same theme for several times.

Speaker C: Good.

Speaker A: Because the theme is, first of all, it's all of us working together. That's fairly obvious. But, uh, on purpose has two meanings. The first is intentionality, right? We are working together on purpose so that we can help Ava's life be better and we can find the opportunities. Rob, you talked about so that everybody has this, right? So that's the first sense of on purpose. But the second is on purpose is it is our collective purpose to help Ava, uh, get her life moving forward. We see it, we had ccc, we talk about it as our job is to help move your life forward. We actually put up a couple of slides at our conference where we had 50 of the attendees or something, it might have been 60, I don't remember. And we put up their purposes as well. All the insurers, the repair facilities, the OEMs, and, and what was amazing, Robin Lee, is how much overlap. Like all. When you put all these purposes on a piece of paper, it's amazingly compelling. You read all the words, you go, we're all trying to do the same thing. Yeah, right. So that was together on purpose, together with intentionality so that we can live out this purpose that all of us are talking about. We're just going to do it together as opposed to just one Company trying to do it.

Speaker B: A rising tide lifts all.

Speaker A: Well said. That's what we're trying to do. And it will lift all boats. Ava will have a better day and we all make some additional margin in the process.

Speaker C: I love that. Um, into a new object here. Everyone who has been in a wreck, myself included, I always said it's more and more expensive to repair cars. Cost, uh, is crazy. Everything's expensive. Like you said, two, you know, on an or two. Two headlights could. Could blow car.

Speaker A: Almost exactly.

Speaker C: Is that included in this? A, uh, focus on making sure that you're bringing the cost of the repairs down with new ways of doing things. You talked about bringing the system working with used parts or something. Is that part of this as well?

Speaker A: The key thing is we want to be accurate. Right? We want to. Do you want to assess. So it. But what we're finding is that in being accurate, there are lots of different ways to do that. I just gave you an example of the headlamps. Right. Um, that's something that doesn't exist today, but could exist in an AI world. Right. You'd have that real time possibility. You could also imagine that the process becomes more. That you have less steps in the process. The specific total loss example, that car might have been towed to a shop and then towed to a salvage yard. Right? Right. But in this case, if it's towed to the shop, it's going to be fixed there. And if it's. If it really is a total, it's going to be towed to the, uh, salvage yard. And so that's just a way of making the whole process a bit more efficient.

Speaker C: That makes sense.

Speaker B: You know, I'm going to admit my mistake. The other day I backed into a car again. I live in Sacramento, and there's a lot of parallel parking in Sacramento. You have to be good at it to live here. And so I'm pretty good at it. But I slipped.

Speaker C: I'm just saying. I'm just saying.

Speaker B: Back to another car, very slow, no damage to their car, but their license plate bolts made two holes in my rear bumper. And I thought to myself, I just created a $2,000 expense for myself in one second in a non. Nothing.

Speaker A: That's right.

Speaker B: You talk about it being a horrible experience. I've had that happen as well. But this was nothing. I mean, how do we deal with that? Or is it just foregone?

Speaker A: There's several things I want to draw out from what you just said, because what you gave was a very powerful example. First of all, I'm Grateful that I don't live in Sacramento because I am a terrible parallel parker. Uh, and my family would go on and on about that. So this, I'm already saving myself from not living, not being. Your second thing that you're highlighting is that the complexity of the cars today is so high. Right. We, we put out a statistic at our conference that there are something like 300 million lines of code in a car.

Speaker C: Oh, my gosh. Right.

Speaker A: We compared it to an airplane, which has a fraction of that amount of code. Right. I mean, these are extraordinarily complex things. And so when you have an accident, as you did, you, you have, you know, you haven't just hit a bumper, you've hit a whole series of chips and sensors and all kinds of things. Right. So that is part of the cost associated with this. You've also, though your example is so powerful because it highlights the consumer question then. So imagine that your premiums now, you don't have to imagine they've probably been the case. Your premiums have gone up 50% in the last five years.

Speaker C: Yeah.

Speaker A: You're now faced with the question of, am I going to get this fixed? Right. It's going to cost a couple thousand. My deductible is probably 1,000 or 500. Right. So, um, what we're seeing is fewer and fewer consumers are reporting those small claims. They're, if they're getting them fixed, they're choosing to pay for it themselves.

Speaker C: Yeah.

Speaker A: Okay.

Speaker B: That's exactly what I assumed I would be doing.

Speaker A: That's exactly right. Now, we have to keep in mind that 60% of consumers can't afford $1,000 accident. They can't come up with the money. Right.

Speaker B: Right.

Speaker A: So all of a sudden it's like, this is not only an annoyance, it's like, this is a major challenge because you're probably, if you can't come up, you're pretty dependent on using your car to get to your job and pick up your kids from daycare and all that other stuff. So this is a real crisis. And so back to the affordability point. You are most highlighting. If we can help improve the accuracy in this system, which could reduce costs and make the whole thing more affordable, you don't put that consumer in the precarious position, uh, that they would otherwise be in.

Speaker B: We can't have a podcast episode recorded anymore without talking, um, at length about AI. I think we all can understand and admit that it's been, it's. And it's coming and it's God knows where. It's all going to end. How are you all harnessing it? And like we, I think we said earlier, AI is, uh, something that you guys have been playing with or you leveraging for years, so you have somewhat of a head start.

Speaker A: Yep. Yeah, there are a couple of different examples because, you know, AI is a very broad term and there's so lots of different examples of it can be used for. What we've been talking about so far is how we think of AI for orchestration. So what I mean by that is, in this case, AI is helping orchestrate Ava through the claims journey. Right. She's doing. Ava is having that experience with AI and humans. Because I want to be crystal clear, we fully expect adjusters and other claims professionals to be deeply involved in this process. But that's an example of how AI helps the humans. The adjusters and other claim professionals guide Ava through the process. That's an example of AI orchestration. Another example of AI use we call guidance. Okay, and let me give you an example of what that looks like. Uh, we bought a company about a year and a half ago called Evolution iq. Yeah, Evolution IQ was in the disability business. Right. So if you're a disability adjuster, you typically have 150 or 200 cases that you're working, and each of those cases has thousands, often of pages of medical records, other information, et cetera. I don't know about you, but I would find 200 cases with thousands of pages. I'd find that a bit overwhelming. And I'd come into work and I wouldn't know what to do. Now, most disability claims adjusters are much more sophisticated than. I would need some help. And in particular, what I would be focused on is how can I help this consumer who's out of work? How can I help them get back to work? Because everybody wants to be back at work. And how can I help their employer and us save money in the process? So what guidance with AI does? It says, I show up at work, I got my 200 cases. I've just come in at 9am on Tuesday. I log into my computer and the guidance system says, okay, Tim, here are the five things that you should do today, the five actions you should take to help get people back to work and improve the overall cost now. And. And it has read through all of my files and all that and determined. These are my five things. I still have a lot of choice in this. Idea one's a great idea, but idea two I'm not so sure about. So I'm not going to do that. One, but I'll do idea one, M3 and 4 and 5. Right. So I, as the claims professional, still have all of my autonomy, but what we're finding is that that helps people get back to work and helps lower cost. And now our customers are using that information to guide the process. So I'm just example. Uh, you know, to your point, Rob, there's AI orchestration, there's AI guidance. There are other uses, but those would be just a couple examples.

Speaker C: I love the AI guidance. That's something that we've been playing with a lot. And it's about not dictating a person's day, but it's about saying, hey, logically, we think these are the best things. You're the human, you know the situation. But we, we've correlated some data. We believe it's right. Now, you use your logic. I think that's a great way to go about that. And is that something that not only are you looking to continue to add, but maybe expand within your. Your system?

Speaker A: That's exactly right. So one of the things we're doing now is taking that same idea and working it into our casualty.

Speaker C: Oh, that's right.

Speaker A: Because casualty adjusters are in a very similar spot to disability adjusters. They have lots of files. It's complicated. Right now they're being inundated with AI and other supported demands. Uh, you know, like, you know, Rob, you were describing you're insured. Hit our claim. Our insured. We got to resolve this. So if you're a casualty adjuster, you could use all the possible benefits of guidance. Right. Because you got so much to do. And so that's how we're taking that idea from disability and applying it in the auto space.

Speaker C: That's exciting.

Speaker B: Tell us a little bit about crash

Speaker A: course 2026 in the sense of the data, the kinds of the findings that it shows is outstanding.

Speaker B: I think we were shared the report.

Speaker A: Yep.

Speaker B: With us. The key points out of that.

Speaker A: We've talked about a number of them and I. I just highlight a few of them. Uh, so the first is the. One of the overall themes of Crash Course was complexity. And you both asked about this. It's. Cars are becoming more complex. The number of models is becoming more complex. Just to give you some sense of this. Yeah. We have in our system more than 27,000 car models. Right. Just alone, you know, each of those car models typically has more than 20,000 parts on it.

Speaker C: Right.

Speaker A: So you just think of the overwhelming complexity now that you're dealing with.

Speaker C: Right.

Speaker A: And then, by the way, you know, one of you is in Texas, one of you is in California. The labor rates, the parts availability, all of that stuff is completely different between Texas and California. You know, it's different between Dallas and Houston, is different between Sacramento and San Francisco. Oh, at, uh, the most basic level, what you're talking about is a system that has extraordinary complexity. Okay. But add to that, how much leniency do you think departments of insurance give carriers for making any mistakes?

Speaker C: Not very much.

Speaker A: Not much. Lens. Right. So you're in an incredibly complex world where precision matters enormously. Right. Accuracy is everything. So that's a lot of what we highlighted in the report is the world's becoming increasingly complex, but it's also highly regulated and precision matters enormously. Right. So in this world, how do we use AI and other tools to help manage that complexity? Uh, very effectively. The report also goes into quite a lot of detail about this particular issue we touched on of low volume claims or low cost claims, claims being handled by consumers and more expensive, more complex claims ending up in shop. Uh, that's another one of the findings. So those would be some of the example of those key findings. And we're glad you find the report

Speaker B: because it's great within the ecosystem. Yep. And I just, I, uh, have to ask this before we run out of time today. Are the car manufacturers in that?

Speaker A: Absolutely.

Speaker B: I mean, aren't they like when I, when I had my little bumper incident, I did, I looked at it carefully, the bumper, and I saw that it's all connected together.

Speaker A: Yes.

Speaker B: One big, enormous. I have two holes the size of pennies, but it's on its the width of my car, right?

Speaker A: Yes.

Speaker B: There's no shortcut to fix it. The whole thing is one unit piece and so it has to be replaced. You would, uh, think your data, which is enormous, your storehouse of data is vast, is that going back to the manufacturers and saying, hey, there's gotta be a better way to do this.

Speaker A: So the short answer is absolutely yes, and in a second I'm going to give you the longer answer. Okay. But the. It's really fascinating for those of you who are watching this live to see the amount of passion that Rob has in describing this accident. He remembers it vividly. He can tell you all the details of it. Robin Lee I have had this experience literally hundreds, if not thousands of times in the last year where people explain it this vividly. This is how important an accident is. I remember my first accident when I was 16 years old. I'd been driving for two weeks. I'm in the parking lot of my high school and I run into. I'm trying to park my car. I run into somebody else's car. That car happens to be owned by the captain of the wrestling team.

Speaker C: Always a good.

Speaker A: Always good. I go into physics that day and my teacher says, Tim, I'd like you to go to the board. We're talking about Newton's laws of physics. Imagine, Tim, that in the parking lot of our school there is a. Called a white Ford Falcon which runs into a red Chevy Duster. Tim, I'd like you to figure out what the forces at work are in this. So totally red faced and humiliated, I get to put a bunch of Newton's equations on the physics board. Right.

Speaker C: Fantastic.

Speaker A: So like, we all remember these experiences very vividly. What I hope we can create together is a system where you say it was really awful and it was complicated, but boy, things worked so well after that that I got back on the road quickly. I got my life back together. So Rob, thanks for your passion on that. The longer answer is we have. All the leading manufacturers are connected into our system and they are sharing data just along with everybody else. They're a core part of this. Their parts data availability is crucial. They are partners with us in figuring out how we can detect accidents quickly, how we can know what parts are done. So you had this very eloquent description of how all the pieces of the bumper were put together is they get feedback about all that sort of thing. Having the auto manufacturers is a hugely important part of our ecosystem, Tim.

Speaker C: With that, I do jump in real quick and just say my wife had an accident not too long ago and I get to report the companies that who repaired the car run on your rails. And at the end she said, wow, that was so easy. It was easy. What it was the wreck is the story that gets told. Nothing ever gets mentioned about the repair because you've kind of got a point of like, why even talk about it? It was that easy.

Speaker A: That's Lee, that's what we want. We want more stories like that.

Speaker C: Yeah.

Speaker A: Where your wife. And by the way, one of the fascinating questions to ask people is how vividly they remember the accident of a spouse or their children.

Speaker C: Oh yeah.

Speaker A: Because. Because they remember the accident of their spouse or their children as vividly as they remember their own. Even if they weren't in the accident.

Speaker C: Yeah, I remember it. I wasn't even there. I just.

Speaker A: You weren't there, but you remembered and you were worried. Yeah, right. And we want everybody to have that experience that Says, boy, it was really easy. And my life moved forward after that.

Speaker C: I love that.

Speaker B: It's remarkable and insightful. We had this episode today because it's one of those life events, like you said, like, uh, remembering a wedding or a birth.

Speaker A: Exactly.

Speaker B: I mean, you remember these things. I was in a very, very bad accent when I was maybe 2, and I can still see it in my mind.

Speaker C: Yeah, clearly. Yep.

Speaker B: Right. I mean, you work in it. You work alongside in an industry that has tremendous human impact.

Speaker A: That's exactly. The two of you have done a wonderful job. I appreciate you sharing your stories because that's exactly. It has a real human impact. And when we have more stories, like your wife le that work out simply and we can reduce. Rob your anxiety about what am I going to do?

Speaker B: Right.

Speaker A: And we all. Everybody's better. Ava. You know, the fictitious consumer we've created is better off, and everybody is doing better as a result. All the players in the ecosystem are doing better, too.

Speaker B: We can't tell you how much we've enjoyed this. And I'll tell you what, next time you come back, bring Ava with you.

Speaker A: Oh, great. Okay. We'd be delighted to.

Speaker C: Yeah, the AI Ava. It'll be fantastic.

Speaker B: We want to hear from Ava, um, as well. But what a pleasure. It's just. It's so interesting what you're doing and what you guys are up to. I just want to say I think that so much of it begins with what you've done in the past, uh, year.

Speaker A: Yes, it's. I've learned so much by listening to everybody.

Speaker C: It's been great.

Speaker B: What amazing, no pun intended, impact that has had, I'm sure on you, no

Speaker A: doubt completely shaped you. You're exactly right, Ron. You're exactly right.

Speaker B: Yeah. We thank you and we hope you'll come back and visit with us again.

Speaker A: It was a real joy. I'd be honored and excited to come back again. Thank you both. Really a pleasure to talk.

Speaker C: Thanks so much, Tim.

Speaker B: Great. You know, sometimes I am accomplished people on our silly little podcast, and, yeah, day is one of those days.

Speaker C: Tim was a delight. Like we always say, he's a. He was a great, great guest. But it was something special about him, and it was his passion. There was so much passion that he brought that made that whole podcast just zoom by. Um, I wish him the best of luck. I think, uh, CCC is better for him being there, and I can't wait to see what he does with it.

Speaker B: In fact, every person that we have, uh, met or touched from that company has been terrific.

Speaker C: They hire great people.

Speaker B: Great people. Very good at hiring strong people. And, uh, I agree, is another great example of that. And we thank him and you all for being here. We thank our production team. It was great to have Uncle Al along.

Speaker C: Yeah. Again, Mr. Aldrin came in.

Speaker B: Al, that was nice.

Speaker C: We brought an audience today.

Speaker B: And Israel, of course, and most especially you for listening. And we'll say to you what we say every single darn time.

Speaker C: Goodbye, everybody.