Welcome The Money in Wealth with John O'Bryant, a production of the Black Effect Podcast Network and iHeartRadio.

Hey, Hey, this is John O'Brien and this is the Money in Wealth podcast series season two.

You all know that.

And by the way, thank you audience for continuing to make this podcast one of the top one hundred in entrepreneurship in the country for Apple and top one hundred and fifty for business in the biggest economy in the world.

I appreciate that I don't often bring on guests, as you know, normally is just me breaking down a topic over forty five minutes to an hour.

If I bring on a guest, they're special.

And this guy is special.

Sometimes you meet somebody and there's no saying a friend you meet with a friend from the very first time, and an acquaintance you meet remains an acquaintance for a lifetime.

You're never quite comfortable with an acquaintance.

And it has something to do with authenticity.

And I met Joshua and we're new friends, which is why I may occasionally screw up his last name.

Still I want to say Mota, but it's Mada, right, Joshua Mada.

Motta look him up.

He's not a household name, but he is all around you.

His insurance company that he co founded is undergrading society as we know.

It is one of the biggest in the world.

I believe the biggest in North America.

He will correct me if I'm wrong about that.

It's Coalition, Inc.

Which is a cool name in and of itself.

But the coolest thing I can tell you about Joshua, which I can't say about anybody else I know.

I can't tell you where we met because the meeting's off the grid.

They don't even have a website.

And I can't tell you about his prior job.

Maybe he will tell you, but I can't tell you about his prior job.

In fact, when I talked about his background, it's the one thing he conveniently left out.

But I think it's pretty cool for the audience to know that part of his intelligence experience was literally working for the CIA.

I don't think of everybody.

I mean, I've got people I know associated with intelligence agencies, but I think it's pretty cool that you work with the CIA.

That maybe that may be the reason why your wife marriage.

She was like that, that's she's cool.

You know, he's a good He's a very very good guy.

He runs his company which does cyber insurance and and basically all things tech related insurance.

I didn't know that he insures me.

I don't where we met.

He just knew that if you were a big growing company and you're looking for best in class insurance against cyber attacks, et cetera, there was a ten chance, not out of ten chance, that you would be using his company.

And I checked with my people, thinking that I'd be doing him a solid by giving him some business because I liked him as a human, only to find out he's already insuring us at Operation Hope.

So Josh, welcome to the podcast.

Before we get into this, I'm going to take a little bit about your background to my audience.

Get this out of the way before founding Coalition.

His resume is impressive.

He includes roles at cloud Flare he was head of Special Project and another roles there and stints and technology, finance and intelligence and cleaning.

As I mentioned the CIA, Microsoft Goldman Sex.

He has really narrated a life that frames out technology, security, data analytics mindset, analytical mindset which I love in risk management.

One could say he's doing what he loves.

He had early our spiritu success when he was fifteen years old.

We relate together on that.

He built tech tools and gained attention from Microsoft Hello, which led to an early higher when he was nineteen nineteen, but the sink in audience fresh out of high school.

Basically, he joined the CIA CIA in the cyber Intelligence program, of course, after passing a polygraph test, which gave him early exposures to security and critical systems and national level credit, national level risk including credit finance, but also business and society.

A coalition was founded in twenty seventeen, and it's pitched as in an insure tech plus cybersecurity hybrid, not just writing policies, but in betting, prevention, detection, and responds into insurance offerings.

The firm oddly Enough, Interestingly enough oddly Enough markets itself as an active insurance company.

We're going to talk about what that means.

But essentially the insurance is not just reactive, which is paying claims.

We're going to get into different types of insurance, but proactive, continuing continuously monitoring, detecting, and helping mitigate threats before they become losses, which is by the way, one of the ways that insurance company becomes successful is not by having to pay a claim, because you've mitigated that risk so much that the claim gets neutralized.

The claim threat gets neutralized.

The company really is a bit of a unicorn now value in the billions.

One article describes the Coalitions customers that thanks to prevention their prevention approach, they file seventy sent fewer claims than industry average.

Okay, did I get that right?

My brother?

I think you've got it mostly right.

You know, the customer is always right, and you're my customer.

I see smart man said he's he's also a capitalist with a heart.

By the way, Joshua, let's break you down for a minute.

Tell me tell the audience a little bit about I asked you a question at lunch, like how'd you become so decent?

Like when we were at lunch at this place that we cannot mention, there was a lot of noise around us.

It was out in the open at a picnic.

But you and I sat down unplanned that we sat down on each other and we locked into a conversation.

And normally I have to pull leaders into a discussion about morals and money.

I've got to reconnecting them, keep reconnecting them to good capitalism or the good of capitalism.

A lot of leaders are uncomfortable talking about out the responsibility of leadership.

And you just kept this conversation going.

It was organic.

I didn't lead it, you were leading it, and it was something clearly embedded in you.

So I didn't ask your lunch, but why did you keep that conversation going on that topic when it when most people would like to talk about the mountains or the fishing or what the kids are doing, you focused on purpose driven items when we talked that were I think important for the health of society.

Yeah.

Yeah.

And then in the course I asked your lunch, what made you, in my opinion, a decent human, like just normal.

You've got this power, you got this company run, but you're very approachable.

Nobody's perfect, but you're very approachable.

It is a reason for that we talked about it.

Yeah.

I mean, look, I think I also told you that I didn't quite know the answer.

I could maybe guess said it.

But which makes you?

That means you're not arrogant, by the way, not to be, But look, I think probably respect it is just the nurture I had great parents, grandparents, family.

Maybe it's I grew up in the Midwest where there's just sort of a Midwestern sensibility to things, But I think a big part of that upbringing was like underscoring the importance of purpose.

Like my parents had a very clear purpose in life, my grandparents, you know, and I think the meaning of life for them to some degree was just helping other people.

And so that's kind of always stuck with me.

I think, you know, my purpose in so far as I can find, you know, meeting in life is to help other people.

And look, at the end of the day, like building a company, being an entrepreneur, like purpose is a is such a powerful tool, right.

I mean it's hard to build a business.

You want to make it as easy as possible.

Like with purpose, it's much easier.

Right, Not only is it easier for me to get up and get excited even when things are difficult, Like there's a clear mission, you know, in our case, it's to protect the unprotected, to protect organizations, not for profits, for profits, organizations you know, from growing sort of cyber threats.

It's also easy street in terms of attracting the right employees.

You know, we can very clearly appeal to people who believe in that mission and who want to follow it, you know, as you might imagine like many software engineers.

Yeah, yeah, because they're comfortable with you as a leader.

That's right.

I mean, I think they have to be comfortable with you.

I think also if they share that same purpose.

You know, they're willing to move mountains for the company, right versus just someone who's working there because it's the best paycheck.

And so you know, I think what I can proudly say about a lot of the people that work at Coalition is, you know, they believe in the mission as much as I do.

They're there every day to help these organizations deal with these new cyber threats.

You know, look, most business owners, they're not worrying about how to protect the land, sea and air around them.

They've got the military or local law enforcement.

But there's now this new fourth domain that we all face, which is the cyber one.

The government's basically said you're on your own, Like that's the message.

You know, you can call the police, but they're not going to be terribly helpful.

And so that's really the role that we we that we fill, and I think people get excited about that.

So, you know, purpose has always been such a big part of my life, and maybe it's one of the reasons why I you know, I'm a decent person.

So purpose is not just profit.

I don't think that they're a conflict with one another.

You know, like, for example, our purpose very much to as you mentioned a statistic like you are far less likely to have a cyber insurance claim if you purchase insurance from us.

That's both because we're better at determining who to give insurance to, but also helping our clients manage it.

You know, we're not doing that because we're mother Teresa, right.

We have a direct financial motive, motivation to help our customers to reduce their losses.

And if we do that, you know, we we are more profitable.

And so again some.

Staying with you which allows you to have sustainable, sustainable, renewable, repeatable income.

That's right.

I mean in this there's an area where if you can align your incentives with your customers, they don't want to have a claim and we don't want to have a claim.

You know, then that I think capitalism can be an incredible model for that outcome.

I call that good capitalism, it's it's profit with a purpose.

So so, while I have not asked you this question, why didn't we click at lunch?

Why did you continue that conversation with all that noise around his own purpose?

Look, I think you mentioned it.

It was just the authenticity of the conversation, Like, very rarely can you have an authentic conversation with someone in that setting, right where there's lots of power, there's you know, there's lots of money, et cetera.

People of their own agendas and motives, Like it was very clear that you and I were in that You yourself are a very authentic individual.

And look, those are the conversations I love that I thrive on, right, you know, and I enjoy meeting other people who have that sense of purpose, who have that authenticity, just makes you want to learn more about them, right, it makes you want to be friends with them.

So I think everything you said it was it was.

It was a mutual feeling.

Yeah, and we clicked immediately.

And one of the fascinating things I found about Joshua uh is he's essentially homeless.

Dems a multi billion dollar company.

He's got thousands of employees, thousands, right, but there are callous.

We were about seven hundred, seven hundred.

Employees my bad, okay, but it will be thousands.

Actually, you probably try to keep you happy.

A kid count low actually a district of the situation, but that you know, he's in a very lead group with seven hundred and fifty employees even and I have four hundred, and I know that I'm one of the iutting up the top less than one percent of all businesses in Black America.

But you're homeless.

You lost, as I recalled, you lost a house that right in the fires.

Well, I was very fortunate that I didn't fully lose the house, but it was dample.

And so my man moves around the country.

I'm not going to tell you where, what how, But he's very he's reasonably comfortable in his own skins.

Have a very cool wife.

All of my wife shakeye Luffy would love that nobody involvement, but she loves experiences.

But it's just everything I learned about the guy I thought was interesting.

He didn't need a place to define him, He didn't need a space to send a message about an address to send a message about how important he was.

And I just think that was very cool.

With that.

I think there was a friend of ours, a mutual friend of ours that you helped out who also had lost their house.

We won't want his name, but he had lost his house and you helped him out, even though you were did on stuff at yourself.

You even let him.

I think stay with you if I recall the CIA thing, nineteen years of age, and that means you have very high intelligence and they targeted you in high school?

Am I incorrect?

Yeah?

I was part of the college program.

Yeah, so I was targeted very early and obviously helped with help with the financial cost of going to school.

Right, And so I'm gonna assume we can't talk about any about that, but if you decide you want to offer something, feel free.

Let's go now to now the audience that was a little bit more about you and why I think you're very cool.

Can you unpad?

Now we're fourteen minute mark, so anybody is sharing this podcast with others and you just you have limited time.

But you really have been curious about insurance, like you don't understand it.

You don't understand different types of insurance.

Why do we have insurance, what's the purpose of it?

Define what's good insurance versus not good insurance.

Can you first of all explain traditional I'm gonna say consumer facing insurance, right, and then we can talk about commercial insurance.

Then you can layer in bad actors in insurance, like how do you know a good company from a bad somebody's going to pay the claim when it is legitimate, and then reinsurance after that.

Yeah, absolutely so.

I mean, looking at the insurance industry is all about helping people transfer risks that they have in their life.

Those could be health risks with medical insurance, they could be you know, the life risks with life insurance, of course, they could be the risks to your automobile or to your home, you know, with homeowners and auto you know.

And when you think about a risk in your life, like you know, you don't have to overcomplicate it.

There's kind of three things you can do.

You can accept the risk, but that means that if something bad happens to you, you're of course responsible yourself.

It's on your balance sheet, so to speak.

You can mitigate risk, which means you can take actions and steps to try and reduce the likelihood that something happens right, whether that's buckling your seatbelt, when you get in the car, whether that's locking your doors of your home.

But of course, mitigation is rarely, if ever.

You know, sort of a linear line that hits zero where you've just eliminated it entirely, right, you can reduce it, but at some point it just sort of flat and out.

And that's kind of a fancy way of saying.

You know, you can't eliminate most risk in your life.

You can't eliminate the risk that you'll get in a car accident.

You know that your home will set fire.

You know this is all too prescient for me.

You can eliminate the cost of that risk, and that's by transferring it.

The third component, so you can accept, you can mitigate, or you can transfer.

Of course, insurance is one of the ways in which you can transfer your risk.

You can transfer to an insurance company.

It's highly regulated.

These insurance companies all have financial ratings.

You have so hold on, Josh.

So let's back up.

So for the audience he mentioned, accepted, Yeah, is it mitigated?

Is that one?

Yep?

So?

Uh?

And and and the and then the third one is to offset the risk, transfer the transfer it for the very wealthy, the uber wealthy, the first two things are sort of combined, except and mitigate.

They're doing some uber wealthy people are doing or bonding themselves.

Or you might be in a prop in an area where insurance companies say that's just too risky at all, We're not going to ensure that at all.

In order to do that, you got tot that all yourself and you literally bond around your own assets.

But that's not this conversation.

But I want to at least raise that so that the audience knew the whole picture.

So now you're at now you're at defining the insurance itself.

Yeah, I mean, look the math you hit it was very simple, like whatever you haven't transferred or mitigated you have accepted.

Right, You've got to kind of do some introspection.

That's a wrap there, turn.

That into a wrap.

Yeah, I mean, you have some introspection.

You got to look at yourself and say, look, what have I not transferred?

What have I not mitigated?

That's what I've accepted, you know.

And in my world, like the case of cyber risk for commercial organizations, you know, they adopt all this technology and they don't they ignore the risks, so most of them they're accepting that risk today, sometimes without realizing it.

And so I think the important thing is to understand what you want to accept and then you can figure out the math and what you want to mitigate, how to mitigate it, and how to transfer it.

But that's what insurance does.

It lets you transfer some of those risks, and particularly the catastrophic ones.

Right.

Insurance isn't built for the things that are just happening every day and for small things.

It's really built for catastrophic things that you know, if it happened, it's just it would bankrupt you or it would you severely impact your life.

And so that's what it's that's what it's intended for.

That's why people buy it.

That's the value of it, you know.

And at the end of the day, Yeah, sometimes the insurance companies may say we're not willing to ensure something.

You got to listen to them occasionally, right, Like you know, they don't want to ensure the house in that area.

It's for a good reason.

It's for a good reason, you know.

And then of course, as you mentioned, for the uber wealthy, sometimes they decide to live in those areas anyway.

But that's that's a decision that they have to make.

A friend that I don't know.

He doesn't come to that meeting, so I'm not sure you know him.

But I can't say too much about him.

Other whe people will guess.

But he runs He has a major real estate company in America, and he has a house in the Hamptons and this house is next to a cliff.

He loves his house, but the erosion keeps coming closer and closer to him.

And this guy decided to pick the house up and move the house one hundred yards in.

Who shows you how much property owns at the coast?

Move one hundred yards in and his and his accountant told him that'll give him the After accountant talked to the appraiser and the assessor and all those people, the account said, well, this will give you ten more years of use of the house before the erosion catches up with you.

The erosion, for anybody's not clear.

It means that the ocean is taking away land because the waves, and I think because of global environmental issues.

But the waves are continuing to push away or chop away at the land, and it was going to chop away at his house.

And so he decided to move the house.

And my guess is he's self insured.

My guess is he's got a bondage self Yeah.

I did to agree with you, all right.

So if you have car insurance, yep, you have home insurance, yep, there's renters insurance.

I'm trying to go through the obvious ones.

Yeah, Renter's medical life, you know, health insurance.

Of course.

There's quite a few forms you can buy insurance for.

You know, jewelry, you know, your engagement ring, you can.

Have I have different policies that layer in on my home policy.

One is a jewelry there's a rider a writer policy that goes on top of the overall policy, like a bonus policy.

And then I'm a key man insurance policy.

Uh well, the organizations I work for talk about capitalism being the gladiator sport.

My organization has gone a policy in case something happens to me.

It was like John, really sorry for you, what you're you know, this happened to you your family, So sorry John's loss.

And then to cheing, the company gets a check.

If I'm immobilized, I'm no longer on the spots.

That's called key man insurance, and I'm the man uh in that example, then you've got board of directors insurance.

Yeah, directors and officers insurance.

You know, directors and officers.

Sot's with the insurance that most people would be dealing with.

Here, let's just make this easiest, uh, car insurance and I guess the easiest one for you home insurance.

You just dealt with this.

Also, yep.

So is there such thing as a bad insurance company?

I mean, you know, of course there's there's such a thing as a bad insurance company.

You know.

I think there's a lot of regulations in each state that try to weed those out.

But you know, at the end of the day, like the best insurance company, they do pay claims, Like that's what we're in the business to do.

If there were no claims or if we didn't pay them, we'd be very quickly out of business.

And so, you know, while I think maybe there's certain companies that don't have as much of a focus on that, or maybe the claim servicing isn't good.

That's I think that's one of the key determinants of why consumers select one insurance company versus another, Like when it comes to highly regulated spaces of insurance like homeowners or auto you're actually buying the exact same policy, Like if you were to look at the policy from State Farm or from Progressive or Geico.

You know, here in California where I am, the wording is identical.

It covers the exact same things.

Wow, it's actually regulated by the state.

You know, what you're choosing is of course the pricing, which they have different views of how risky you are, and they'll offer you different prices.

And then you're paying for the servicing.

You know, who's going to give you the best service, who's going to take care of you, who's most likely to pay the claim?

And you know, those are reputations that are hard fought for and of course easily lost, you know if they're if that's broken.

So big part of the businesses on trust, see that.

I think the churance companies you want to avoid are those that don't have that long term view, you know, that don't want to build that long term relationship with you.

But at the end of the day, with companies like ours, we're you know, we're here to partner with our customers, like we're in this together.

We're taking the same shared risk with them, and we want to help them.

Well you're honorable.

Let me when I was growing up.

That's why I have you on this podcast and why I'm one of the feature us.

I think you're a role model for good capitalism and responsible business.

When I was growing up in Common, California, No, this was South and Gerrola to be specific, I did not have a lot of money I bought it was my first car or my second car, and all I could afford I thought I could afford was liability insurance.

You had.

It was in order to drive the car, you had to at least have liability insurance, right, and you need to have comp and collision if you have I guess a bank loan or something like that.

So I had liability insurance and I went and got cheap compic collision that I had a bank loan.

Bank will force the insurance on you if you don't get it yourself.

If they force it, it's going to be very expensive.

But anyway, I had this policy, but I got the sketchiest just a full transparency.

I ended up with the sketchiest insurance company you can imagine because I was a little the cheapest deal and audience, it looks too good to be true.

It probably is.

And I got this this policy that really wasn't all that great, and I just prayed to god I never had to use it.

That was a fearful.

I was definitely afraid that I'd call this company and either the phone number would work or they just wouldn't the claim and srure enough, I had a claim and they ran me through the ringer and they send people out to the repair company, and they took photos.

They took weeks and weeks and weeks, and then they paid paid the smallest portion of it.

And it taught me like, you really need to do your research.

You need to get a company that's a good balance sheet as good reviews.

You got to research these companies.

All these companies are not made identical, even though as you just educated the audience and me, the policies themselves are actually the wording is identical.

That's why I asked you about are there sketchy firms?

So what does the audience need to know about, whether it's an auto policy or a home owns policy.

There's some quick, easy recommendations you have for them before we go on.

Yeah, sure, I mean, like you said, you know, with auto you can buy liability only coverage, which means it doesn't cover your loss, just someone else's.

If you get into an accident, and that means you know, you're you're kind of up the creek without the paddle if that happens, that's where I think you you want to buy those first party coverages, the collision, the comprehensive, you know, to make sure you're covered.

But at a minimum.

That's like you said, you only need the liability I think you know.

In the homeowners again, it's all fairly standardized.

There are some differences in policies, like whether they cover, you know, your sewage line.

As an example, if your sewage line backs up, you have to buy that coverage specifically, you need to ask your insurance company for it.

Many homeowners policies don't cover it, and people are surprised, you know, when that happens that hey, they've got to pay for it all, which can be thousands of dollars, you know, in an unexpected expense.

Some homeowners policies now cover cyber for for people like you know, for data privacy, if you know, for for things like that, you know, or if your home network is hacked, you know, they'll help you recover it.

You know that that might be an add on that people want to think about.

It's typically very inexpensive, so yeah, but otherwise, you know, it's they're fairly standardized.

Fire, fire coverage, blood coverage.

Many owners policies don't cover flood, and so you have if you're in a flood prone area, you need to think about purchasing dedicated flood insurance.

Sometimes sometimes the state offers it.

That's right, depending on the state you're in.

The same thing for other large natural disasters.

Earthquake insurance not covered under a standard policy, but you can purchase it from the California Earthquake Authority for example, where we are so flood and earthquake you know, tend to be tend to be excluded.

So you need to think about purchasing those coverages specifically if you can't get insurance from a standard commercial insurance company.

Many states also have you know, last resort insurance offerings, like in the state of Florida or the state of California with the Fair Plan.

You know, a lot of the folks who are affected in the LA fires, that's the only insurance they could buy given you know how difficult it was for the insurance companies to get the rates they needed, or just the extreme risk of where people were building.

So let's deal with that for a minute.

You educated me at lunch about the raid environment and where some insurance we won't name names, but some insurance companies have said I don't want to do business in California or Florida whatever, I'm out.

And some people may demonize that, but the reality is that the honorable companies, the good ones we're talking about, the shysters I talked about earlier.

The good companies have to make listen to the audience, a profit.

They've got to be able to make a profit, and that means managing risk.

So if you have an area with higher risk, they need a rate environment that mitigates the risks.

So there's more coming in that's going out.

If all they do is paying claims all the time because it's high risk, and the premiums what you pay monthly or annually or semi annually don't cover that plus a return to the company in reasonable return to the shareholders, that company does not have a future.

And in some states the insurance commissioner, so there is no national insurance commissioner, there's national banking commissioners.

But there's insurance of state by state regulated and some states have elected officials officials in this role versus somebody appointed by the governor who serves as the chief executive of the state.

When you're elected, there's more pressure on you to be responsive to to be blocked the voters.

What the voters want, Chief Chief, Chief, Chief Chief cheap.

So what do people elected who are running with that role.

They promised the moon and then their job is then the beat up sort of the big guy versus the little guy message, beat up on the big guy representing the little guy, supposedly, and that's the narrative.

I happen to be speaking to a person who's running for insurance commissioner after we had lunch, and I mentioned this to him and he agreed with you.

By the way, he's running for insurance commissioner, and part of his platform I wish I remember his name.

Actually, the part of his platform is once he's elected, he wants to lobby for advocate for moving this from He wants to be the last elected insurance commissioner.

Actually it's in California.

He's actually a black man.

And Greg raised the neighborhoods like gr Up and he think it's a better system, which you recommended.

Now, in places like California where I grew up, you might have a fire that triggers a flood and maybe you were covered by the fire, but the real damage was done by the flood, and if you don't have flood insurance, you may not get your claim pay.

Am I right about that?

Am I wrong about that?

I mean, it's it's always really complex.

It really depends on all the circumstances.

But yeah, it's entirely possible.

I mean, I mean you can also have circumstances.

An earthquake, you know, causes a gas leak which leads to a fire of your home.

You know that actually probably would be covered because in this case it is covered for fire damage even though the fire was caused by the earthquake.

Had had it just been damaged from an earthquake, it wouldn't have been covered, so you know, unless of course, you purchased earthquake insurance specifically.

So it really depends on what's the like, the most proximate cause that's causing the loss.

I also want to encourage the audience to think about there's a lot of renters these days, and I'm I am, I have been and will be soon again a landlord.

I encourage renters to goog to get renters insurance because if something happens to your unit, one you might be liable is it happens in your unit, but also somebody unfortunately breaks in your unit, you can get your money back for that.

Even utilities insurance.

I've had insurance for very expensive utility appliances.

Actually inside the house of an impliance insurance, your refrigerator, all that stuff when it breaks down, their insurance for that.

That's so I just want the audience to understand this is an entire ecosystem and you have to be smart about it.

The last thing I mentioned is I had a employee that passed away and the family was busy for doing a go fundme, organizing a go fundme campaign for his funeral expenses, not realizing that in his health policy health insurance policy was in the small print a death benefit of twenty five thousand dollars.

So, anybody listening to this, if you're employed by a reasonably large employer and you have health insurance from a responsible, respectable firm, there's a reasonably good chance that's buried in there.

The word buried, but embedded in the health insurance policy is a death benefit.

God forbid, something happens that's covered.

So please read your part.

This is financial life insurance policy too.

Yeah, I think you know you could have a great landlord like John here, who you have insurance for the building, but that insurance doesn't cover the personal property of the renter.

That's why renters insurance is so important, right, you know it don't it won't cover you know, they need that coverage for their own personal property, their own furniture, their own you know, valuables.

Right.

So now let's let's uh in the time that you have left.

It's amazing how fast thirty minutes when thirty five minutes.

Let's jump up now to reinsurance.

Sorry, unless you have something else to say about traditional insurance.

I get only get to your side top of insurance as order to drop the mic.

But I want to do with reinsurance people don't know about No.

I mean, look, i'd say, you're I want to go back and emphasize a point, which is like, you know, the insurance companies are not the bad guys here, right, you know, No, insurance company wants to leave any state, like we want to do business in every state, especially ones.

It's just that sometimes they have to if they can't get the right pricing, if the regulators won't approve it.

And look, no one wants to pay more for their insurance.

But we also have to look in the mirror and realize that, you know, as risk in our society increases, you know, the cost of insurance will as well, and if we don't allow it to we won't be able to get it.

Like that's the simple matter.

But no, let's talk about you know, reinsurance, which is really just the insurance of other insurance companies.

It's that simple.

Fascinating guys, listen to this.

This is great stuff here.

And so I d of Lloyd's of London, is that a reinsurre.

Lloyds of London is an insurance marketplace and they do both insurance.

You can get a policy directly from Lloyd's.

You know, I think David Beckham got it for his you know, his calves and.

Being got it for his life.

No insurance company would give would give doctor Martin Luther King Jr.

A live insurance policy.

That's absolutely a risk insurance and then they also ensure other insurance companies, so they also do they do both.

Look, the simple principle with reinsurance, like in our lives and our wealth, it's about diversification, right, Like you know you need to diversify your assets.

You don't want all your eggs in one basket, as they say, Well, the same is true for insurance companies.

Right.

You can imagine that if there was one, you know, with the California wildfires, you know that exposure for any individual insurance company could be catastrophic if they're insuring all the homes in that area.

Well, by by using reinsurance, they can actually buy their own insurance policy and they can diversify that risk.

They can pass on some of the risk that they're taking from their clients and they can give it to other companies, whether that's Lloyd's of London, or whether that's other big reinsurance companies like Munichry or Swissery, or there's there's the Renaissance Free Archery.

There's many and so it's all about diversification.

How to insurance companies diversify their risks so they can continue operating even if there is a catastrophe that happens.

So somebody might run a policy for fifty million dollars, let's pick a number, and they want to they want to mitigate that.

They can sell off that in ten million dollar blocks to a partner in that insurance policy.

Is that right, Yeah, that's what.

There's many ways they can structure it.

So one way is, hey, I write fifty million, I'm going to give you forty million because I can only afford to take on ten.

So that's one way they do it.

Another way they might do it is say, look, I'm I can ensure I can take a loss on an event up to forty million, but I want to buy reinsurance for anything above that.

So if the loss of a single event like a wildfire or hurricane goes above that level, then I can purchase reinsurance and the reinsure will take on all the risk above it.

That way, I know exactly what my worst case scenario is and I can make sure that my business, my balance sheet is set up to where I can withstand that.

So that's just one mechanism that insurance companies used to try and just like we do as people, you know, manage the risks to themselves.

Right.

I had a situation last week where I love cars, and one of my automobiles, which is one of my favorites, there was a crack in the windshield.

And you know, I grew up not with much and so I'm thinking, okay, we'll just go have the people say, you know, safe light where it is, you know, just fix the crack.

They're like, no, that's not this kind of that's not this kind of a windshield.

So they called my people call me or like, this windshield is fifteen thousand dollars.

I am was passed out.

I said no, no, no, you mean the car.

No, no, the windshield.

And they said, but John, not to worry.

You've got a policy for windshields, which I was like, oh my god.

Maybe I am smart as I as smart as I think I am.

So that costs me zero Actually no premium?

No no, no, what's that part where you copey?

There was no copay noble Yeah, no deductible.

Right.

So there are, by the way, for those listening, there are there's insurance for if you scratch your rams.

You I'm joking, but I'm serious, Like, there are insurance policies that will cover it almost anything.

You can imagine there was such an entrepreneurial environment.

Anything that has a risk, somebody is trying to mitigate it.

And in this example he just that Josh just dave.

Insurers are mitigating their own risk with reinsurers and partners in insurance.

You don't see that as the as a client, but it's happening in the background.

Let's not talk about the biggest area, the nine hundred pound gorilla in the room.

We've not talked about.

We're forty minutes in.

Let's dedicate the last eight to ten minutes or so talking about this great business you really pioneered in many ways, and what it is you do and why it's so important to businesses.

Does it Does it relate to folks who find themselves held hostage.

You've got somebody saying basically, shut you out of your own mainframe computer, shut you out of your email, shut you out.

They've gotten into your system and they said we won't release it unless you pay a ransom to us in cryptocurrency or whatever.

Is that this?

Yeah, that's certainly one of the things that we cover absolutely, and I think most people who are listening have probably experienced some sort of inconvenience from a cyber attack, right, like they couldn't board their plane or it was delayed or you know, I mean they've had their data compromise.

You know, this is just a it's a growing risk.

Like over about six or seven out of every company that purchases cyber insurance, which is what we do, they'll have a claim in any given year.

It's one of the highest frequency claims that you might have as a business owner, and yet a lot of companies still don't purchase it.

Right, So that's another one of those things where do you really want to accept this risk and do you know how much you are accepting?

And an AI environment is going to be even more critical.

Absolutely, And my guess is as people, as computers start masquerating as humans, as things like pass codes that which used to be hard to crack become easier to crack.

I mean, I used to be really irritated at double whether basically double double crunched passwords where the social media account would require me to confirm twice that it's me.

Now I love it, but when I first started, I thought it was completely nonsense.

And now I can see it, I can see what even that's not enough.

So as the risk change, and as society becomes more technology becomes more sophisticated, my guess is you've got a bunch of engineers every day trying to crunch and analyze the newest areas of risk and how to mintigate.

Is that right, that's absolutely right.

Yeah.

I mean we're in a place where I tell people, you know, they asked me, do I need cyber insurance?

Do you use a computer?

Do you use the internet?

And you need My God, Joshua, everything's in the cloud.

Everything, and even if you're using technology, chances are someone else's is and if that fails, it can impact you.

I mean, take right now, that big yeah, you know, take Jaguar land Rover.

You know, they're making cars.

They experienced this devastating cyber attack, but the impact goes way beyond them.

All their suppliers, you know, who are making parts, who are stitching that, you know, the seats, like whatever.

They can't do business.

They're losing business.

They got shut down.

They got shut down.

I mean, and that's the thing.

Even if someone else gets shut down, it can have a profound impact on your own business.

And so that's what cyber insurance is there to cover not just your own losses, but also losses you might experience because someone else in your supply chain you know, has a as a security failure.

This is not directly related to your business.

But one thing is that I found fascinating is twenty years ago there were landline phones in everybody's house, and now there's almost no landline phones in anybody's house.

I have a land loan land line phone is my reinsuring risk.

Not nostalgic.

I'm not just being nostalgic.

If something happens to the saving network, if there is a if there's a if there's a bad guy and a bad actor country out there that wants to mess with us.

They cut the cables on the ocean floor that is that transfers a lot of our data, and they find a way to disrupt the cell phone system, and first responders can't communicate.

You can't find your your loved ones, your phone, your house goes dark.

So I have a hard, old school landline phone just in case, because people are reliable.

Right, Yes, I'm mitigating myself.

So give us take us into your mind, not not in your mind, take us into the world of your company coalition, what kind of things are you ensuring, what kind of things are you dealing with, and what are some examples of how you mitigated that you can share?

Yeah.

Absolutely, I mean, look, I'll go backward from what are the claims that are that our customers are filing, like where are they losing money?

A lot of it is with social engineering, right There's it's not even hacking, it's just there being criminals are using technology, whether it's email or fake invoices are now deep fakes where they're using AI to mimic people's voices or whatnot to basically trick you into typically wiring the money, right, or it could be to give them a bunch of gift cards because if you go out and run and get gift cards and give them the numbers, that's as good as money.

And so there's just a lot of social engineering where they're trying to trick people into wiring funds.

I mean, this morning, my CFO asked me if an invoice was legitimate, and it absolutely was not, you know, and he thought about paying it.

That's how convincing some of these things can be.

So that's what happened to us at Operation Hope.

And so how do you mitigate that as.

An insurer, Well, so you know, we try and advise our clients to have sort of an authentication mechanism before they wire money, right, like make sure that you know in particular businesses they tend to be wiring to the same folks.

If you're getting some sort of instruction that it's like, hey, we need to change our wiring instructions, you need to pick up the phone or some they're out of band means to communicate and verify that that's in fact true, because you can't rely on email.

If those instructions come into an email, it could be that their email was hacked, and so you want a separate means of communication to validate that whatever change is coming through is them or if it's a first time wire.

We encourage our clients to do the same thing.

Make sure you reach out through a different communications method to confirm the wire instructions.

So that's a big, big way you can mitigate it just through a simple process change and people should do that in their own lives.

You know, when you're buying homes, criminals know that that is a that is a place where they can potentially get a big windfall and so they'll try and hack the emails of realtors of the title companies, and if they can find a way in, they can try and convince you to wire you know, your down payment or your the proceeds to buy a house to them.

I mean, it's and it can be devastating.

And so that's why it's just so important to make sure that you're verifying, you know, instructions, not just taking for granted whatever is being sent to you via email.

So be paranoid.

Only do paranoid survive as they as has been said.

Yes, so if it looks sketchy, stop and pause.

And even if it doesn't look sketchy, that's the thing.

Sometimes these things don't look sketchy.

Sometimes look legitimate, but still stop and pause.

In other words, that are safe than sorry.

Even if if you're if you're if you're transferring what you consider important sums of money, whatever important is to you, just take a moment to this confirm, put the phone or do something as you say it out of the system, to confirm that the person you're that is asking for it is actually asking for it.

And they say, yes, we are, we are, we are requesting that you do excellent and you confirm this email, confirm it all before you hit that SIND button.

When I want to send a wire to someone I have, I can have my chief of staff for me to send a note to the bank.

The bank must call me and get a verbal confirmation for me voice to voice on my on the phone before they send that wire every time, which I again used to irritate me.

Now I'm very thankful.

I have a friend of mine that lost a half a million dollars to the scam that you just mentioned.

He has an automotive company and his CFO was is send an email to the bank, and this particular time it was the process was different.

It was a different email address.

Somebody had hacked the system, and the way it was done the bank he was able to hold the bank accountable.

The bank was actually able to claw back the money.

Oddly enough, they got lucky, but the bank would have been on the hook case.

But had he not gotten lucky in the situation, he'd have been out of a half a million dollars.

And because they were just moving too fast.

So be paranoid.

Confirm out of system, which means if you're going by email or by text, call someone or confirm in some other way.

Don't just respond to the email because the email is Joshua said, might be hacked itself.

That's once a week.

Could get a scam on my phone.

Call on my phone, somebody says.

And by the way, don't hit buttons when they say please press this.

You know your your phone's been I get this all the time.

Your phone's been hacked.

Hit this button.

Do not hit that button.

Yes, do not send that gift card.

You know for sure.

Now there's lots of these scams.

And look, your friend's lucky.

I mean, most banks will won't cover it, right, They'll say, hey, you made the decision, you were the one trick.

There wasn't any failure in our process.

The other thing that can be very helpful is if you have an insurance company like us, you call us and we have remarkable success in clawing back funds.

In fact, I think in the past twelve months we've clawed back over one hundred million dollars for our clients.

Wow, can explain what clawback means?

Josh yeah, absolutely so.

Look, when when these criminals are tricking you to wiring money, you know they're typically having you send it into an account that they've taken over.

They've they've hijacked someone's real bank account.

They know they're going to get caught at some point and the bank account will be frozen and then they just find another one.

But if you can and so, some of those funds are still there, they're still in the US financial system, they're in that bank, and so if you can get there quickly, you can claw back that money.

You can pull it out of the bank account that you sent it to and get it back.

But of course it's important to do it, to do it quickly, and that's something that again as your insurance company, we can we help you do, right because we have an incentive to get it back for you.

If we don't, we of course pay out your loss because typically, again and it's in our experience, a bank is not often willing to do that.

So yeah, that's a really common one.

I mean, the other thing is is you pointed out this whole multi factor authentication, you know, making sure that it's not just a password.

You know that you have your account tied to maybe a text message, a code that you get because the other most common claim we see is people taking over people's emails accounts you know, and once they're in your email, they can literally send an email like you John, and it's like someone receiving it wouldn't know the difference.

Right, it's coming, it's legitimate, you know, maybe you're asking them to send money or something very difficult to detect.

And so making sure you have that additional protection on your most key accounts is really important.

Are you guys doing social media insurance yet?

Have you delved into that?

I think that's a big market for you.

Yeah.

I mean we do account takeover kind of insurance for companies.

So if someone takes over their social media profile yet really yeah, we call it service fraud.

If they if they take over any service you have and they use it in a way that causes you a loss, there can be coverage for it.

So for example, they could take over your cloud accounts and install sort of a crypto minor they want to like mind cryptocurrency, it drives up your bill sky high.

Or maybe they take over your telephone system and drive your bill up.

You know, all those types of things would be would be covered.

But also your people can advise if you are insuring somebody in that regard, you can advise the claimant on ways to fight back, to mitigate.

So the reason I'm saying this is a celebrity friend of mine called me last year.

His Facebook account had been taken over, the fan account, right, and there were a million people that he wasn't talking to anymore.

The bad people were talking to him and they were asking for money from the fans.

But it felt like it's sat tho it.

The impression was the celebrity was asking for the money.

It was driving him crazy.

For Abby's reason, Joshua, this went on for months.

He couldn't he couldn't get He didn't know how to actually helped him.

As I know the people had met a Facebook.

I put him in touch with that would give Zuckerberg some credit here, put him in touch with Mark Zuckerberg's chief of staff, and she did a fabulous job of dreve's the name of resolving this.

I want to thank her publicly.

But it saved my guy, my friend, from pulling his hair out.

And there's probably right now twenty fake accounts in my name on Instagram TikTok for sure.

People just I don't know why they're wasting their time trying to be like somebody else.

But people will put my name plus a one mispail my name.

If, by the way, if somebody's following me, it doesn't have a check mark next to it, it's not me.

Becau doesn't have a blue check mark on every place other than X.

It's not me.

It's always just my name, John O'Brien.

But people have told me they have lost twenty five thousand dollars one friendship, or told me somebody that he knows that John Brant asked them to send them twenty five thousand dollars in this person somehow reasons said please audience, I'm never going to ask you for money, right, no legitimate public figure it's going to be asking you for money.

It's a scam.

But Joshua has a program that ensures companies and public figures like mine against these risks.

So you might want to look his company up for that.

That's a nice little bonus cherry on top that I wasn't thinking about Joshua as we ramped this thing up.

This has been fantastic.

Is there can you tell people like the different services that you offer at Coalition, how do people reach you?

And is there like some takeaway wisdom that you have for people who are dreamers with a shovel in their hand.

They want they want to be part of the American dream.

They want to be part of capitalism and free enterprise.

They want to be successful, they want to own a home.

You know, what are some things that you would just recommend to people?

Yeah, look, maybe maybe I'll start there.

I mean, I think, look, pick a problem that you're passionate about.

You know, what's something that you see that's happening in our society or in your life or in your community that you know, if you could fix it, it'd be better for everyone.

Right, Like, now you're finding something like a problem to be solved that's actually valuable, you know, if you can find a way to turn that into a business, you know, similar to what we did.

You know, I think that's powerful and it makes it easier to barely be resilient and push through you know the difficulties of starting a business, you know.

And in our case, it was like, Hey, we could see all these businesses adopting technology and it's wonderful, right, like all the stuff that's coming out, all the new technologies, But of course there's all these risks that come along with it, and we really felt that with insurance combined with some security products, we could build an entirely different way to approach this problem them.

We could make it a lot more affordable.

We could make it easy for people, And that's the key.

Everyone wants easy, you know.

So I think for anyone who wants to pick up the shovel and build, you know, find the thing that inspires you.

That's the problem that people have that you know, if you solve it, you know, you think it'll be valuable.

You know, nine out of ten times you can find a way to create a business around it.

And he just told you the essence of capitalism.

Capitalism is solving problems.

Uh.

And entrepreneurship in the free enterprise system is how you do that.

Well.

Small business are business, which is different from corporate business entrepreneurship.

These are three different routes.

I'm an entrepreneur, crazy creating something out of nothing.

Josh is an entrepreneur crazy creating something out of nothing didn't exist before.

A business owner might take what we're doing and try to replicate it using our business plan.

That's not entrepreneurship, but that is business.

But find something where you're solving a problem.

A hair brush is solving a nappy hair problem, our kiki air problem.

I'm willing to pay for that hair brush.

Or skin care is solving a problem of beautification or a rash.

All of this is capitalism, and I think his advice has really dropped the mic.

It is quite brilliant, and it's coming from somebody came up with an idea in twenty seventeen, which was a nothing when he started, and he's taken it from zero in twenty seventeen to what's the revenue and or the valuation today, Josh, they're about their.

About recyclon valuation.

Yeah, five billion invaluation from twenty seventeen.

That is eight years, pretty impressive.

And he's created jobs for seven hundred and fifty people, giving them a living wage.

They're paying their car notes, they're paying their insurance, they're sending their kids to college, they're paying their taxes into the government, which is in the place for police service and fire service and public services and schools.

So he's doing his part.

And then the vendors that he's paying out of this company that is worth five billion dollars, All the vendors and contractors that's all helping them to live a good life and for them hopefully they to gain wealth as well.

That's a great takeaway suggestion.

What are the things that your company does.

Yeah, so our company we ensure other companies are not for profits, startups, I mean, sports teams, all sorts of people.

We're ensuring them from their digital risks, like the risk that there the data they collect gets lost, so privacy related things we cover when their technology fails and interrupts their business.

We cover all forms of cybercrime, you know, social engineering.

So think of it as you know, as you digitize your business, we want to cover all the risks that come along with that digitization.

And you know, whether it's the regulatory risks, whether it's the liability you have the third parties, it's pretty broad coverage for those sorts of things.

And then on top of the insurance, we give our customers tools in a team of people that can help them both reduce the likelihood that they ever have a claim or they ever have a loss, because no one wants to have to have an insurance claim.

And then importantly if they do have a claim, we're nine to one one.

We are the emergency services.

We're there to go and fight the fire to help restore our customers' operations that they can keep doing business right.

They can't call the police, they can't call the fire department, they can't be helpful.

We can.

It's a team of instant responders that sort of go in and help clean things up.

And then, of course, on the back end of it, just like a normal insurance company, we cover you financially for whatever it is that you've lost.

So it's both that operational recovery and the financial recovery together.

Your digital crimes.

Nine one one.

That's right.

Before we wrap up, And I know that I'm opening up Pandora's box here, but we will just keep it short and we can do another maybe podcast in the future.

My guess is that this AI revolution, I've said this.

I'm co chearing the AI Etics Council with our friend sam Aldman, who I believe is the Steve Jobs of this generation, by the way, very good guy.

I trust him.

He both thinks that AI will help to solve cancer within ten years.

He also thinks that some very bad things are going to happen the next ten years.

He doesn't know what they are, and I respect his honesty for being blunt about that.

But what I am convinced of is that by twenty thirty the world that we live in will be radically different, possibly unrecognizable, with the introduction of AI.

This is not like the Internet or you know, CDs coming from cassette tapes.

This is a fundamental transformation, ground swell, groundwater effect in society.

Is that going to radically change somebody?

Expand your business and are you focused on that yet?

Yeah?

Of course, I mean and look, Sam sam Almon is one of my first investors in the company, So wow, I didn't know that, that's right, Yeah, one of the first five.

I mean, I think we both saw where things were going and how much risk that this could create, and so I absolutely see it as just another type of risk that we can help our clients manage.

We can help manage their cyber risk.

We can help manage their AI risk, and that's both giving them the tools and the knowledge and then know how you know to use it responsibly, and it's also about providing insurance and financial coverage for when it creates losses.

And so absolutely we're planning to We've already expanded our products to cover AI affirmatively, and we plan on rolling out more covers, both for main street businesses that are using AI all the way up to you know, companies like open Ai or Xai or others Anthropic that are building their own models, so specialist insurance coverages for those technology businesses.

Yeah.

I like the founder of Anthropic too.

He seems to be very conscious conscious as a technologists.

A lot of my technology friends are geniuses, but they have a block I called people.

I like the founder of Anthropic and the founder of Open the Eye in particular.

Thank you very much to be I like you as a founder.

Also, you're really cool people.

And I'm glad we met, and I'm glad we're new friends and you're stuck with me.

And thanks for empowering this audience with how.

Yeah no, thank you for having me on.

It's been a joy to be your friend.

And we'll carry it forward.

Let's go try to do good in the world and promote a new form of capitalism, which is good capitalism.

Dare we say capitalism for all?

This has been a fascinating and wonderful trip through the unique nature and space of insurance.

And by the way, before you wrap, how big is the insurance industry?

I didn't ask this question here, either here in the US or worldwide.

How does it compare like, is it a big part of the of the of the global economic market.

It's enormous.

I think it's the second largest industry, you know, by assets, and so it's probably about two trillion dollars a year sort of the property and casualty insurance, about a trillion of which is just in the United States.

So it's a very, very big industry.

And you've heard from one of the innovators in this space, the only person I know in proactive insurance.

So thank you, Joshua.

For Mota mata mata.

Oh, it's gonna be a joke that we're gonna play.

For the rest of our lives.

Yeah, my brain is stuck on Mota mata.

All right, God believe you, appreciate you.

And for the audience, tell all your friends to go play back this episode for certainly starting a more minute fourteen where my friend unpacks and repacks insurance for the average everyday person to understand it all the way up to the most sophisticated later in the world to comprehend and use it.

And you might want to call his service and use it.

Because social media, something that affects all of us.

I assume.

Then get to your website.

Coalition Yep, Coalition i NC inc dot com.

By the way, why coalition?

What a cool name?

Yeah?

I mean look at the idea was like, anytime you have a company that has the same risk, or every company is in the case of cyber risk, it just doesn't make sense to fight that problem individually.

Like, let's create literally a coalition of organizations that all face this risk.

They can each chip in a little bit of money, you know, we collect it and we pool it, and we use it to pay out the claims that happen, and then we use part of it to also invest and build capabilities to hire people that any individual company could never do themselves.

Right.

So that was the idea, like, let's build truly a coalition of people to go fight this problem collectively.

Even the name has social justice in it, there's meaning for sure.

All Right, God, bless you friend, Thanks so.

Much, Thank you.

O'Brien.

Money and Wealth There's been another episode in season two.

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