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Few companies are as in the thick of the insurance battle these days as SelectQuote. The home-grown Kansas City company works to sell more than 50 insurance carriers’ products.
Two company leaders, Tim Danker, CEO, and Bill Grant, COO, were the featured speakers at October’s ACG KC virtual breakfast meeting.
SelectQuote shops for insurance by comparing prices of carriers. It offers life insurance coverage along with home insurance, auto insurance, Medicare and more.
The company has been growing at a steady rate for years, but seeing some of its best growth this year, in the midst of the COVID-19 pandemic.
That surprised some listeners given the fact that many of the company’s customers are senior citizens who aren’t thought to be as technologically savvy or willing to buy something online as younger people.
“Seniors absolutely interact online,” Danker said.
Seniors are also willing to do business on the phone, especially once they have made contact online and particularly these days when they decidedly don’t want to meet face-to-face.
So, how did SelectQuote get here? To Danker, the formula is two-fold: the company’s proprietary technology and its skilled sales team are a perfect blend.
“We have really invested in data science,” Danker said. “We are really data driven.”
A few years ago, company leaders decided the time was right to take on some private equity, restructure its board of directors and pave the way for some additional changes by broadening coverage areas.
“It was eye-opening going from a small, family-owned business to a growth company with private equity,” Grant said.
It was after the equity infusion that company leaders began discussing the future.
“In 2018 we started talking about liquidity,” Grant said. “What would the exit path look like?”
Just recently the company had its first IPO, a milestone that was two years in the making. When company leaders started talking about long-term finances, they wanted to make the right choice. Plans quickly changed when they saw that “the market said we weren’t worth as much as we thought we were,” Grant said.
Then, a new accounting standard, ASC 606 came into the picture. ASC 606 requires companies to recognize the lifetime value of their contracts to better match revenue with expenses, Grant explained.
“We knew we were creating a bigger business than we were getting credit for,” Grant said. “(ASC 606) enabled us to take the value of a customer and account for their lifetime.”
With company’s valuations now verified where leaders wanted, they started making financial plans again. This time, the situation was right to take SelectQuote public.
Plans were put into place and things were rolling along until 2020 and COVID-19. The company was ready to go on March 10. Everyone was hyped, a celebration at the Big 12 men’s basketball tournament was set and then the markets started crashing, people were sick and the economy slowed to a crawl.
The team was disappointed, Decker said, but immediately began moving forward.
“We brought 2,000 people home and started them working from there in the span of seven days,” Decker said. “Our employees responded; business stared picking up and we began looking again at launching our IPO.”
After March, when zero IPOs were launched, SelectQuote launched the first virtual IPO ever and the first non-technology offering since COVID-19 began.
Today, six months later, SelectQuote continues its upward trajectory. With many of its associates still working from home – although many also have returned to offices at least on a hybrid basis – the company has been able to recruit new employees from across the country. Decker and Grant expect the growth to continue.
“We grew 15 times over the industry average last year,” Decker said.
Oct 16 2020