The Great Equalizer
How Carey Anne Nadeau unearthed the leveling power of insurance.
Courtesy of Carey Anne Nadeau - Co-CEO & Co-Founder of Loop; former Researcher at the Brookings Institution and Urban Institute.
What attracted you to city planning?
City planning is a conglomerate of disciplines that are so relevant today - the way brands think about interfacing with consumers and the importance of equity and fairness in our world today. City planners think about a range of things, from where you live to where you work, where you or your kids go to school and how you get to and from in between all of those different life activities. They need to make sure the roads are built to help accommodate as many people as they expect to have in their city while having a focus on social justice and social equity.
All of that ties in together beautifully with what we’re building at Loop in a modern car insurer. The reality is that there’s a lot of data that can be used to understand, quantify and support arguments around what communities of color and people who have suffered economically have been saying for a long time i.e., pick yourself up by your bootstraps isn’t for everybody. For example, people that can’t afford to buy homes are not people that insurance companies want to recruit for car insurance.
What drives me the most is that there are all sorts of ways to protest injustice. You can go out with a big sign like an all-white couple that I saw holding up a ‘Black Lives Matter’ sign on the major onramp to a highway. My form of social entrepreneurship is to direct my ‘super techy, math nerd’ resources towards supporting that cause.
And you know what’s really powerful? It’s so easy to recruit people who have similar skills like engineers and data scientists because they still want to do good things in the world. They don’t just want to optimize market algorithms - they want to make people’s lives tangibly better. Working at Loop gives people that ability to express that activism, even if they’re not that person that would stand on the frontlines and protest. They know that they’re contributing to something really important.
Did you have a vision of the path your career would take when it first started?
My life has taken many swirls and loops. For a period of time, I travelled around the world. As a city planner, it helps to have different references and be able to see different cultures authentically express themselves. You get too tired of seeing the one way that a city works. New York is different to Rio which is different to Auckland. They all have different things that you can incorporate together to build the city that you want or love. I think early on in my career I was probably just trying to learn as much as I could, to build those references, to question my assumptions, to deeply ask what are the problems that I feel passionate about exploring. Plus, some things were happening at that time.
In 2009, President Obama passed the Open Data Act, which is a federal law that mandated the federal government to release a lot of data for the sake of transparency and accountability. It inspired, at the time, the broad nationwide ‘open data’ movement.
City and local governments were publishing vast amounts of information about city municipal activities. So, you could see this broad landscape that was much more inclusive of everyone’s reality in and around cities. The data that was never available but would become a very important tool for us to understand and live in a modern, data-driven society became available.
The second thing that happened in my life was cell phones becoming ubiquitous. The advent of the cell phone does two things:
a) It makes products more accessible more broadly. An independent agent that sells insurance in your local community is now competing one-to-one with a product that is sold without a storefront, that can resonate with consumers through social channels. It just has so much potential to change the unit economics of a business that has relied on door-to-door canvassing.
b) Cell phones are another really fantastic source of data about people. You take your cell phone to the bathroom with you. You go to bed with your cell phone at night. Everywhere you go, your cell phone is there. It’s collecting biometric, geographic information about you - it’s able to know more about you than you do about yourself.
The amount of data that we collect at Loop is really powerful for two reasons. It helps us build models that can really measure what matters when it comes to car crashes and deliver that value to customers. Wouldn’t it be great for customers to have a relationship with their insurance carrier where they’re actually getting risk management services? If we take care of you at Loop and you don’t have a car crash because of some information that we gave you, everybody wins. You don’t go through the pain and suffering as a result of that crash and avoid all the things that go through your head like how you’re going to get to work tomorrow.
As a former city planner and, now, auto-insurance co-founder, how do you marry the creation of physical spaces with that of economic spaces for people to thrive?
What excites me is that I have the perfect answer for that. There’s a lot of history and institution that is attached to where you live. There’s a reason why states like Alabama, Mississippi, Arkansas have a black belt. They’re where fertile soil was, where slaves came and economic mobility has not been a priority for investment. In effect, you still see a historical legacy of poor black families. How do you overcome hundreds of years of structural inequality, from zoning to economic plans that just don’t see those communities?
I get what we’re up against, but what makes me so excited is that roads are the great equalizer. Everybody’s on the road, to and from. You can look to your right and see a guy that looks like a newfound tech entrepreneur in a Tesla and look to your left to see an old, broken down Camry struggling to make it. There is everybody on the roads, and we mix. There are some who may live and travel fifteen miles of their home, but if you look at highways, for example, they tend to be a really diversified unit.
So, if we can actually expand people’s mobility, help people to be able to not be exploited by their insurance carriers and, furthermore, help them get on the road and stay on the road, that gives them access to more jobs further afield from their homes. It gives access to more reliable childcare because they’re not relying on a neighbor anymore to do so because they don’t have a car. It gives access to more choices for your child’s education as well as more choices for recreation. There are so many things that mobility helps people in their quality of life and their upward economic mobility.
One thing specifically that we’re doing at Loop is that we’re paying to subsidize our employees’ car insurance. If they need a car [to get to work] and have a car, we want them to be able to drive to work and drop their kids off at school. As part of my day job, I’m actively reaching out to major brands asking them to join us. We’re helping create a corporate product so that companies can subsidize in the same way they do for employees’ healthcare to make sure that when they’re sick, they can get well and come back to work. Why not subsidize your employees’ car insurance to make sure they can stay on the road? I think it’s a no-brainer for us to do, and so, we’re actively looking for other organizations who understand the broader context [to partner with].
Where did the name and idea behind Loop come from?
Loop is inspired and driven by a mission to make auto insurance fairer. What we realized when we were analyzing data is all the structural bias that has been built into the way things have always been done and have always been priced. We didn’t feel that we could be complacent in perpetuating that institutional bias. Whether that’s social, economic or racial bias, it’s all there.
Insurance is a very old, established and unchanged industry. We felt it was necessary to revisit the ways some of the things have been done with a fresher take. For example, we can measure what actually causes a car crash including checking whether the roads you’re driving on are safe. We’re making an agreement with our customers to share this sort of information with us, and we will do our best to make sure they’re not involved in a crash. That’s our value proposition. We want to make sure you get to where you’re going safely.
It should be a conversation, a community of people coming together to care for each other in their greatest time of need. That’s what insurance is. That’s what insurance should be about. It feels like the greatest product that we can provide to build the community at scale and to spread that mission of caring for each other in a deep way. It’s a civil rights movement where we’ve gone part of the way, but the job is still not yet done.
When you peel back the curtain of financial services, guess what’s hiding in the background? Right now, it’s auto-insurance. About 80% of your car insurance price is pre-determined by whether you live in a favorable zip code (what does that sound like?), whether you have a white-collar occupation, a high school diploma or college degree, and, also, if you own your home. Did you become 15% less risky because you own a home? No, you didn’t.
They’re subsidizing the cost of car insurance for upper middle-class white people by charging people of color and those who don’t quite fit the mold - people with a bit of student loan debt, people who had a health emergency in their life and now their credit isn’t great. Those people are paying a ton more for their car insurance for no good reason.
Loop is trying to get rid of some of that. For example, we will not use credit because we don’t care to be in your wallet. We care to be a companion in your drive. We won’t ask for occupation, education or even gender. It’s important to modernize the product and the experience from end to end.
How is Loop helping you be the person and professional you want to be?
Loop is a billion-dollar brand and an important company for the future. Whether we achieve that level of financial success or not, I know that what we’re doing is deeply important. We are putting our best foot forward to realize some of what we believe the future can look like. Not only do we know we’re onto something, but we know we have to do it. It feels so compelling. It feels like life’s purpose manifesting itself into something that other people can benefit from. If we do nothing else right, we have inspired more people to build businesses like this. All we have to do is keep being our authentic selves and, hopefully, that resonates with people who feel the same way and think about the world similarly to us. We will keep adapting the product to accommodate more people and build a more inclusive carrier. There’s so much that we can do to build a product today that meets the moment in delivering something that isn’t just what people want, but, today, feels like they just have to have.