I find the CEO transition to be a non-event, so will limit my comments mostly to the earnings release. I suggest reading the 8K announcing it, though, which gives some monetary information, rather than just the press release, which does not. Why a founder worth a billion dollars and transitioning to an executive chairman role can’t just give up the entire lofty salary and stock grants is beyond me, but oh well. For some folks it’s just never enough.
When I first put down some thoughts almost 6 years ago on this property and casualty insurance broker, I never imagined it could ever be labeled as a “disruptor” to the rather ordinary business of selling P&C insurance. Never crossed my mind. The only part of their business that was even slightly different was their decision to go the franchise route; in exchange for signing a $60k 5-year note to the company along with giving up a big chunk of their trailing commission business, new brokers would get some back-office support along with some lead generation. Having at one time been licensed to sell P&C insurance products, I couldn’t imagine why any agent/broker would willingly give up potentially a life-time’s worth of renewal commissions in exchange for not having to answer the occasional phone call. Just didn’t make sense to me. Renewal commissions are what gets a broker off the policy-writing treadmill and helps create a permanent income stream. Give that up? Never. Plus, has anyone ever actually heard a Goosehead Insurance promo spot or commercial? I live in the very densely populated SoCal area, 20M souls within an hour in any direction, and have yet to hear one or see one. Lead generation? Perhaps that’s why, despite spending 10’s of thousands of their own dollars establishing a franchise, the attrition rate of franchise owners continues to increase, and perhaps their recent results are finally starting to show those effects.