Jared Haas is the Digital Agile Solutions Supervisor for UPS Capital, a financial services division of UPS that offers traditional and non-traditional financial services and insurance products. He's currently working with UPS Capital's InsureShield shipping insurance, a Shopify application to help Shopify merchants protect their shipments and improve the customer experience.
On this episode, Jared and I talk about InsureShield, why shipping insurance is so important for Shopify merchants, common pain points for eCommerce merchants, and much more.
What is InsureShield and UPS Capital?
Jared Haas: Let's kind of start from UPS Capital, what that is, if you don't mind. So UPS Capital, we are a subsidiary of UPS, started in the late 1990s, 1998, originally as the financial services for UPS and really branched off into insurance products. And we really look at ourselves as the post delivery experience partner of UPS.
So, cause insurance is not necessarily a word that everybody likes to talk about all the time. So with that being said, you know, we do offer through our insure shield portfolio, a line of products that can be customized for your business and your supply chain to make sure that your business is covered when a loss, a damage, or a porch pirate of theft takes place.
Alex Bond: And we were talking a little bit before the show that just because it is by UPS capital doesn't mean that it has any sort of necessary tie to UPS, that you can also work with different companies. You mentioned FedEx. Can you elaborate on that a little bit for me?
Jared Haas: Yeah, absolutely. So although we are part of UPS. We're not only insuring UPS packages. We are insuring your supply chain the way that you need it to be insured. We know that not everybody is shipping exclusively with UPS.
We have customers that are using FedEx, DHL, USPS that ship freight LTL shipments, and we can customize those policies to make sure that you're covered.For what your business needs in case of that eventual loss.
Alex Bond: No, that's wonderful. And could you actually run me through a little bit how this started, how InsureShield kind of came to be a little bit?
Jared Haas: Yeah. So once again, we have a lot of different InsureShield products that can cover different parts of your supply chain. But the big thing for us was as a subsidiary of UPS and UPS capital, our marketing, you know, we reach out to people and we say UPS capital.
And they're not necessarily shipping with UPS or not just thinking only of that part of their supply chain. So the insure shield branded products really allowed us to kind of market ourselves to customers and companies that are shipping outside of the UPS network.
But what we really are aiming to do is make sure that we can indemnify, which means in insurance terms, that we make you absolutely whole again. In case of a loss, damage or forced piracy theft. So what we do for our customers with our different insurance products and different plans that we have in place, which can be transactional or annual plans.
You think of an annual plan kind of like a homeowner's insurance or your auto insurance, where we have like a set number for the beginning of the year that we stick to. But however, we need to do it to customize it for our customers.
We just want to make sure that you are covered for not only the invoice value of the shipments, but also the shipping costs that are incurred to make sure that your whole again, you can take care of your end customers and make sure that customer experience is exactly where it needs to be to continue to grow your business.
Building Trust and Providing Peace of Mind: InsureShield's Approach to Easing Financial Burden and Reducing Anxiety for Business Owners
Alex Bond: So aside from kind of that financial ease that you can give owners, how do you try to give them a little less anxiety and comfort and trust in you and your insurance and your services?
Jared Haas: Yeah, so I think that the biggest pain point that people have isn't necessarily always that they're not getting paid back for a claim. Of course, that's part of it when you're working with carriers or other insurance companies.
The biggest piece is the time on task that it takes to file a claim. People don't think about that all the time, but, you know, when you're going through a carriers and UPS, FedEx, DHL, their job, their main customer service is to get your package from point A to point B without an issue.
And a lot of times, and the vast majority of times, that's what happens. Their customer service is not necessarily centered around your claims experience. The whole goal was to never get there in the first place. So a lot of times, especially when you're talking to shipping managers, our customer experience managers for different businesses, the biggest pain points are how long it took them to file a claim with a carrier.
How long it took for somebody to get back to them until they had a decision made, even if it was for an eventual pay payment made by the carrier, just that time on task is worth a lot of money to your business as well.
Things that you could have been doing to grow your business. Now you're doing just to get that money back. What I think really sets us apart is our 24/7 claims portal where a customer can go on. File claim in a matter of minutes and be paid back in days, not weeks when those types of instances occur.
Alex Bond: No, that's a very comforting turnaround time. And the other part of things you, you talk about task on on time or time on task.
The other part that's kind of that intangible that isn't just I need to be paid for the products that were ruined and in some sort of accident or something like that, is also the possible damage to the relationship of if I tell this person they're going to get this thing in 5 days and they don't. And they might not be as understanding about that.
Is there a way that InsureShield can like kind of help repair that relationship at the same time? Because that's, that's something that is kind of in its own little corner and I wouldn't expect an insurance company to be able to do that. But when you talk customer experience, that's kind of part of what I hear a little bit too.
Jared Haas: Yeah. So I think the peace of mind, knowing that you have insurance, that's going to pay you back for that loss and damage allows you to do things for your customer that you typically wouldn't be able to do if you didn't have insurance backing you. So what I mean by that is we allow our merchants that we work with to handle their own customer experience.
I mean, that's a big part of the way that you run your business. Amazon kind of set a standard for everybody, right? I get my, the first thing they did was everybody gets their packages in two days. Okay. And now every small e commerce business had to figure out how to do that too. So they could compete with Amazon.
The next thing that they started doing was they're going to go ahead and even without a picture of the damage, they're probably just going to send you a new item anytime that you say that this one was damaged or lost and that quick turnaround time is a great customer experience for most customers.
It's just something that's embedded into their minds of how it should work now. With that being said, when you know that you have insurance backing with UPS Capital through our InsureShield products, and you know that you're going to get paid back even if it is going to take a day or two or a couple days for that to happen.
Generally you have the confidence now to go ahead and take care of your customer immediately so they don't have to worry about how long it's going to take for a claim to get paid out the documentation so on and so forth. You get to be the hero in that customer experience.
Addressing Unspoken Pain Points: How InsureShield Can Alleviate Challenges Faced by eCommerce Merchants
Alex Bond: Are there any sort of other pain points that we haven't talked about, or I'm not thinking of that eCommerce merchants face today in terms of how InsureShield can help those pain points?
Jared Haas: Yeah, I would say the biggest pain point that's at least all over the news right now. Everybody's feeling in one way or another if you're shipping, especially to residential customers, which that's what we're talking about in the eCommerce space. We're talking about porch piracy.
Okay, so I'm sure you've seen numbers, statistics about porch piracy. You've probably seen videos on the news from people's ring doorbells, people coming up stealing something off the porch. It's a real issue. I mean, there was 260 million porch pirated items in 2022 alone. That was a 24 percent from 2021.
It's a wild number. And we're thinking about, okay, up from 2021, you would think. Since the e commerce boom, and especially since 2020, when more people have been ordering things online than ever have before, having things delivered to the doorstep, people are getting more comfortable with that process.
You would think with ring doorbells and people being home, maybe from you know, more of a work from home style of living that this wouldn't be happening as much, but it's still continuing to happen. Like I said, up 24 percent from the year before.
That's a huge pain point for people because it puts you in a little bit of parody with your customer when they say they didn't receive an item, but you're looking at the delivery notice from the carrier you're using, say that item has been delivered to the doorstep.
What we get a lot are our customers before we really get a chance to talk to them about actual insurance coverage on their packages. What they're doing is they're utilizing carrier liability, what the carrier offers for coverage on the shipments. Well, carrier liability is never going to cover porch pirated theft because the carrier cannot be liable.
For something that they successfully delivered to your house. I mean, that's definitely one of the big pain points that people have. There's certainly others that we cover and I would say that we pay just as much, if not more on claims, but that is a huge pain point for anybody that's shipping to residential areas.
The Vital Importance of Shipping Insurance: Beyond Peace of Mind and Financial Recuperation
Alex Bond: No, absolutely. I mean, I know just recently I have a friend who's a neighbor who called me and said, Hey, I've got this thing coming in. Can you go over to my house and put it in my backyard for me? And we don't even live in kind of a neighborhood where that's known to be a thing, but that sort of a thing doesn't matter.
You know, I mean, the demographics of certain areas doesn't change the fact that. I mean, tens of millions of people is, is a pretty daunting number. So is that part of why shipping insurance is so important for small businesses and consumers? I mean, what are some of the other reasons why, aside from maybe peace of mind and financial recuperation, why it's just so important in general, be tacked on to, you know, carrier liability, like you were mentioning.
Jared Haas: Yeah. So it's important for a lot of reasons, some of which we've already covered. But, you know, number one, especially for a very small business, you're talking about any one loss, it could take you tens to hundreds of sales to recuperate the margin you lost on one loss. Cause there's a lot that goes into that.
There's a lot of time that goes into it. If you're manufacturing the goods yourself and depending on what the margin of the product products you sell, you know, it's more than just a one to one sale to make up for that loss, so we see that a lot of small businesses can be crippled by a big loss early on in the process.
The other side of it is, you know, we're talking about a day and age now where your doorstep is the new customer counter, essentially, you know, it's that people aren't walking into the storefront as much, but the doorstep is a piece of that customer experience.
So when something goes wrong in that shipping journey, you as the merchant are going to be the one that has to deal with the customer, right? That's your customer there. And if you aren't able to deal with them the right way, meaning you're not providing the right level of customer service, what are we all looking for?
When we go online to find products, we're looking at reviews and that's where you can really get dinged with those negative reviews. On the flip side of when you have insurance and you have that peace of mind that you are going to be backed for that financial loss, you take care of your customer immediately.
Now, you're making yourself the hero, you're going to get more repeat business, and you're going to see a lot more five star reviews when you can take care of those situations.
Overcoming Challenges: Delivering Exceptional Customer Experience in the Shipping Insurance Industry
Alex Bond: Because personally, aside from product or services that I'm paying for, the amount of attention that I get, especially when something is wrong from a brand is a game changer to me. I worked in customer service for a long time and I understand the value of it and that that is actual effort, that that's not always something that, you know, for me, it should be face value.
That's like the baseline is good customer service, but I don't think a lot of other people do. And I think in e commerce spaces and, you know, small business brands in the e commerce world. Do you think, you know, this is kind of a bit of a tangent, but do you think it's harder to provide good customer experience and good customer service as an insurance agency?
Because, you know, as a shipping insurance brand, because there's already a certain, maybe stigma attached to it that other people might have, or some sort of confirmation bias of, oh, great, I got to deal with insurance. Does that kind of put you guys already, I don't know, in a harder spot?
Jared Haas: Yeah. I mean, to your point, insurance can be considered a bad word for some people. Depending on what your experience is in the past, maybe with your car insurance, or maybe with your homeowner's insurance, when you've tried to file a claim.
And a lot of people feel like, and it's just a bad stigma that's put on the industry. A lot of times is people are just trying to get out of paying claims a lot, right? Just collect the checks. Well, for us, that is our customer service, right? If we're not paying claims for our customers at a very, very high rate. Then what, what are we here for?
So for us, we really take that very seriously. Claims side, what we do for our customers to make it as easy as possible to file their claims and make that payment done as quickly as possible is really where our bread and butter lies. And that's our biggest offering that we can give to any customer that we're talking to.
Setting the Standard: How InsureShield Stands Out Among Competing Insurance Solutions for Shopify Customers
Jared Haas: What we really see a lot of are two wildly different ways that these merchants can insure their brands. First way would be completely merchant based, meaning that you as the merchant are the one that's paying for all the insurance you're going to decide on a shipment by shipment basis, usually pretty manually what you're going to insure and for how much, okay.
And that takes a little bit of time because you're a man when you're creating the label, that's when you're going to insert the invoice value for that ship or what you want covered. And then the other way is to make it completely consumer based. So you put something in your checkout cart, you allow consumers to purchase insurance in that checkout cart.
If they decide not to, then it's going to be an uninsured order. What we do that is very different, and, you know, as far as I've seen, we're the only ones doing this right now is that we have consumer options, which allow you as the merchant to offer this insurance to your end consumer in the checkout cart, but we also offer merchant based business rules.
So you could essentially put this in your checkout cart, allow consumers to purchase it. But if they decide not to still ensure yourself on the backend to make sure when something does go wrong, eventually, unfortunately it will, that shipment is still covered and now you can still be the hero to your customer.
At the end of the day, Hey, I see that you didn't ensure that shipment. We're going to take care of you on this one because you're a valued customer. And once again, that's going to create more repeat business. It's going to make you a hero for that five star review when something went wrong and you took care of it quickly. So that's really the biggest thing with that. All the customizable rules that we have a set it and forget it app that you can set your business rules when you start. You can change them as you go.
So if you have a change in the way that you're selling, or if you have a different pricing structure today, you notice you're having more problems in one area of the country or the world compared to another, you can set those business rules to make sure that it's no touch on your end to have what you need insured and customized for your business.
Alex Bond: It sounds like it surprises you that you guys are the only ones that do that, because I don't know a lot about insurance, but that makes a lot of sense to me. And it sounds surprising to you too. Is there a reason no one else does, does it that way? Or is it just, no one's really thought of it. I mean, it sounds pretty innovative from the way that you describe it.
Jared Haas: Yeah, so I can't necessarily get anybody's head of why they haven't thought of or if they haven't thought of it before. I know for us, you know, we go back a long way with ensuring shipments for our customers, and we've done it a lot of different types of ways, and we still do it a lot of different types of ways.
Once again, everything that we do is customizable, but we're really trying to anchor on right now is meeting our customers where they need us, and that's when we got into the Shopify app space because we know that there's a lot of eCommerce customers out there that are utilizing Shopify.
They're used to just downloading apps and being able to go, whether it's a marketing app, whether it's a reviews app and insurance apps, what we've always been able to offer our customers is these merchant based insurance rules. Allowing them to transactionally ensure their shipments as they need to.
And what we've really gotten to is that rules based insurance. So it can be low, no touch on your end, allow you to do what you need to do. Sell your products, market your products, create your products, whatever that is. You probably didn't get into the e commerce space because you're an expert on shipping insurance. That's usually not the first way that you start selling your products, right?
So we wanted to make it as easy as possible for those customers. We started out with that app being completely merchant based rules. We saw what other people were doing within the space of this customer checkout cart, having the ability to pass off the insurance cost to the customers, as well as giving them peace of mind that when they purchase it, they know this item is insured.
We also know that at the end of the day, merchants, they have to have some control over what's insured on their end too. Not just a shot in the dark that, Hey, between 50 and 70 percent of the time, when I set this widget as an auto on for insurance, consumer is going to purchase it. What happens the other 30 to 50 percent of the time, because we go back to that Amazon example we were given before.
That customer has a loss, a damage package, of course, pirated theft that occurs. They're still going to contact you as the merchant, and they're going to expect something to be done. You have two choices. The first one is you're going to replace or refund the customer. And that would be out of your own pocket.
If you didn't have insurance on that shipment, or you're going to go tell that customer, well, sorry, you didn't purchase insurance. We're not going to pay you back. See how that one goes, right? That's going to be a one star review and you're going to lose that customer's business. So we wanted to make sure that the merchant still had those back end business rules available to themselves.
And we're not going to show your customer. Hey, you didn't purchase insurance, but this merchant purchased it on your behalf. We don't necessarily want them to know that you're just going to take care of it for them, because if you're trying to pass it off within that checkout cart in the future, when they come back. We want them to purchase it the next time. But once again, allow yourself to be the hero in that customer journey, that customer experience. And that will pay dividends later on.
Revolutionizing Customer Service: InsureShield's Unique Approach to Balancing Accountability and Exceptional Support
Alex Bond: But, you know, your customer service has to be really, really fine tuned to not place blame, but not take credit at the same time. Does that mean y'all are uniquely, like, suited in a customer service and experience affair that a lot of companies might not be able to? Because I've called a lot of toll numbers in my days.
And I've worked for a lot of customer service, and these guys have sheets, you know, they have certain terms and phrases that they have to say. So in the customer service part of things, is insure shield uniquely suited and a innovative kind of customer service way that a lot of other companies aren't?
Because again, I hear one is kind of like blame the client because they messed up and just move on to a new one or take full accountability. But then customers can take advantage of you. So how do you kind of tow that line is I guess the root of my question.
Jared Haas: Yeah. So, you know, and I don't know if it's innovative, I think that it's helpful for a lot of the brands that work with us and they certainly appreciate it. Unlike these other insurance providers where the customer can purchase the insurance in the cart and a lot of their business models. You insure through them in the cart. And then that end consumer is the one that files the claim with that insurance provider.
In our case, the merchant is the only one that files claims with us. You are the one that has a policy with us. So that consumer does not contact us directly. They contact the merchant and the merchant can handle the customer service, the way they set the rules for their business. And what's really nice about that is when you're not involved in that claims process as the merchant and something does take some extra time.
Maybe there's some extra paperwork needed. Maybe there was some photos that needed to be pushed to the claims Adjusters in that scenario if the consumer is working straight with the insurance company You as the merchant don't even know that anything happened at this point, you don't even know anything wrong. You're in the dark.
So you can't take care of your customer because you're not aware of it. Meanwhile, while that customer service may be lagging, you're the one that's going to get the negative review at the end of the day, or that customer is going to associate you with it because at the end of the day, you're the one who hired them to handle your customer service. So I think that's, what's very unique about what we do.
Expert Advice for Shopify Brands to Thrive and Stand Out in the Competitive eCommerce Landscape
Alex Bond: I'm curious, Jared, what advice you might have to give to Shopify brands that are trying to, you know, grow their e commerce business or separate from the noise a little bit or anything like that.
Jared Haas: Yeah. So I think that, you know, it's not something that we think about a lot, especially early on. A lot of the customers that we talked to for the first time don't even know that they're not utilizing insurance today.
A lot of them believe that when they work through a carrier and they're using carrier liability coverage, some of them may call it declared value coverage because that's what it says on the label that they create. When they put in a value, they think that they're getting insurance from the carrier.
Unfortunately, that's just not correct. There's no carrier out there that actually sells insurance. This carrier liability is actually there to protect the carrier from when they're not liable or negligent in the loss of your goods, the damage of your goods.
So I say, number one, just educating yourself on what is actually covered through carrier liability and what the process is before you go ahead and start shipping out all this, all your goods paying for extra coverage that may not really be there to protect you.
The next thing is just understanding what a loss can do so even just one loss in a month or a year can do to your business. What your margin looks like on your sales and how many sales you'd have to make to make up for that one loss. And then really take a look at the way you're going to handle your customer service.
Are you going to wait for a carrier to tell you whether or not they're going to pay you back before you pay your customer, or are you going to take care of your customers? In that case, are you self insuring? Are you self insuring by, you know, Alex, you're kind of saying you gamble on these things a little bit.
Is your self insurance just gambling? You know, you're just hoping you don't have a loss or is your self insurance putting funds to the side for whatever the biggest value of loss you could have at any one time. And making sure that you have that pot of money there to pay yourself back. That would be true self insurance.
There's a problem with that when you're trying to grow your business, that money that you're sitting there. Couple hundred, couple thousand, tens of thousands of dollars, depending on what you sell and how much you sell that's sitting there.
And it's not growing your business. You're not putting that into things that can actually help your business grow. And early on, especially that's a real problem that you're going to have with trying to get to that next level of sales.
Alex Bond: Because there's always going to be a break in case of emergency, but you might be consistently telling yourself as a, as a business owner, this isn't big enough to use the money. This isn't big enough to use money. And then it's not sitting in a bank account growing or even in the business, you know, operations growing. It's just sitting. I think that's a really, really valuable point, Jared.
Jared Haas: And we're talking about less than a percent of each sale, is what we're talking about to have a known loss with insurance. You know, there's a cost associated with it.
So there's a known loss to make sure that you're always covered for that unknown, that scary situation that could happen, a catastrophic loss that could occur down the road. Much a little bit easier to sleep at night when you know that you can build that into your pricing structure to make sure that you're covered. So you don't have to break that in case of emergency box.
Learning from Mistakes: Key Red Flags and Lessons for Entrepreneurs in the Insurance Industry
Alex Bond: Are there any sort of other mistakes like that? I mean, I guess in terms of from your viewpoint and the insurance side of things, are there any sort of other mistakes that entrepreneurs that are listening could have made or that even you have made that entrepreneurs can look out for in the future so that they can kind of see the red flags and and go, you know, left instead of right.
Jared Haas: I mean, a lot of things that we just talked about it, just education there. And to be fair, like, it's not necessarily the most exciting subject that people are just looking up all the time. You know, people. I don't know if you get scared to call 1 800 numbers or, you know, if you think you're just going to be talking to sales folks.
Here we have teams of essentially consultants because we understand that as insurance agents, especially in this space of inland marine insurance is basically what we're talking about here. You're just not getting that all the time. You don't really understand how it could work for you.
You know, I think the biggest and most common Misconception outside of that carrier liability versus insurance is, especially for these smaller startup businesses. They don't think that they're big enough that be able to have an annual insurance policy yet. Which is really the case for a lot of insurance providers out there.
But we're talking about our Shopify app. You know, we have no minimums to that. You could use it once a week, once a month. You know, as far as you're growing your business, there's no minimum premiums. We're not going to cut you off because you haven't spent enough things like that.
I think a lot of people when they look at like business owners, policies or inland marine policies in the past, they may seen those things before and don't realize that I can have this from day one to make sure that I'm covered in case. I don't know if that loss is going to occur day one week, one month, one, or year one, but it's going to happen at some point.
Alex Bond: And I think, you know, you're really bringing some good advice to the table in terms of the research bit. You don't think it's exciting. I think maybe a little bit, even the stuff that isn't exciting to me in my personal life though. And I'm not great at it all the time is I try to spend a lot of time researching it before actually doing anything.
Don't get me wrong. I can be a very impulsive person, but stuff that I don't want to do, or maybe seems like boring to me. It helps to listen to a podcast or try to find someone that does make it a little more exciting or clear.
I think there's something to something being, you know, very concise and understandable in terms of doing the research to make something a little more exciting, even though that might not sound like the most aha solution. That's something that helps for me a lot too. So I think you make a really valid point there.
Jared Haas: Sorry to interrupt you there, Alex. But another thing that I think is so important about what we do, because we remember that we're a subsidiary of UPS. You know, been around for, we're going to UPS itself is going to celebrate it's 116th birthday here in August. We have a lot of transportation knowledge that other insurance providers don't necessarily have.
So we really try to get down to the root cause of where your losses and how they're occurring to, to try to help you avoid those losses in the first place. So it's not just about paying you back when that loss occurs, but especially as a new business and new shipper, heck, even if you've been doing it for a while.
We can talk to you about the way you're packaging your goods, the way you're labeling your goods to try to protect them from having that loss in the first place. Because at the end of the day, you would rather not have that customer conversation. Hey, that package was damaged.
Future Vision: Exploring the Growth and Innovation Roadmap of InsureShield and UPS Capital in the Next 5 Years
Alex Bond: So what about, you know, looking forward 5, 10 years down the road? I mean, you mentioned 116 years for UPS, we'll go a little smaller and just say, what is, you know, InsureShield and UPS Capital look like in the next five years, what's some stuff that y'all have been working on or developing?
Jared Haas: Yeah. So, I mean, for us, we're trying to really get that voice of customer. That's the biggest thing at the end of the day, when we listen to our customers, we find that we continue to grow. And we give them what they want, what you've seen, the transformation, even in just like the last three to four years for us is a very digital transformation.
And I don't see that stopping anytime soon. We went from a very, hey, we're going to attach to a UPS shipping account, or we're going to give you this annual policy, tell me how much you think you're going to sell this year, to being able to attach APIs to your shipping platform to now we have apps available for you webhooks available for you on different platforms. So we're trying to grow to where our customers need us to meet them and where they want to ensure.
So we're continuing to do that. And we're trying to get a lot better with our data because we have so much multi carrier data where we're trying to be a lot more proactive in helping our customers make informed decisions on, you know, where to ship, how to ship, just try to get themselves out of these risky situations where they have maybe lower confidence and where they're shipping it because of lost history.