Asia InsurTech Podcast spoke with Kulin Shah and Yogesh Agrawal, the co-founders of Onsurity. The startup just celebrated its one year anniversary. Onsurity has the vision to bring affordable healthcare to SMBs and to increase insurance penetration in India.
Transcript:
Michael
Hi, this is Michael Waitze and welcome back to the Asia InsurTech Podcast. This is the only podcast in Asia focused on insurance that gives entrepreneurs thought leaders and investors a platform to discuss how technology is reshaping the insurance industry in Asia. Today I’m joined by Kulin Shah and Yogesh Agrawal, the co-founders of Onsurity and it turns out that Yogesh is actually the world’s youngest actuary. That’s amazing! And for all of you who know how difficult that test is, or that process is, that’s amazing. Guys, it’s great to have you on the show. How are you doing today?
Kulin
Hey, thanks, Michael, for you know, having us and for me, it’s like the second run out here. I think we recorded one in 2019. We didn’t come back. Yeah. And I’m really excited to kind of speak out here. And thanks for inviting us out here.
Michael
So why don’t we start with Yogesh his background? Let’s do like a quick little short and sharp background for both of you. And then let’s jump right in.
Yogesh
So I’m Yogesh, founder at Onsurity. In terms of my background, as Michael mentioned, I’m qualified actuary and chartered accountant, I have worked in the insurance space over the last 10 years, had helped multiple, big insurance companies in designing their insurance product, setting up their reserving and accurately. And also, I was over the last three years been associated with a couple of InsurTechs in India. Yeah, so that’s a brief about me.
Michael
Got it. And we’ve already met you cool. And so we can actually bypass that. Why don’t you guys tell me from your perspective? What do you think is the biggest trend in InsurTech in India? And by extension, the rest of Asia?
Kulin
Sure. So for India, and I guess for many Asia markets, per se, right, the entire pandemic has kind of, you know, changed the entire landscape. Like, you know, earlier, you know, there were a lot of products that were, you know, being adopted, being distributed. Right. But I think the biggest change that has happened right now, is in the health insurance space. And I think everyone has kind of seen the impact that health insurance can have in this space, and especially from a healthcare perspective. You know, insurance is not only just about hospitalization now, right? It is kind of moving, it is kind of becoming more encompassing. In fact, because of the pandemic, on the health insurance side, and on the healthcare side, there’s been a lot of buzz about it, especially in India, in the SMB space. So the adoption for healthcare and healthcare related products, has really kind of been on the upsurge, have been seeing a hockey stick growth, right, when it comes to adoption out there. Till now, you know, health insurance was almost like for the privileged ones, in a country like India, where health care is not necessarily sponsored for everyone by the government. So there is this whole missing middle, if I may say, so that, you know, we have the corporates who get corporate plans, and then we have some, you know, health care insurance related benefits from the government for those who are below the poverty line. But what happens for the missing middle? And I think that’s where all the action is, and we understand that, you know, in a lot of Asian countries, whichever similar business landscape, where SMBs play a very important role. SMB employee healthcare benefits, is really on the upsurge. So, on a macro level, I think that’s what we’ve kind of seen from the biggest trend in InsurTech is kind of getting the right products, you know, different ways of distributing them. I think these two have really kind of, you know, seen a lot of innovation, a lot of rethinking, relooking when it comes to healthcare.
Michael
So it surprises me, actually, and maybe it’s just my lack of understanding, that it took so long for healthcare and health insurance to kind of be bundled together. Does that make sense? Why do you think that didn’t happen in the past? In other words, a lot of insurance companies and InsurTech are working on this as well have figured out that if our clients are more healthy, then they won’t have as many claims, but that’s by definition, a health care event for them. Right. Why did it take so long?
Kulin
I think it’s till date, a lot of people, you know, had this notion that they are not susceptible to diseases, right? Or, or they will realize very later in life that he has, you know, there are lifestyle diseases that they can get. Right. I think that is something that has really changed with, you know, the pandemic, right. The pandemic has not discriminated. Anyone, on any factors, right, and then seeing that that’s the whole unknown about the pandemic, the rising cost associated with, you know, recovery from the pandemic, right has kind of been a brought about this, you know, two things: That one, one needs to kind of, you know, at the first level of the funnel, one needs to be healthy, right, they need to kind of start building their immunity, right. And that’s where the healthcare part of it comes. And in a situation where, you know, one kind of, you know, contracts, any kind of a disease, then, you know, with the growing healthcare expenses on the hospital front, right. People are kind of seeing the benefits of insurance. And I think it’s also the, you know, one small point is the increasing cost of hospital expenses has also kind of, you know, made people realize that, you know, there they could be depleting your savings, and hence, an insurance product could kind of help as a financial protection out there. So I think that’s my take on this.
Michael
Okay. And you also mentioned that, there is this big middle that’s missing the insurance, right, you said, so the underserved and maybe the the endemic poor, get help from the government, though the rich or the wealthy have either helped through their jobs, or through their corporations. And that there’s this middle group of people, maybe they are working for SMEs and SMBs. But now it’s time to attack that problem, right? Do you think that technology is making it? Because you can scale it faster? Do you think it’s making it less expensive to provide that middle with insurance? And you think that that’s what’s driving this? Or do you just think there’s like a social realization that those people also need health care? Like, what do you think’s driving that as a focus for the insurance industry?
Yogesh
Yeah. So basically, Michael have both the part actually goes side by side. So basically, with the use of technology, and the use of all the digital platforms means most of the SMEs SMBs, in fact, employees are having now smartphones, or the assembly, or at least having the smartphone. There is a great revolution that had happened in India on the payment side, which actually enables the digital transactions at a very easy kind of uptake. So that is one of the factor that is creating a lot of buzz, when it comes to the SMB employee. And the second part is, of course, the realization. And so basically, both of the things are going side by side. So I will tell you one of the example that we have seen in the Indian market. That basically, because of the pandemic, a lot of the migrant workers who were who were working far away from their hometowns in some different big cities, they had to actually go back to their hometown, because of the uncertainty about the pandemic. And when things started opening up, means when the lockdown zone for the restriction starts getting up. So basically for all the SMB when facing major challenges to bring back their workforce. And I think the insurance companies InsurTechs in India had actually at least held SMEs to provide the right product at the right time, which enabled a lot of SMBs to bring back their workforce. Because one of the major issue where the workforce was facing about the uncertainty that if they can’t contract with the pandemic, or with the disease, then what would happen, and I guess the insurance and the kind of a product had given them a certainty. And this had really contributed India to come back to the main force. And I guess, in December, especially the kind of the numbers of the GDP that we are having it around. It seems that we are coming back. And that’s where what we see that it’s the realization as well as the technology which enables this particular facilitation that’s happening.
Michael
I understand. Look, let’s talk about Onsurity. Right, the two of you are the co-founders of it. Yogesh, obviously you’ve been in the insurance industry for a long time and Kulin you’ve been with other InsurTechs before but what was the reason or the impetus for starting this particular company?
Yogesh
So Michael, I will just go with that. I will just share with everyone with my personal experience. So basically I come from a family who runs their own small businesses in Calcutta city in India. During my teenage days, after college, I was also looking my father’s business. And at that time, we employ a couple of blue collar staff in our business. And one of the major challenges we face every year was because of their family medical emergency, we have to provide a kind of a salary advances or loan to our employees. And which basically, at that time, also, I remember my father always taught to actually get some kind of an insurance or a social security product for his employees. But there was no kind of a ready made product that was available that caters to the SMB or to any organization having less than, like 50 employees. Between like 2017 to 2019, I was also running my own actuarial consulting firm. And I also faced a similar problem in year 2018, and 19, when I was running my own boutique, actuarial consulting firm of 17 members. I also faced like a lot of challenge in order to get a suitable healthcare product. And talking about when I have actually worked in like, in a couple of leadership positions in different insurance companies. And even after that, I also faced the same kind of a problem. So I just thought that let’s means try to solve this particular problem, which is there in India. And somewhere around November 2019, I thought to start about making Onsurity, given that there is a significant supply constraint in the healthcare market, and being an actuary where my specialization was to create employee benefit and Social Security product, I thought that this is the very right thing for my career and this is how I can contribute to the Indian system.
Michael
And can you also tell me how technology drives this? You can be very specific if you want. I’m very curious about this. In other words, you know, technology can provide a scaling mechanism, it can provide analysis of data can do a bunch of different things, but how do you see it in this space, providing the added value to then accomplish that thing that you said you want to accomplish? Right? In other words, I look at SMEs and SMBs, right? And I see 10 people working over here and 13 people working over there. But if you pull all of them together, you have a risk pool, that’s as big as it would be if it was two or three corporations, right? So how does technology help put that all together in one place and make it efficient and also price efficient, if that makes sense.
Yogesh
So, basically on this particular part, Michael, technology is like a key. For example, if I talk about the Onsurity, we created a kind of a platform within like two minutes, the SMB can actually purchase kind of a suitable healthcare membership for their employees. And within the same two minutes, he can actually onboard all of their employees. And that can only be possible with the use of technology, where we have actually integrated our system with different macro system of government system like GST system in India, or provident fund or the other social security system in India. Where by just putting some no registration numbers, we can actually get most of the details about the SMB and using our technology platform or using the dashboards or the mobile apps, what we have facilitated for the SMB and employees, this particular thing is possible. I guess, one of the major revolution that we try to bring on and is kind of a monthly payments for the healthcare of the employees and that too got facilitated only to the technology. So, in India, unlike the other developed market, the the cost of healthcare is still paid on an annual basis. And this is the time when we have brought this particular part where the SMB can actually pay it on a monthly basis. And that then actually makes the entire product more affordable for the SMB. Given that in India, they always have some kind of a working capital issue, or a liquidity issue. So paying on a monthly basis, really solve the challenge and I guess this is how the product becomes more affordable with the use of technology. Because the collection of the monthly payments always require a suitable payment layer, which the UPI and the different Indian Government payment mechanisms had helped to solve it out. And again, I will just put this, the technology actually enables those monthly collections that can be deposited.
Michael
Is there, and either one of you can answer this right, but is there a trust issue here, and I’ll let me put it into context for you. I make all almost all my payments using a mobile app on my phone. And I just do bank transfers, like I almost never carry cash. When I go to a restaurant or a store, I just say what account do I transfer to just directly. But again, I’m a technologist right at heart, I love it. But also, before I hit the send button, I show it to the person that that’s dealing with me to make sure the account is right in the name is right, just to make sure because I don’t know how to back out that transaction if I’m wrong. Right. So I have to believe it’s right. Do you find that when you go to sell this to SMEs or SMBs that aren’t necessarily as technologically advanced as some bigger companies, that there’s a little bit of skepticism about? Is this really gonna work kind of thing?
Kulin
So, no, you know, I think that’s where actually a monthly thing helps us even more, right? Because one that, you know, when we’re making the payment, right, it’s a seamless payment experience. One, and it’s, and we don’t kind of, you know, drive the traffic outside, it’s a native payment experience that we have on our product. So what is that? And to that, you know, because it’s a smaller amount, right? And some monthly amount, right? They know that if something goes wrong, it’s only like, 8.33% of the of the final amount that they’re paying right now.
Michael
And for those people out there that don’t understand why it’s 8.33%. That’s one over 12. Yeah, cuz it’s a monthly payment.
Kulin
Yeah. So in fact, the whole monthly thing has actually helped people to kind of, you know, take a, you know, go through the friction and say, Hey, you know, what, let me get this healthcare for my employees. Right, because in case they don’t, you know, in case, I see that this is not the right thing, I have not made an annual commitment where my money’s gone, you know, down the drain, and I will not get my money back. So I think technology is actually helped us to kind of, you know, create that trust, you know, even more, this whole ability to kind of bring about monthly payments.
Michael
And what is, now that I sort of understand why this company was founded, what is the longer term vision of it, I like the fact that Yogesh kind of said at the end, and I want to have an impact, and in a positive impact on Indian society, like he can’t, it was kind of like a throwaway line. But that’s also really important, I would think, but what’s the sort of long term vision of Onsurity?
Yogesh
So, basically, for us, the long term vision is that in India, like, there are like 42.5 million SMB, which actually employ, like 40% of Indian workforce, and regenerates like earning for around 500 million lives. So, the kind of the use case, what we are trying to solve is itself so so big, that if we just means for us, if we just keep this kind of a vision, that how we can actually bring this entire SMB market into India’s healthcare and Social Security network, that is the kind of vision that we are having it around. Of course, our Prime Minister, our governments, our regulators are also having the same vision and because of the pandemic had open eyes of all the large Institutes. So basically, this is what our vision is that how we actually make it out and reach to almost all the SMBs that are there. What we had mentioned also that in India, most of the loans that have been given are mostly for the healthcare treatment when it goes to the middle incomes or to the lower income guy in India. And this had really the, insufficient social protection or the healthcare prediction how to really cause poverty, and lifetime debt for millions of families. So I guess, our vision, we just want, I mean, we really we wish to be focused towards this SMB market, and try to create a platform because again, it’s important for us and then to make the platform more affordable, more sustainable, more efficient and more customer focused. Because given that it’s a SMB market, so they are always extremely price sensitive again this particular product and like any other country, they are they do not have to mandatory providing any form of social security. So efficiency and affordability and value for money is like the most important part. And that then involves that our vision is to actually create kind of a creator platform, which can give like an entire experience around the employee healthcare. So it should not just be focused towards like secondary care or towards tertiary care, but how we actually create or touch all the three, that is primary, secondary, and tertiary, and kind of create a platform, which actually provides like a one-stop-shop for the employee healthcare and benefits for the entire SMB.
Michael
You made a really good point there, and I’m curious what impact the government has, and the IRDAI I guess, in in tandem, on the sort of growth and the dynamism inside the insurance and the InsurTech space? Like, do you feel it?
Yogesh
Yes. So we actually feel it out. So basically, around like three months, three and a half months back also, there are like a lot of push that’s happening from the government and the regulator side on how to actually increase the insurance penetration overall. And, and basically, if we go very deeper in the Indian insurance market, that what is the source of the lower penetration, and when we actually have gone more deeper, the source of under penetration is because the SMB is quite unsolved. SMB in India actually contributes around 30 to 35% kind of a GDP in the country, but their insurance penetration is very, very low means that’s far below the average penetration in India. And this is where the Indian insurance penetration overall, is quite lower than the global benchmarks. And this is what the government and IRDAI is trying to do. And I guess, all the initiative is the regulator in India is in that particular direction, how to increase the penetration. And this is why on a regular basis, they are creating sandbox products they are, they are actually asking insurance companies to create new products. And again, I will just give you a recent example that how quickly I already had worked during this particular pandemic. So basically, somewhere in the month of February, there are there were news that COVID-19 is actually touching the borders of India. And by middle of March, the regulator had health insurance companies to bring like a COVID 19 Health Cover product. And during that time, I guess most of the other countries were even preparing to actually bring such kind of a product, but the kind of the push the regulator and the government had done, I guess, that was fantastic. And that really shows their commitment towards increasing the penetration in the market.
Michael
Got it. Can we talk let’s talk specifically about Onsurity. When was it founded? Like when did it actually come into being but when did it actually launch its products? And what is the traction or has been the sort of business acceptance of these products?
Kulin
Alright, Yogesh incorporated Onsurity in the month of Feb. And I joined him as a co-founder in March of 2020. I was supposed to take a sabbatical, but COVID happened and those plans got dropped. And you know, Yogesh said, Hey, we work together in the past, let’s work on something which you know, will actually create an impact and actually solve, you know, a problem, right? The whole Onsurity story sounded very interesting and I kind of joined him as a co founder in March of 2020. And we launched our product, in midst of COVID. So I, you know, this is a very, it’s a it’s though, maybe that is etched in stone, kind of a thing that Yogesh and I, you know, on the 20th of March, or, you know, some some time around that, left the office with 18 employees, and we said, you know, hey, you know, what a lockdown might happen? We’ll get back in a month’s time. Right. And we’ve still not opened our offices to now but we had a 72 odd team members now.
Michael
72 did you say 72? That’s a lot. Okay. That’s awesome.
Kulin
Yeah, and we are now have 400 plus businesses, or we partner with 400 plus businesses, as their healthcare partners or their employee healthcare program. So we launched our…
Michael
Can I ask you quickly, are the 400 companies or maybe what percentage of them were using somebody else for the services that you’re doing or these companies that just didn’t have the services at all and said, We need them and then you provide those services to them.
Yogesh
This like, completely new to the market kind of for SMB. So almost like out of 400? I would say that like, not more than like 10 to 12. guys were having any kind of a product before Onsurity. So basically these are like almost like, first in time kind of a consumer.
Michael
Wow. That’s cool. Sorry, I interrupted you. Kulin, you were saying
Kulin
I was just doing the same thing, Yogesh. That, you know, our focus has also been, you know, go after companies which don’t have a healthcare product, because, you know, that’s where the real need is, right? And yes, there are now companies who were like inbound queries about companies who have, you know, healthcare existing healthcare products, and but to be honest, they have only health insurance, right. And, you know, they’ll actually come back to us and saying that, listen, we want a more comprehensive outlook towards health. And, and that’s where they see the benefit of working with us. And one of the other benefits that, you know, we kind of provide, given that we work in the SMB space, is that we just not only provide these benefits only to, you know, on role employees, we also kind of have kind of removed that discrimination and said, Listen, freelance interns, consultants freelancers, you know, contract workers, right, or equal on consulting basis. Right, right. Let’s provide that to everyone, right, because they, too, are a building block in your company, why discriminate, right? So Onsurity And you know what, in the SMB, there is a high rate of attrition, right. And a lot of times a lot of off roll contract employees are there. So we kind of cater to the entire bunch, right. And that is also seen as the innovation in the space. And we have a lot of people who have come across saying, Listen, you are actually solving a problem, because I might have only five employees full time, but I have like 10 people who are on contract for the next six months or 12 months, you know, what do I do for them? And that’s the reason why they’ve held back a decision. And that’s where we’ve come in, and you know, pitched enough products.
Michael
So does it this is just interesting to me. Does it make sense? Or maybe again, I’m missing something. But does it make sense for a company like Onsurity, right? Particularly if you’re talking about these temporary workers, or maybe part time workers, right, that should also get covered? There’s a company, you know, founded in Singapore, but kind of based in Bangkok called Workmate, right, that they hire a bunch of people, then they parse those people out to a bunch of different companies all over the country. Would it make sense to work with them to provide all of their employees with insurance as well, even though, like, their employees don’t work at Workmade, but they get jobs through Workmate and get paid by Workmate because the SMEs or SMBs, pays workmate, which then pays the employees. Does that make sense?
Kulin
Absolutely. And we already have such use cases on the platform to be honest today, because we have similar companies might not be providing, you know, in-house help, or a maid but yeah, providing like impartial employees and, you know, on the ground, you know, field forced by working with us.
Michael
That’s really interesting. Yeah, you should talk to Workmate, because I think I don’t know how many employees they have. But I think it’s a lot like ten-something-thousand It’s a big company here. I interrupted you, when when you were talking about you launched your, the launch of your product, you said the not the beta, but the alpha of your product, you were talking about that? And then we’re going to build into the the full launch. You want to continue that or?
Kulin
Yeah, it was just a small point that, you know, we started in the midst of pandemic, you know, with, you know, two or three people on the business development side, you know, a lot of times, you know, we’re thinking to ourselves that Listen, do we need a feet on street to kind of, you know, push the product, because, you know, insurance typically has been a push product, right. But we realized that when we kind of, you know, when we looked at healthcare as a, you know, offering, right, that’s, and that’s what Onsurity is about, like creating or giving a comprehensive health care product, right. We’ve not had anyone go on the field to kind of, you know, pitch to any business. We’ve done all our business, you know, sitting at our homes, and, you know, connecting with people, connecting with business owners, telling them about what we’re doing. And, you know, we see a, you know, a bond being built in the first conversation itself. You know, we can almost feel the smile on the, you know, on the call thing that hey, yes, this is exactly what you know. Makes sense. For me. It feels good. Yeah. Yeah, it just feels good that, you know, we got such an early product market fit. And now we kind of are looking to scale this now.
Michael
But you’ve signed up 400 customers from your couch is what you’re saying.So my question is, what have you learned about sales? But really when you stop and think about it, right, because sales used to be going into the factory, going to the SME sitting down with their head of this letter, the other thing, and then convincing them through some sort of metrics and stuff that they shouldn’t use your product. What have you learned about sales? And through this digital channel, right? Because it must all be done over Skype or Zoom or Jio or something, right? What have you learned about sales in this process?
Kulin
Two learnings, Michael. One is that, you know, when when a macro environment pushes you, and you can’t go and meet people, or you can’t meet people to purchase something, you have to do it virtually. Right. And I’m not saying that we are the best salespeople in Onsurity it like, has the world’s best salespeople? No, we’re not the best salespeople. But I think, but I think that, you know, our thought that you know, don’t want to sell healthcare, right? Problem solved with healthcare. Right. I think that’s something that has worked for us, we’ve let go of a lot of opportunities where we felt that we were selling them healthcare and not really solving a problem. And that’s where we, as a team said, Listen, you know, what, you’re just not ready for it as yet. Right? But we leave them with the frameworks in their lesson in the next one month, observe this kind of a behavior, right? If you observe this behavior, right, come back to us, we have a solution to your problem. Right? So I think we’ve, we’ve learned the habit of saying on short, is this not a product to be kind of, you know, sold, and its features to be, you know, just sold to people. We’re seeing that, hey, let’s put it contextually in people, you know, in the scheme of things, and then see how it fits in. And that’s where we saw most of our, you know, you know, closures or, you know, accounts will happen. We’ve on boarded into n right, from the state of demo to onboarding employees in in two hours flat. Right. And, Michael, you are from the InsurTech space, you know, insurance, health insurance is not an easy sell. Yeah. So we’ve done a healthcare sale in two hours flat, I have, I have messages on that on my WhatsApp and, you know, recently shared it on Twitter, too. But we’ve done that in like, in two hours and eight hours in less than 24 hours. So, yes, I think I think we’ve just made healthcare very contextual. And you know, help people kind of see the way they should be looking at healthcare and just not at the sale of our insurance product.
Michael
So I like this, I think I’m going to make that the title of this episode, actually, which is solving a problem not selling? I like it. And that’s why I asked that question, because I truly want to learn something when I talk to teams like yours. You mentioned you joined in March of 2020. When you joined, how many people were in the company already?
Kulin
Yogesh, what was the count
Yogesh
Was somewhere like 17, 18.
Michael
So you went from, let’s just say 18? Because I like even numbers. And now you have 70? And actually 17 times four, no, it’s 18 times 4 is 72. Right. So it’s an easy number for me. How did you fund all this? Or did you just fund out of like your own working capital? Because you know, 18 people’s a lot, but 72 people, obviously, we said, it’s four times that how did you fund this? So if you raise money, like what does that look like?
Yogesh
So basically, in terms of yours, in the month of March, we raised around close to two and a half million dollars from one of the leading VC in India that has been to partner, and that that fund actually had really does to develop this particular product, developer, right team for the technology. And to create a kind of a platform, which again, as we mentioned, that couple of innovations that we have brought into the market, which kind of a revolutionary, and I think that with the good use of tech, that was possible. And the team, which we are trying to build it around, has really helped us to do that or had made it possible. So yeah, so that’s how it’s funded by the one other VC.
Kulin
So we got AngelList, Whiteboard Capital and Nexus, and a few other angels who have participated in the round. And just to give you a context on the team, I think the largest team, you know, is our customer experience team, followed by the technology team. And then, you know, then and then there are smaller teams for business, then there’s, you know, for the product, and to finance and admin and all these things. But the largest two teams are customer experience teams and technology teams,
Michael
Which sounds like it fits into your philosophy, right? And it gets back to this whole idea of you’re not selling them a product, right, you’re trying to solve a problem for them. And if that’s the case, you’re going to need a big customer experience team because that’s where a lot of the problem solving takes place. Obviously using technology to do it but that’s where the interface is. No.
Okay, guys it sounds like you’re doing really well. It sounds like a really exciting opportunity there’s also sounds like you’re growing really fast which is cool. And raising two and a half million dollars in March of last year is kind of miraculous. So congratulations on that. And let’s do this I want to end here I want to thank you both for coming in and doing this right Yogesh Agrawal and Kulin Shah that co-founders of Onsurity but I also want to have you come back in like another six to nine months. So we can see like how much more you’ve grown and what the progress is that you’ve made, if that’s cool with you guys.
Listen to our previous episode with Kulin during his time at Acko Insurance here.
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