EP 154 – Sanjib Jha – CEO & Executive Director of Coverfox – Every Crisis Is an Opportunity

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Michael Waitze worked in Global Finance for more than 20 years, employed by firms like Citigroup, Morgan Stanley and Goldman Sachs, primarily in Tokyo.  Michael lived and worked in Tokyo from February 1990 until December 2011.  Michael always maintained a particular focus on how technology could be used to make businesses more efficient and to drive P/L growth. Michael is a leader in the digital media space, building one of the biggest and fastest-growing podcast listener bases in the region.  His AsiaTechPodcast.com show has listeners in more than 130 countries and his company, Michael Waitze Media produces some of Asia’s most popular podcasts.

Guest
Sanjib Jha

Sanjib is a globally recognized expert in financial services, impact and startup ecosystem. He was hired by the World Bank to help execute the $500 million Innovative MSME Funding Program of the Government of India, which was operationalized by SIDBI. He was involved in conceptualizing the 59 minutes loan along with the World Bank. He further led the $1.5 billion Fund of Fund for Start-ups in India.

This episode is brought to you by:

The Asia InsurTech Podcast spoke with Sanjib Jha, the CEO and Executive Director of Coverfox, about the startup ecosystem in India and how Coverfox has pivoted during Covid and came out the other end stronger than ever.

Listen to our podcasts with PolicyBazaar here.

Find the transcript of our conversation here:

Michael Waitze
Okay, we’re on. 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 globally. Today, we are honored to be joined by Sanjib Jha, the CEO and Executive Director of Coverfox and a co-founder of Avaana Capital . Sanjib, it’s great to have you on the show today. How are you doing?

Sanjib Jha
I’m doing good this morning, Michael, thank you so much for having me on the show.

Michael Waitze
We’re really happy to have you here. Before we get into the main part of the conversation, what do you think is the biggest trend in InsurTech today in India?

Sanjib Jha
I think the biggest trend that is happening there are actually I’ll say two, two parts. One is that over the course of last few years and more particularly in the last three to five years, there’s a lot of capital, international capital, domestic capital that is coming in, because of that, there is an enormous amount of awareness around insurance that is actually happening. Now, capital awareness, and at the same time, we have seen that and we all know India is the second-largest populated country in the world, and we have seen a massive disruption in digitization that has happened across the board not only in insurance, so insurance is adopting at a very, very fast rate. It is digitizing itself very at a very, very fast rate. So capital, number one, number two awareness. Awareness would include education people knowing more about it, people understanding why how important it is. And third, how do you digitize it so that it becomes easily accessible, while by and easily claimable when there is a problem that occurs? This is the this is a trend that is there.

Michael Waitze
That is really interesting. I want to get back to that in a second. But before we do that, can we give our listeners a little bit of your background as well for some context?

Sanjib Jha
Yes, yes, certainly. So I’m very new to insurance to begin with. Coverfox definitely is an interesting place to learn and understand insurance. And I am a learner. But this going back, Michael, I would say I’m an entrepreneur, serial entrepreneur. This is my seventh company that seventh different kind of business that I have been involved in. By training I’m a lawyer and a company secretary. Been involved in banking, financial services, distribution of loans to microfinance, all those I have done, I have also been an investor, I’ve invested in several companies. But more importantly, over the course of last 15 years, I have contributed to a large extent in how startups in India would get funding. I mean, be it either debt. So IntelleGrow was the first company in India, which I started, which was lending to Indian startups. And in three years time I funded 162 startups, and many of them are unicorns today, and then that I carried that with the Government of India with the help of World Bank and SIDBI. They are my biggest mandate was to, to look at what IntelleGrow at a very, very tiny, small scale, can it be done at a national level by the government. So I was the lead advisor to the startup action plan that Prime Minister Modi had, and then I saw a big opportunity. So I jumped into Coverfox and I thought that here is an opportunity where one can use capital, awareness and digitisation to cover the entire country, which is not covered yet. So that’s my background.

Michael Waitze
Can we back up again for a second? Because I find this really interesting, right? What got you originally interested in the startup world? And again, not from a VC perspective, right. But more from a lending the IntelleGrow, I think experience is actually really interesting. And then into the into the World Bank, can you just dig a little bit deeper and tell me what that experience was like?

Sanjib Jha
Yes, yes. So see, I was part of a firm called Aavishkaar Intellecap. I was on the founding team. And what we realized over there, Michael, was that and it’s world’s largest impact ecosystem there I would say. So they do lending advisory and investing and biggest learning over there was that there was lots of grant that was coming to startups which were doing impact businesses, be it microfinance, VT education, beat health care, a lot of grant that was coming there’s a lot of equity that was flowing in. But see a business is a business. Every business has a debt to equity ratio, every business is when you look at it from a point of view of scale, you have to have a healthy balance sheet which which requires lending and which requires equity. And at the same time, the entrepreneurs who are running it the promoters who are running it, they also need to have a longer skin in the game not only just have skin in the game game but their skin in the game has to be for a very, very long period of time because most of the investors globally they invest on the vision of the entrepreneur. But if the entrepreneur is diluted by the time it is fourth or fifth year of his business very, very, very, very insignificant ownership, he would lose interest, she would lose interest. So, there we realize that you know, is there a possibility of giving them debt which is non dilutive capital, but yet is the highest risk capital because the company’s yet not yet to be profitable, they won’t be able to return your capital, return your debt, just like that, you know it because there is no profit itself. So, you have to come out with a business model, wherein you take your money back from the cash flow, it generates, not necessarily the profits it generates. So, we we saw that as a huge problem in India and India and talking about India, when, in 2011-12, when, when we we actually anticipated that it will become the fastest growing startup economy in the world. But somebody needed to take the risk, somebody needed to walk the talk and say that, you know, if a company is less than three years old, or businesses less than three years old, then that is also possible, one can actually give them that. We were lucky enough to get some grant funding from Shell foundation, but very soon, we actually raised a lot of commercial capital, and it became a phenomenon. So following Intellegrow, a lot of venture debt firms actually came today, it’s a big industry in India, I would say it’s almost a four to $5 billion industry, lending industry lending to startups in India. So I’m proud of that. Then actually, that became a case study for World Bank. Globally, they wanted to replicate the model in Middle East, they wanted to replicate the model in Asia, South Asia, they wanted to replicate the model in Southeast Asia, I had sold my ownership from Aavishkaar Intellecap, including IntelleGrow in 2015. And I was literally doing nothing I was actually traveling the rest of the world. World bank called me and said that look, we want to give $500 million to the Government of India to do exactly what IntelleGrow has done. Would you be keen to advise them? I was reluctant initially, but then I took up the opportunity. And then one thing followed after the other exit B and many unique and interesting things actually happened over there. So yes, startups have not only been able to access equity in India, but following IntelleGrow, I would say a lot of debt has also flowed in

Michael Waitze
when you first started giving debt to startups right. In a way it almost reminds me almost Yeah, reminds me of Mike Milken giving junk bonds to fast growing companies in the United States. The criteria obviously, for those loans were very different for existing companies, because the cash flows were completely different. They were rejecting future cash flows, and then lending based on those potentially right, different different idea. He wasn’t lending to micro SMEs as well. But it’s just a different view on it. And I’m curious, when you first started IntelleGrow and said, we’re gonna lend money because it more closely aligns, I think, with what the with what the founders want to do they want to grow, but they also want to keep their equity stake. Like you said, the venture capital investors and equity investors are afraid that if they’re diluted to 50, 40 30%, he or she will lose interest. But when you first started doing this, it wasn’t the norm. Was there pushback originally? Or did people just go okay, it’s fine.

Sanjib Jha
Yes. Yes. So it was it was very, very difficult, I would say, See, people actually, when they start a business, and they’re very young, they are in their late 20s, early 30s Sure, majority of the population don’t understand the difference between debt and equity. And when you say that, look, I’m giving you debt, but this debt you have to pay me interest and the interest might be anything between 18 to 25%. And they will say look what the equity guys are not asking me anything back. But dude, in the shell of your company, you don’t understand the value of that. So so that was my biggest challenge initially to explain to them the difference between debt and equity. Once they got it and they said, Oh, wow, this is actually something which is helpful to us and not to them, then then it became a product so that was one challenge. The second challenge was the cash flow itself. How do I get my money back and you know, equity, when equities investor itself with a long term view, you expect the money to come back after seven to eight years, okay? Or maybe five years in times maybe if you’re very lucky, you can actually get your exit in three years time. But when it came to debt is the DNA is very different. You expect the money to come back every month. Now so a you are giving risk capital and B you are on that risk capital, you’re expecting the money to come back immediately and then then you have to navigate you have to negotiate with the equity shareholders who are already there in the company of equity. negotiate with the entrepreneurs. It was tough. But yes, once so we had to create products we had to create. Our return had to be based on some mathematics, some warrant structures. And then we had to come out with escrow structures, we had to come out with the ballooning structures, we had to take money when they received the money. So we had to add a more of a moratorium. So it was all funny. But the good thing is that till the time I ran it, we literally didn’t lose too much of money, we were operating at three to 4% of NPA. And, and the company company became very valuable. And it was able to walk the talk and create a asset class in itself, startup lending. So I’m proud of that, what we could do in four years time and deliver

Michael Waitze
very interesting real music, I think we could do a whole show on the difference between debt and equity, and also the leverage that sits in equity that people don’t understand. I mean, I think you’re right, I’ll move on from this in a second. But I think you’re right. If most founders are 27, 28, 29 years old, they’re probably not coming from a finance backgrounds, which means they don’t understand this kind of cash flows, they don’t understand the future value of money. And they don’t understand the leverage that’s embedded in equity over a seven to 10 year term, particularly when it comes to venture capital investing. But let’s leave that aside. What was the impetus? Because you’ve done a bunch of different companies, you said, but what was the impetus to join Coverfox, let’s go back to that as a senior executive. And then when you joined, like, how did you see the competitive landscape that you were jumping into

Sanjib Jha
it very honest with you, Michael. So I mean, when I, when I sold IntelleGrow, I somehow realized that I will never become a CEO. I didn’t want to be a CEO. It’s a tough job. Not not many people would say that publicly, but it’s a hard job, it’s a tough job, it’s actually takes the entire use out of you. So I said, I won’t, I will not do any of these. So I was very happy with what I was advising the government of India, and I was paid well, I would say over there. And then they wanted me to stay for a longer period of time. And I was like, no, no, I’m an entrepreneur, I’ll do something different, but I will not be a CEO. Right. But but then then market market actually starts recognizing you as someone, right. So there was so many opportunities that came along, and then we will navigate as navigating around those opportunities. And then we set up this fund called Avanna Capital along with my co founder, and we invest in this company called Coverfox. And within six months, I’m talking about a time it was 2018-19. You know, within six months, a lot of things changed in Indian Indian financial services ecosystem, I would say a, there was the monetization that happened. And that actually virtually stopped capital to come inside financial services organizations, which was which was in the growth phase. Second thing that happened Policy Bazaar was able to quickly and very, very rapidly raise capital, yes. Okay. And while both the company’s Coverfox and Policy Bazaar was almost same, but 2018, same as in similar sized, but because Policy Bazaar could raise capital so fast and there and, and going to D monetization and owing to banking crisis, after Island Fs and few other bands just which was on the verge of collapsing, we realized that you know, there is no capital that is coming in. So we had two choices at Coverfox as a shareholder. One choice was that we sell up in a company pen it work dollars of yours. And the second choice was that, look, India is second largest populated country in the world. I have personally seen three financial crisis before, okay, I’ve seen 2008 crisis. I’ve seen the microfinance crisis in 2012. And then I had also witnessed the automobile crisis in 1999, and 2000, these stay for two to three years, and then then things comes out, you know, yeah. So I told myself and I told my co founder, Anjali, and I said that, you know, Anjali, maybe if we stick around for a couple of years, we will be able to not only turn this company around, but we will be able to create a huge success over here. So let’s not sell actually, let’s not let’s just stay put, and from being an investor, I, I said that, well, I don’t understand anything about insurance. I don’t understand anything about technology. But what I what I’m good at is I’m good at identifying talents who are best in doing their job. So as any smart leader I, I fundamentally believe that and you know, I surrounded myself with people who are better than Sony was obviously better than me. And along with that came a bunch of people who whom we put together and the moment we did all of that, and we realized that no, it’s not just about that. It’s not about putting people together. You also need capital to build it and scale it and how would you do it if you are already exposed with a COVID crisis? So while If all this were happening COVID in March 2020 came and it was tough for us. So Michael, it was not easy. And but see every again, I am sure many leaders in across the world believes in it. But I have believed in it. And I’ve had I’ve seen it happening in my personal life as well. every problem, every crisis is an opportunity. Yeah. So we said that what do we have, we have the best of the talent, we have a company which has sold insurance in the past, and is very good there is there’s so many, so much competition, and our competitions are well funded. So let them do the mistakes, we will not do those mistakes. The mistakes were like every rupee as an aggregator you spend actually for rupee, that’s not a business. It’s a some of the largest and I will not name them on the show. But some of the largest of the aggregators earned one rupee and spent four rupees. That is not business, you are effectively burning shareholders money. And at the same time, when you are exposed with a lifetime prices, like COVID, it was third world war, it was like you are at your home, and you are, you know, talking on some phone. And my my mother used to say that when India and Pakistan went into a war in 7172, suddenly, there would be blackout, and nobody would get out of the homes. So I was able to feel it like that is that we are actually in a war. And we have to save this company called Coverfox, which has 1000 employees. And I don’t know how to let them go. But at the same time, I know that if in India, people are able to buy food on on an app, and I was sitting at home, I’m able to order food on swiggy and Zomato. I’m able to pay my home loans on my banking app, and I’m able to actually do transactions on my phone. Why the hell I’m not able to buy insurance and claim insurance from my phone? Why am I not able to do that? What’s the problem?

Michael Waitze
I can do everything else there. Why can’t I do that?

Sanjib Jha
Oh, no regulator is like that this is that and this is very complicated business one has to educate the customers, and then only it will happen or No, no, it’s not like that we have in the last 30 years only been selling, we have been selling what we wanted to sell. We have not understood what the consumer wants. Consumer effectively wants the insurance products be available on their fingertips, let them choose what they want to buy, why do we have to force them we have to have to shove them through their throat and know you have to buy this only otherwise you are dead? No, let them choose their choosing so many things today. You know, and India 60% of Indians are less than 35 years old. They are very smart guys. They are very, very intelligent people. So why do I have to shop things for them? So that gave us an opportunity to think of the cost structure in such a manner that no I don’t want to spend one to four rupee to earn one rupee, I will spend 95 or 90 Pence or more however you translate the dollar and I will actually earn and that was the anger I would say and that actually forced all of us in in management that we put together at our folks. So to ask me a question, How did I get into Coverfox it was more into more a more a challenge that why is there no organization which is thinking about customer first. And from there, they are able to build a business everybody is trying to sell what either their boardroom is asking them to do oh no, no, you show growth, you show growth. So you are constantly selling whatever you want. Insurers are also selling whatever they have. Regulator is saying that, you know, if you have to put a comma in a product line, you have to come and take my approval. This entire industrial sector is so complicated. And but nobody’s thinking about the consumer.

Michael Waitze
Do you think it helped you a little bit that you didn’t have any insurance experience before you came? Yeah,

Sanjib Jha
Yeah, except for one of my senior colleagues. Nobody understood insurance. We said that okay, that’s very good. We don’t have to know anything, all we have to do is that we are who are we we are we are an intermediary there is a manufacturer there is a consumer, my job is not to force things. My job is to give them the convenience, ease. You know, so that changed our mindset that forced us to believe that and we were by the time first wave was actually ending we knew that and we I still believe it. This is not gone. This will take another five years to become normal. So this will change the way the world operates. It has already changed the way the world operates. Okay, so if it has already changed or it is in the process of changing, and fortunately Michael I read books of history. So I have read books around Second World War, I have read books around the different kind of economics or economy that has transitioned. So we are, we were going through a tea tree economy. So third trend. So first trend was pre World War One. The second trend was post World War Two that actually gave the birth of what WTO and so on so forth all the way all the country can work together, buy and sell from each one. Trend three was where they were superpowers that was coming. They were powers in Korea, they were powers in India, this are in US, Russia, they were becoming powerful. And I’m glad that some crisis like this actually happened, where humanity actually came in the forefront right. But at the same time, this crisis also made two things possible. One, actually believing that digitizing and making things making life simple for a consumer be it lending, be it financial services, be it agri, be it anything is very, very simple. One can actually do the transactions, right. And second is that people have become very easy, you know, I mean, of course, they are there, their tears, they’re worried their their deaths in the family, but but people want to live normal life, they want to, they want to believe that you know, you can, life will end at any point in time. And at the same time businesses, which was growing so rapidly, and I would say they were growing rapidly was burning and losing money to primarily meet the valuation benchmark or whatever, has forced a lot of these companies and our thing thinking like ours forced us to believe that there has to be a bottom line, you are doing a business building a business. And our parents actually taught us that look at the bottom line first before you look at the top line. So all these market forces forced us to look at Coverfox to become the largest digital distributor in the country. Today I will say Coverfox is a company which is a technology company to begin with. What we are we are we have been able to bring all the insurance products that is sold in India, we are the second largest integrated platform. We focused on doing that first of all. We got all the products into one place and imagine that to be an electronic warehouse, okay? And then we said that, okay, I don’t have to sell everything myself. There are so many people who are selling other things. Why can’t I sit in their CRM? Why can’t I sit in their, so let’s go to the E commerce company, say Amazon, or Flipkart and say that look, guys, you are selling from a paint to an elephant. Sell insurance also know Who’s stopping you right now? We don’t have integrations insurance is complicated. No, no, we have uncomplicated it for you. So here is the API integration are here is the technology kit. And you just have to plug it in your system and start selling. You have 100 million for people coming onto your platform every month. And then we went to banks also, we went to equity brokers like ICC direct. And we said that you have so many customers you are selling well, you’re selling equity, what are we stopping you to sell insurance? Please go ahead and sell we will become so we became a company which integrated everything together, we said that we will sell ourselves directly, but will make our consumers life easier over there will not shove them push the product to them. Let us also see that feet on street who are selling let’s make their life so simple that they are people who are hardly earning, you know, $50 a month or not even $50 a month, I mean, and they’re not educated, they’re their 10th grade pass. Or they maybe they understand how to read and write, and why to make their life so difficult. And give them some jargon language in English, which they are not able to understand. So we said that let’s uncomplicated let’s make it simple. And let’s make it readable and understandable and transactable in their own language, so that they can sell. So you don’t have to sell everything you know. So you enable the selling in a simplest manner. And we embedded our insurance product with other large distributors. So yeah, a company which was almost in the brink of closure before the COVID crisis, because it was doing the business in the old fashioned way. It was buying leads, it was spending four rupees per one rupee of revenue on like some of the largest IPO candidates have done, to a company which is doing similar revenue before the crisis or before I came in, we were doing a million dollars of revenue a month and losing $2 million a month. To a company which is doing a million dollars a month and my burden is equal to my management salary, which is not even $50,000 a month, right. So that’s what we did and and I’m able to do the same business with 300 people that I was able to do with 1200 people.

Michael Waitze
Do you feel like the mindset that you had back when you started IntelleGrow, which said, like, you have to have a company with revenue? Because if you have no revenue, yeah, then you can’t pay back the debt. You know what I mean? I just want to make the connection between these things.

Sanjib Jha
Yes, yes. Yes. Yes. So my wife was talking to this back to me and said that, why do you have to be in an organization which is always in trouble? So I don’t know whether it is my energy, which goes over there. So yes, and I’m personally self made, man. Okay. I, I didn’t have means to pay for my own studies when I was young. Okay. So for me, it was there has to be a top line and there has to be a savings. And saving is profit, right? Unless you have both of these, how can you sustain and run organization. So that’s the thing. So when I ran IntelleGrow, when I looked at startups, I said that look, guys, you have to have a profit, a top line, and you have to have a bottom line, then only you will be able to scale, build, grow, and so on, so forth. So that mindset is there. And that also got me over here. And while I didn’t know anything about insurance, I surrounded myself with people who understood things better than me. So the CTO that we have, he actually changed the way the mobility happens in India, he was the head of engineering for Ola in India. So we got him and so like that we created a money high esteem, I would say, you know, and and not money, highest in the negative way, but a team which has their own strengths, got them together and said that our first target is to A. turn around. Now our goal is to not only turn around, but become the largest in the country, but be digital first. Okay, and let people buy what they want to buy, don’t sell what the you want to sell.

Michael Waitze
I mean, to me, making analogies makes it easier for people that aren’t in the industry to understand if I walk into a pizza place, I can put anchovies on it if I want, even if it’s not on the menu. And it’s really easy to do. And I feel like insurance should kind of be the same way. To be fair, I’ve been trying to get my own health insurance for the past year and a half. And I still haven’t been able to do it. And I’m almost there. But it’s just been way more complicated than it needs to be for me to do that. Because again, it’s just been very hard to understand. And I do this every day, I talk to people like you I like I know this stuff inside and out, it’s good to see that someone’s trying to make it easier. I want to ask you this too, though, as well, now that you’ve come through this and survived and thrived right after in the midst and sort of as we come out, we’ll never really come out of COVID but as we get used to it, and you talked about embedded insurance, which I love, because I was going to ask you about that. But it’s the natural progression of the way insurance and insurance distribution works, I think. There’s a company in Indonesia. And this is just maybe my ignorance about the way Indian Indian insurance is regulated. But in Indonesia, there’s a company called Qoala. And they’ve built an app, right, that allows anybody to sell insurance. So if you and I are sitting around having a cup of coffee in Jakarta, I can say, hey, you should use the mobile app that I have to buy some insurance if you want and I kind of get a commission for it. Is that possible in India as well? Do you only mean like discover drive? allow that? Or is that just for existing brokers and licensed insurance agents?

Sanjib Jha
And let us take two steps back over here, Michael? One is that you know, is it possible short answer is yes, it is possible. Now why it is not possible. Let’s delve into that the way the hierarchy is in the insurance. So there is a regulator and on top of that there is obviously the lawmakers which is the Parliament of India. And so I’m sure there is a regulator, the regulator is not mature regulator. And I may be reprimanded, but I don’t mind actually, I’m very vocal about it. Regulator is just 30 years old, okay. And of those 30 years, 20 years of that has been people at the helm of that regulator had been people who were executives in the public sector, public sector insurance companies like LSE of India, GIC of India, so they were the one we’re regulating it. Now, if you are a regulator and your mind is that I have to regulate. Okay, then the problem is that you want control now, and I am a lawyer, so so there was a there was a legislation in India called fairer foreign exchange Regulation Act. And I’m sure if you have interviewed so many Indian entrepreneurs, if you interview in entrepreneurs of 80s and 70s, right, they would often use the term called license Raj, which effectively meant that the regulator ultimate authority to approve what business will you will Michael do now that what changed back in the early 90s from being a foreign exchange Regulation Act to Foreign Exchange Management Act? Okay.

That’s point number one, okay. Point number two is if I look at and I have been a lender myself and I have also I have, I have, I have been one of those guys who have dealt with Sebby Securities Exchange Board of India, I’ve dealt with Reserve Bank of India, and I am now dealing with IRD also. So if I look at RBI, the central bank, I think They are one of the most evolved regulators globally they are able to see things 20 years ahead of time okay. That was not the case before Raghu Rama Rajan came in I would say that also but the foresightedness that RBI has is actually how do you think about making making the life of your job is not to regulate your job is to make things simpler in such a manner that you have the adequate checks and balances and if there is something going wrong, you are able to manage it, control it and there are ways through which you will be able to keep things in order, right, that’s your job. Now, unfortunately, in case of insurance, everything is owned and controlled by the regulator. So, an insurance company if it wants to change a product line, it has to go through a regulatory approval, they have been open in the last few years, but they are not yet they’re not able to see that India is So, low and low penetrated they are we are just 4% penetrated to the GDP ratio which is which is abysmally low and and do we not have the capacity to buy insurance or ability to buy insurance, the RBI actually forces every loan to have a insurance right. But even to do that, there’s so much of complications. So, to answer your question, Michael, I would say that it has to start from the regulator first the regulator has to first of all believe that your job is not to regulate right Your name should actually change from IRT insurance regulatory Development Authority to insurance Management Development Authority, I am I am the right similarly, RBI is not the Reserve Bank of India right they are a bank the central bank Securities Exchange Board of India is not Securities Exchange regulation Board of India right. Okay. So, the power and authority needs to be decentralized number one. Number two, there are very, very smart and intelligent people doing insurance selling today, unlike 20 years ago, 20 years ago, when li c and GIC operated so LSE has the highest largest agent network in the world 1.7 million people Yeah, it appeared on street they have right now you talk to those agents they are like they’re not smartest of the people. Today there is data available there is this big data available there is intelligence available there is too much of interconnection between between the various transactions people are doing that is centralized right you have another you have a number if I want to borrow money, I just have to go to a bank and say that I need 100,000 rupees as loan what does the bank the bank asks for my income tax identification number and my personal identification number which is my unique ID which is my other they will just enter that and they will get the entire history of me and based on that they will create a credit report and within seconds they will give me a loan. But today if I have to go and take a health insurance, there is nothing which is like on in common. Even if I give my Aadhaar pan passport numbers international passport number anything shoe size, nothing is connected, they don’t allow you to connect okay. So this has become so complicated this is this This makes things difficult. So when so coming to the point of people being smarter, so there are bigger companies, which has sold millions of insurance life policy was like our folks like total meant like we have sold millions and millions of insurance. We have so much of data available. Regulator allows you to hire an agent, okay, individual agent, it says that okay, you can license but I can’t I as a broker can’t license another corporate to become a corporate agent that has to go and be an there’s a jargon of complications that needs to be resolved. So short answer can like this company in Indonesia, that koala that you said, anybody can start selling insurance. Yes, anybody in India should also sell insurance. Yeah, it is not that complicated. But there has to be a start at the regulator. So they have to first of all become a management rather than they have to manage it rather than regulated. They have to uncomplicate things they have to link the data that is available for lending to insurance. Okay, and there’s a series of things and I’m intending to write a white paper on that. But the answer is long answer is it will take some more time but it is possible. I will go back I actually first visited Kenya in 2012. And I was amazed. totally amazed to learn about m PESA. M PESA. India didn’t have that. And I was like why is India to have it? So we realized that no, India doesn’t have it because India doesn’t think like that. And now it is 2022 We are the largest payments digital payments country in the world easily mean you? Yeah, we have UPI. So somebody will actually in the center say that, Look, you guys, we have given you power and authority over the last 30 years, you have done nothing, we will create a payment insurance gateway, like you have UPI, right. And you connect everybody, so health will be connected to live life will be connected to a car car will be connected to whatever.

Michael Waitze
What do you think about companies like phone pay actually trying to use UPI to, you know, and their 500 million users or whatever, 400 I can’t remember the exact number right, to then get into the insurance business as well take advantage of UPI and their connectivity on the payment side to then source and sell insurance through that channel.

Sanjib Jha
I think it’s fantastic. Pompeo has done a very good job. I think that’s the way to go. What they are trying to do is they’re trying to inform pay, if you translate that into English phone as in phone, and pay as in not try payment. Yeah. On pay as in on the phone. Yeah. Sorry. funfair. Yeah. So so on the phone, so you’re doing everything on the phone, right. So, so if you are able to buy a train ticket or a flight ticket or fast tag or this and that everything on the phone, why will you not buy insurance on the phone, so and they are connected to UPS. So I think phone pay is doing fantastic jobs, they would obviously spend money on their branding and visibility and so on and so forth. But the reality is that if I look at the data, Michael, most of most of us and cover Fox’s volume is very, very small still as compared to the overall national record national data. But most of the companies including cover falls, we are a large urban selling company we sell only in urban India, in the last two years, we have tried to go more into deeper into India, we are in about 800 small towns in India today, okay, including 40 districts. But what I’m trying to tell you is that if we are able to find ways and means to make insurance a commodity like we have made loan a commodity and make it available to general masses on general people who are not in urban India and and make the regulator or request the regulator’s politely to allow insurance company to be innovative on their products without seeking their approval. I think in next seven to eight years time India will be well covered from an insurance perspective. Is there a motivation to do that? There are all most of the startups actually wants to do it? Yeah. Does the government want to do it? I think yes. And I’ve spent three years with the government. So I can tell you that there’s lot of good things that they have done, and not so good things also. And, but we have to find ways to decentralize, we are a vast country. And we are, we are in particular, as a population, I think we should be called the united states of India rather than Republic of India. We speak so many languages. And it’s very, very complicated. So having control with one individual or one regulator on insurance, you have to learn to decentralized

Michael Waitze
It feels a bit unnatural, right? Yeah,

Sanjib Jha
it’s very unnatural. So again, going back by the drawing by the analogy of Farah and Pema, when FEMA came, there’s a lot of authority that was given to Indian banks, okay, to manage foreign direct investment into India, and repatriation outside India. Okay. So the authority needs to be decentralized there, those authorities need to come to companies like our fox policy was our turtle meant, you know, such brokers, we’re using data and technology to so much extend. So, like they did for banks, they should do it for for brokers so that when you decentralize it, the scale is going to be come rapid, and the entire country will be covered.

Michael Waitze
I want to ask you one more thing, before I let you go. You’ve mentioned this word data, big data bunch of times. As you get bigger and more successful you gather more and more data. So two things. Are you building your own data science team? Or has it already been built? You don’t I mean, machine learning on ml ops team and stuff like that. And then the second thing is, as you build all that out, do you see a path or a you know, particularly from your place in the in the value chain for insurance? Do you see a path to becoming a full stack insurer and doing some of your own underwriting as well? Since you have all that data?

Sanjib Jha
Yes, yes, yes. So we already have a data science team and we are actually increasing the capacity of that as we are growing look what we want to do we want to do the following things Number one, we want to be a company which is which is able to use the insurance digital way insurance which are digitally connected and connect into a single wireframe, and then create outlets all over so directly that we will sell directly, we will enable the feet on street to sell we will enable the large corporates which have digital footprint to sell them. So that we will do definitely, then what we want to do we want to capture all of this data which we are doing right now create co create products, which are for masses in and in rural India. So which we are already doing, but not using too much of data yet, co create products along with the insurance and help them navigate or help them reduce their losses to a large extent. Because see, when they are selling, they’re selling only from a myopic point of view, and they are selling to a limited set of people. But we are all over the country, we are in 800 800 Smaller towns 40 districts, and we have access to so many people who speaks different languages, right? And, and and who have who are, who are in different economic strata. So we definitely want to help those insurers underwrite better products that we certainly want to do. And largely see the vision and the ambition of our folks is to become an insurance ecosystem aggregator. Now what does that mean? It means that I will be selling insurance under under Indian sky, and with every corporate and every individual who can actually sell as long as the regulator allows you to do, I want to be a company which enables claims. So if you mentioned about you buying health insurance, I’m telling you buy health insurance, and then you’d go and take a claim, it will take you two days to get a claim in India. I mean, you pay extra money for one more day in the hospital, because the process is not digitized. It’s so painful. Okay, so I want to also become a claim to claim tech company. So by insurance ecosystem aggregator I want to sell I want to be the company which is using technology to make claims easier for people and claims is an integral part of insurance. Otherwise, why are you paying premium there’s no point paying premium, if you’re not able to take claims on time. Third, I want to help the insurers underwrite better underwrite okay. And when I talk about embedded insurance, I am actually saying that it is not only about the integration, it is also about the entire infrastructure that you have right. So, there is CRM, there is learning there is data, there is call center, there is this and that I want to take that and go international also. So, we are already in talks with several Middle East company, we are in touch with companies in Indonesia, also. Wherein we want to take the central architecture, marry that with the local regulation, enable the brokers over there to become digital. Yeah, so we will be we will be the largest insurance ecosystem aggregator in the country, probably globally.

Michael Waitze
Okay, look, I think that’s a great way to end. This was incredible. I really want to thank you, Sanjib Jha, the CEO and Executive Director of Coverfox, thank you so much for doing this today.

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