EP 104 – Arsh Maini – CEO at Candela Labs – The Making of a Perfect Storm

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Michael Waitze has been podcasting with some of the best investors and business builders globally and discussing all things startup with them from an Asian perspective. Michael worked in Global Finance for more than 20 years, employed by firms like Citigroup, Morgan Stanley, and Goldman Sachs, primarily in Tokyo. Michael always maintained a particular focus on how technology could be used successfully to make businesses more efficient and to drive P/L growth. Michael is quite skilled at connecting people and capital to innovative ideas and is a trusted advisor to both investors and founders. Michael is a leader in the digital media space, having pioneered the concept of a podcast network in Asia while building the biggest and fastest-growing listener base in the region. His flagship website, AsiaTechPodcast.com, has listeners in over 130 countries and is available on virtually every podcast player that supports RSS feeds.

Guest
Arsh Maini

Arsh is a business leader with over 20 years of experience across general management and corporate development, with an outstanding track record of building and expanding strong international businesses in the services and technology domains. He has worked as a CEO / Partner / Senior Executive for blue chip businesses including KPMG, Serco and Deloitte Consulting. Arsh joined Candela Labs in May 2016 seeing the potential to take the business to the next level. Outside of work his passions include photography, humour writing and travel. He also enjoys golf and skiing.

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The Asia InsurTech Podcast spoke with Arsh Maini, the Chief Executive Officer of Candela Labs about the wave of Digital Transformation in the Insurance Industry and the fact that it is definitively here to stay. We discussed how data helps drive micro-targeted and personalized products and the impact that the move to cloud computing will have on the industry and Candela Labs. finally, we discussed Candela Labs’ growth last year and what is likely to move the industry forward this year.

Find the full transcript with Arsh Maini below:

Michael Waitze 0:01
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 excited to be joined by Arsh Maini, the Chief Executive Officer of Candela Labs. Arsh, it is super to have you on the show today. How are you doing?

Arsh Maini 0:28
Doing very well. Glad to be on your show, Michael.

Michael Waitze 0:31
And where are you based right now?

Arsh Maini 0:34
I’m on the outskirts of London.

Michael Waitze 0:37
Right. So you and I have a temperature difference of probably like 25 degrees Celsius now. Look, let’s just jump right into this. What do you think is exciting you and the insurance industry today.

Arsh Maini 0:55
I think if there’s one word that defines insurance today, its transformation. It is really transforming and I don’t mean to use that word lightly. It’s transforming like never before. And I don’t think this is something that’s going to go away in the next year, two years, three years. This is a trend here to stay. It’s not about single companies. It’s the entire sector transforming.

Arsh Maini 1:20
As someone who came from management consulting, it’s the most exciting sector to be working in. I am really fortunate. We are really fortunate to be to be a part of this journey.

Arsh Maini 1:33
Insurance has been seen as being conservative, slow to change for so many years, decades, maybe. I mean, I remember a senior of mine, at our office in New York. And this is probably 10 years ago, saying to me, you know Arsh, the last industry to adopt a new technology in the world, is banking. It’s because they’ve got to get everything right. And then there’s insurance. Insurance wasn’t even last it was it was then there is insurance. And yet, you’d see, Michael, you’d see banks. During times of stress, you’ll see some banks, rare, but some banks go down. You almost never see an insurance company fail.

Arsh Maini 2:24
There’s something astonishing about the industry. And of course, its risk averse, it helps us all manage risk. So I don’t think the industry itself has to be on the backfoot for the fact that it’s risk averse. But today, the winds of change is something we can see right in front of us. This is a transformation. Like I said transformation in insurance is here, it’s here to stay, the industry will change, it will it will look quite different, if you will, from within it will look quite different. And that’s the excitement.

Michael Waitze 2:58
And look, I think you’ve made a really good point here. And I’ll give you an anecdote from my side. 18 or 19 months ago, when we first started doing the InsurTech podcast, people would literally start their conversation with me by saying I know insurance isn’t sexy, but I haven’t heard that in over a year. Because I do think it’s so exciting what’s happening. And I think you see what’s happening in industry, not just in Asia, not just in Europe, but globally. And I think people are starting to think, wait a second, super exciting stuff is happening. There are super complex products, I can put some mathematics to it, like actuarial math is not straightforward. I think people are starting to figure out that if they do transform it, that it can be super exciting. I don’t disagree with you at all.

Arsh Maini 3:40
I think it’s the making of a perfect storm, isn’t it Michael? The customers are changing. And their buying behavior itself is changing quite significantly. So the customer that wanted to sit down with the financial advisor now wants to transact on their mobile device. Competitions changing there’s FinTech out there, knocking on the doors, and we’ve all heard of cases like Lemonade. And then there are microeconomic forces, the low-interest rate regime, that’s here to stay. I mean, 10 years ago, pre-2009, what were the interest rates and what are they now? You take all of these things together. And you know that this is an industry that’s got to change and is changing.

Michael Waitze 4:27
Absolutely. Look, let’s back up for a second and why don’t you give our listeners a little bit of your background for some context?

Arsh Maini 4:36
Sure. So I grew up as a management consultant, very fortunate to have worked across continents with with large fortune 500 firms. And that groundings always helped me in good stead. Started with business transformation. Again, very fortunate that the transformation work that we did at that time and I did at that time, wasn’t just focused on cost reduction, operating model change, but also on transforming for growth. And that whole growth mindset that you that you build into a firm you build into its entire operating model, and therefore take an outside in approach to transformation itself. So those were the first 10 years of my career, then went on to a FTSE 100 firm, at that time, became the head of corporate strategy, you know, got the entrepreneurial bug, if you will. And that led to Candela labs and here we are.

Michael Waitze 5:37
That’s a great summary, by the way, and thank you for that. I want to go back to this idea of low interest rates in this low or almost zero interest rate regime. And I want to put that in context, when I was trading US government bonds from 1994 to 1998, one of the things that we always talked about was the Fed path, right? So the path of the Federal Reserve, are they raising rates, lowering rates? And what’s going to be the impact on the bond market, obviously, right? And now, the Fed path has nothing, they don’t do anything, rates don’t change. For years in Japan, there was zero interest rates and negative nominal interest rates. And now that’s kind of happening all over the world, because it’s all started with the quantitative easing as a result of the global financial crisis. And it’s kind of stayed even through the economic recovery during the Obama administration. And it’s still there now. Right? What impact is that having on the insurance industry.

Arsh Maini 6:29
I mean, if you’ve got long-term products, and you obviously, therefore got to price the returns on your investments into that product, you have two choices. Either your cost of products are going to go up, ie your prices are going to go up, or the cost point at which these firms work are going to change quite significantly. That’s where again, now one element of the transformation comes in.

Arsh Maini 6:52
So Michael, if you see that the need for cost reduction in insurance, and I’d almost use the words slightly differently. It isn’t just about restructuring, it’s about ground-up thinking through the entire model. What products are we going to take to the customers? Increasingly, these products are going to have to be finely tuned to fairly small segments of customers. So the micro-targeted. What mechanism are we going to take to offer these products to the customers? How am I going to sell? How am I going to onboard my customers? What experience do they go through during that onboarding process? How do I service that customer? Right through the many years that they’re going to stay on our system? And then, of course, the moment of truth. How do we manage their claim in that rare circumstance, that there is a claim that comes in? How do you manage that claim? So if you then step back and say, this is got to be literally building blocks that you put in place to say, this is what it’s going to look like 10, 15 years down the road. And therefore, let’s start.

Michael Waitze 8:03
I want to talk a little bit about the technology around insurance now. And I want to understand what role automation plays. And I want to understand what role Intelligent Automation plays, and why the insurance industry as a whole is just ripe for this.

Arsh Maini 8:23
So if you look at the journeys that we were just talking about, and these are customer journeys, so customers and how they interact with an insurance firm. Each of these elements, has multiple steps built in. Starts with the customer, typically will go in through a financial advisor or an agent into a form that reaches the insurance firm. The insurance firm then processes that form. And that processing isn’t just a simple straightforward go/no-go decision. So there could be multiple people, multiple systems touching that form. It then goes to an underwriter who has a decision to make that comes back into say, again, that yes/no decision, which then gets communicated back into the customer.

Arsh Maini 9:15
Just this is all we’re talking about is the new business and underwriting journey. During this period of time, there could be multiple external pieces of data that you’re looking out for. It could be a part of what you call the KYC norms, it could be because you’re trying to check someone’s background. Or it could just be you reaching out back to your customer to ask questions like Hey, could you also give me this bit of information that was missing, health policy as an example. Now just an envision all of that being done manually versus all of that being automated. What does that mean for the customer themselves. It means shorter turnaround times. It means much smoother processes, hopefully frictionless processes. What does it mean for the insurance firm? It means given the right technology, x percentage of those cases can be processed automatically, ie hands free. Now the industry calls these jet cases and we can have 20, 30, 40, 50 percent of the cases, going through as jet cases, because you set the rules, you’ve got the systems, you’ve got the data, and you could actually be processing these these cases in seconds, rather than in days or weeks. And then there’s the second set of cases that will, that will flow through humans, who are now accessing all of this information on that book bench, if I can use that word, on that one integrated system. Technology makes that possible. That’s the that’s the business that we are in. Complex workflows, use intelligence on top of that, make life easier for the customer and for the knowledge workers inside the insurance firm.

Michael Waitze 11:03
Yeah, absolutely. And do you talk to your end customers and try to figure out the types of issues that they’re having? Like, do you do official research on this? And if you do, can you share any of those stories with us?

Arsh Maini 11:16
Certainly, Michael, so the short answer is yes. And all the time. Unless we understand what the end customer wants, how do you build products for the insurance sector or for the insurance industry, that they can use to service their customers. In 2017, when Candela Labs was born, it came out of automated workflows. We started that journey with a fairly detailed piece of research with consumers of insurance customers across different markets. And I still remember a young couple in Singapore, who just recently filed a health claim saying to us, “You know, I can get my car on this app. And this app tells me down to the last minute when the car will arrive. You can’t even tell me down to the last day when my claim will be serviced, will be clear.” That was a penny dropping moment for us, Michael.

Arsh Maini 12:12
You then start to question why do we look at digital and the frontend apps as completely different from automation, ie things that are done within an organization? For a customer it doesn’t really matter. It starts with them filing that claim, goes all the way into the organization, into the insurance firm that processes that claim. And for that customer, all that matters is during that period of time, do they know exactly where their claim stands? Do they know when they’re going to get that final answer? And is it frictionless? Can it be done in in a manner which is shorter timeframes, faster processing, easier to deal with? They shouldn’t have to call and follow up. Can that entire process be proactive? And that’s exactly the journey that we are on. So we build products, which we then implement, ie we will customize for an insurance firm. And we are very fortunate to have done 30 plus large, Intelligent Automation led transformations within insurance firms. That life for us, that’s what we do day in and day out.

Michael Waitze 13:20
You said you’ve done 30 of these transformation programs. That’s a lot of programs. You also said that, you know, when I asked you the question, are you are you doing research on this with customers? You said constantly. Does that mean that at Candela Labs there’s a group that’s dedicated to going out and continuously, like iterating, around the customer research. Continually going back and getting feedback from them.

Arsh Maini 13:41
So there’s a group within Candela Labs that’s that we call the IP team, an IP, just intellectual property. That group has a set of folks who are focused on research and product management. And then there’s a whole set of people who are focused on new product development itself. Under one umbrella, which is the IBD, we will reach out to end customers, we also reach out to insurance firms, and we reach out to the partners of the insurance firms. Now, for example, last year, we did a fairly significant piece of research where we reached out to agents across multiple markets in in Asia. And you get surprising results. You ask agents a simple question: Why aren’t you using the mobile app that you have on your phone which an insurance firm gave you? And that will tell you something? In Asia, I just don’t want to use my app as an electronic point of sale. I want to sell and service because that’s just how business is done, ie the ePOS app had to be an ePOSS app, it had to be an electronic point of sale and service app. And then they tell us, these are the kinds of features we’d like. For example, can I and my customer co-browse on the app, can we go through a document together, what they see is what I see. And can I then take them through a policy document as an example? Can they sign and I sign? Can we do this together? Because if I don’t do it now, it might never get done.

Michael Waitze 15:12
What you’re saying is that, and this is a really interesting concept, right. If I’m on the phone with my agent, and she she says to me, I sent you a document, you know, you always go through this process of, “are you looking at page three, or you’re looking at page four” kind of thing. But if you can co-browse and look at it at exactly the same time in exactly the same place – you know, we do this on Google docs sometimes, right? Where I can just click on a button and go right to where you are – that’s kind of a cool feature, particularly in a mobile app, right?

Arsh Maini 15:39
Absolutely. And for insurance, if you can make it secure, if you could make it light, and you can make sure that it can be rolled out to the 1000s and 1000s of agents that are out there, as usually in 10s of 1000s. And can be used seamlessly by a very high percentage of those agents. Well, you’ve met the goals that you set out to achieve.

Michael Waitze 16:03
I want to follow up on this what we’ve learned from these 30 plus transformation programs that you’ve done, right. Not just the research, but do you find that people expect to have sort of a tech-driven approach, as opposed to a business-driven approach? And like what things work and what things don’t?

Arsh Maini 16:22
So that’s a very good question. In fact, we just wrote a paper called “The Hitchhiker’s Guide to Digital Transformation In Insurance”. We covered almost exactly this question. We asked ourselves, what have we learned over these 30 plus programs that we worked on? I mean, we’ve had front row seats, and being active participants in this journey, I think the first most important element is that these programs have to be led by the business, not tech. Of course, the tech led, and the tech enabled, but ultimately, the business has to own it. And if the business doesn’t own it, ie there isn’t a clear vision, there isn’t a clear strategy, there isn’t a clear set of outcomes that we’re out to deliver, somewhere along the way, we could end up meandering, we could end up losing our way.

Arsh Maini 17:16
So that clear alignment of the entire organization, that’s really important. Why it’s also got to be business-led is because it’s not just about internal stakeholders, it’s about managing stakeholders right across. As an example, we were just talking about advisors or agents. So you got to make sure everyone’s aligned. And that brings us to the second element of success. Bring these stakeholders onto the board into the process really early in the cycle. Don’t tell them, ask them.

Arsh Maini 17:49
Don’t tell them, I’m going to launch these six features, and they’re going to come to you on this date. Tell them the whole journey, tell them the end point. And that requires back to the business case, it can’t be a business case, for single initiatives themselves to single initiatives have to come together under a larger umbrella of where the organization’s headed. So therefore, what is the vision? And therefore what should technology enable. So you’ve got a strong business case, you’ve got a very strong vision that then leads to business cases, for the individual programs, the sum of the parts has to be greater than each individual case. So the whole is larger than the sum of the parts. You then involve stakeholders really early, and you keep your ears to the ground. So keep talking to end customers, agents, internal employees, and ask them, is this something that would work for you? Is this how you’d like to see it? That test is important that sort of feedback loop is important because it gives the entire organization a sense of confidence, I guess we can go out and make this change happen. I think there are certain other elements of of success. And I don’t want to play down technology. I just wanted to start with the fact that it’s really important to start with business and the business case. You then get to the point around how do you do it in an agile manner? And how do you deliver digital at scale?

Michael Waitze 19:17
Talk to me about that. How do you deliver digital at scale? And particularly for people that may not even understand what agile is, right?

Arsh Maini 19:25
Yes, and I use agile in two different ways. One, agile as culturally how an organization ought to be, how we think how we respond, how we react. The second approach the methodology of Agile where we don’t just take a big bang approach, but we build, deliver, check, build, deliver, check and along the way we fine-tune. Now, digital at scale is going to come through because there is a large innovation that binds individual programs together. But it also needs certain other elements. So for example, before starting on the journey, we really do need to think through what are the capabilities we need? What are the competency gaps that need to be fulfilled? Who’s going to fulfill those competency gaps? Or how are we going to fulfill them? Internally, externally, partners, who’s going to do that? So that’s, that’s one element of this. The second element of this is, who’s going to play the master of ceremonies, who’s going to be the conductor of this orchestra as different instruments play? Because they’ve got to make music. And they’ve all got to come together. So a larger transformation office, perhaps led by the Chief Executive, in some cases, led by the Chief Operating Officer, in some cases, it could be led by the by the CIO. But again, someone who’s really close to the business. So that sort of orchestration of all of the different programs, and what do they mean, for the customer for the business for the end outcomes that that we’re out to deliver. If we can get those pieces, we can then start to do individual programs, implement individual programs, these are digital programs, learn from them, and then sort of apply the X-Factor, if you will. Then say, we’ve done two, we’ve done three, we did them one at a time. But now we’re ready to sort of press on the pedal and do five together. And that’s where the digital skills will come from.

Michael Waitze 21:26
So I want to lean on your experience for a second. When you go into a new client, and you try to explain to them that these differences, right, the difference, the difference between digital versus automation, right? A lot of people when they talk about digitizing a business, they just think of like turning everything into a PDF and just doing all the same processes in a digital way, as opposed to in an automated way. Does that make sense? When you get into an organization, is there a period of time that it takes you to find the right person internally that actually understands the difference and empower them? Whether it’s the CIO, the CTO, or even somebody close closer to the business? You have to change their mindset when it comes to delivering? Again, this thing called digital transformation?

Arsh Maini 22:12
Again, that’s a very good question because what it points to is that internal silos and org design can get in the way of this larger transformation. So someone’s got to take that into a view. And increasingly, we’re seeing in the industry that that view is being taken. And that’s what gives me a sense of confidence that these transformation, transformation programs will work, they will deliver. We have to do far less work today than we had to do three years ago. For us, it’s very clear that, that that journey from digital to automation, actually, it’s the end to end journey, it has to start with digital, it has to go through the entire set of automation pieces, that’s the core system at the end, and then go all the way back out to the customer. And that’s what we are out to deliver.

Michael Waitze 22:58
Perfect. I want to talk one of the things we haven’t touched on yet is data and data analytics. And I’ll tell you why. Because I also think that outside in the real world, there’s a little bit of a misunderstanding, I do think people think that data analytics is either a yes or no thing. There’s a gate somewhere with a zero and a one on it. And I think most people also think that when they think about data analytics, they think about descriptive analytics, right? What happened? I don’t even think they’re thinking to diagnostic as opposed to why. And I don’t even think getting as far as predictive and then even prescriptive. Can you talk a little bit about how these four things work together? And where it fits into what you’re doing as well?

Arsh Maini 23:34
No, absolutely, absolutely. So data and data analytics are really important and critical elements of this digital journey. We’re not going to get the desired end results on the larger Transformation Program, if we didn’t start thinking about data and how we leverage that data from day one. Now, typically, organizations tend to think of data programs as outside of the day to day, and let’s do a proof of concept. Let’s check whether we can make it work or not. And that’s to your point, that’s the 0/1 approach. If it doesn’t work, well, you say, Hey, we’re not ready, let’s just put that on the side, we’ll come back to it. And data, data analytics is a journey, you’ve got to start with each of these digital and automation programs. It’s got to start with what sort of data should we be capturing at what level of granular detail. With that data? What What problems are we going to solve? And then once you’ve answered that question, even if it was a simple automation programs, such as automating the claims processing process, and I use the word simple, and it isn’t easy. I mean, it’s a straightforward process. You know what, where it starts, you know, where it ends, and you say, this is the process that we automating. But during that process, we’re going to capture a whole lot of data. It could be data coming in from customers. It could be data around what claims were approved. What were not approved, and why? And you can do a whole lot of analytics on that data. We can also do data analytics on the actual processing itself. When does an A-assesor say this is complex and give it to a B-assessor, to the senior assessor? And the system can learn that and therefore reroute workflows and say, Hey, would you like to consider doing this. So you’re not really taking decisions on behalf of the human, but at least you’re aiding or helping the human being. So again, you don’t have to think of this as the endpoint, it’s all it’s all automated, and it’s hands-free, and no human gets involved, which is a very long journey right now, as we see it, or a fairly long journey. It’s got to be in steps. What data should we capture? At what level of granularity? How do we capture that data? How do we make sure these are not fragmented sets of data that have been duplicated? How do we make sure it’s clean and therefore can be used for my format for our date API, or data initiatives? In parallel, look at the problems that need to be solved and ask yourselves to solve these problems. Is that the right data? And this is this is a continuous loop, right? Once you work through these processes, you do get a multiplier end results.

Michael Waitze 26:21
Yeah, I love this idea of clean data. Again, another term that most people don’t understand. They just think if they get a bunch of data, they can use everything they get and just apply it to something. But in fact, you have to actually do some sort of machine learning operations on and try to understand what data is relevant, what data is not relevant, and then make sure that that data is clean. Is that is that fair?

Arsh Maini 26:42
Absolutely. One of the things that gets in the way of scaling up data initiatives.

Michael Waitze 26:48
Yeah. Is there dirty data or just irrelevant data. I want to ask, this just popped into my head. But I want to ask your opinion about self-sovereign data. In other words, at some point, having that data owned or specific data owned by the person who it’s actually about, particularly when it comes to the insurance companies, and health data, right. In other words, I own all my health data, I keep it on sort of a stick of some kind of data stick or some kind of place where I can keep it in a vault. And then I can share that data because I own it myself, self-sovereign, with different people, different interested parties, right? This gets into a blockchain conversation, which I’m not so interested in getting in right now. But you understand that concept? How do you look at that?

Arsh Maini 27:34
I think you step back and as a firm you’ll ask yourself, are we capturing the right level of data. Are we using it for the right purposes? And are we creating clear boundaries between personally identifiable information and the larger macro data sets that I need? i.e It cannot be misused. This isn’t about a individual and his or her data. This is about data coming from x0,000 different customers, and then you can do a whole bunch of analytics on that data.

Arsh Maini 28:11
The question around sort of who owns that data, I think gets gets gets overly complicated. If you don’t separate that. Those elements, the PII the personally identifiable bits, I can’t identify where this came from, can I use it? Can I keep it within, within an ecosystem to use it? Is that going to become valuable? Absolutely. Increasingly, increasingly being done?

Michael Waitze 28:36
Yeah, fair enough. And look, before I get to what you think is gonna happen in the future. I feel like I left something on the table with these interest rates. And I’d like to ask because I think a lot of people don’t understand as well that, you know, I always used to think when I was a kid, or when I first started trading bonds, who’s going to buy a 30 year bond? Like why would anybody look that far into the future? And why do interest rates on 30 year bonds matter? And I don’t think that most people understand that insurance companies are obviously big consumers of 30-year bonds, because they have 30-year liabilities on the other side. That makes sense. Yeah. Right. So maybe I can ask you again, to explain in a little bit more detail about why the yield curve, right, which again, is super flat, but also super low. I mean, when I was trading bonds, five years would trade at 5% 6%. Now they’re trading at 50 basis points or 70 basis points, right. So your ability to earn long-term returns is limited. There’s also an investment part of every insurance company that I don’t think most consumers know where all of the not all of them, but the premiums get paid in and then they have an entire investment arm that invests in stocks, bonds, futures currencies, to try to earn a return so that they can match their assets with their liabilities. Right. So that’s a big problem.

Arsh Maini 29:51
Yeah, absolutely. I mean, absolutely. And if in the long run, our weighted average returns, if you will, across that portfolio. is going to come down. And if you’re an insurer, you’re going to go for the gilt-edged in gilt-edged investments, because you want, because you want a level of safety built-in. Because you’re regulated. And we started with the fact that we haven’t seen insurance firms go down they, they, they are rock solid organizations. So when you put all of those things together, and then ask us that, ask yourself, here’s a 30-year liability, as you said, and therefore, therefore, what returns are we going to get on the investments we make? And if there’s going to be if there’s, if there’s going to be reset, as far as that’s concerned, which is, which is largely what happened was 2009, then the whole model changes.

Michael Waitze 30:43
Yeah, I just thought that was interesting, right? Because I don’t think a lot of people understand that. And I know this, because a lot of my clients when I was at Morgan Stanley and Goldman Sachs were insurance companies for on their investment arms. Anyway, I just want to make that point. I want to talk about the future. And we don’t have to go that far into the future. But when you think about or when you’re focused on sort of the next three to five years, what do you think this means for the insurance industry as a whole? And in that context, what do you think it means for Candela?

Arsh Maini 31:14
I think for the in insurance industry itself, let’s go back to the basics. And you’ll see that extreme segmentation. And therefore segmentation targeting and positioning of customer is, is absolutely the reality that we’re going to see what does that mean, actually, in real terms, it means smaller segments of customers that, that we understand, much better than we used to. So this isn’t just the demographics, demographics, and psychographics, we understand the customer, we know exactly what they want. And therefore the ability to tailor-make policies for them, or products for them. Those products that are that are made for this, this smaller and smaller segment of customers, it fits like a glove. So the view and insights into the customer’s view of the customer’s insights on the customers will increase multiple folds. So that’s one thing that I clearly see happening. insurance products being micro-targeted, absolutely see happening. Customers’ interactions with insurance firms changing quite significantly. going digital, absolutely see that happening. Reset of how the service, timelines, experience and outcomes delivered to the customer. And we aren’t just talking about percentage changes, we’ll be talking about leapfrog changes then. And of course, if I were going out on a limb, I would say in the next two to three years, it’s quite likely we’re going to see big insurance meet big tech. And those are the kinds of partnerships that we might see, what does that mean, if I were a betting man, I would bet on that.

Michael Waitze 32:56
But does that mean that Microsoft is selling insurance? I mean, I know that Amazon is going to they’re already doing that if you consider them big tech. But does that mean that Microsoft is going to or that Google is going to do that? Is that what you mean, when you say big insurance means big tech?

Arsh Maini 33:09
I think they might, they might partner with tie-up with a large insurance firm. And these types you can clearly see the synergies between the two firms. You can see why both will win, you can see why the consumer will win. And if that aligns that equation is strong and delivers to the end consumer works for the two sets of firms that come together, the insurer and the tech firm, you can see you can almost bet on the fact that it’s likely to happen.

Michael Waitze 33:36
Yeah, I mean, to be fair, apples been in the insurance business forever with Apple Care. People don’t think that it’s an insurance product, but it definitely and definitively is. And even Tesla came out, I think at the beginning of last year and said they’re gonna start an insurance company. Yeah, yeah. Yeah, I don’t think I agree with you. If I were a betting man, and I’m not, but if I were definitely and I think I think some of the insurtech startups are worried about big insurance meeting big tech, because the amount of data that they have the amount of experience that they have, as we talked about with cleaning that data and make sure that that data is relevant and analyzable, for lack of a better term, I think scares a lot of people. One of the biggest advantages that Google has over any competitor is just all the data that they’ve gathered over the last 25 years, right.

Arsh Maini 34:24
Yeah, absolutely. Absolutely. Now your question around what does this mean for Candela Labs? When we started our journey, we asked ourselves, what critical ingredients do we bring to the table? Why will we succeed? And we saw, we saw the fact that we understood Intelligent Automation really well. But in equal parts we understood and had deep insights into insurance. And therefore the reason we said we could beat big tech, if you will, at this game is because we could make products that were insurance-specific Ground Up build for insurance. And that’s been our mantra for success. Now, take that forward, if you will, in terms of what that means. We’ve done, we’ve done 30-plus large, successful implementations across Asia and Africa. And we chose Asia as a market to play in. We chose Asia because we saw the runway for insurers that runway for growth that the insurance firms could see for themselves. So the problem that we were going to solve for them with them was how to deliver that growth as much as how to deliver the cost and the and the efficiency side of the equation. So we knew that we were going to get rich experience, and it’s only a matter of time that that will then get pulled into the larger developed markets. So we see that happening now. So to your question, Where does Candela go from here, we have seen that pull from both the US as well as the UK and Europe. So that’s, that’s one element of it clearly see. The second, the last one year, if anything has, has only accelerated the digital transformation journey, if you will. So we saw double-digit growth in the last one year, we expect to see 30% plus growth next year. So we are set up for high growth. We are, we are therefore preparing for that. And that means the products have to work flawlessly. It also means the implementations have to work flawlessly. For us, it also means that we’re going to have more and more partners, as providers, the core system providers, large implementation firms, SIs (System Integrators) who are going to go out and implement the product. And that means a multiplier growth going forward. That’s how we see the journey.

Michael Waitze 36:47
So you talked a little bit about double-digit growth and what and you think that this is gonna be a good year, where do you think this growth is gonna come from for Candela Labs?

Arsh Maini 36:57
So, Michael, we’ve been really busy in the kitchen in the last one year. And that was, I thought, just the most appropriate time to do this. We built a cloud-ready version of our product. So what we offer to the market right now is an on-prem product that automates these processes. So we focus on new business and underwriting claims processing, policy servicing, how do you now take it to a hosted on the cloud product, where the tech pieces are already predefined? Our clients can make tweaks to the process, but it comes with a process flow built-in sort of the blueprint for what good looks like, is already built-in. And guess what that does for the market? It opens up a whole new segment of insurance clients for us, who typically would not have invested in these large programs, because we can offer this at a very different price point. They can see implementations and go-lives in a quarter. So very short implementation cycles. And that’s what tier two, tier three insurers can benefit from from the cloud.

Michael Waitze 38:04
I was gonna say, once you put stuff on the cloud, right? It means that the distribution for you is so much easier, but also the maintenance, right in the sense that everybody gets the update automatically. But you can also manage it from one place as opposed to, as opposed to having to go on premises and fix it.

Arsh Maini 38:20
And you’re absolutely right. And that’s, that opens up the entire global market for us, if you will. So we will still start with tier two and tier three insurers in Asia, we will still offer sort of the the love and care and attention that each customer needs, insurance is special. That is why we win. So you never lose that, that proximity to each insurer. But then you build in the ability to scale up. So that’s that’s what cloud is going to do for us. On the cloud, we’re also now offering the electronic point of sale and service product that I spoke about. The research that we did, led to a product being built, which has gone live with a large insurer in Malaysia, being used by agents, financial advisors, as we speak right now. And that gets offered again, as a product that can be offered right across the globe. Start with Asia, take it out to the world.

Michael Waitze 39:18
Yeah, I mean, look, there’s massive room for growth in Asia, for sure. And we even see the same interest in what we do. Just people are just coming out of the woodwork to talk about it. I will say this, though. And I’m curious about your opinion on this, if big insurance meets big tech, right? I just do look at some of these big tech companies. And Google in particular, and even with all their data, which I’ve on which I’ve already commented, they kind of haven’t been successful in the travel business. They haven’t been successful in the employment business, you know, trying to take stuff away from the sort of job marketplaces, do you think that they can be successful in the insurance business even though they still get something like 90% of their revenue just from ads.

Arsh Maini 39:59
So I think Michael, the difference there being, Would they do it by themselves? Or would they partner with an insurance firm? And you started with this thing insurance is, is a fairly specialized industry.

Michael Waitze 40:09
It is.

Arsh Maini 40:12
As geeks from within the industry, we see the kind of, we see the kind of complexity that the industry has to deal with. So I think the future lies in partnerships rather than going out, going in alone and trying to solve that problem. So if I were betting, again, I’m not a betting man. But if I were betting I would go the direction of big tech plus big insurance. And together they…

Michael Waitze 40:37
And do you think that there’s a culture clash there, because I think it’s more likely that smaller providers, and I think those smaller providers are going to get much bigger, maybe even turn into big tech themselves have a larger chance of succeeding than someone like Google working with Swiss Re, I’m just pulling it out of thin air really because the cultures are just so different.

Arsh Maini 40:56
So I think the way I see it is, obviously that cultural match is so important for success, isn’t it? Otherwise, these are, you know, these are two sort of trains working at very different speeds. And we were trying to get them to work together. So. So you’re right, that that the cultural match has to happen. I think you’d be surprised at the pace at which even large insurance firms are changing. It’s very positive, but even that change is coming through. And on the other hand, on the other hand, you can also see that there’s going to be a bit of backlash. And that’s going to have to be resolved. I think it’s good to start with single countries as POCs proof of concepts to deliver initial programs, and then scale up.

Michael Waitze 41:55
Yeah, I mean, I think by definition, there has to be that way, because then you’re dealing with culture across country as well, not just across firm. And that just makes things exponentially more difficult in my mind.

Arsh Maini 42:04
That’s right. And in an insurance, given the regulated nature of the industry. It’s been the industry itself has been, has been quite federated. So different countries, take their own decisions, have their own management teams, and then they come together under a larger umbrella. While tech firms have gone the other way, you know, they run as one big large organization around the world. So, so I’m not saying this is easy, but all I’m saying is this is likely to happen.

Michael Waitze 42:36
And the great thing is we get to watch the whole thing play out.

Arsh Maini 42:40
Absolutely, absolutely. It’s the most exciting. It’s the most exciting sector, the most exciting industry to be working in right now. Insurance and tech. And if that comes together, as InsurTech, couldn’t have asked for more.

Michael Waitze 42:54
I couldn’t have asked for a better way to end either. Arsh Maini, the Chief Executive Officer at Candela Labs. That was awesome. Thank you so much.

Arsh Maini 43:03
Michael, a pleasure. Thank you. Thanks so much.

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