The Asia InsurTech Podcast was catching up with Tom Duncan, the Managing Director Insurance and Wealth at Grab Financial Group to dicuss financial inclusion, the power and limitations of embedded insurance and how social media can help increase awareness. Listen to our other episode with Tom here.
Michael Waitze
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. Today, we are welcoming Tom Duncan, the managing director insurance and wealth at Grab Financial Group. Tom, it’s great to have you back on the show. The last time you were here by yourself was September 2019. I don’t even think I was very good at this back then.
Tom Duncan
Well, good to be back, Michael. And I guess the world changed a little bit.
Michael Waitze
You think? I think that looked back then the biggest trend in InsurTech space was distribution was the only thing we talked about. What do you think has changed since then? And what are some of the major trends now?
Tom Duncan
Yeah, I think one of the major trends is still related to distribution. But I think the omni channel approach that’s emerging more and more in several markets. But I think the interesting dynamic has been obviously, there’s been a big focus on digital and digital transformation and InsurTech. But I think we’re starting to see some of the limitations of that for certain types of products or perhaps more comprehensive health and life products. And so I think you are seeing this trend towards complementing digital with offline distribution or sort of online to offline and distribution business models.
Michael Waitze
Yeah. Look, I think one of the things that I’ve learned over the past few years, particularly talking to so many entrepreneurs and investors, on this show, and on some of the other shows that we do, is that digital itself is not a panacea, right. And I’m really a really big believer now that this hybrid model, we can call it online to offline as well, is going to be the way things evolve over time. Is that fair?
Tom Duncan
I think so. I think people still need that guidance for these sort of more comprehensive covers, they need to know, they need to know that they’ve thought through everything before they can commit to buying these, these sort of this sort of protection. I mean, I went through it recently, buying health insurance for my family, had a third arrival since we last spoke and you know, buying health insurance for this, thank you, and buying health insurance for the family. And it’s just that reassurance of of talking to someone. So I agree, and I think we’re digital and technology plays a role is just, and this is where there’s still a gap, I think is just around the customer experience. So whether I interact through a fully digital purchase path, or whether I do want to break out and speak to an agent, that should be very seamless. It should be on demand ideally. And I think that’s where, you know, the world, the world’s trending, and so too, will InsurTech, but when I when you know, when I want to speak to an agent when I want to, you know, set aside time to think about health insurance or life insurance, and I kind of want to get it done. So I think that’s where tech will pay to play the role of just customer experience, even if part of that customer experiences is offline.
Michael Waitze
So really interesting concept here on demand to an agent. How do we think technology actually enables that or facilitates that?
Tom Duncan
There’s a few parts to that. But I think one is, is what we’re doing now. So you know, video technology. So I think the ability to connect with an agent over video rather than having to set up that meeting time, which sounds obvious, but it’s still, you know, it’s still the case, like when I was, as I said, when I was buying health insurance for the family, I end up meeting an agent three times. The agent was great came over to my place three times, but that just the convenience of actually being able to, you know, dial and dial or zoom and have that conversation and work through the questions you have. I think that’s an important event. But obviously, the transaction and all of the kind of infrastructure needed to support the end to end transaction also needs to be there. So whether that’s digital signatures, or just the agent, you know, empowered to be able to push the push the transactions through a platform.
Michael Waitze
Yeah, I mean, I’ve been saying for years that I think that the digital technology actually superpowers a great agent and marginalizes kind of a bad agent. But I’ve been talking about hybrid years. And one of the other pieces of technology, and maybe this is me, just talking my own game, really, that I think is really important, is the environment in which we operate during calls like this. And I think for an agent, even a small thing, like just getting a better microphone or getting a better camera can really change the entire experience. Does that make sense as well?
Tom Duncan
Yeah, I think so. Yeah, that makes sense. These conversations can be quite technical, I guess. So they’re potentially trying to explain quite complicated product. And so yeah, obviously breaking up and breaking out and not being you know, not having a smooth experience on the call is actually an important part of it. I mean, actually insane that you just made me think of another point is that the product, perhaps where, you know, there’s a conversation to be had as a product is still complex, you know, so we’re still talking about traditional products that actually require that. And so I think another perhaps trend is still towards the simplification of products. And I think Grab Financial Group, across financial services, and especially in insurance, you know, one of the things we are really focused on is accessibility, affordability, affordability, you know, micro products that are very simple, you know, whether they’re a driver on our platform or consumer to understand. So I think that’s part of this picture as well. But ultimately, there still will be, I think, a category of product that needs that human interaction and quality human interaction to close it out.
Michael Waitze
I want to dig deeper into product in a moment. But, you know, we said a lot of stuff has changed. And and frankly, I don’t want to spend a lot of time talking about COVID. Because I think you and I, and everybody else has already had this conversation 1000 times. So let’s leave that as off to the side. But penetration itself, which was something that we discussed a couple of years ago, while growing still it’s still low, right? Can we talked a little bit in detail about what some of the things are, that still need to change, or still need to get done to meet the insurance needs of Southeast Asia’s population and increased penetration in the process.
Tom Duncan
Yeah, so there’s a range of things. And, again, our focus is on simplification of products, making them accessible to our customer base. So for example, you know, for our driver base, in particular, what we’re really done there is we’ve really stripped the products down to very simple value propositions. We’ve not bundled together too many different things, so that a driver finds that easy, easy to understand. So I think that that’s, you know, that’s definitely one part of it. And I think the other the other part of it that I’ve always thought efficient Southeast Asia, and especially outside of Singapore is is payments. You know, one of the key challenges that consumers have, and actually insurers have, is taking payment. So how do you make a really simple micro policy available to a customer, if you need to take a credit card or even need to be a cash payment? It doesn’t work. So I think in Grab Financial Group, what we’re focused on is sort of leveraging I guess, our ecosystem of services, including Grabpay, which just, you know, makes things like deducting ten cents a trip from a driver, which is a product we do so our critical illness product in Singapore where a driver can pay between 10 and 50 cents a trip and accumulate credit critical illness cover over time is possible because of digital payments and wouldn’t be so easy with a credit card. I think that the credit card frequently 10 or 20 cents a time.
Michael Waitze
Yeah, I mean, micro insurance itself is just gets really hard once all the fees, get involved in a credit card payment. And you’re right, if you can leverage the ecosystem that Grab as a larger entity has built through GFG, then sure having those micro insurance products is a lot easier for sure. And and I guess one of the questions that I’ve had over the and I’m kind of glad we’re getting you two years later, because there’s a lot of experience that you’ve gained and learned over that period of time. What do you what do you say for sure, though, right. And I’m curious, what you’ve seen over the past two years, is micro insurance as a product, driving conversion into sort of bigger and more sophisticated products, which was always one of the sort of theories that we had, that that would happen?
Tom Duncan
Yeah, it’s a great question. And I think the jury’s still out on that. But, you know, since we last spoke, and over the last two years, you know, we’ve now issued over 130 million policies through micro policies through the Grab platform. You know, we’ve seen our GWP premiums tripled over the last year. So we have seen really good results. And a lot of that’s been from embedded insurance, which is another theme in the market. And actually the theme I think has, has its limitations. But certainly in a platform like Grab there are opportunities to, to leverage embedded insurance. And that’s where we’re seeing really real scale. So that 130 million plus policies is really come from that. In terms of converting those micro policies into, you know, more comprehensive coverages. We’ve had some success with it on the driver’s side, in particular. So we are seeing our drivers, you know, they might take out a very micro critical illness product. But you know, they then do migrate over into more comprehensive income protection products. And we’re just starting to sort of educate them. And quite frankly, we’re starting to just, you know, over the two years, we’ve built more awareness with them of who we are, educate them on insurance, and we have seen that sort of migration from micro kind of startup products, through the more comprehensive income protection with as many of our products as possible, we look at bringing in the family, you know, families as well. So we have seen that happen. You know, we see quite a, you know, a large percentage of our drivers in Singapore, for example, have at least taken out one product. Similar in Malaysia and in Malaysia, what we are seeing is quite a large adoption of drivers taking out family products as well. So, so, we have seen some progress on that, especially where, you know, we’re we’re very tightly, you know, we we can work very closely with our driver base. On the consumer side, I think it’s ultimately been more challenging, it’s yet to be proven if I am very honest in Indonesia, you know, we take a very local localized kind of strategy. So in Indonesia, we have focused more on, say, health insurance products, and they’ve come up with some pretty innovative and interesting, interesting products. But I think in Indonesia, what you run into is sort of financial literacy. So we’re sort of doubling down on that aspect as well, which I think you need to get that base right before you’re really going to see, you know, things like critical illness, insurance and hospitalization insurance scale.
Michael Waitze
I feel as you’re looking at my notes.
Tom Duncan
I promise I’m not.
Michael Waitze
I feel like I’m being surveilled. Financial literacy is an issue, right? And you bring it up, and I’m so glad you brought it up. And I had Benny Fajarai on the show a couple of days ago. And they’ve kind of institutionalized at Lifepal. They’ve institutionalized the way they try to make their clients more literate through their blog, where they have 4 million monthly users, and their Instagram account where they have 500,000 followers. Have you, as your team, as an entity, institutionalize that as well, this idea of financial literacy and put out stuff in a similar way?
Tom Duncan
We have we have. So especially in the last year, we’ve started to take media more like TikTok and YouTube, we’ve used a YouTube influencer in Indonesia, to just help, I think get the message across in a more compelling or more interesting and engaging way. We have seen some, we’ve seen some progress. We’ve seen some early results on that. And one of the places we see it is actually more around retention. So one of the things we noticed with our health products in Indonesia, is that we actually saw quite good growth in terms of acquisition, when people buying the product. But because we actually make them very flexible, we don’t lock people in, we actually saw higher churn and we would like as well initially. And so one thing we’ve done is, you know, like I said, through the through the kind of content strategy, whether it’s using an influencer on YouTube or TikTok, you know, it’s just continuing that kind of education process post sale as well. And through doing then, just looking at the numbers just this morning, we’ve seen a really meaningful and quite rapid uptake in terms of retention. So I think it’s just that what I think is working is the probably more non traditional media channels to engage on insurance, which traditionally is not been my topic.
Michael Waitze
So when I think of Grab or big financial institutions, I don’t think of TikTok I know I should. And I’m sure you’re not the person actually doing the TikTok stuff, but I’m sure you look at the numbers. What does the experience using TikTok been like? I’m really curious. Because I don’t use it yet. But I’m thinking about going there. Yeah.
Tom Duncan
Yeah, I personally stayed off TikTok as well, because, you know, I’ve got enough going on day to day, I don’t want to be infinitely scrolling on TikTok. But nonetheless, what we’ve seen the word categorize it, as we’ve seen, TikTok has been brilliant for building awareness in particular. So if you think about a funnel, right, it’s the top of the funnel that TikTok is, is it’s been really successful for us. In terms of conversion, it’s not, it’s been okay. But it’s not been probably the best tool we’ve got to drive conversion. And I think it’s just probably I mean, that probably makes sense, right? Like you’re you’re on TikTok for a certain reason, which is to look at videos, you’re not going to bounce out and, and into another sort of user journey that easily. So I think what we’ve seen is really good progress or results from driving awareness, that conversion, you know, we use other tools. And typically, that’s more on actually the Grab platform, in leveraging our our ecosystem.
Michael Waitze
I would think so. I’m really curious about the feedback loop. I want to talk about product creation and product design, actually, in particular, but I don’t think you can have great product design unless you’re focused on the end consumer, whether that consumer is an individual or a company or whatever, right. What kind of feedback loop do you have with existing clients? You know, do you like the product and what do you like about it and also potential policyholders for what types of products they expect and need?
Tom Duncan
Yeah, you know, that’s one of the things we were very lucky in Grab Financial Group is that we have the ability both to talk to, and get feedback from potential customers. As well as also once once we’ve got the customers, it’s very straightforward for us to get feedback. So perhaps starting with existing customers, and how we take feedback and iterate, you know, one of the most important metrics for us is NPS. So we look at that and monitor that very, very rigorously. And in quite honestly, we made mistakes early on, some of our products didn’t have great NPS scores. And so we really spent a lot of time iterating and improving on that. And we’ve seen quite rapid turnaround. And it’s just a simple thing, like making information more readily available, making it more transparent to customers. So we’ve really sort of, you know, we’ve seen seen results from that. In terms of how we do that. I mean we’re, we’re, we’re lucky in that we’ve got a number of different ways, we can run quite easily sort of surveys and get sort of quantitative kind of results, like NPS, but also other surveys, where we have more ask more specific questions around products that we’ve launched. But also, I think the most value we get is actually from sort of workshops with actual customers. So we sort of, you know, run voice of customer, a voice of customer program, where we will have customers, especially customers that have had a bad experience, but also, you know, customers that that like our products and, and they’ll come in and talk to us, and we’ll run a sort of a facilitated session with them. And I think that’s immensely valuable. And thinking about how we iterate products, in probably the final point on this bit is that iterating products and having that that sort of process embedded in your product and engineering team is so important. And it’s easy to skip, or it’s easy to give lip service to and not do because it’s always tempting to try and focus on watching the next thing rather than iterating on what you’ve got. But we’re lucky in GFG and in Grab Insur we’ve got a brilliant product team, they do an amazing job. And they’re really, really rigorous about, you know, not just launching, but then also iterating on product. And we’ve seen great results from the back of that.
Michael Waitze
Yeah, I mean, obviously a really, in this iteration ideas, obviously a really important topic. How do you build that in to the culture? Right? In other words, you know, 5, 6, 7 years ago, when Grab was a much smaller company. The expectation wasn’t that there was going to be a big Financial Group, right. But there is now, it’s actually quite large. So how do you build the culture of iteration and experimentation into a group that’s growing rapidly, but also is big to begin with?
Tom Duncan
Yeah, I mean, it actually probably stems from the culture of the core business around mobility and delivery, where you know, iteration has been a you’ve, you’ve probably seen, if you use yet you’ve probably seen the change pretty rapidly over the last few years. But I think how you how you build it in one of the key points to me is, what’s the matrix you managed to? So and we’ve been through different phases on this, honestly. But if you’re if you’re managing towards just pure growth metrics, which might be you know, the number of monthly transacting users, then actually, probably what happens with that is iterations and improving on what we launch is, is deprioritize. Maybe inadvertently, but you know, it’s all about what’s the next thing we can do to launch to grow. And so I think, first and foremost, what we do is, and what we’ll come up with is a very simple framework, in terms of the key metrics across Grab Financial Group that we that we measure for, but one of the leading ones is NPS and at a product level, and so at a segment and product level. So passenger, you know, scenario insurance, if we talk about or embedded insurance, right, right cover, for example, you know, we ran, we ran NPS on that. And so that that from as a starting point drives an iteration mindset. Because if you get a bad NPS, then, then that’s one of the main things you measured on, you’re very naturally thinking about, well, what do we need to do to address this, and it happens pretty quickly. So as with everything, I think you sort of you manage what you measure for. And so NPS, for us has been has been pretty, pretty critical add to that. And then it’s just the the rigor and the discipline around the product management process. And I think, you know, grab is a great product organization, we have really strong product leaders from top all the way down to the sort of working teams. And I think it’s just that, that rigor in which we, you know, we have a cadence of sort of monthly reviews, quarterly reviews, semi annual reviews of products. And one of the things around it is one of the things that’s quite interesting and challenging for Financial Services is when you say that a product is not working and that you actually should take it down and kill it. And that’s something we wrestle a little bit with because Financial Services is a little bit of a different base, it takes a while to get these things live, what the stakeholders that are involved in them. And then it’s a tough call there to take a product down. And that that, you know, that’s part of the discipline. And that’s something that we’ve we’ve sort of tackled.
Michael Waitze
So you’ve mentioned embedded insurance a few times. And earlier in the conversation, you said, it’s good for some things, but it also has its own limitations. Can you talk about some places where it’s been very successful, but also some of the limitations around that as well? Because again, that’s becoming a little bit of a buzzy buzzword?
Tom Duncan
Yeah, I think so. There’s a bit of hype with that, I think. But, I mean, look, honestly, we’re we’ve seen success and what contributed significantly to the sort of the 130 million plus policies we’ve now issued, is we with embedded insurance with, say rides, or with delivery. So with ride things like extra personal accident cover, although what we thought and when we looked at the pain points of the customers that we get, one of the biggest pain points that we see is that, you know, deliver a sorry, a pickup is delayed. So when we looked at our and actually, that’s coming back to your question earlier, is how do we identify customer, customer needs or product ideas, as this is a good example, we looked at Grabs NPS scores. And we saw what customers were telling us they they didn’t like about what’s happening on Grab platform. And one of the biggest pain points, as I just mentioned, was when your pickup is delayed. And so what we ended up doing was bundling personal extra insurance, which we think is really important, you know, we want to give people the ability to have extra coverage, especially saving families, we’ve seen higher paying families, for example. But also, can we address another pain point. And that’s we were bundled in a payout if you’re if your pick up is delay. So that product has been really, really successful. Another one is deliveries, you know, when we do package delivery, offering insurance in past there, and it could be just, you know, a basic level of cover, or it could be if people are delivering on, you know, I don’t know, a mobile phone, that they want an extra level of sort of peace of mind for theft. And again, we’ve seen strong uptake on that. So I think that works, I think with the limitations, and perhaps the, I don’t know, hype, the right word around this is that there are, there’s only so many scenarios where I think embedded insurance makes sense. In Grab, we’re lucky to have, you know, a large number of them, probably more we’ll discover over time as being part of a sort of a super app ecosystem. But overall, I think there is kind of a natural ceiling to the number of opportunities that you can embed insurance. And also I think, if you if you look at the more meaningful protection gap you see, in Southeast Asia, which is more around health and live in really embedded insurance, I’m not sure that that’s going to solve that problem. You might get, you know, things like digi banks that are emerging, and they have a really, you know, new way of reaching customers. But I’m not sure I’d say that embedded necessarily. So I think that there’s sort of a ceiling to the the embedded insurance, and I think we still need to solve for how do we get better health and life products in front of people in Southeast Asia?
Michael Waitze
And how do you think about just in this context of embedded, how do you think about parametric insurance, where the entire process is just automated, right, from beginning to end? And, you know, offering products to drivers, but also to consumers that are automated in a parametric way?
Tom Duncan
Well, we’ve we’ve done that. And we’ve done that with a couple of our products. So I mean, the obvious example is if a ride is delayed, and obviously we can trigger that payout automatically. And that’s, that’s actually a great experience for the customer. Obviously, they’ve had a frustration with a ride being delayed, which is pretty rare. But when it does happen, that automatic payout is a good experience. Beyond that, you know, I’ve seen the limited, limited application of parametric insurance. You know, some of the ideas, including recently with one of our insurance partners, we’ve been talking about talking about flood insurance and on a parametric basis. And you can see how that could, yeah, weather related. And you can you can see how that would add real value for, for example, for our drivers. So if there’s flooding in their city or in their part of the city, and obviously, they’re probably not going to be able to work and maybe they’ve lost a vehicle or had demonstrated at home that an automatic payout would be a real value. So there’s there’s those ideas that I think have been talked about for a little while. And but as yet we haven’t, you know, we haven’t executed on them. And I’m not I haven’t seen them widely sort of distributed in market yet.
Michael Waitze
Yeah, I mean, two companies come to mind so parametrics out of Israel, rights cloud protection insurance. I don’t think it’s super relevant to what you’re doing, although it may have some on the data side. And then obviously RiskWolf in Switzerland and in Austria for connectivity insurance. I just think that those are really interesting things right, particularly for drivers or anybody that’s involved in just being connected. Having some kind of insurance. Anyway,
Tom Duncan
yeah, I saw the Riskwolf product. And I actually spoke to the guys there. And I think through connection through through you a while back, and it was when they’re very early on. But you know, really, really cool product. And I think that’s a good example of how parametric insurance would work, you know, if you have an internet outage, and obviously, that affects a lot of businesses these days, including, including on our platform. So yeah, I thought that was a that was really, yeah. And you touched on another point, I think is interesting, which is around? Well, I think you were referring to perhaps some more more like cyber type risks, you mentioned cloud. But yeah, I think I didn’t talk about that, because it’s not a space we’re playing in. But I do think in market that is a trend. That is also an interesting trend that’s starting to emerge where I think he’s starting to get more sophisticated cyber insurance products.
Tom Duncan
Well, yeah, I mean, we think there’s great synergies between, obviously our insurance business and and the Digi bank. So it’ll enable us to reach out our users or drive partners with, you know, more comprehensive financial services offerings, such as savings, lending, wealth solutions as well, then, you know, definitely insurance. And I also think, if you think, you know, you look at the likes of life, or health insurance, a Digi bank is a really good context for those sort of products. So yeah, we’re still building out a Digi bank at this stage. And, you know, I think we’ll have more to talk about on that front and closer to the launch, and which is, you know, going to be early 2022.
Michael Waitze
I cannot wait, I really look forward to that. I did want to ask you, I think and I do feel like you’re reading my notes. It just makes me laugh. You know, again, back when we first spoke to you, you were just you were the head of insurance, which was a big business right now, we all you mentioned your title now. You’re also an in charge of all the wealth stuff as well, which must cover the banking and a lot of the other stuff in GFG. And there will be synergies and synergies there, excuse me, as you just mentioned, do you ever consider and I’m sure you’ve heard me say this. But I really want to ask you, have you ever considered taking like $1 a month from all the drivers and and the partners that you have on your platform? Which could be if it’s just drivers alone, I don’t remember the numbers. But let’s make up a number like 8 million drivers or so it doesn’t really matter. But you can get a mutual fund a principal kind of mutual fund up and running really quickly. At eight $8 million a month. It’s about $100 million a year. I’m rounding Right. Yeah. Yep. And and the reason why I asked that, because financial inclusion is something that’s really important to me. And it’s a great way to get people involved in financial markets without them even knowing yet right so you can turn a driver into an investor at scale. Do you consider that as well?
Michael Waitze
I think so as well. At the there’s so much to cover here at the end of 2020 Grab was granted a digital banking license in Singapore. So congratulations on that front as well. And as you know, just in your previous life, bancassurance remains a powerful distribution tool for insurance products. How does that license or can it impact GFG’s insurance business going forward?
Tom Duncan
We have looked at the Mutual Insurance sector. And we have considered that there’s a couple of comments I’d make. I think the regulatory environment for it is probably one of the major blockers to seeing more of mutual insurance products in Southeast Asia. Interesting what you’ve seen in China, obviously, Mutual Insurance getting very, very rare, some huge mutual still still some huge mutual there, that the regulator’s have had a look at the sector and said, Hey, hang on, I think we need to, you know, they obviously want to do a little bit more. They don’t regret. They don’t love regulation.
Michael Waitze
What I what I was asking about there was like a mutual fund. In other words, just take the money, put it into a principal mutual fund and invest in the stock market globally for drivers that don’t have. Yeah, no, it’s okay. I wasn’t clear.
Tom Duncan
Yeah, no. Okay. In terms of the wealth side, look, yeah, we, I mean, not specifically on a mutual concept, like you mentioned, but we obviously are looking at how you can better meet the needs of gig workers for financial services, including well, and it does come down to making products more micro and whether it’s a mutual structure or whether it’s just, you know, other other investment approaches. It’s definitely it’s definitely a focus And I think you’ll see more and more on that on that front over over the coming year or so.
Michael Waitze
well. I think it’s really exciting. Okay. I don’t want to take up much more of your time today was awesome. I know how busy you are. Tom Duncan, Managing Director insurance and wealth at Grab Financial Group. This was awesome. Test. Thank you for your help as well. I really appreciate it today.
Tom Duncan
Yeah, thanks for having me, Michael. Big fan. So great. Great to be on.
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