The Asia InsurTech Podcast was speaking with Aparajit Bhattacharya, a managing partner at Insure First, about what kind of products, processes and technology is required to take insurance to the underserved.
Find the transcript of our conversation below:
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, I am joined by Aparajit Bhattacharya, a managing partner at Insure First, and a senior consultant at Zopper. Both of which are very interesting businesses. Aparajit it’s great to have you on the show. How are you doing this afternoon?
Aparajit Bhattacharya
Thank you, Michael, thank you for inviting me for this wonderful session. Really honored to be here. Yes, I’m doing very well. Thank you. Interesting times.
Michael Waitze
Yes, very interesting times. Before we get into the main part of the conversation, what do you think is the biggest trend in InsurTech in India and by extension, the rest of the world?
Aparajit Bhattacharya
Well, I can’t speak about the Americas or the Europe. I can definitely speak about India and the subcontinent, especially Southeast Asia, as well as South Asian countries. One of the core important updates that I have from my side is that I’m seeing a lot of movement on the embedded insurance propositions that are coming up through platforms. As you know, that insurance is moving from a product centric approach to a solution centric approach. That’s what I would the term specifically I would like to use. What I mean by that is, you know, there are huge platforms, like, you know, Shopee in Southeast Asia or maybe Grameen for in Bangladesh, or maybe Phonepe in India, or maybe even Gojek, which has become a super app. And as a part of value added services, you would definitely notice that this these organizations are bringing in insurance and embedding them into the systems and the and the, and the customer journeys. So I think, in a nutshell, this is a huge trend that I’m seeing in the last couple of years, especially after the pandemic, where people have been stuck at home and a lot of risks have started coming into the homes of an average consumer. So whether it’s a cybersecurity risk, or whether they’re kind of ordering something online and the person doesn’t reach them. So, therefore, requirement of a personal insurance product. They’re probably buying smartphone or white goods or gadgets. So, you have a requirement for an accidental damage, liquid damage or a skin protection product as an extended warranty or maybe as a standalone product. So, all these what we would like to say is satchel insurance programs are kind of becoming mainstream nowadays, which used to be more like an experiment, even up till 2019.
Michael Waitze
That is just a great answer. And before we kind of dig a little bit deeper into those things, maybe you can give our listeners your killer background for some context.
Aparajit Bhattacharya
So, so I, I have a pretty interesting background in the sense that I have, I have 20 years of experience in the insurance business. I have, over the period of my career represented big brands like New York Life, Standard Life, MetLife, Prudential in India, I have worked abroad. I have lived and worked in Africa representing Allianz International, based out of Nigeria, in Lagos. I have friend that business. I have traveled more than 15 countries. I’ve been exposed to various cultures. And currently as an entrepreneur since last five years I am running this organization called Insure First, which is focusing on the under penetrated and underserved markets of India. And we are trying to figure out what kind of products, processes and technology is required to kind of take insurance to the underserved. So that’s a very focus area for me and an area of interest as well. Apart from this I also do turnkey projects in Bangladesh, in Myanmar. Obviously Myanmar is under a coup but before the coup I was working on a project very interesting projects for a telco. I am running a project in Vietnam right now and exploring an opportunity in Sri Lanka through Zopper for which I consult. Now I have consulted for companies like Cover Genius, you must have heard about them. Global InsurTech which is very strong on the embedded insurance and b2b2c models of distribution. I am working for another leading InsurTech in India, which is called Zopper and they are the undisputed leaders as far as extended warranty, accidental damage, liquid damage programs are concerned. So, yes, it’s like multiple hats that I wear across the day as a consultant, as well as, as an entrepreneur running my own business.
Michael Waitze
It’s a pretty amazing bit of experience and background. I’m curious what it was like working in Legos for you.
Aparajit Bhattacharya
Wow. That has been like a huge, huge learning experience for me. So when I entered Lagos in 2015, that time, two things were happening simultaneously. Part of Nigeria was under control of terrorist group called Boko Haram and not. And then Ebola was raging in the south. So it was a very interesting time when I entered that market. And then we started building up this insurance company from from the from grounds up. So. So the first challenge was how do we reach out to those people who are scattered across the country? How do we kind of create products, which makes sense to them? And how do we distribute right? So therefore, with such disruptions happening all around it was it was technology first approach that we kind of brought in, and much before the API’s. As we all know, API is now kind of mainstream in terms of creating product propositions. In 2015. Of course, API’s were not there. But we used to use a lot of technologies, like Google Hangouts, which we’re using right now. Even then, as well. To connect with all the branch managers and the area managers, excetra, we launched businesses, we created digital first products, we created our own sales journey, which is totally digital, in terms of motor in terms of health, in terms of funerals. In terms of building new products, whether it’s it is a motor insurance product, we created a completely digital product, whereby, first we kind of digitized our policy system, which was more like a legacy system. We move to cloud and then we started building products, one by one. So in total, we launched about 14 or products in Nigeria. And I think those products are doing extremely well. So Lagos is like a huge city, you know, 20 million population, a lot of traffic. There’s something called a go slow in Lagos. So which means during peak hours, office hours and peak business hours, nothing goes action, so you’re stuck on the road. So therefore. So all these, how do you ensure their productivity levels are high, their morale is high. So even in 2015, and 2016, we use a lot of technology, including video to reach out to our business partners, our our, our agents, our Salesforce? across not just in Lagos, but in across the country, so Abuja, Port Harcourt, you just name it, we’re there. So it was an amazing time we had, especially building an insurance company from product process to distribution system, it was a great experience.
Michael Waitze
Really interesting. Can you talk a little bit about localization. You’ve worked in a bunch of different places across a bunch of different cultures and I think, I just want to get a sense for what you’ve learned about localizing a product even through the digitalization process, and how the local culture impacts the way you build those processes and those products.
Aparajit Bhattacharya
Sure, sure. So see, the basic confusion around insurances is still there very much. So if I have to broadly classify them into four categories. Category one is I don’t understand what this product is all about is very complex. I don’t understand the terms and conditions. Secondly, I think the insurance companies are cheats, they will not pay me, or when I’m gone, they will not serve your claims. Third, I find these products to be very expensive, I don’t know whether I can afford them. Fourth, I do not know from where I can buy, I want to buy an insurance policy but I don’t know where I should go. So if I, if I asked if I if I kind of classify into these four broad categories, I’ve seen a common sentiment coming across various markets, in these lines, typically. So a insurance is very cumbersome, I don’t know where to buy, I don’t trust the people who are selling insurance when they sell claims. So broadly, these four categories, so so it’s quite quite uniform, whether it’s Bangladesh, which is again, an emerging market, or whether it’s Nigeria, or whether it’s Canada, all emerging markets, more or less behave the same, even in Philippines. So So, so I haven’t worked in a mature market like Singapore or us right, mainly on the emerging markets, and even in India is the same thing. The penetration levels are low people have a general mistrust towards the insurance policy structures. And the same same problem. I mean, the terms and conditions extremely complicated, I don’t understand. So the challenge here is how do you simplify your communication, that’s one second is when you talk about multiple countries, you have to respect the language of the land. So you have to kind of bring in local languages to kind of cater to your customers. Just to give you a sense, in in in Africa, there are 1000s of different languages which are in play. Out of which about 24 languages are mainstream. So yes, local content in local language, easy to understand terms and conditions. They can make payments, they get notification in their cell phones, or or gadgets, whatever they are using to make the payment that yes, the payment has gone to the right hands. And the policy document is simple enough for them to understand that yes, even in my absence, the claims etc, will be honored. So this this challenge isn’t very much there. And we are trying to decode this layer by layer to bring it or make it even more accessible to the mass market.
Michael Waitze
Got it. Can you explain to me what the Genesis was of you leaving, what sounds like a really interesting and successful career working for big companies kind of across the globe, and deciding to do the really hard yards of becoming an entrepreneur?
Aparajit Bhattacharya
Yes, very interesting question. Thank you for raising this. So I had, I had on one hand, a huge brand backing me with a lot of capital, a lot of processes, people, you name it, I had it. Right. On the other hand, over the last 20 years, I still continue to observe that the gap between you know, the expectation and realities of the markets were not kind of matching up. What I mean to say bye, that is the penetration levels were still more or less same, what it was 15 years back in India. But interesting levels of insurance in emerging markets are even worse. It’s not even point 5% of the GDP of any given emerging market. So while you have the access or the audience’s of the world, which are doing billions of dollars in businesses, on the other hand, you have, you know, you have more than 3 billion or 4 billion people who doesn’t even have access to basic insurance across the globe, if I have to speak about. And in India, it’s the addressable market is more than half a billion. That’s about 450 million people doesn’t have any form of insurance, right? So I decided to kind of challenge the status quo. And I decided to take this problem head on. And I realized that if I have to do this work, I have to do this work in an independent environment. Because when you are a CFO, and an insurance company, you are driven by a lot of other things, which includes PnL, which includes your board, which includes your colleagues, and there’s a bit of a bureaucracy that also you have to kind of face for sure, which doesn’t work when you’re trying to create a category or when you’re trying to create a new process. It’s just harder you need freedom you need speed, unit agility. So therefore, I understood this and I realized that working in such an organization Probably this part of of my career fulfillment for Bill not kind of fructify. So therefore, I decided to go independent and start creating these journeys. And it has been an amazing business I’m in the last five years have been tumultuous to be heard, politely speaking about it, because in India, we saw two disruptions pre pademic. They call it goods and service tax GST, which got implemented. So that kind of impacted the economy to some extent. And of course, after that, it’s been two years we have been in the pandemic era. But having said all this, I think I’m quite happy that I took that decision. And I’m quite happy that I challenged myself to move out of the comfort zone to create something, create a category create a new business line, and happy to share with you currently there are about 32 insurers with which we work very closely in India. Okay. And all the brands are really excited to work with us, specifically, in terms of the kind of journeys that we have created and the technologies that we have been kind of embedding into the system. So yes, it’s like, it’s like a circle, which is coming back. So it’s, it’s full, this thing.
Michael Waitze
How do you use technology to make sure that insurance is simple, easy and effective.
Aparajit Bhattacharya
So first, what we have done is from a legacy system, like IBM ps 400, we are shifted to cloud, that’s one. So we use AWS, which is itself is very, very flexible in terms of stuff that you can do. Secondly, we have created about 27 different types of journeys across life health and non life insurance, including various products. Third, what we have done is we have created databases, we have collected databases, from the insurance companies in terms of their rates in terms of their occupancies, etc. And we have codified that into the system. Fourth, what we have done is we have taken the policy documents from various insurance companies. And we have created a master database whereby we have matched line by line in terms of similarities. When it comes to inclusions and exclusions are concerned. Once we have completed this work, it took us about 18 months to do it. Now we are creating API’s to, you know, to kind of swiftly embed this products with our partners, which includes online and offline platforms, offline platforms, meaning cooperative banks, rural banks, microfinance institutions, self help groups, online platforms includes new banks and fintechs. So so it’s like a very versatile, and an agile product suite that we have developed. But we worked in building the infrastructure, the first 18 months of our journey. So now you can do anything with this you can you can bring in different language API is to simplify it even further, you can design your own illustrations to make it even more simpler. We are also negotiating with various insurance partners to give us Claims Settlement API’s as well. Some of them have it some of them doesn’t have. So that journey, we are trying to figure out how we can also bring into our ecosystem so so that we can provide an end to end solution, starting from products to the middleware, which is the policy administration system and claims.
Michael Waitze
Okay, how do you look at distribution in a new way, particularly if you’re trying to reach the underserved? And sort of the the lack of financial literacy for the customers that you’re trying to serve as well?
Aparajit Bhattacharya
So there are various routes to distribution, right. So if you if you are trying to look at bottom of the pyramid consumers, like agriculture is to farmers, etc. So, so the first thing that we kind of try to figure out is where do these people go? I mean, what, how does this people kind of behave in their own ecosystem? So in India, for example, to a great extent, farmer is dependent on various subsidies. They’re dependent on various types of loans. They’re dependent on various types of support for them to kind of continue with their livelihoods and to be present Each and every those touch points is what I would like to say, in the form of rural cooperative banks. Yes, we are trying to enable them digitally to kind of provide them with products like hospital cash, op ed products in health simple to understand, on a daily basis, on an hourly basis even possible, yes, personal accident. This kind of products, which, which is easy to understand and comprehensible. We haven’t looked at the bigger problems like crop insurance, etc. Because that’s what we realize is without the support of government, it is going to be very difficult because in India, the rates of crop insurance is actually based on an index index priced. And index pricing is like pretty expensive, right? Yeah. So therefore, quite a few state governments kind of provide subsidies to bring it down. But otherwise, it’s very difficult to run such programs independently. So because of which we are kind of focusing on, on, on providing solutions for their assets, which could be their shop or their local business. We are trying to provide solutions for their cattle, we’re trying to provide solutions for their home theft and burglary. Because these are the products, they need much more than a life insurance policy. Because, you know, in India, an agriculturist also doubles up as a as a blue collar worker, right in offseasons. And they keep on migrating a lot. So therefore, traditional insurance products won’t fly in this kind of segment. On the other hand, when we look at Gen Z, or the youngsters as we call them, they had they got their kind of brawn brought up and they’re living the lives digital, right? So they’re highly opinionated. So probably their biggest asset is their Mac Book, right? Or their iPhone. So again, life insurance might not be something which they might be interested in looking at. But definitely, they would like to buy insurance to protect their MacBook and their iPhone. So yes, we are, we are kind of preparing these kind of products, looking at specific personas and providing them through our partners which are OEM like Xiaomi in India through Zopper. Neobanks fintechs, which are into the lending lending part of the business. We are kind of embedding ourselves into those journeys.
Michael Waitze
So Zopper to me and maybe you can talk about this the reason for founding it. The reason for building it, there’s a similar company, I believe in the United States called Extend an interesting name. And it’s almost like Apple Care for every other product. Does that make sense?
Aparajit Bhattacharya
Yes, if you if you look at software out there, one of their big customers is Xiaomi in India. So apart from that they also work with ahdb financials, which is part of the HDFC Bank, you know, it’s a huge bank. Yes. Plus, they also work with various other big brands. There’s, there’s a company called Kashi fi which which is which is which is which is like a unicorn. So cashify is a is a portal where you can actually just sell your gadget and buy something new and stuff like that. So, so so they’re they’re kind of present in all segments and Zopper is looking to get into other more traditional segments as well. So it’s very interesting company and I’m very, I’m actually delighted to be associated with them. Yes,
Michael Waitze
It’s relatively new though, and I think it’s a new it’s not a new concept per se, but it’s a new concept. Sorry, go ahead.
Aparajit Bhattacharya
A part of Zopper technology stack was taken over by Phonepe. And they have been funded by marquee investors, Bloom ventures etc. They have already raised series A about $25 million. Okay. So it’s a pretty well capitalized organization, they have over 350 plus employees in India. And they are winning accolades across the globe recently they have recently they have they have they have applied for plug and play. I think they got selected in that so quite a few interesting opportunities are actually coming their way however, you know, pandemic has been a huge dampener. So we can’t travel internationally right now. Right. And it’s very difficult to crack any any kind of a deal or any kind of nourishment, purely on you know, speaking to a screen so, end of the day, a memorandum of understanding or whatever you call it actually. It happens in a man to man are organized to organize So yes, even though we have made quite a bit of progress, however, we just waiting for the markets to open up so that we can move aggressively.
Michael Waitze
I understand. And can you talk to me a little bit about parametric insurance? And the potential? Yes, I’m ready to grow as well. Sure.
Aparajit Bhattacharya
So yes, parametric. Um, so so let’s let’s discuss about about a potential case. So, you know, there’s a startup in India called Bounce, which gives two wheelers on rent. Something similar in Bangladesh called Padao. Oh, but how is a is a mobility player, well funded, go jek. Of course, huge organization. So parametric, and indemnity has has a decent play in this in this kind of an ecosystem. Let’s assume that you are sitting behind one of the drivers who is who’s taking you from point A to point B. So we can create a parametric product up to let’s say, 500 bucks, or maybe 1000 bucks. If anything happens minor scratches here and there, you just go to a medicine shop, right? You trigger that claim, instantly it is credited to your wallet or to your bank account, you can simply buy your medicines, get out, get a bandaid or get a bandage and then move on move ahead with life. So that’s the parametric side of the same product. The indemnity side of the product is when you actually have probably a bigger, bigger kind of scratch or an accident and you have to move to a daycare or you might have to get shifted to hospital, well then an Indian lady can kick in. So, so in one particular contract, you have a parametric solution as well as an indemnity solution for the mobility workers as well as for mobility consumers. So this kind of interesting concepts and interesting product products etc, are like in the pipeline. We are just trying to figure out that how can we find a like minded underwriter who will be interested to look into this kind of Proposition so that the customer gets a unified experience. What I meant to say by that is, let’s say bounce. If I find two underwriters, one says I’m interested in the parametric the other says I’m interested in the indemnity and then two multiple policies come in then I have to create an application where those two different policies will sit right and they will behave differently the tasks will be different, the experience will be different. So therefore is it will be a broken consumer journey experience, which we want to avoid at this point.
Michael Waitze
Yeah, I mean, the concept of a para indemnity policy is a good one where there’s a parametric component and indemnity to it.
Aparajit Bhattacharya
Otherwise flight cancellation is something which is already there. That’s a parametric solution. There are few startups in Southeast Asia which are doing it even cover genius also, does it India also make my trip? There’s a possibility I mean, not just a possibility I’m know for sure one of the players is working out a process on parametric solutions for flight delays and cancellations so simple is a flight is canceled. The agreed amount is immediately credited to your wallet or or account. You are sitting in the airport, waiting for the next flight. You can enjoy coffee, maybe a sandwich. Yeah, so yes, but then the bigger side of parametric is obviously weather related programs as I say Said drops excetera if something can be done on flags and inundations. But that’s a huge project and huge program and and my mind body or fear is that without governmental support is going to be very difficult to price such a product. And, and most probably, something of this sort would come from the side of the government rather than a private player trying to place it in the market. That’s what I think as of now, but of course, my my overview might change in the next six months if I see some trends. But I do some serious research every day, practically about for a couple of hours on the parametric solution because it is a very, very interesting subject. And the usage, especially in underserved market is huge.
Michael Waitze
Yeah, for sure. There are two really interesting companies in this space one, of course, is called Parametrics, based out of Israel, and the other is called RiskWolf, which is based out of Switzerland. So two very interesting companies to look at in the parametric space. Anyway, look, this has been a really great and interesting conversation for me. I’m gonna let you go now. I really appreciate your time apart Aparajit Bhattacharya managing partner at insure first and a senior consultant at zapper a great conversation, I really appreciate it.
Aparajit Bhattacharya
Thank you so much. Thank you. It was a pleasure talking with you.
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