The Asia InsurTech Podcast spoke with Roopa Malhotra, the head of digital APAC at Chubb Insurance, about embedded insurance and how to build an innovation culture that embraces digital.
Make sure to join Roopa’s keynote panel at the much-anticipated FinTech Connect Asia (5-7 October, SGT): ‘Digital led business models in Insurance – How are start-ups and incumbents innovating and re-imagining the Insurance business?’. Register now to attend.
Find the transcript of our conversation below:
Michael Waitze
Okay, the recorders 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 in Asia. Today I’m joined by Roopa Malhotra, the head of digital for Asia Pacific at Chubb. Roopa, you’re a rock star. Thanks for coming on the show.
Roopa Malhotra
Thanks, Michael for having me here. I’m really good. Start of the week with the wonderful podcast with you. What else can I ask for?
Michael Waitze
It’s completely my pleasure. Before we get into the main part of the conversation, let’s give our listeners a bit of your background for context.
Roopa Malhotra
Sure, I come from I often see my background a bit reverse to what most people do actually join the insurance industry. And not even reinsurance but retrocession space, which is such as we. I joined actually a hedge fund who were doing before giving reinsurance to reinsurers, that’s how I started my career a lot into CAT bonds, got into catastrophe modeling, risk pricing. And then four years back, I kind of moved into did a kind of a big pivot into the business side of things, I joined the then formed digital team in Chubb. At that point in time, I started looking at consumer products for digital, it was the consumer side was new, the digital side was new, it was an interesting area, and I then I kind of started working a lot with our partners. And from their on I took on a digital partnership management role. And then last year, I kind of then took over the digital distribution head role for Chubb in Asia Pacific. So kind of went from risk to digital and from numbers to people. So yeah, that’s, that’s kind of my story so far and interesting area to be in.
Michael Waitze
Can we talk a little bit about that experience D. E. Shaw, I think that’s what you mean, right? They actually looked at that in business. Didn’t they have a business in the Cayman Islands as well? And they were trying to, like you said, do some reinsurance on the reinsurance business? It’s gonna be a great way to start, right? Because the whole core of insurance is about taking risk and managing risk. Was that interesting for you at the time?
Roopa Malhotra
Absolutely. It was fascinating for me, it was, I think, gonna join D. E. Shaw at that point in time, what they were doing were that they were actually looking at all these big reinsurers and actually giving them capacity on the highest limits of after the excess of you know, we were looking at an excess of a billion or 2 billion at that point in time, I’m talking more than 10 years back, when this industry was fairly new, they were looking into CAT bond swaps, and kind of, you know, begging US hurricane to Japanese earthquake was an interesting start of my career to know about how all of the head works. And yes, you’re right, we were we were actually, it was a Bermuda based entity that we was working with. And yeah, I think, definitely a great way to just get introduced to the whole concept of risk management, how from an individual risk, all the way up to portfolio risk. I actually started read the portfolio level, and then kind of gone to an individual risk level. So it’s been interesting.
Michael Waitze
But I think it’s good, because just kind of get this high level view. I mean, the thing about working at a hedge fund, remember, hedge funds were a lot of my clients when I was in the portfolio trading and in the trading business, when I was at Morgan Stanley and Goldman Sachs, obviously, D. E. Shaw is well known to all of us. But the idea that then they can look and one of the interesting things that D. E. Shaw did was obviously they were one of the earliest firms in that business to implement technology to do analysis on trades. But the fact that they saw this relationship between what they were doing already and risk in that NATCAT bonds, and that’s so interesting, like NATCAT swaps, or bond swaps, just fascinating stuff. But then to drop it down for you. To the individual level, it almost means you have a view and a vision on this that most other people that do your job don’t have. Because they haven’t had that pathway into this. Is that fair?
Roopa Malhotra
Yeah, I think I’ve definitely been very lucky in terms of how this has planned out for me. And I think D. E. Shaw has been, I mean, they’ve been at pioneer in terms of what they do on the whole equity side of things. And bond market has, I think, it was interesting that I’ve been when I joined that team, it was the first team they had actually formed internally as well. So I was I think, was lucky at that point in time as well. And when I look back, kind of coming to individual risk, I was happy when Chubb was forming their first digital team here in the region. So from that perspective, it’s been interesting and and i think you’re you’re right, because what I learned that my initial start of my career was how the whole capital how the capital works, right at the end of the day, how industries and businesses the risk is managed at a very aggregate or macro level. I think now kind of coming at looking at individuals, how the perspective change, how the decision making changes, to what granularity and what you look at it. So I think there’s it’s a very, very interesting space to look at from macro to micro, you know, how the risk factors change and, and how to kind of drive decisions, right? So yes, absolutely, I think I’ve got with that experience a kind of a very interesting lens over things.
Michael Waitze
You know when I first started at Morgan Stanley in feels like 1942, but it was actually 1987.
Roopa Malhotra
You could have said earlier, you could have just said 1990.
Michael Waitze
But the interesting thing that they did with us was they they made us read a book called after the trade, so that we could understand like, the whole operational aspect of the business and the idea that you could do any trade you wanted, not a problem at all. But if you couldn’t process that trade and understand what the lifecycle of that trade was, then you, you can’t really make any money, because you can’t guarantee that that trade is actually going to get affected. And I think from the insurance industry, if you look at it in reverse, if you don’t understand where capacity originates, then it’s has to be harder to do the micro side of it.
Roopa Malhotra
You’re spot on, because I think then you when you when you start looking at why these models of reinsurers how these MGAs would work and how now if you look at the whole interplay of them in the digital space that I’m working now, I can kind of connect the dots a lot more on on all of that stuff. Right, that you’re referring to. One of the other thing interesting is I think back then, also how much technology and data access have changed and and how the decision making has been further, it’s fascinating to kind of just look back and and see how that’s how we are kind of moving ahead. It’s the last word mentioned was when I joined at that point in time, the industry, right, they were looking into investing into those supercomputers because they wanted to know the weather trends. And now if you see that’s, that’s kind of moving faster, yes. But that concept is is it gets get more now I can understand also and appreciate it a lot more.
Michael Waitze
From your perspective, when you look at the whole ecosystem now, what do you think is the biggest trend in InsurTech in Asia?
Roopa Malhotra
Michael, it’s a very hot discussed topic as well. If I look around the trends in specially in digital, right, you see everything from from IoT devices, to to blockchains, to of course, embedding, personalization, you know, data, all these all these topics come up, right. But when I take a context of Asia and digital, I think Asia has its own uniqueness when it comes to the issue of penetration, the issue of of access, lack of inclusion of just financial well being rights, not just insurance of just financial services on its own. So if I kind of take that lens of Asia, I think the biggest trend that we are seeing has to be on on embedding and why I say that is because you see all the all the regulators in the market in Asia, and they are crushing digital banks right now. And the fintechs on both not just consumer, but on corporate size, you’re seeing a lot of fintechs coming and on financing of SMEs and helping streamline their processes. Now what’s happening with that, of course, is I think embedding, it’s going to be big for insurance, because that kind of helps in leveraging, reducing, you know, the cost of distribution. And and how do you make it simple so that the segment of the society, especially in Asia, it’s insurance is offering the most uncomplicated way. So from that all that perspective, I think, taken altogether, I think embedding is probably going to be one of the key drivers not only purchase one of the key drivers I see as a trend in digital in Asia.
Michael Waitze
Yeah, look, I know, we talked about this before, but I want to dig a little bit deeper into this embedding. And I’ll tell you why. You know, embeddings been around for a while. Right? We’ve we’ve had embedded insurance in airlines and airline tickets forever. And frankly, in some cases, even in hotels, right? It’s always been kind of related to travel, if you get if you travel somewhere get travel insurance. But I’m more curious about again, from a digital perspective is, has something changed on the technology side? Right, to make this easier to do, like is it the compute? Is it the ubiquity of connectivity? Is it the cloud access, like what is it about today, that makes embedding so prevalent?
Roopa Malhotra
I think this few things that have happened, so you’re absolutely right. Travel has been in this space. Even if you look at your offline channels, when loans were traditionally being dispersed as well, you would have added insurance in that space, but there’s few things that have happened. One of them is digitization. So a lot of these outside of travel, of course, but a lot of financial institutions, everyone, they’re all the processes are becoming digital. And when they are, those processes become digital now it gives an automatically an opportunity to, to now tap on to those customer journey touch points that actually enables you to offer insurance. The second one is just the silver lining of COVID-19, which is, you know, the digital penetration has really skyrocketed in this region, just as reading the report of adding Google, Temasek and for Asia, and they were saying just within one year, last year, 40 million customers have come online for the first time and 90% of them are likely to remain online in all their usage. Now that’s, that’s a big number that takes the total to 400 million. So you’re talking about a big chunk of your population, not just coming digital being digital savvy. And what that does is that it has given rise to a lot of ecosystem. So that’s kind of the third thing of our platforms are super apps as you as you may call them. And all of that kind of gives all the more relevant touch points for insurance, to now actually have offerings that are more catered towards it. So I think oh, and of course, all this is backed by technology and cloud that is enabling it, right? So but if you kind of look at some macro trends of digitization of you know, people coming, just living their lives digitally. And then of course, these new business models that have come up, as just as just kind of sparkled into why embedding has now become so much relevant than then probably two years back.
Michael Waitze
I made in my notes, when you’re talking about D. E. Shaw and this desire to like go get a supercomputer to be able to model weather patterns. We probably have more power in our pockets today then supercomputers had 15 or 20 years ago. And I think that that means again, just to tie some of this together from a distribution standpoint, you have people carrying around this connectivity device in their pocket. We used to talk a lot about and you mentioned also digital banks and Neo banks and FinTech and we’ll get to all this stuff as well. But banks kind of used to be the main way to distribute insurance, right? You already had people had all these bank accounts, you already had touchpoints with them. But now that’s changing. Do you want to talk a little bit about how partnerships drive these things? I understand the ecosystem side of it, right, everybody, and again, we take this for granted, right? everybody buys stuff online. COVID definitely accelerated that, particularly out here. But penetration does still remain low. So how do you at Chubb look at partnerships to help accelerate that penetration? And that distribution of insurance?
Roopa Malhotra
So so I think that’s a very, very key point, right? I think, first thing first, just because things are everyone is digital does not mean it leads to high penetration. No wonder some of the models like you know, just having marketplaces of insurance, people don’t wake up and want insurance, unfortunately. So it’s just not the it’s just not as fancy as as going online and buying a T shirt. Right? So they would rather spend on that so or not they I probably will say I could refer to that as well. So guilty as well. So So I think we are talking here about a lot about it’s even psychology, something that is reminding them of something that they can’t even say feel that that can happen to them, all these are factors why you know, penetration is an issue and just because people are interacting digitally is not the solution. And hence to to your question, it becomes critical to then identify what kind of partners do we need need to look at when we think of distribution. And I think that’s where now you’ll see a lot more focused on where are our customers interacting, so we want to take it rather than taking customers to where or take them to a place where we sell them insurance, we want to go we want to bring insurance where they are interacting and hence I think now the whole lens on on distribution partnership is around where customer sitting. So that’s why your e commerce players, your your super apps, like the likes of Grab and Uber, and these are the ones that are that are more prevalent, people are buying, they are ordering food or taking rides. So I think that’s kind of where our approach has also shifted to look at where customers are going. And second of all, I think the biggest change that we are now looking from a distribution partnership distribution is is not to kind of enclose our traditional insurance products, because that’s the other thing. Just because if I’m again, going back to my example of you know, if I’m buying the, if I’m buying the T shirt, no point selling insurance that has absolutely zero affinity for what I’m doing, and then it will be the most absurd placement ever and can probably get an award for that. So so i think so I think that’s, that’s the thing says two things, identifying the right partners where your customers are and two identifying your right insurance proposition and not trying to fit out your square, you know, in a circle hole. So I think i think that’s that’s kind of where our approach has shifted as well on digital partnerships.
Michael Waitze
When we first started doing this podcast, over two years ago, people were saying a lot of what you just said about how like insurance isn’t fancy, it isn’t sexy. But I feel like today, that’s really changed. I’m serious, like do you get the sense that during the amount of time that you’ve been in the insurance business, that the perception of the business itself overall, as InsurTech’s themselves have become more prevalent, that the desire for people to be involved in the business has changed over time, and that maybe even the mindset that drives the sort of product creation and product production has changed?
Roopa Malhotra
Absolutely, I think I think if you you’re spot on, I think it’s it has its own, it had its own evolution. And thankfully, it’s, it’s been a shorter period than a 10 year. I think in the last two, three years itself, we have seen a lot evolving in this space. And and people are no less talking about everyone, I think, have learned the lesson that don’t try and enforce your traditional products, because it has not worked for anyone. And that’s the reality. And I think that’s kind of forcing businesses to change their thinking their process their mindset around it, right? And yes, you’re absolutely right, the whole outlook on on digital insurance, but the way support that has come from InsurTechs has really evolved, because I think what’s, if you see one of the ways that a lot of InsurTech would approach this as that we want to build the trust that, you know, legacy insurers don’t have, I think there’s been a lot of blaming and shaming is well, that has happened. But I think what that has led to is that everyone is adopting the right mindset of looking at proposition, looking at not just your product by looking at coverages and services that you get with along with it. I think that’s to me is big, because you’re no longer saying, oh, by personal accident or health insurance as a generic term, when trying to make it a bit more contextual to the individual. What does it mean in their day to day life? And I think simplifying that and giving them what they would need, not just from insurance, but servicing point of view has really helped evolve. But yeah, I think it’s just the start of the journey. I think we still as industry have a long way to go, but very excited that I think we’re on the right track.
Michael Waitze
I think so can you talk to me about some of the ways that Chubb itself is innovating. And even some of the the platform stuff that you build, not just today, but five years ago or six years ago, that’s led you to where you are today, even on the API side?
Roopa Malhotra
Yeah, no, definitely. I think, I think as I said, Why I think we started the journey four years back so and and I think, as we were talking about embedding, and product proposition back in 2018, we were already kind of crafting one of our products with our partner Grab, which is, which has been, which has been a phenomenal success for us. But I think that is a reflection of the fact that we were already developing our API’s four or five years back, we were already trying to focus more on the proposition rather than the the standard coverages. And I think what we have done at Chubb as an as an organization, when we have a very clear vision, we want to be number one enabler of, of embedded insurance globally. And that’s a message that we we are we’re sending it to the partners we work with. We do not want to boil the ocean and do everything we want to make sure we are giving the right proposition out there. And in to enable that what we have invested is we’ve invested a lot on scaling our platform. So what we call Chubb studio, may you have heard about it. So what we’ve done is we call it insurance in a box and and we put together our insurance technology, as well as all the enablers that come with it, and it’s not a static box. So to say it’s something that’s very dynamic, it’s something that any region globally within Chubb, any digital team that, you know, enables one feature that gets available to everyone else. And it’s interesting if you see the landscape we are we we have already have API suites, I think we are done with it. I don’t want to talk too much. We are more looking into what’s next we are looking into some other toolkits like we’re looking into SDKs and, and we’re looking into bridges, how we kind of enable all of that for our partners.
Michael Waitze
Talk to me about the significance of the software development kit. We’ve talked about this before, right? But this idea that there are the real powerful companies in the world end up building platforms on which people interact. Right? And to communicate with those platforms, you really have to you have to have a bunch of things. And the platform itself has to be robust. API’s are like the beginning. But to properly communicate and build things on top of those API’s, then you have to have the software development kit as well. And if you’re doing it the right way, it leads into a marketplace. Can you talk about how all those things come together? And then maybe some of these tools that you’re building on top of it?
Roopa Malhotra
Yeah, sure. I think, I think I said, right, I think Chubb, we’re very clear we are, we want to make sure we are whatever we are developing as within customer vision in mind. But we also want to make sure that we are enabling our partners because they are our distribution, you know, mechanics. And so having said that thing, when we looked into when we develop API’s, we realized, well, well, the kind of partners we are talking about are the ones who are using more sophisticated tools. So we kind of need to work with the way our partners work. And I think we need to enable them with the right tools, if we want to have the speed to market if we want to have the same agility that any modern insurer needs to have. And I think with that mindset, what we’ve done is now kind of looking into what are the kind of embeddings, we want to work regionally to kind of provide that SDK toolkit to our to our partners, because that drives the right conversation. And that drives the right speed to market. And I think that is also very much I feel is forward looking, because as I said, we’re serious about this business of embedding, we don’t want to have just one touch point and go away. But we want to make sure any opportunity that we can get to, you know, give assurance to our customer or from insurance point of view, we want to tap that. And I think all these toolkits will enable our partners and asked to kind of offer that to our customers. So I think it’s it’s that whole vision and mindset that’s driving these tools, technology as an enabler. But I think it’s very critical to keep in mind that it’s backed by how we think about our business.
Michael Waitze
Right? And you’ve mentioned this word mindset. And I said, I wanted to get back to this. You know, insurance companies, particularly incumbent insurance companies have been perceived for a long time as being very conservative. And I’m curious, what drives a company culture that feels like it’s really open minded and less conservative than others? Right? And I’m also particularly curious about what happens to somebody new when they come from another institution, maybe? Or come directly out of university, into this environment? How do you train them to have that sort of open minded mindset? and not think so conservatively? Because I probably believe that they’re coming into a conservative environment?
Roopa Malhotra
Yeah. tricky, tricky question. So I think I think two parts, right. The first one is how do we internally kind of more broadly as an industry, and maybe I can speak a bit more on on Chubb more having having worked here for long and seeing that transition? Right. I think insurance industry as a whole right, from my experience, it’s been always been about the lens have been about underwriting profit, the lens have been about very risk conversations and dialogues, internally. It’s all about risk discussion. But what has happened is that as we have gone into this whole digital era, and now that we’re saying that, hey, now to kind of sell this to our consumers, we have to speak the language of customers. So I think the biggest shift that has come is that while the principles of insurance still remains the same, you have to look at the lens of customer. So customer first has become the biggest mindset shift that has happened, it hasn’t happened overnight. And I think that’s where kind of COVID come to shove, I think I see it with a few factors, not one that has led to that shift for us, thankfully, and I think first of all has been the overarching support from management right from our CEO and ga see our management here in Asia, I think it’s been it’s been very clear and I think that has really helped drive the mandate internally. And two, I think, some of the early successes that we have been able to identify in terms of our opportunity with our partnerships like the likes of UPS and Grab and then of course have played with Revolute and new bank in other parts of the world that has given a lot of confidence and I think success gives that confidence internally and has now we’ve been able to really accelerate the whole mindset change and now it’s no longer a digital team that’s talking about customer first, now every other parts of the business be it operation, be it claims, especially at product underwriting, it’s not an alien concept anymore that okay, but what’s the okay what is that we are offering to customers the first thing that now comes in every conversation which is so refreshing and yes, it has been a journey, wasn’t there four or five years back. But I think it’s it’s so glad we’ve kind of made that bridge. And that leads to your last point on how does now relate to someone who wants to enter into this industry, I think I think what what’s helped is that we are now interacting with the brands that can that these new young millennials and Gen Z are really interacting with. And they are now seeing insurance and let’s say Chubb, in our case, being actually being available there, right. So they see that we are doing the right things. And that helps, definitely that that really helps. And I think we, the interview processes are also not such, our training, onboarding processes are not, are actually more about customer first. So there’s a lot of shift that has happened, you know, as we have kind of grown in the last four or five years, which is very interesting to see.
Michael Waitze
It must be neat for you to look back at the sort of formation of that digital group, right? Which one was formed, probably other people inside the company were like, what are those people doing over there, to now where they’ve switched and said, either I want to be in that group, or it’s almost like the whole company has become part of that digital group where they’re just saying, like, this is the future of where we’re going, as opposed to before they’re like, I wonder what’s going to happen over there. But for you who’ve been involved in this for so long, you’re right. It’s been a bit by bit mindset change. But it seems to be working.
Roopa Malhotra
Absolutely. It’s been working. And and as I said, Now, it’s I think everyone wants a piece of digital. And I think the best way I think what we have done is rather than trying everyone to be part of digital, the best way for us as being digital as part of everyone in our culture. So I think that is the right approach rather than making it one time. At the end of the week, I’m one big digital team. So the entire office has one big digital team now. So I think that’s kind of the way forward and and that gets reflected in a very happy to see I think in the in the in the way the trainings are going for for other departments. And it’s very, it’s very heartening to see that and, you know, we do get involved, becasue we get involved in a lot of doing all of that. And I think that’s an exciting part. The customer journey, right? So an ops having all the claims, having that kind of a session just within their own teams, nothing to do with digital is refreshing. And I think that’s what’s kind of leading to the change. So, so yes, I think that’s that’s the way forward, as I said, long way to go back, and we’re absolutely happy to be on the right path.
Michael Waitze
You’re smiling, and it leads me to believe that it must be fun for you to come to work every day. Before I let you go. I want to talk because you’ve mentioned FinTech and where insurance and InsurTech fits inside that ecosystem as well. I want to talk specifically about FinTech Connect, which is coming up soon. And you’re speaking there as well. Can you talk a little bit about what you’re going to speak about, why it’s important and why you’re excited to be going there?
Roopa Malhotra
Absolutely. So the FinTech Connect, so I am actually joining a panel discussion. So Wilson, who is actually co founder of PolicyStreet, he is going to be the moderator and we are going to discuss about digital led business models and, and how, how it differs between incumbents and startups on innovation and reimagining insurance. So I think it’s definitely going to be a very, very interesting discussion. So we’ve got Tom from from Grab and Manish from Prudential as well joining that. So really looking forward to, to how, how we all kind of have, hopefully the bring different perspective with the same vision. I think that’s kind of where the conversation is going to be. But now looking forward to that conversation.
Michael Waitze
That is super. Okay, I really want to thank you for doing this. Roopa Malhotra, head of digital for APAC at Chubb for doing this. I really appreciate it.
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