The Asia InsurTech Podcast spoke with Prannay Batra, Director and Head of General Insurance at PhonePe about affinity partnerships and the massive opportunities in the Indian insurance market.
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 globally. Today, I’m joined by Prannay Batra, Director and Head of General Insurance at PhonePe. Prannay, it’s very nice to have you on the show. How are you doing today?
Prannay Batra
Doing very well, Michael, how are you?
Michael Waitze
I am super. Before we get into the main part of the conversation, what do you think is the biggest trend in insurance and InsurTech in India, and by extension, the rest of Asia?
Prannay Batra
Sure, Michael, I think there’s a couple of really large trends that I see converging. And especially over the last couple of years, given the whole COVID context. One, a lot more people are a lot more aware about, you know, the kind of protection needs that they have. I think the other part of this is, you now have a lot more platforms that are making simplified journeys for people to address those production needs, address those protection gaps. In a way, there’s almost, and you would say, you know, this is unheard of in the field of insurance, it’s really a push product, people don’t really want to spend too much time on it. I feel like there’s an existing and growing demand that we are seeing, and especially this is coming from not just the metro cities, not just the big cities and towns in India, but also a lot more interest from tier two, tier three cities and towns, you know, especially the hinterland. If you were to see our geographical map of users that we serve, a lot of our users come from these areas. This is where, you know, the arrival of Coronavirus, I’d say made these folks a lot more aware. And because there was someone like PhonePe and other platforms as such as well, that addressed the access bit and access in a manner where, you know, it was a lot more transparent, it was a lot less difficult to, you know, onboard a user or to buy an insurance policy, which perhaps before this time period, it was a lot more traditional, it was a lot more tedious, and which is what probably most people shied away from. Yeah, it’s no surprise that our penetration rates are you know, compared to a lot more developing countries and regions is a lot less. One down to, you know, the large population. But the other being just plane access, cost of acquisition, for most insurers, or many other traditional platforms or distribution channels is a lot higher, the more and more you start going into tier two and tier three cities and towns. I think that’s where, you know, digitalized online platforms came in. They started off with a payments use case, because suddenly it was a lot more difficult to pay people using hard cash. And they got used to this right, this behavior of transacting online being comfortable with it, feeling secure about it, came in, and that is now translating further and further into different financial services needs that can also be addressed. It’s the convergence of those two things.
Michael Waitze
It’s really interesting. I want to get to that idea of other financial services in a second. But before we do that, can we get a little bit of your background just to set up the rest of the conversation?
Prannay Batra
Oh, absolutely. I’d start from day one and my entire career has been in insurance. But it’s, but it’s, it’s done so many loops, and so many different transitions. And I’ll try and walk you through them. But my first job
Michael Waitze
Before you do that guys real quick question. Was that a purpose purposeful choice on your part? You know, I’ve been doing 140, 150 of these recordings, right? And a lot of people say to me, you know, I was getting recruited at school and I could have had this job or that job or this job and I kind of just fell into insurance. But even if I look at your educational background, I feel like this is something you decided early on. Is there a reason why?
Prannay Batra
Yeah. Funny enough, and maybe, you know, take it, how you may. Alright, the way it really works is I finished my post grad and then within campus, after you’re done with with your MBA is when a lot of companies are coming in and start recruiting folks. I think, at this point, I did not exactly know what it was I wanted to pursue my career. And, you know, I was a confused kid at that moment in time. And I turned to my dad for advice. And he said, you know, what, if you’re confused, and if you don’t really have a strong passion for an industry just yet, for the beginning of your career, try and sell something. You know, that’s probably going to lay down a very strong foundation for everything else that comes next, you know, as you grow, and you know, you’ll come and thank me for it for 10 years later, but try and sell something. I went back, I tried to, you know, see what it could be that I could sell. It turns out insurance is one of the most difficult things to sell. So, you know, Bajaj Allianz comes onto campus. And they start interviewing folks. And I’m this ego guy raising my hand up and saying, Hey, meet me, I want to sell this. And a lot of other folks are going, you know, this is I’m a marketing genius, and what have you, everyone has their own preferences and choices. I get in, and I’m smack in the middle now of sheer life insurance sales. I kid you not I was, you know, I had a mini office in the back of my car with brochures with policy documents with forms for customers to fill out. And while we were handling a bankassurance relationship, it really did come down to us, the insurer to go out and make those calls with customers. So I was visiting households, I was visiting bus stops, I was visiting shops, wherever I could find, you know, the bank customers for an appointment. And I was pitching life insurance to them. I did that for a year and eight months and then grew a lot more curious about the other side of it. The other side of the coin, which is P&C, you know, what goes on there? Back lifted by a passion for cars. And I don’t know how that translated exactly. But I saw an opportunity on the P&C side for Bajaja Allianz as well that said, Hey, Key Account Manager for BMW. Wow. That’d be something, you know, interviewed, got in, started handling that as a relationship nationally. And at that point, because it was a corporate agent relationship, any new BMW vehicle used to be retailed with a Bajaj Allianz motor insurance policy, right. So my job essentially was, you know, making sure all stakeholders in that chain of relationship which included the insurer, which included BMW Financial Services, the corporate agent, and its dealers were happy, right? We’re happy about penetration rates being as high as possible, the dealers are happy about all their online insurances, being you know, as much driven online as possible without any hiccups. And the insurer side being you know, all your pricing and underwriting measures are in place so that your portfolio isn’t really going downhill. During that, let’s say that stint is when these folks from Allianz, the parent company or the JV partner, as you have it started coming in and they will these very specific folks that work at a team called global automotive, you know it is just starting out. They wanted to further their interests in not only automotive, but also automotive ancillary products in Asia and Southeast Asia. They did that around the world, they had these global tie ups with you know, of course, the three German OEM brands. And then coming to Asia, they realize the importance of the Korean and Japanese brands as well. And that’s where, you know, they wanted to come in, they wanted to understand how we did business. So they did that in each country, and then try and further their interests around products such as extended warranty, RTI gap, Payment Protection, insurance, tire and rim insurance, what have you, and so forth. I think during these conversations with these guys is when, you know, I was asked if I wanted to move on over to the Singapore branch of this company, which was the Allianz Global Automotive Company, looking me three years into my corporate career in India, in insurance, and I’m getting asked if I wanted to head to Singapore.
Michael Waitze
Basically to another continent. All I can think of right now is all you think of right now is your dad just like high fiving himself.
Prannay Batra
It wasn’t just him though. I’ve met some brilliant people, Michael, during my career. And I brought this proposition back to my then head of the motor insurance channel, who’s Mr. Vijay Kumar. And he’s currently by the way, CEO of Go Digit. He works with Kamesh. And I said, what do you think? And he says, Prannay the kind of exposure that you’d get by doing this, the kind of different, you know, kinds of people the, and by the way, the exposure into insurance happening and working in Indonesia versus Thailand versus Malaysia versus Lao of all places, right, it’s unparalleled? You’re not going to see that here. Go ahead and do this. So my glad jumped. I went, took that, you know, with both hands and did that for a few years, site visiting each and every country within, you know, that purview, and started understanding how motor insurance was sold, and what else we could do there. And that’s, I think, within the Allianz world, once you start doing that, you start forming a very strong network. That’s how that industry also works in a lot of ways where people know each other, and if there’s, you know, roles that get pointed out, and people know whom to ask them to call.
Michael Waitze
You were like a hub now with a ton of different spokes. And that’s actually a great way to be.
Prannay Batra
Absolutely. So now I’m in Thailand, and this is sometime early 2017. And I’m helping out with a Daimler tender for the Thai P&C entity of Allianz. And that’s when I think there was a position that had just become vacant, or they were just setting up this new channel called affinity business which existed, but they were adding the digital partnerships side of it. And, yeah, the CEO there during my time, there asked if I wanted to come over and you know, take that on as my first p&l sort of responsibility and see if that is something I could make a success out of. Again, difficult decision, but why not, you know, now going from looking my background, I’ve done motor insurance in a few countries, seeing how that works and evolves. And in terms of product breadth point of view, I could now have a lot more, you know, insights into different other different lines of P&C insurance businesses of products, as well as interact with partners that are just not OEMs anymore, or dealers anymore. You know, these could be now last mile delivery providers, it could be a Grab, it could be a Lineman in Thailand, it would be a Kaidee, which was then the largest used car, selling platform in Thailand, used goods platform in Thailand. And by the way, another country, another exposure, another language to learn, it takes a lot of boxes, and it gave me my own p&l to run.
Michael Waitze
I mean, you are running up a learning curve really quickly. Right. And that’s the most exciting thing about that part of your career. No.
Prannay Batra
Yeah, but I think when you’re young, and you’re you’re just seeing so many different things happen and how they happen. You’re just absorbing everything. And you’re picking up stuff from you know, just taking an example for that particular comment there. BMW had a tire and rim program in India for the longest time, right. During my stint with global automotive, we went down to Indonesia, and there was a tie up, which was happening with BMW and we said hey, we can do a tire and rim program here. Okay, how do we do it? What goes into making it happen? You know, who pays for it? Who doesn’t? What’s the experience like? All of that. You just pick it up from India, you drop it in Indonesia, it works almost in the exact place, exact same manner. Good stuff. So yeah, and you know, bringing all of that then to Thailand. Tough, tough nut to crack, I’d say. But I think we had a couple of really strong relationships, which we thrived on. And then we tried to do a lot more around on the digital aspect of it. And was near about getting into the thick of things is when you know, a recruiter from India then called about the PhonePe opportunity. And this was a tough one, this is a very tough one. Because yeah, you’re you’re outside you you made a very good you know, life for yourself. You’re entrenched in this Allianz network, and you know, that you just need to, you know, make the right steps and you will go far within this very company. And having worked with them for nine years, I didn’t exactly see myself leaving, you know, it was just a matter of, you know, it’s done nine now you just need to look forward to 15 and then 20 him, just keep going down that road. The excitement of it. Digital payments in India booming, just picking up, you know, a storm and going on its way and that trajectory just did not seem ending at that moment in time. And imagine my excitement when I’m asked, forget a website, try and sell insurance through an app.
Michael Waitze
Yeah. Again, this gets back to the thing that your dad told you, if you can sell, I mean this so seriously, like, it sounds a little bit sarcastic. But it’s really great advice. Because if you know how to sell things, anything, and if you can sell the hardest stuff. I always talk in relative terms, but then sales over time becomes relatively easy, but also managing a sales team. Everything has a sales component to it, right? Nothing is just there. Yeah, so sorry, go ahead. But yeah, it’s awesome.
Prannay Batra
I think that’s what pulled me right. And as like, if I cracked this nut, which is selling insurance on an app, and by the way, in India, that’s gonna set me up for a world of learning. And imagine utilizing that learning in, you know, many other places or for many other use cases. And, Michael, to be honest, the last two and a half years that I’ve spent here, it has been fantastic.
Michael Waitze
Let’s get to that. Let’s get to that. I’m sure it’s amazing. I want to share something with you, too. I don’t know how old you are when they sent you to Singapore, but you probably were not much older, much younger than I was when the same kind of opportunity happened to me. And I jumped at it too. And they said, would you like to go work in Japan. And I was working in New York. And I looked around almost like it was a bad movie. And I was like, it’s not really a question. But it changed my whole life. I haven’t lived the United States since that person tapped on my shoulder. And that was 30 something years ago. So. And there were articles back then that were written and said, Don’t go east young man, you know, was making fun of that phrase that they had in America of like, Go West young man. But I wouldn’t have done anything any differently. And I understand that feeling you had where you go out now. And now you get to see this larger universe of opportunity. And once you see it, you can’t unsee it. Which means when you go back to India to work for PhonePe, we’ll get to that in a second. Everything looks different. Is that fair?
Prannay Batra
It absolutely does. And you know what, suddenly the country that you’re going to doesn’t really matter anymore. But from you should understand how you know, things need to be sold. And you need to understand the geography, the Democratic situation in the country, the various metrics that go into play. But now it’s not about moving back to India, it’s about moving to a market where you’re going to learn about selling insurance via an app.
Michael Waitze
Yeah. What was it like moving from a company that was founded in 1890? To a company that was founded in 2015? I know you first started operating in 2016. But what was that, like? You know what? I mean? Were you prepared for that?
Prannay Batra
In a way, yes. My experience in Thailand, exposed me to a world of startups and Thailand even today, for example, you know, it’s a huge hub for e-commerce. It’s a hub for digital payments. It’s a hub for last mile delivery platforms. And during my interactions, you know, I was approaching these guys, for them to become my clients. But I ended up learning a lot from them the way they work the way, you know, design thinking works, for example. I attended a workshop where the CEO of Kaidee, you know, just broke this down into very simplistic terms. And I suddenly saw a whole new world.
Michael Waitze
Tiwa is really good at that.
Prannay Batra
You know Tiwa?
Michael Waitze
Of course.
Prannay Batra
I did not know that. So I think what struck me was the speed of decisions. And the speed of execution, right? Those two coupled together that bias for impact, which is faster, which is sooner than later, that whole field of you know, let’s just go out and test this out. We’ve heard this from our users, we’ve tried to build it in a way that addresses their concerns, and just get it out. Try it. If it doesn’t work, we move on to the next iteration. The path that I was probably not used to was how far along you know the Indian employment space has moved as well. The startups folks in India are exactly the same as the startup folks anywhere. They speak the same language. They speak the same principles. They speak about customer centricity, everything emanating from there and that was something that I was definitely not used to because I left behind, you know, six, seven years before that a company, which was again, a lot more traditional.
Michael Waitze
This conversation is already awesome. How would you describe the state of the insurance business at PhonePe when you arrived? And then how is it different now?
Prannay Batra
Alright. I think we hadn’t launched a single product when I joined.
Michael Waitze
I just wanted to, like, I knew the answer, but I just wanted to establish that like, there were no products that when you arrived, it was completely greenfields for you. Right.
Prannay Batra
So I was the second hire, I was the second high on the beam, and, you know, the gentlemen who’s still my boss, was setting this thing up. And I think what took initially a bit more time was rallying around information about how insurance really works. You know, it can be a complicated animal, it may not be as simple as you know, just, and I’m not saying solving for digital payments is simpler, but it’s a completely different space. It has regulation behind it, it has a different regulator. It has policy wordings that need to be followed to the tee, it has inclusions, it has exclusions, there are things that you need to say to consumers, there are things that you can you cannot say to consumers, there are things that you need for the insurers to accept the policies, and then there are things that insurers just put in there for, you know, their own data purposes. It’s not really underwriting parameters. So it took us some time, right, and we launched the international travel product as the first one. And we were the first in the country to do that. That was in January 2020, COVID hits 22nd of March. And you know, we don’t really get the chance to explore the true potential of that business. But I think what really, really worked was, yes, we launched that first product and took a bit of time. We turned around that learning as a group, right as a pod as we have it in PhonePe. We turn that around within about three weeks, and we launched a Coronavirus, specific health insurance product. And that really exposed us right and that that that puts so much weight behind this access that we were providing to people. And sales for that product, you know, along with just awareness around it made us believe that we were on the right path, you know, if you’re able to explain to users what they were getting into, and what they were getting for the amount of money that they were spending it via a very simplistic journey. And if I don’t know if you’ve seen that journey, but it was literally two screens long, right? You come in, you know, within a minute, you’re done and you are secured for Coronavirus, or expenses against Coronavirus in fact. I think that’s what really gave us a lot more reinforcement that we were on the right path. And we continued that way launching other smaller, let’s say ticket covers such as personal accident, you know, hospital daily cash and so forth. And then moved on to a lot Meteor, let’s say mainline offerings, such as car and bike insurance. I think what struck us again was the moment we launched bike insurance, right? And within a few weeks, we were serving up millions of quots. Now imagine this a market like India, where most of the two wheelers running around are uninsured. You know it costs me probably less to get a damage repaired that my neighborhood repair guy whom I know really well and has known since my childhood versus getting you know spending time and money on insurance. But the moment and this is where beliefs, you know, we’re just smashed right outside the window that insurance is not a cool product. It is starting to become that you put a product which is a lot more transparent. A lot more simple to understand, to go through and onboard and adopt. And people will get into that stream and they are aware that it is a mandatory offering and they go ahead and buy it.
Michael Waitze
I feel like there’s a there’s a two sided market here right And I’ll explain what I mean. And then I want to get your comment on this. So this simplified product. First of all, you launched this travel product, which was probably an amazing product, but then COVID hit. So now you’re back to having no products. But you’re also in a situation where PhonePe traditionally not an insurance company. So there’s management at PhonePe looking watching you guys going, Oh, come on, do you don’t mean, so you have to get them to believe too. So you have two issues, really, I mean, you have more than that. But two big ones. One is senior management committed to this, but now they’ve really got to buy into it right. And the second is you have to have customer start buying your product. So the first swing was a miss in a way not because the product was bad, but because the world flipped upside down. But you took all the things, I love this, right? Because you took all the things that you learned with design thinking and quick iteration and all of your exposure to startups, which maybe at the time, felt like a little bit luxurious, right, are now starting to pay off, you’re like, don’t worry about it. We’ll launch this thing because now this thing happened. We can iterate really quickly. This is the beauty of this environment, which is different than a traditional insurer, nothing against any of them. They’re all great. And, and then you turn it into a pole product where people were like, I never needed this before, because my cousin was always fixing my bike, I didn’t care. But now you start to get millions of hits, and now management is gone, I think those guys are onto something. You know what I mean? Because that’s important, too, because then when you introduce the next product, they’re already believers, because they’ve seen it happen once. Is that fair? I just want to establish that because that is really interesting for me.
Prannay Batra
I think that’s fair. And to a large extent, I think with PhonePe, though, you know, just the plain ubiquity of the application. Like imagine the base, right. COVID has hit and then even before that, for example, people were coming into the app to do tons of things, they still do, you know, I can I can pay for my gas bill, I can, you know, keep my loan EMIs, you know, automatically being debited from there. I can do so many transactions. So I think we knew to a large extent that this should work if we solved for it correctly. And and just the whole, you know, aspect around Coronavirus, hitting and the product, then, you know, going off the shelf, that quickly, of course reinforced it a lot further. But even today, it’s a question of the six, you know, or other I’d say the success of the insurance bit is down to the ubiquity in the success of the PhonePe application, because there’s just so much going on.
Michael Waitze
There is and I want to establish this too, right? So the National Payments Corporation of India, right, which created and it was one of the earliest to do this, right? The unified payments interface. And to be fair, PhonePe was one of the first companies to really take advantage of that ubiquity. It’s a word I was gonna use anyway. Right, the payment rails were there. And PhonePe was very good at taking advantage of that, do you know? And in a way, to me, it’s a little bit of a Trojan horse product, right? Because once you like, no one knows what’s coming next. I’m curious if you know that if the management of PhonePe when they started were like, Let’s get on the payment rails, let’s get 250 million clients. And then let’s turn this thing, not just into a full fledged financial services provider, but a platform where other people can also put their services on seamlessly. So it doesn’t even seem like it’s a different product. Do you know if that was part of the mindset?
Prannay Batra
Um, I wouldn’t say I know for sure, but and I can’t speak on behalf of them. But I think if you go down to the basics, and this was about inclusion, right, it was, it is about letting as many people in India with, by the way the size of our population, start using things a lot more digitally, a lot more online. You know, whether it’s about payments, or it’s about insurance inclusions, or it’s about anything else, it addresses that particular need. So as much as you can, that’s as far as you get.
Michael Waitze
Yeah. And now that you’ve done that, right, so and I think this is so cool, because you it hasn’t really taken you that much time to get to scale. And that’s great, right? But now there’s some pretty big established players out there like PolicyBazaar, and you mentioned Digit earlier, right, that are fully integrated. And then some other smaller players like PolicyX, like when you look at the competitive landscape, what does it look like to you now now that you’ve been putting products out there? There’s been some successes and stuff like that. What does it look like to you?
Prannay Batra
I think there’s obviously a firmly established market leader In the online space in India, what we’re trying to do is probably a lot different. And I think it goes in the direction of having this 300 million plus base, you know, that’s using our application and addressing their needs, getting them included into the insurance umbrella. And how do you go about doing that, you know, as far as possible, digitally? With what we’ve seen over the last, more or less a year and a half, I think we’re in a way where we’ve barely scratched the surface. Right? Even with reaching some sense of scale, I think there’s so much more that needs to be done. Because the Indian consumer, at the end of the day, is a demanding consumer who likes to be spoken to, for some of his or her needs. I think that’s that’s currently, let’s say, the path that we seem to be on, you know, we’ve lost some mainline offerings that already have existing demand. We are going out the scene a lot of traction on the two wheeler insurance bit, which traditionally is uninsured out in the market. But I think from here on, it just gets more and more difficult, because you may have solved for the existing need. But what about all those people who have not seen your products? Or do not look at you as that trusted distributor?
Michael Waitze
Yeah, I mean, you mentioned just the mere size of the market. And there’s a part of me that believes that you’re not taking basis points or percentage points away from other players, but that there’s a pie that’s getting built that’s getting built bigger and bigger every day. And I think you see it, you know, I think that’s just not our opinion. You see big companies like Amazon coming in and partnering with Acko and you see Walmart buying Flipkart, which, you know, on PhonePe, it’s just that it’s so large that other companies from other countries are coming into the market, because their markets are stagnant. And they’re looking at India and saying, This is just a massive opportunity. So I agree with you. I think that it’s not about competing, it’s about in a way, it’s almost like co-building.
Prannay Batra
Absolutely.
Michael Waitze
That’s what it looks like to me. I want to get back to this affinity business, because this is also interesting. It almost seems like you flip this upside down, right? When you are at Bajaj, Allianz, you are in charge of going out and doing that. And now you have people doing it to you. Do I understand this properly? Right, because now you are the affinity?
Prannay Batra
Absolutely. I don’t find it easier or more difficult to be honest. I think, from my perspective, I’m able to understand my insurance partners needs a whole lot better, because I’ve been on that side. Yeah, right. I mean, I know exactly what’s, you know, top of mind for, for the folks who, you know, are approaching us. And not trying to say that, you know, we use that to any other means. But I think in the insurance business, at the end of the day, if you can co-create a portfolio that makes money for, you know, both parties, and by the way addresses or provides value to consumers, that’s when you’ve really cracked it. Traditionally, again, most distributors, and I’ve seen this happen, you know, in Southeast Asia as well. It’s all me, me, me. And, you know, they squeeze margins, these tweets costs, and it all comes down to the insurer, you know, probably just running for a top-line objective, rather than, you know, rather scampering them to fulfill bottom-line objectives from other means and sources. I think that’s where I’d say, I’m a lot more sensitive to how that needs to get built out. At the end of the day, if you know, you do this for five, seven, ten years, partners are going to start falling off that wagon. Yeah, you know, manufacturers are going to understand that this is something that possibly they will not be able to sustain in the long term. So how do we do that? Right? How do we work with our partners a lot more intelligently, a lot less traditionally, in order to not only provide stuff that is differentiated to our users and consumers, but also delivers a lot more value back to the manufacturer. I think that’s what’s probably helping me with my experience.
Michael Waitze
Yeah. And also when they walk into an office to sell to you or even just to discuss this as a possibility with you. Once they know what you’ve done in the past that must be easier for them to have that conversation because There’s a whole bunch of stuff they don’t have to teach you. They don’t have to explain to you why. You’re just like yeah I get it okay what’s how do we want to do this not do we want to do it? And that’s different.
Prannay Batra
That’s correct.
Michael Waitze
I’d like to thank Prannay Batra Director and Head of general insurance at phone pay for coming on and doing this today. That was awesome. Thank you so much.
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