The Asia InsurTech Podcast spoke with Amerson Lin, a co-founder, and the CEO of Giga Cover, about the impact of the COVID-19 pandemic on the gig economy and how Giga Cover has pivoted since we last spoke with Amerson in August 2019.
Find the transcript of our conversation here:
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 in Asia. Today, we have Amerson Lin, a co founder, and the CEO of Giga Cover on the show. Amerson, great to have you back. We talked about this offline. But just to let everybody else know, the last time you were on the show was August 2019. In retrospect, it feels like first of all forever ago, but it was also a much simpler time. Yeah.
Amerson Lin
Yeah, for sure, Michael. I wish we were back in those days.
Michael Waitze
So do I. I’ve never looked back and said, I wish I was doing that now. But this is the first time in my life where I’m looking back and going it was better than than it is now. Uhm, what’s new?
Amerson Lin
Well, how much time do you have Michael.
Michael Waitze
All the time in the world for you. Seriously, what’s new? What’s going on?
Amerson Lin
Well, yeah, I mean, let’s talk about a bunch of things that happened to Giga Cover over these two year. We weren’t scared by the pandemic, right, not by a longshot, you know, our revenues, our value proposition, you know, that is all challenge during the pandemic. So, so maybe when I can start with is, well, first of all, thank you for having me on. I think I should recognize that, you know, appreciate the time. And likewise, you know, if there’s any other things you’d like me to speak about the future, you know, happy to, to offer that. So maybe I can start first, Michael, by telling you, you know, what problems we face when the the pandemic hit us, right. So in 2019, when you when you heard about us in the interview, we were very much 100%, insurance focused business, primarily gig workers in Singapore, particularly the driving segment. So these were ride hailing drivers from Gojek, taxi drivers from all over comfortless, MRT. We were going to b2b as well as to retail. And why because this is a very large segment in Singapore. And they do face a lot of risk, right? They were independent. So they obviously didn’t have the sort of group level coverage. That was missing, right? So when the pandemic hit, guess what the first thing that dried up was transport. Right? So whoever we worked with whatever benefits they were giving it workers, and these are workers who get incentives and benefits, because the giving rides, you know, they were just unable to continue doing that, right. No more rides, no more transport, no more rides, no more business, no more benefits. Right, that was the contracts we had, that was the arrangements. So when it dried up everything, not just our revenue, but also our ability to protect these drivers, right? We converted a bunch of them on to self buy so instead of being sponsored, you know, 60% of them chose to continue our coverage. But still, that’s a 40% drop off, you know, on protection levels that have existed before a pandemic. So what do we have to do, well number one, we need to look for new problems to solve, you know, new industries to work with. Thankfully, a lot of the work the jobs went to food delivery, logistics, cleaning, healthcare, right. So we follow. We started working with Homage, FoodPanda, pick up Google X just to name a few clients. And there we found more opportunities. So yeah, that that was one of the biggest things we had to do was to move into other industries. Now at about the same time we also made the decision to launch in Indonesia, right now, we made it of course, before the pandemic hit. But things had already been set in motion. We had a country launcher, few BD business development, staff and operations. So we tried say, Okay, well, we got this, you know, life has to go on. We banked on the fact that the pandemic would bring about more education and awareness, right, our protection. But you know, a couple things that happened in Indonesia that are very interesting, and I’ll be happy to dig into them. But then the other thing that happened, right, we had already committed to an expansion. And so even during the pandemic, that was something that we continue to drive and push. And I would say that it made our business a stronger business, right going through the pandemic in two countries at the same time. Reacting you know, definitely was tough, but it made us stronger. And the last thing I would say, as a matter of a summary is the needs of our workers, our users also saw a shift right from protection needs, I think we saw how many of them are looking for more work. Right job straight up, more workers flooded the supply equation, so less work to go around many more workers. So cash flow, and cash just became a high concern, many were looking to get their earnings earlier. So we launched an earnings, early access to earnings product, which I just call earnings advances, which is very similar to early bridge access, except for us, since we deal with independent workers. This is more of you know, just earnings instead of salary. Right, so Michael, yeah, those were the top three things that happened during the pandemic. So we’re out of the pandemic kind of now. I mean, Singapore is coming back, Indonesia, they got 80% vaccination in Jakarta. So we in two countries, we’ve got a much broader scope insurance as well as some financing. And yeah, we hope 2022 will be the year that we can grow together with the recovery.
Michael Waitze
Can I just back up to this? If you listened to the story, it sounds like all of those things just happened in a nice easy order. And I know, I know, you don’t mean that. Right. And I heard you laughing. Yeah. So you’re just you’re looking back in retrospect and going because I wouldn’t sounded like because that’s probably not what it was really like. But um, yeah. And I’ll tell you why, I’m saying this right. You may remember that at the beginning of 2020, might have been in March or April, I can’t remember, you know, Theresa, and I said, Okay, look, the pandemic feels like it’s a thing, but probably a short term thing. Why don’t we do an episode like a roundtable episode and talk to people that we know in the InsurTech, an insurance space, and just find out, like, what the impact has been for the last month or so and what they think the future looks like when this thing ends because it’s gonna end, you know, soon? Well, I think that was a fairly like a well accepted belief, even though it was completely wrong. So I’m curious when you look back on March or April of 2020, or whenever it was, when you realize like, Okay, this thing’s a thing. Now. When did you when did you as a management team, sit around and go, oh, there could be a 40% drop off. And I liked the way you framed it, not just in our revenues, which is important, but also in our ability to give cover to people that need it that haven’t had access to it before? Because that’s important to us, right? Like, when did that realization hit? And what did you do as a management team to build that resilience into your business and say, Wait a second, we have to get some other products out there. You don’t I mean?
Amerson Lin
Absolutely. Michael. When the pandemic hit, the first thing that happened to us in Singapore, we went through a circuit breaker, right, some kind of lockdown. You know, we thought the same way, you know, maybe we’ll get out in three months. So why don’t we just continue BAU? And, you know, we’ll Yeah, we’ll recover q3. So it was only in q3, that it became a bit more apparent, right, this is going to be a long game. So it’s q3 that we made a decision management board. Number one, we needed to get a bit more money in our balance sheet. So we raised small round, just for more for more runway. And then two, along with that base was a variety of changes to our strategy, cost structure. And to the problems that we’re solving, I think I’ve always been a problem focus person and say, the business. So what can we do for the drivers in this period, and guess what they weren’t going to deliver at work and logistics, right? So we followed them into those industries as well. And they also we found many other workers in the same predicament. That’s where the problems were.
Michael Waitze
Right. Were you ever scared as a management team that just things were just going to go pear shaped and we’re gonna be recoverable. Do you know what I mean?
Amerson Lin
Oh, for sure. I mean, even now, I’m scared.
Michael Waitze
We’re both laughing but not because it’s funny, right? Because it’s just easier to laugh than it is to cry about it.
Amerson Lin
Yeah, like I’ve gotten so used to worrying about existentialism that, you know, yeah, I come to accept it, you know, just do the best you can, do right by your customers, everything will be fine. So were we afraid. Well, the good news was the macro trends, I think still held in place. You know, it was it was clear that the gig economy was here to stay. The pandemic pushed even more people into remote work, right even more people to even more businesses to say I don’t want a fully employed workforce, I want a hybrid workforce. I want some portion of my workforce to be freelance or contract. So with this backdrop, you know, Michael, I thought, okay, I was I was worried. But you know, I think the big picture still held true. And if our investors were comfortable and confident, yeah, I think we could right through the crisis. So that’s my mindset.
Michael Waitze
So walk me through this. I don’t want to talk about Indonesia, per se, just because at one point, Indonesia was getting hit really hard, right. And it’s just a massive country. But it’s also really fragmented, right? 18,000 islands. So from a movement standpoint, for that government and for their health system, healthcare system, it’s just hard. Right? And I think everybody there was operating in good faith, it was just hard to manage that type of fragmentation, particularly from a pandemic perspective. But what was the idea behind these learning advances, these productivity loans and some of these other services where you kind of morphing into kind of a full fledged fintech? Right with insurance as well? Is that fair?
Amerson Lin
I think that’s an accurate representation. You know, when we first started this journey, insurance was not the be all of our business, we actually said, get worker benefits from day one. That’s what we wanted to go after. It’s just my own bias, everybody else’s bias. At that point, we think of benefits, you tend to just think of insurance and health care, right? Because we’re so used to employee benefits. But if we were to think of benefits from a first principles approach and look at self employed people and their lives, and actually Financial Services is an equally large part. Right. So So rethinking this ground up, was what the pandemic forces to do. And then not to mention, just the apparent needs during the pandemic, which is, you know, that front center, we are asking, Oh, can you get us more money? Can you get us loans? You know, so it was very clear. Just the benefits for them, what would get them to work for one business versus another was, you know, can I get paid earlier? Are you gonna protect me and my spouse? For my kids, my dependents basically, from bigger risk, right. So yeah, we just follow the problems.
Michael Waitze
Yeah. And interestingly enough, when you named the company, which may seem insignificant to people, right, but even Apple did this, they changed their name from Apple computer just to Apple because it was no longer a computer company. And frankly, you didn’t have to go through that process, it’s Giga Cover, we just cover you for all the benefits that a gig worker would need. And you can develop other FinTech products easily and it fits right in. So in my from my background in financial services, when we were building new products on the trading desk, or even new trading systems. I was very involved in building out the technology infrastructure, because I wanted to build in a flexibility, which meant that if something happened, that we didn’t anticipate, we didn’t have to go back. And reinvent the wheel from an infrastructure and systemic standpoint, we could just add it on. Was almost like micro services before there were micro services so that the all the things were separate, but were inter operable. When you when you made these decisions to build out other products, like the earning advances and the loans and stuff like that, how difficult a technical challenge was that for your team to build on top of the infrastructure that you’d already built to handle the Insurance part of the business?
Amerson Lin
Oh, fantastic question, Michael. A topic I could talk about, since I also have somewhat of a technical background. So from the start of our business, we always saw ourselves as a membership program. Right, not as an insurance distribution channel. So from day one, we want users to be Giga Cover members. We are the mega cooperative. In Indonesia, they call it the mega Koperasi. Right. And that’s how we built this group, which has a significant size that we can use to negotiate better underwriting, better pricing, you know, and so on. So, that also worked itself into our architecture, right? So we have subscriptions to our memberships that we have different tiers and memberships and each membership tier gets you a different bundle of products. Right? So we’ve been doing that already in terms of the technical architecture, you will buy a subscription and you get earnings protection or personal accident and in Singapore with the throw in you know, health care access to some of our panels, panel doctor’s panel dentists. So adding in another add on, if you will, earnings advance as a product was similar to adding on another insurance product by adding another health care product. Let’s say we wanted to add on COVID, you know, PCR tests? Yeah, we just we just we just create the product. But what was different for the first time was the KYC that we had to do. Right? Because this factoring business, if you will, its earnings advances is basically bringing forward money that you have earned. So it’s not really financing is more factoring require us to KYC the business that we work with. Right, so they are the ones repaying us at the end of the pay cycle, not the user, so users get the earnings early, and we collected from the business. Right, so who is the risk? Or the risk is the business but if they don’t pay us, but it may shut down? You know, and go bankrupt? Right. So that is why we do it. That was the technical challenge. Right? How do I build software to quickly you know, firstly, you know, be able to parse Indonesia, sort of documents, financial statements, you know, give a line of credit kind of, are these a limit? Yeah, to the amount of advances we could do for a particular client. Right. So, so architecture wise, yeah, plugging a new product was already sort of, in our DNA, but the KYC was something new.
Michael Waitze
Yeah, it’s interesting. And we, we, I think you and I could spend a lot of time talking about software development and the infrastructure around it. And when I say infrastructure, you know what I mean? I don’t just mean like, the servers that it runs on. It’s the actual structure, right? Of like, what a CTO does, I think people misunderstand, in some cases, they don’t always writing the code. They’re building the structure around which all in which and through which all of the development will be done. And that’s really important for this exact reason, so that it builds flexibility into your ability to design products and add new things in as opposed to having to bolt them on in a way. That’s not efficient. Yeah.
Amerson Lin
Not to mention Miko, you know, if we’re not dealing with wages, wages are very regular. Right? You don’t change wages every month. But with freelancers, their Commission’s on your platform that’s different every month. So our ability to integrate, you know, or to provide a way for them to upload data on a regular basis. Yeah, that was critical.
Michael Waitze
Yeah, so like the EWA thing, right. The Earned wage access thing is interesting to me. But it’s very gets consistent, right? In other words, I’m working 40 hours a week, I’m making $9 an hour. I know what how much money I’ve made by the middle of the month. And if I can, I’m not even really borrowing against it. I’m kind of borrowing against it. Right. But you’re right. It’s different between access and factoring. How does that work logistically? In other words, how do you get access to that money? After it’s been earned? Does it come from the company? Do you build that software with an API connection that then the companies connect to, which then feeds into a bank account for one of these freelancers? How does that work?
Amerson Lin
Yeah, so first of all, it starts with the client relationship. And that is not just on the earnings advances piece, we always pitch and provide, you know, a more holistic membership solution. So the buy in is at that level. And then the next step is getting the earnings information. And how do we feed that to the user so that they can see like, How much money do I have and, you know, apply policies against it. So the clients will apply policies, I code, you can only advance at most twice a week, sort of twice a month. And at most 75% of your existing earnings, right? It’s really up to the client. So building that flexibility in is part of the challenge. Now the second part, which is your question around? How does that feed into the transfer of money? So I’ll break it down into two parts. The first one is transferring money to the workers. And then the second part is collecting that money from the business. So the first part, yes, we’re building some very interesting stuff that we’re building up payroll accounts, which are backed by virtual accounts that have been being built, thanks to the banking infrastructure players in Indonesia. So we can do that on an automated basis, you apply for your advance if it’s the policy requirements, it gets auto approved. You know, the next day, you see some of money in your bank account in your virtual account. Right, and it’s backed by a proper bank, right? So you can do everything as per normal transferred to pay bills, etc. However, the collection from the business, that’s the second part, that’s still a fairly invoice manual process, and and you know, it’s a right now there’s not too much of an operational burden. But at more scale, it might be and that’s where we will have to build something more interesting. And we have some ideas in pipelines, but they’re just not as ready as the first part of the process.
Michael Waitze
But it’s interesting that you get to deal with all of these, what I will call sort of fascinating tech technology challenges, right? In other words, you have to build this it doesn’t exist, you’re not copying something that somebody already has done. You have to figure this stuff out on the fly. That’s fun. At some level, no.
Amerson Lin
Oh, for me, it is, that technical background. And it also creates business value, right. He says overheads and keeps prices low. And what I’ll say Michael is, you know, people see this earnings advances as a completely separate thing from insurance. But because we have a better sense now of the earnings and income, that actually drives a lot of the underwriting for the insurance products, and we already have. We’ve got earnings protection, right? That as an insurance product, we have personal accident, with sums assured. So how do you get the optimal sum assured and pay the optimal premium? Well, that was based on your income? Right, so actually sees to it’s fairly synergistic, you know, within the space you’re in right now. And not as two separate products.
Michael Waitze
Yeah, not at all. I mean, once you get access and understand the data around what somebodies earnings are, even if they’re not, in fixed intervals, you can get some sense of average and mean reversion for their earnings. There’s so many other products you can offer them. And the whole idea of ability to pay means you can actually still pull all these people together understand that even if they are nothing in January, because it’s slow, you know, February, March are going to be busy, because historically, they’ve been that way. And they can create really creative products around how they pay for their even if it’s just insurance, right? Because normally people make upfront payments for insurance. But you can have periodic payments, because you can have faith, that the data tells you that their ability to pay is going to be maintained. It’s just interesting the way that product construction then can get done.
Amerson Lin
Exactly. And you talk about embedded insurance earlier, this is exactly where it fits in. This is exactly what we’re doing. Right. So for certain advances. Sorry, for all advances, we offer an embedded protection as an opt in, right, if you choose to as part of the advance for your fees to include, you know, a little bit extra, but to include, let’s say hospital cash coverage. Right, we make that happen. And that allows us to collect very small micro premiums, you know, 10 cents to 50 cents, right? If we were to do it on individual basis, just to transfer costs would make that impossible. But because we are already doing something with you. And the transaction is of a certain size. Yeah, this is negligible. So that’s how we’re embedding and providing this a little bit more coverage, right to our users and getting them more acquainted of insurance, we hopefully make some claims so that you know, they can even enjoy some of the benefits. And yeah, so we learn that insurance is not a scam. It’s it’s something that is valuable. And you know, have them be our evangelists.
Michael Waitze
Yeah. And the creativity, because you make a really good point, right? You can anybody can take micro insurance premiums, 10 cents, 12 cents, whatever it is, right? But it costs more than that to actually make that payment digitally still. But if it’s embedded inside a much larger payment where the cost benefit actually makes sense, then you can do that at scale. But you couldn’t do otherwise, particularly in the micro premium payment business. Yeah.
Amerson Lin
Exactly. Exactly. So. So that’s what I think also is, you know, the general conclusion in Southeast Asia about insurance. It’s a it’s a much lower penetration, product, penetrated product. It’s yeah, dedication levels are lower with the coming up, thanks to the pandemic. But a busy two ways to push it either you embed and small and you know, they can accrue and become pretty much significant. Or agent net, right. That’s my push product. So it’s really just these two models, anything in the middle? So far, I haven’t seen too much success.
Michael Waitze
Yeah, exactly. It’s funny. listening to you talk, I get the sense that while the pandemic was really painful, and maybe even a little bit scary at the beginning, that it accelerated your teams like the necessity for your team to build some of these other products that maybe you already wanted to build, but may have waited to build because, hey, the insurance thing was growing so fast, and the market was like moving in your favor. But now you were forced to go out and do this stuff. And in a way that’s a big benefit to you, but also to the people that you’re serving, right, your clients or your members. Is that fair?
Amerson Lin
Oh, yes, I think the pushing us on our drawer plans, if you will, was was definitely something we didn’t expect. I’ll tell you, I told you an example of something happened in Indonesia. So, in Singapore, we launched a free COVID protection insurance in the middle of the pandemic. And we said, you know, this was some goodwill by some of our insurer partners. And the takeup was great, right. Lots of signups. Everybody wanted it, there were a few claims, you know, success. So we thought we’ll replicate this in individual. And we see the same thing, right? The basic COVID protection, you, you’re on our base, so we’re just going to give it to you. If you have a claim, feel free to use this form as a simple form, get a payout. And we just gave it out, right? So we didn’t ask for any consensus that you’re signed up, you’re signed up, we already have the information. But what surprised me was there were quite a few people writing in to say, you know, take me off immediately. Because in their culture, some of them believe that given insurance means that you don’t believe in, you are challenging your religious beliefs. And you’re not you’re not having enough faith. Right, so just learning some of these things. Yeah, that forces us to really accelerate our understanding of Southeast Asia and their approaches to insurance.
Michael Waitze
Yeah, I mean, that’s an unbelievable lesson about localization and product localization, right, and that there’s not like one size fits all. Even in the insurance business, where you’re thinking, I’m going to give you this product for free, it must be good for you. But the interesting result of that, where someone says, If I receive this and accept it, to others, and to myself, it will look like I’m challenging the faith that I that I that I espouse. And that’s fascinating. No.
Amerson Lin
Yes, yes, I was completely caught off guard. So the other way of, of implementing this is that you give the group the business, the protection. Right. And if you’re part of the group, okay, you’re, you’re just automatically covered effectively is the same, but just culturally, it came across in a much different way. Way more acceptable.
Michael Waitze
Well, I learned, I learned a lot today, actually, to be fair, but that’s, that’s awesome. You mentioned financial literacy. So I just want to talk about this before I let you go. If people need to be included, right, so financial inclusion, and they also need to be literate, which is what you mentioned. There are some companies that are handling this in, in really interesting ways. Right? I think I mentioned this to you offline. So company like Lifepal has 4 million people. 4 million monthly average users for their blog which is just a blog for an insurance company. Right? That’s kind of amazing. And 500,000 followers on Instagram. And they’re very engaged, obviously. What’s your view on that as a strategy for customer acquisition? Or just customer engagement?
Amerson Lin
Well, first of all, I’m very impressed by what Lifepal has done. And those are some real numbers. Yeah. And, you know, for them to engage the consumer in such a way. You know, it’s going to be more and more effective as they get, you know, maybe even viral. Now, we’ve, we’ve approached it slightly differently. So overall, yeah, I think the education is the first piece that has to go to be done. You know, it’s inviting speakers. It’s showing examples of successes, claims and whatnot, you know, good stories around life changing claims. So you want big sums that really move the needle? Yeah, I think it’s stuff like that, that the methods right, so yeah, so good luck to Lifepal. Actually, I kind of know that they did some some network land, as well. Sure. So we’ve approached it from, again, the clients we work with, since we’re very client focused, so we do webinars with our clients. Right, we go, Well, you know, we could we would go down in person. invite everybody to lunch talk. You know, talk about what it means to save. How would you budget, what it means to protect yourself from certain risks rinsurance, how to not have over leveraged yourself on loans. So we will do that in person. Now. We do it more in zoom. But yeah, we’re also approaching the literacy piece, just from a slightly different angle right from your employer.
Michael Waitze
Yeah, really interesting. Okay. It’s amazing. Like this is one of the fastest 30 minute conversations I’ve had, I’ve learned a ton. Is there something else that you want to cover that I missed? Or should I just let you go?
Amerson Lin
I think, Michael, that. I think what we chatted about is is so summarizes what Giga Cover has gone through the last 18 months. They just the final word. You know, we’re still bullish on the mission. Right, our mission is to get as many people covered benefits. And also incentive programs. We see conversations happening in Southeast Asia that happened in the US and UK, one or two years ago. Uber, Lift, Deliveroo, they face problems around are your workers sufficiently protected, right? What are the minimum rights? Do they get sick days? Right, so these conversations are coming here. PMD, our prime minister spoke about this in his national day speech. Right, he said that food delivery riders are not protected sufficiently. And that has echoed through the ecosystem, you know, sort of seeing the positive repercussions of this coming up. And hopefully, that will still be filtered through the rest of Southeast Asia. Right. So I think we’re on something. We think that these conversations will help us and also, you know, help the workers, right. Yeah, so you know, thanks for listening. Thanks for probing and asking the right questions. Yeah, I think that’s all for today.
Michael Waitze
Awesome. Let me thank you as well. I want to thank Amerson Lin, a co founder and CEO Giga Cover for coming on the show today. That was really great. Thank you again.
Amerson Lin
All right. Thank you, Michael. Take care.
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