The Asia InsurTech Podcast spoke with Rob Schimek, the Group CEO at bolttech about the power of embedded insurance and how bolttech is aiming to be the rails that the insurance industry builds itself on.
Find the transcript of our conversation here:
Michael Waitze
Okay, we are 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 just how technology is reshaping the insurance industry in Asia. We are very excited to be joined by Rob Schimek, the Group CEO at bolttech. Rob it’s great to have you on the show. How are you doing today?
Rob Schimek
I’m wonderful, Michael, thanks for having me today.
Michael Waitze
It is my pleasure. And I really appreciate you making this time. Are you just getting home by the way?
Rob Schimek
I am. Just I just back from the Thanksgiving break in the US.
Michael Waitze
Oh, you’re so lucky. So were you in the Philadelphia area for Thanksgiving.
Rob Schimek
I was, I was and I flew out the next morning and was able to be here for the first day of business of the new week in Singapore.
Michael Waitze
You are so lucky. My parents, by the way are in Bucks County.
Rob Schimek
Oh, that’s my home turf.
Michael Waitze
I went to high school in Pennsylvania. Anyway, I just thought I’d throw that out there. Yeah, it was great. What do you think is the biggest trend in insurance and InsurTech in Asia, and by extension, the rest of the world?
Rob Schimek
Michael, my view is that embedded insurance is certainly picking up pace globally. And it’s really not hard to see why. It offers pretty much a win win scenario for all the parties that are involved. It offers the potential for being a high margin, high growth revenue generator. And when you pair that with the fact that insurance continues to be largely under penetrated in the market globally, then I think we’ve got a recipe for success. So you know, enabling non insurers, for example, to become a part of the insurance industry is a big part of the opportunity there. And you know, we’re really essentially creating a new distribution model for an old industry, one of the oldest industries around, that hasn’t fundamentally really changed for many years.
Michael Waitze
I want to get back to that. Excuse me, I want to get back to that in a second. Because I think that is very important to discuss. But before we do that, let’s back up and give our listeners a little bit of your background for some context.
Rob Schimek
Yeah, so I am a US native, you can tell by this accent. I live today in Singapore. But I spent 18 years with Deloitte and Touche out of the New York area, I have my claim to fame early on was that I helped to take MetLife public. Way back around 2000. And in 2005, I left the public accounting profession to really try my hand at it for real, being the CFO of the largest business unit for AIG. So now, by the way, I didn’t create the global financial crisis.
Michael Waitze
I wasn’t going to go there.
Rob Schimek
But I was there for a wonderful company to try to help navigate them through the global financial crisis. I joined in 2005, stayed with AIG for 12 years. And ultimately, by the time I was done at AIG, in my 12 years, I had become, ultimately the CEO of the commercial insurance business for AIG globally. That’s pretty much shorthand for it was the general insurance business for AIG, in all the countries that operate around the world. So in 2017, I left AIG and had the wonderful opportunity to join a growing opportunity out here in Asia, and joined initially FWD, the life insurer here in Asia. But that was really as a pitstop to becoming the CEO of the general insurance sister company to FWD, which is bolttech. And so that’s what I do today, loving my time here in Asia, and I really live in Asia, because I think it’s so hard to understand this market. And to really take advantage of the opportunities unless you really are enbedded in it, living here in Asia.
Michael Waitze
I mean, I could not agree with you more. First of all, I’ve been in Asia for over 30 years. And I looked at the financial crisis from the other side, or from another side, not the other side. I was at Citibank and Citigroup when that was going on in Tokyo. And I agree with you, I don’t think you can be I don’t think you can understand business out here or anywhere, frankly, without being on the ground there because you just have to get it by osmosis. You cannot get it from some other country you cannot helicopter in and figure it out. Had you been to Asia or done business in Asia a lot before you came out to Singapore.
Rob Schimek
Yeah, my responsibilities at AIG included all the countries around the world. And I had visited out here many times, to Asia to help our businesses succeed around the world. But I had never actually lived here. But I knew that I wanted to, I had lived in Europe as part of my responsibilities at AIG. And it really convinced me as much as I loved living in the US, it convinced me that I wanted to live outside of the US. And having lived already in Europe, running Europe, the Middle East, and Africa, I knew that the next frontier was Asia. And I’m so glad that I’ve now almost got, let’s say, three and a half years under my belt here in Asia, truly enjoying it, and it’s everything I would have hoped it would be.
Michael Waitze
Yeah, so most of my buddies went out to Morgan Stanley, and Tokyo for two or three years and never left. So hopefully, you’ve packed enough socks. Um, I want to get back to this idea about insurance penetration being low in Asia, and what are some of the ways that we can address this, but also maybe address why that’s the case first, and then how we not fix it, but how we address it?
Rob Schimek
Yeah, you know, look, I think that for sure in Asia, one of the issues is really that, that there hasn’t been a lot of education, there hasn’t been a lot of education for the consumer about what kind of protection what kind of insurance really is available? How do we make it easy for these people to buy insurance? And then it’s complicated. And how do we take something that’s complicated, make it less complicated, make it more affordable, make it readily available, and quite frankly, make it very pertinent to their situation, and their needs, not to what someone in Europe would have needed or someone in the US would have needed? But what do you need right here in Asia. And so I don’t think I just feel like, this is the frontier that hasn’t yet been served the way that it should be. And I think that this is one of the fastest growing markets in the world, and it will continue to be.
Michael Waitze
I don’t disagree with you at all. I do mention when I talk about just financial literacy, right, the idea that Lifepal has 4 million people looking at their blog every month and a half a million people looking at their Instagram account. And, you know, you talked about new forms of distribution, which I want to get back to in a second, too. But they’re also new forms of creating or helping this financial literacy. If I had told you five years ago or six years ago that somebody would be using a photo app to be creating insurance literacy or financial literacy, you probably would have laughed me out of the room along with everybody else. But that’s what’s happening. Do you see yourselves doing that as well, using those types of channels for to help with the literacy issue?
Rob Schimek
Yeah, I think, to be honest with you, there’s so many companies that are helping with this. And there are just so many opportunities to help with this. The truth of the matter is, I think there are a ton of insurtechs around the world that are aiming their sights on how can we improve the literacy in these underserved markets? Asia is one of them. And so for sure, our goal in that is just to help continue to make this something that people really understand. How do we make it easy? How do we make it fast? How do we make it uncomplicated? How do we provide choice? And that’s been our primary focus.
Michael Waitze
For people that may not understand exactly what embedded insurance is, right? So if we go back to the old distribution models, or the traditional ones bancassurance, right, you have a bank account, your bank sells your insurance, you talk to an agent, an agent sells you insurance, but embeding has been kind of in the airline industry for almost forever, but I don’t think people thought about it that way, right? You buy a ticket? Do you want travel insurance? Do you want luggage insurance and stuff like that? Is there something that’s changed either from a technological standpoint, or from a platform standpoint that hass just made it like more, what’s the right word, frictionless to embed insurance and other places?
Rob Schimek
It’s never so easy to say that it’s frictionless. But I think the main thing that’s really changing is there’s a changing mindset. And so what I mean by that is, that many times in the past, when someone owned a customer relationship, they sort of had this mindset that said, if it’s not a solution for the customer that I created, then it’s not good enough, right? And we’ll run into this trap of it and all that has to be has to be my idea has to be built by me, you know, and whoever me is, is is that company that owns the customer relationship andI think you know, if you rewind for a moment and just think about the conference of the sharing economy, okay, we’re out here in Asia, it’s Grab, which is the way that many of us get transported around, or whether it’s any of the other ways that we get our meals delivered during COVID. But this concept of sharing economy, and people recognizing that you almost have to cooperate with others in an ecosystem and in a partnership, in order to provide a full solution to the customer. And if you really are willing to do that, and change your mindset around that, then this concept of embedded insurance becomes really a live possibility.
Michael Waitze
So Apple has been doing this for a while as well right through a product that they call Apple Care. And again, I don’t think most people when they buy Apple Care, think about it like an insurance product. One interesting development that I’ve noticed that I just noticed, I’m not saying it’s only been going on for the last six months is a company in the US called Extend. And Extend is basically selling themselves as the Apple Care for everything else. This is also a really interesting, another really interesting example of embedded insurance. Right? So that means now that you talked about the sharing economy, there’s also a platform economy out there. Companies like Tokopedia, companies, like you know, Gojek goes along with Grab, right, but Lazada, Shopee, that are all trying to get into the insurance distribution business. And I think you’re right, that this creates not just new channels, but new ways for consumers to understand better the experience of insurance, if that makes sense. In other words, if you have health insurance, and you never get sick, you may wonder why I have insurance. But if you buy a product and a breaks, and you get a product back, now you understand the benefits. And then you think, where else can I use this in my life? Is that fair?
Rob Schimek
I love the way you just put that Michael. Well, I mean, there’s two really interesting points that listeners might not be aware of. The first one is that bolttech is to Samsung, as another provider might be, for example, to Apple. And we agree that when you are buying your new cell phone, for example, and you buy that brand new technology, and you recognize by the way, that it’s your lifeline to connectivity to the rest of the world, people will say, I don’t care what you do to me, but please don’t take my phone, don’t let me be without my phone. And so, so this idea of an entry-level product that is embedded into the customer journey, at the time you buy your phone, you protect your phone, and oh, by the way, if you’re going to protect your phone, then maybe bolttech can help you protect all of your home electronics. And if we can help you protect all of your home electronics, maybe we can help you protect your home. If we protect your home, why not protect your auto in your home. And you can sort of see the logical connectivity. You used a phrase that I also love, which is that you talked about it being kind of a platform. And that, in its root is really very much what it is that bolttech has created. So we are in fact, we refer to ourselves as an insurance exchange were the largest technology-enabled insurance exchange in the world. So $5 billion, in US dollars of premiums transact across the bolttech platform, connecting customers, to distribution partners, to insurers. And that platform is really the heart of what we do at bolttech. We use this embedded insurance, like insurance for your cell phone, as an entry-level logical product from which we can do many other things. But the very first thing we’re trying to do is find good solutions for the customer at the point of need when they’re buying their original product. That’s the embedded insurance angle.
Michael Waitze
Yeah, contextual, right. It has to be contextual because if it’s not that does the meaning for the consumer potentially doesn’t translate. You kind of said this in passing, but I want to focus on it for a moment if you don’t mind. The connectivity of the devices that people provide are endemic to their lives, whether and you and you mentioned the sharing economy, whether you’re an Grab driver, or a food delivery person, or anything that has to do with a digital economy. Is there a way to use insurance to ensure connectivity as well?
Rob Schimek
Yeah, I love that line of thinking. As a matter of fact, at bolttech, we refer to what we do is the power of connection. That’s actually our tagline. So this concept of connectivity, for us, it is everything. You know, when we were creating bolttech, we began by just reimagining insurance and protection through the eyes of that consumer. And we asked ourselves the question, how can we make insurance more accessible and more convenient for the customers? And we say, you know, we want to enable the customers to say, to get a yes answer, when they’re asking, you know, can I do this? The answer should be yes. Unless, I’m only focused on what I can tell you. When a customer says, Can I do something? The answer has to be yes. And, and in many ways, we kind of built this thing that we refer to as that power of connection, because we set out to build the world’s leading technology enabled ecosystem for protection in insurance that connected the customer, the distribution partner, and the insure all at the same time. And so we think the answer is yes. If you put yourself into the, into the position of what I’m really trying to do is find a solution for the customer not find a way to sell my product.
Michael Waitze
But this is a very subtle difference, though, Rob. It’s very subtle, right? It sounds obvious to you. But this idea that I’m trying to do what’s right for the customer, rather than trying to find a product that I have to sell to you is super nuanced, I think, right? But it’s really important, because I think over time, customers really notice the difference that in a way, it’s almost better to say today, I don’t have anything that I can sell you rather than take this product, it’s not appropriate for you. Does that make sense as well?
Rob Schimek
Yeah. 100% to end. You know, again, I think that this is really a mindset shift. And when people think, you know, InsurTech are coming in, and we’re going to disrupted the world and and change everyone’s mindset, the very first thing I say is, gosh, I don’t even think of us as trying to disrupt anything. What we’re trying to do is we’re trying to enable everything, we want to enable the customer to get a yes, we want to enable a insurer to be able to have access to a customer base that they might not otherwise have access to. We want to enable distribution partners to say yes to their customer and own the customer relationship, not be the kings of one particular product or one particular space. But but find a way for those customers and say we love you, and we want to be your partner.
Michael Waitze
So I’m just going to interrupt you for a second and say, I think you just came up with the title for this episode. Enable the customer to get a yes. Well, and now that I’ve said it, I think I have to use it. I want to go back to this idea of connectivity and also of claim, right, because I think it’s really important for first time insurance owners, right for policyholders to get a claim, just to have it happens. They know what it means to get it. Is there a benefit, particularly on the connectivity side to create a parametric claim for them. So that it’s really like almost instantaneous, a trigger happens, you get paid. It may not even be a big claim. But it’s something where you just feel it almost instantaneously. And there’s a little dopamine reaction that says, I think I love insurance kind of thing.
Rob Schimek
Michael, you said something earlier that about sort of subtle differences. And this is one of those interesting, subtle differences. So we refer to ourselves as providing this connectivity for protection and insurance. There’s an important nuance there. Protection and insurance. Sometimes that protection we’re providing is not technically insurance. Now, let me use an example for you. When we work with Samsung, and we’re providing the coverage for Samsung Cares Plus, I think some of their equivalent of the product that their competitor offers. So Samsung Cares Plus that’s an example of a place where they want to make sure that that solution is going to be a yes answer for the customer. And so so it’s almost like an extended warranty. And so we’ve created an introduced in certain locations, product where we are designing it to just give a yes answer to the customer when they have a claim. So I’m going to use an example for you. In Hong Kong, if you picked up your phone and threw it into Victoria Harbor. Now, you don’t need to do that. Look, everyone has a rough day. And if you have that rough day and you pick your phone up and you’re just throw it into the harbor, we will replace that phone within six hours, period. And you and if it were insurance, technically insurance? The answer is we probably wouldn’t. But but because it’s an extended warranty capability, we think of it more as a service and our service is the benefit the service. And the end this benefit the service is that we are doing what you asked about earlier, we are making sure you can stay connected. We’re focusing on the power of connection, and think about the experience of a customer who has lost their phone, doesn’t know how they lost it. Maybe their phone broke, or their child was playing with their phone, which is many times not a covered claim. And in a pure insurance environment, we want to find a way to say yes, our net promoter score when we do that, viewed again, through the eyes of the customer, it’s remarkable. Our NPS, it’s very common for us to see NPS in the 70s, in the 80s, in the 90s. That’s because the customers love the experience. And that first product doesn’t have to be insurance, it can be more of a service, yes, we’re providing a replacement of your phone within six hours, so that you can remain connected. From there, we can connect you into insurance products. But the very first experience in that world is such a positive experience, that the customers then want to deal with this insurance exchange for other potential insurance needs.
Michael Waitze
Right. And to be fair in that particular example, to the customer it feels like insurance. Even if from the regulatory standpoint, it’s a different product in a way, it doesn’t matter what you call it, as long as they feel like they’re getting a benefit, because this builds brand equity, so that when someone says the Samsung Care Plus, they’ll think, okay, I trust this, how can I get more of this in other parts of my life, even if those products are different technically, and they actually end up being insurance companies? I want to ask you about, sorry, go ahead.
Rob Schimek
Well, I was going to say, you know, I said earlier, it’s complicated. My responsibility, and the responsibility of bolttech is, we’ll deal with the complexity. We’re the ones who have to understand the regulation, it’s very important to operate within the regulatory guidelines and the laws and regulations every country. But that should be the complexity that we take upon ourselves. Our job is to make it simple for the consumer, so that they don’t have to worry about any of these things. And this difference between extended warranty and insurance, that’s all technical mumbo jumbo, lets keep it simple for the customer, they just need to know that someone understands all of that.
Michael Waitze
So at some level that technical mumbo jumbo or that feeling that it is that has been true for big corporations as well. I’m always curious about how the sales cycle for new products or new platforms change over time. Right. So when bolttech goes out for the first time to sell these types of new products, technology based products, to big companies, there must be some pushback is the wrong word. But just huh. I don’t see how that fits in with the products that we offer. And I don’t know how we’d integrate it. But do you see that sales process getting easier? In other words, that there’s now a poll for this, like, Hey, I got to talk to the guys at bolttech. Because I need this thing. Whereas before you’d show up? And they’d say like, I don’t think we need this today kind of thing.
Rob Schimek
Yet. Look, our biggest competitor in the world is the do it yourself mentality of potential business partners. And, and getting behind that, and changing that mentality so that they understand, actually, we can just enable you to move faster to move better. You know, I came from an organization that that is a wonderful organization, but it’s 100 years old. And there’s definitely a desire to be as advanced as possible from a digital and technology perspective. But there’s a technology debt. And by the way, that’s true of everyone who’s been around for a long time. You know, the real the real challenge here is to convince people that we can actually just enable you to move faster to move better. And by the way, if we help you to move fast, and then you want to build it yourself, do that. Build it yourself and that there’s no need for you to wait to be able to provide this solution to the customer until you build it yourself. And to me, there’s some element of getting our partners to understand product and understand different solutions that they can offer to their customers. But the biggest change in mindset, the biggest in the world, is getting people over the DIY. Do It Yourself mindset that permeates the world.
Michael Waitze
So as a business owner, myself, who does sales for his own business, I love when somebody tells me, that’s okay, we’ll do that ourselves. Because to me, that’s just an opportunity three months later. I’m not saying that’s what you’re saying. I’m just saying for me, and I’ve seen this in a bunch of different places. And the reason why is because like you said, what you’re doing if you’re doing it well, right, has to look easy. Right? But simplicity is creating simplicity is very complex. And what I think people find out, at least in my business, and I’m sure in yours as well is that we’ll do it on our own. And they try to do it on their own, and then think, Wow, this is way more complex than we thought it was. Let’s go to somebody who has already solved part of this problem and worked together with them in partnership to figure this out better. Is that fair?
Rob Schimek
Yeah, that’s very well said. Look, we we’ve connect over 700 distribution partners around the world, to over 150 different insurance carriers around the world. It’s the combinations of product and carrier and geography that we can bring to the table. It’s really remarkable. But it really does take a potential distribution partner, potential business partner, to really recognize, one, that they’re willing to offer someone else’s product in an effort to provide a solution that’s the best answer for the customer. And two, for them to recognize that they don’t have to build it all themselves. And as you said, sometimes that sale won’t happen on that first or second or third try. But that’s the beauty of it is that long term, this is all potential upside for us. As we think about who’s our next sale to the answer is everyone we already spoke to.
Michael Waitze
Everyone that already said no. Yeah, it’s like my dating life. Um, I strongly believe I strongly believe that no company succeeds alone that no person succeeds alone, right. And I struggled to explain this properly, right. But it just means that if you have to partner and collaborate with other people, and as the world becomes more complex, it’s hard to build every component on your own. Right, we can get into microservices in a bit. But I want to talk about the this platform thing that I brought up earlier alluded to earlier. Do you see bolttech looking later, or even today, if I just don’t know this, like companies like Salesforce, like companies like Shopify, where they have the Shopify market, where other people build things that Shopify can use via their API, and then those businesses as well turn into billion dollar businesses, we saw this happen with Shogun, who builds a page builder for Shopify, Salesforce has been doing this for years. Is that something that bolttech considers as well? Like, how do you look at that opportunity by creating a marketplace that where people can build stuff vetted by, you know, and curated by bolttech, stuff that we know works, but then creates other businesses for other people as well, almost like an app store.
Rob Schimek
I again, very much love the way that you’re thinking about all these points, because it’s the way we describe it to. We would say, we want to be the rails that this industry builds itself on. And we’re so happy to be a software as a service solution, that people then can build their capability right on top, we create the headless API capability that enables a company to use it, and to be able to do other things that maybe we might not have even imagined, with the product, but what we know for sure is we start with a foundation that they otherwise would have taken years to build. And so that’s for us a great path forward, we kind of offer a very modular capability. And when I say modular, I think of it like Lego blocks. So with us, you can just have the technology, which is software as a service. But we’re also a licensed insurance broker in just about every market that we operate in. And if you need a licensed capability, then we can help you in that way. If you’re already licensed and you just need the technology we can help you in that way. And if you need something somewhere in between. We’ll almost do any permeation in between, depending on what your needs are as a partner.
Michael Waitze
Do you feel like as an experienced insurance executive that you just in the exact right place at the exact right time where, like the fun part of technology and the fast pace of technology is being applied to insurance in a way that it wasn’t even like five or 10 years ago? Like, do you feel the same excitement that I feel? I think you can feel it in my voice. Yeah.
Rob Schimek
Yeah. When I began this journey that created bolttech back in 2018, is still just then an idea. But what was very clear was that this was really a huge opportunity. The truth of the matter is that success many times is just when good timing, and good fortune can meet preparation. So we’ve been working on this concept for a while. But the truth of the matter is, I think that the conditions in the marketplace are just perfect right now for an InsurTech.
Michael Waitze
Yeah, I mean, just so you know, one of the other things I like to say is everyone’s an overnight success 10 years later. It just looks easy on the outside. I want to end with this, can you talk a little bit about the recent capital raise that you did, and its significance for bolttech going forward?
Rob Schimek
Yeah, so we’ve had the great distinction of being the largest series A in the history of the world for an InsurTech. And so I say that with a bit of humility, and a bit of pride. So let’s start with that, with pride, anytime you do something, for the first time in the history of the world, the world’s pretty old. And so as long as there’s something good that you’ve done, then that’s a really neat accomplishment. But what it really is a reflection of is the fact that we’ve had the opportunity to partner up with some really great strategic investors. And those strategic investors are here in Asia, they’re in Europe, they’re in the United States. And those strategic investors all see fundamentally the same thing we do, they see that this is an opportunity, as an enabler as a platform that the industry can build itself on, to really have a long runway of potential success. So I think for us, we had the opportunity to be born out of an idea, officially in 2020. And here in 2021, we’re already a unicorn, and part of the largest series A in the history of the world. Our intention, by the way, is to put the money to good use in ways that people would hope to keep investing in the technology, to keep investing in the platform, to make it better, simpler, easier for customers and for distribution partners to use and to access. But also, you’ve really got to have a good relationship with the regulators. And so around the world. We invest a lot of our time and a lot of our efforts and a lot of our resources and getting the licenses and developing the relationship with the regulators so that they understand what we’re doing and why it’s good for the consumers in their marketplace.
Michael Waitze
That is the perfect way to end. Rob Schimek, the Group CEO at bolttech. Thank you so much for doing this today.
Rob Schimek
Michael, thanks for having me.
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