EP 148 – Jess Tham – KSK Insurance – We Should Embrace Change and Not Fear The Inevitable

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Michael Waitze worked in Global Finance for more than 20 years, employed by firms like Citigroup, Morgan Stanley and Goldman Sachs, primarily in Tokyo.  Michael lived and worked in Tokyo from February 1990 until December 2011.  Michael always maintained a particular focus on how technology could be used to make businesses more efficient and to drive P/L growth. Michael is a leader in the digital media space, building one of the biggest and fastest-growing podcast listener bases in the region.  His AsiaTechPodcast.com show has listeners in more than 130 countries and his company, Michael Waitze Media produces some of Asia’s most popular podcasts.

Guest
Jess Tham

Jess Tham currently serves as the Executive Director and Head of Claims, vast experience in managing claims at various stages of its lifecycle from motor to accident and health insurance. Tham has been part of the wider family at KSK Group with headquarters in Kuala Lumpur, Malaysia, since 1994. She was instrumental in spearheading KSK Group’s positioning as one of the top 20 most valuable brands in Malaysia within her claims and customer services role. Prior to that, she was attached with Berjaya General Insurance and Maybank Assurance Berhad in Kuala Lumpur, Malaysia.

The Asia InsurTech Podcast spoke with Jess Tham, the Executive Director and Head of claims of KSK in Thailand, about how incumbent insurer KSK is working together with InsurTech startup Sunday.

Find the transcript of our conversation below.

Michael Waitze
Okay, we’re on. Hi, this is Michael Waitze. And welcome back to the Asia InsurTech Podcast. This is the only podcast in Asia focused on insurance that gives entrepreneurs, thought leaders and investors a platform to discuss how technology is reshaping the insurance industry in Asia. And frankly, globally. Today, I am super happy to be joined by Jess Tham, the Executive Director and Head of claims of KSK in Thailand. Jess, it is super great to have you on the show. How are you doing this morning?

Jess Tham
Hi Michael. Thank you very much for having me here today. I’m glad to be on the show.

Michael Waitze
Super to have you. Before we get into the main part of the conversation. What do you think is the biggest trend in InsurTech and insurance in Thailand and by extension, the rest of Southeast Asia.

Jess Tham
I will say that data mining and analytics is definitely one of the biggest trend here. InsurTech as the new sales channel, and digitizing after sales channel is definitely the trend that everybody wants to emulate. And I can say that, you know, the point as it is now in Asia, is a very fertile ground for flurry of activities. And more so for startups. And also, insurance companies would like to also look at it from the point as to how to improve their sales. Like I say that is also a situation whereby with the high population, high education level, increasing household income, makes it more attractive to sell.

Michael Waitze
That’s a really great answer. I want to get back to some of that in a second. But can you give our listeners a bit of your background? And maybe also some background of KSK for context?

Jess Tham
All right. I’m the Executive Director and also the claims HOD of KSK insurance, a general insurance base in Thailand. I’ve been in the industry for about more than 20 years. First doing claims, then normal auto underwriting before switching back to claims. It will seem at that time that underwriting was more repetative and back office. So that’s the that’s the change that I decided. So I was based in Malaysia with Kurnia Insurance, the largest motor insurer, then before moving to KSK Thailand in 2016, which was previously part of the Kurnia group.

Michael Waitze
And can you explain what the Kurnia group is and maybe how its progressed over time, this is a first generation company is that true?

Jess Tham
The starting point of Kurnia Malaysia was in 1991. It was a fully homegrown insurer. I was based in Malaysia Kurnia insurance, the largest motor insurer then, before going to KSK, Thailand in 2016, which was previously under the Kurnia group. So Kurnia, Malaysia, started as a home fully homegrown insurer in 1991, and then quickly established themselves to be the largest motor insurer, it was a situation whereby we overtook the market very quickly with a lot of digital initiatives, a lot of painstaking activities and so on. But nevertheless, it gave us a very strong starting point. So that’s where, after that, have we also acquired and started having a base in Thailand and also Indonesia?

Michael Waitze
Do you remember back then, that feeling? And the reason why I ask is because the claims is kind of the most intimate moment between a customer and the insurance company, right? Buying the policy is great, your agent is really great and stuff, but when the claim comes, this is where we say the rubber hits the road. Do you remember like that feeling of I’m going to do this claims thing as best as humanly possible, because that drives the growth at some level. No,

Jess Tham
Definitely. So the thing is that basically what transpires that at the early stage, everything was very manual, you know, papers, everywhere, files totally piling up. And to a certain extent, it was so difficult to find your files and so on. So it was a very, very painstaking situation whereby it was difficult to service the customer in that, in that sense, and involves a lot of manpower in managing processes, a lot of activities is really very detailed and so on. So, in that sense, it has progressed very, very rapidly if I were to compare 20 years back and until now, is totally a very huge change. So what I can say is like for example, for example, definitely the files, the piling up of files are no longer there is all, you know, definitely a total paperless environment, we’re able to get all the files, were able to look at it, and at the same time, process the files with digitization, and improve the processes further. So it’s shorter shortens the time in terms of our actual process. So previously, it was like, from a 14 days kind of a scenario, it progresses quickly. And now we’re able to even approve the claim, you know, within a day or so that will be the kind of a scenario that, you know, a total change of environment is really seen. So it’s actually, if you were to reflect back, that’s, that’s the exciting times, that you’re able to witness all these changes, and, and also look at it into the future as to how the future would be, you know, with further enhancement on digitization. Right, that will be the very interesting part to see.

Michael Waitze
So let me let me reflect something to you. When I first started at Morgan Stanley in New York in 1987. I did not have a computer on my desk. And I argued, not argued, but I begged for one, I wanted one so badly, because I knew it would make me more productive. And it did. And it was kind of from that point on where my career started to take off, because I took the technology, and made everything that I did more productive, using Compute. And I’m curious, when you first started, was there a computer that was dedicated to you? And if not, when you got one, did you feel the difference that technology made in your job and in your life?

Jess Tham
I can say that to a certain extent, um, well, I was a bit lucky in that sense that I have my own computer. So that was a very basic, a very basic system that was so called supporting the process. So if we were to look backwards, still, if you compare the current situation, and and also previously, it’s a total change, you know, in terms of internet speed, in terms of information, in terms of, let’s say, the data, that analysis that as a claims person would need to do. So it has progressed tremendously. Now with the click of a finger directly, I can get all the data that I want, as compared to previously, I’d have to like painstakingly get the information here and then trying to piece everything together, just to try to understand the fraud and also the claims and the customer’s journey. So that will be that kind of a total change that that is has been impressive. Did

Michael Waitze
you maintain a role in this sort of technology development, not writing code? For sure, I did not do that either. But in making sure that as technology progressed, that that customer journey became better because you were using tech to do that.

Jess Tham
Yes, yes, definitely. So the thing is that as what the as part of our transformation towards digital, so we are working very closely with our InsurTech partners, and looking at it as to how from a technology point of view other things that needs to be done, how to improve our processes further, how to rebuild everything from scratch, and so on. So maybe, perhaps I’ll give you a little bit of history for clarity first, please. So so that means basically, if you look at, you know, the current time market, right, the current time market is predominantly Motor, having nearly 60% of the country’s GWP it was a very competitive market with over 40 insurers eyeing the same cake, our wish the top 10 Insurance takes like 70% of the chunk. So since Thailand is very much a brokerage market, the high brokerage Commission also adds up to the operating costs of the insurer. So as you’re aware costs managing is also part of a very important factor in terms of profitability. So what transpired is that you know, if you look at, you know, how KSK does things differently from the first generation and the second generation? Okay, so keep citing Konya, Thailand as an example. So having had continual losses and needing to skill, so it was decided that our company has to disrupt ourselves and cut we what we did was that we cut 90% of our motor business, and we actually undergone a mere 360 degree transformation from a motor based insurer to health. So part of the attractiveness as on the health side right as to why we wanted to change our business model and so on. So part of the attractiveness of the health market is it contributes only like 5% of the GWP. But more importantly, is the fastest growing product at 15% CAGR. So, we had undertaken a very aggressive approach in our transformation in the May 2018, which no insurance actually there, too. So, what we did was a couple of things. Firstly, as said, within a direct 90%, cut off our motor business, so it resulted in a very sharp drop and decline in a GWP, in tandem. So, if you look at it in the expec, is actually quite a scary kind of a situation that many insurance may not dare to write, because it’s, it results in a much, much less GWP to support the liabilities, and also the operating costs. So what we did was that, we still continue with our obligation as a good insurer to ensure that we pay any outstanding claims, or any other incoming claims that on the risks that we have accepted earlier. So the third thing that we did was that we had to restart from scratch into the Thai health space as a newbie, since we are not known in the market as a health insurer. So that was also one of the new business direction that we had, of course, there’s also having to look at changing our processes to suit the new business environment, we had to revamp the manpower support, retrain the people as part of the business, process reengineering. And all those sounds like starting from scratch, I have a situation. So I can say that is the biggest challenge to an insurer is to is finding the right platform. So finding the right platform to support a journey, a simplified journey towards digital transformation is the most important key. So in fact, in fact, we have such a huge roadmap, it is no longer to work in silo. And also spend effort to build our own team support the transformation, it definitely will be a very long journey. And at the same time, we also need to be expected to execute a trajectory growth right? Within the shortest time. So that’s where we had to look at, you know, how to do all these things ourselves. If we were to do all these things ourselves, is definitely going to be very drought draining to us. What is it

Michael Waitze
about the culture of KSK that made it possible to accept that fear? Was I was gonna ask you about that? Was that scary, but you just jumped into it and said it anyway. But it takes a very unique corporate culture to say, we’re gonna drop our GWP by 90%. We’re gonna jump off that cliff. I just curious about that environment that was created that everyone was like, Okay, we have to do that, like, how did that happen?

Jess Tham
Okay, I have to say that, you know, most most importantly, is the clear direction as to the dictation as to what is the new path that we want to pursue, but more importantly, is also the shareholders genuine support in terms of the new inch initiatives and so on. So that is what mainly drives the whole transformation process, because without the shareholder support without the Board of Directors support, it will be something that, you know, it’s not agreeable, because you need to have a situation whereby your finances are strong to support the immediate change.

Michael Waitze
Right, because if your GWP goes down by 90%, like he said, you still have to support the infrastructure and your outstanding obligations. Right. And you said this, one of the things we decided for sure, was that we were not going to walk away from those existing obligations as a good insurer, right, which you did not do. And that’s great. Was this the genesis of Sunday as well? In other words, what was that process and experience like of taking the well established and incumbent insurer and combining it with an InsurTech? Right? What was that like?

Jess Tham
Yeah. Okay, so The thing is that what transpired was that when the Kurnia insurance Malaysia was delisted, so that’s where we set up Sunday Holdings in Singapore. So that’s our, that’s our new base. So basically, with the, with the new structure, we incorporated into a few infrastructure that supports the whole group. So firstly is the license holder being Kurnia insurance Thailand, the other one is Sunday Ins Broker. So the other brokerage that supports us, the other licensed broker, doing general and also life. And we also have Sunday Tech, who’s actually supporting in terms of our technology, support, our requirements, and so on. And of course, we also have another company called Sunday Care, which is into the third party administrator platform. So with the combined effort of all the companies, that’s where we started looking at, you know, how to do this, you know, if if, let’s say, KSK, were to have this new business direction we need, definitely we need support, to ensure that that how we are going to go through the process of a full digitization within the shortest time possible. So that’s where we look at our InsurTech partners. If you look at it in that context, there’s a few major things that you can see, like, for instance, before InsurTech partner, they had used their data mining expertise, using external and internal data for analytics purposes. So this has actually helped us to automate pricing, change the scale, the business, the underwriting process, even for complex case, wire dynamic data modeling, and turning all this insightful analysis for better pricing and also a predictive modeling. So that’s, that’s something that, you know, helped us a lot in terms of our initiatives. And from the claims perspective, just now you’re asking me the question like how much claims have changed, right. So basically, if you look at the context, like just now, he was just like, talking about paper documents everywhere, you know, how to find the documents, this and that, right? The current situation is also something that we look forward to is actually to not only to help us in terms of our documentation, not only to help us in terms of our turnaround time, how we are servicing our customer having various touch points being addressed, you know, but more importantly, is also looking at data in itself, how to manage the data, to fine tune our fraud detection measures, and so on, with all this support and collaborative effort of our InsurTech partner. So coupled by our assessors knowledge, so we had actually been able to build our own AI assit machine learning claims assessment. So that’s, that’s something that we are putting a lot of effort on.

Michael Waitze
And has that improved the fraud detection?

Jess Tham
To a ceratin extend there’s still a lot of work that needs to be done, admittedly is always a situation whereby you will need to continually fine tune and also address, let’s say, any shortcomings, any oversight, and looking at it from the point as to how to have a full fledged AI in the near future.

Michael Waitze
So one of the things you said at the beginning of this conversation was that it was really exciting. Back in the early days when the growth was really strong. Just kind of overtook, like the motor business in Malaysia. But I can also hear in your voice now and also hear in the terms that you’re using, you’re talking about artificial intelligence, you’re talking about data, science, all these things. These must be new to you, they’re new to me for sure. Do you have the same level of excitement now, even at this stage, where you’re thinking like oh my gosh, I am learning all this amazing new stuff every day. And now you’re kind of back to the beginning of and we can see the growth trajectory for the new business as well.

Jess Tham
Yeah, yeah, I can say that basically, it is definitely an exciting kind of environment now. There is actually a number of things that you know, we need to look at from a human point of view, right. So human, I always feel that, you know, we are always face in a constant change environment. Change is necessary. So that’s something that you know, we should embrace change and not fear the inevitable So that’s the most important thing that I feel that, you know, we learn as also part of the transformation process. And I think the other thing that we also need to look at is always be ready to learn and relearn and re skill with technological outlook. Because if we are not able to embrace the technological outlaw, if we are not able to, you know, look at it from the perspective that what are the things that is around us, that can help us, I can say that definitely, we will be lagging behind. Yeah. So, of course, another important thing I guess would be is a can-do-spirit, that means, you know, when you undergo a transformation process, at times, you may not be able to achieve what you want, it may take a longer time, to a certain extent for certain activities and so on. But more importantly, is you do not lose sight as to what is being planned and how to execute it better.

Michael Waitze
Yes. Was there an understanding at the beginning of this process, that a mindset change amongst the staff at all levels, right, from senior staff, to even new employees was gonna have to occur? And was that done purposefully? And can you see that happening continuously? People just like changing the way they perceive the structure and the roles that they’re performing? And how technology fixes that? Do you see that?

Jess Tham
Yeah, I can see that basically, um, when we started the change, there has been in the past, some people having fear of having this kind of a fear factor, I guess, it’s actually a very common kind of situation, right for, for people to be fearful of change. So because they’ve been like, you know, doing the same thing for ages, so they don’t feel that there is a need for change. So what transpired was that we really had to undergo a constant kind of communication, and also establish the fact that we need to go forward, that’s the most important thing for everyone to be in having the having the same mindset, we all of us will need to have to go forward together, there is also a situation whereby, you know, looking at it from the point of the staff, for instance, so there will be a situation whereby some of them are fearful of losing their job, because of the digitization and so on. So this is where we step in, and we tell them and we show it to them and say that, hey, basically, it is something that will actually help you, technology is there to help you so that you are no longer being bogged down to do redundant work, you know, you will be able to free yourself to be in a very good person, a very good perspective of actually doing your job, the job that is needed, that needs to be executed. So that’s where we decide to examples to them, like for instance, if a certain job can be digitized, you know. So those will be the steps that we would use, let’s say RPA other technology like OCR, and so on. So that’s where they will be able to look at it from the point that okay, as a claims assessor, this is my job, truly focus on doing the claims assessor, it frees my time to really look at the cases in detail. So so that’s the complex of it.

Michael Waitze
Yeah, I mean, it’s always been my understanding and my theory that technology would help make somebody who’s good at their job great at their job. Right. As opposed to telling them they don’t need to do their job anymore. Humans want to deal with other humans. They don’t want to deal with machines. And I just want to ask you this again, does it sometimes surprise you when you hear the word RPA? Or robotic process automation come out of your own mouth? Something that didn’t even exist? When you when I first started working? Do you know what I mean?

Jess Tham
Yeah, exactly. I have to say that technology has been thoroughly impressive, even for the fact just like a simple mobile phone, right? You can practically do everything on your mobile phone nowadays. As opposed to I mean, my time it was like a situation whereby it’s like a box, and everybody had to lug it around. So the technology change has been both really impressive. But one thing that I I feel quite impressed is that you see if you look at it from the point of the InsurTech companies, right? To me, the InsurTech companies are like Christopher Columbus of the 21st century, you know, because they are the ones that are exploring new technology for us, opening up a new frontiers and showing us what are the capabilities and the things that is around us that can that can enable the insurer to embrace. So that’s the one thing that I’m actually thoroughly impressed on. Because just now I was touching on a bit, like, you know, how the InsurTech partners was able to use the data mining expertise and how to share the external and internal information to us, right. So, so basically, just not to touch on that part and also touch on the claims part. But I think, I think on another point is that, that let me just look at it in the context that Okay, another example is the fact that the InsurTech is now taken as a new form of sales channel, in reaching out to customers versus the traditional approach. So to the consumers in general, right, normally, what the is like a black box to them. In terms of insurance, right. Though there are differences in the market footprint in Asia, like, for example, in Malaysia, in Indonesia, they are very much agency based, whereas Thailand is more of a brokerage ratio, right. So I can say that there is a situation whereby when is look at the context of the insurer. So what we what was done is that, you know, our InsurTech partners, was able to have a continual engagement with with the customers via their channel. So because they are also looking at it from the brokerage point of view, right. So it has created an added leverage for us in understanding our customers wants, instead of the standard off the shelf packages, so we are resulting from that we are able to customize our coverage and benefits better, we are also able to embed and also bundle the products into our partner as part of our sales strategy. Right. So another area that we put emphasis on is digitizing every touchpoint whether it is internal or external. We are actually rebuilding our infrastructure further to complement our traditional system to support our, our new business environment, right. So because basically as say, scaling business doesn’t mean increasing the staff force. So identify the gaps that can be digitized to achieve our company’s goal will actually enable the staff to play a more progressive role in managing our processes instead of being stuck with redundant and also manual work which can be automated, right? So in line with this, this is actually in line with our company’s mission to be fully digital as a full fledged digital insurer, which we are placing. So lending strength from our InsurTech partners has actually given us a strong head start on this. Our partnering has resulted in a strong after sales services, which includes like the app admin platform, you know, we also had the equipped with real time claims overview, a support app to to assess their benefits, conduct purchases, cashless steady consultation, online case management, AI, symptom checker and so on. So these are the support and and key to the service depreciation, which in turn is boosting our GWP safes. So that is something that that is very interesting. So part of the also the interesting part is that, though we are on our third year, in the health space, or the insurance are also now seeing as a competitor, and no, not a newbie. So in that sense, this is something that we feel that we are making inroads and our continual effort to grow together with our InsurTech partner is bearing fruit in that sense. So admittedly, have we gone for the transformation based on our internal strength and capabilities in the past? I can, I can say that most probably we will definitely feel, especially since moto product was very much ingrained in our business.

Michael Waitze
Yeah. And it all I mean, also moving into health, right? Like you said, there’s 50% CAGR every year. So that’s really important. And if it’s only 5% of GWP, it just means that the opportunity is much larger than something that was already 60% of GWP. Yes. I’d like to thank Jess Tham, the Executive Director and Head of claims of KSK in Thailand. That was really super thank you again for doing this.

Jess Tham
Thank you very much, Michael for having me. Truly appreciate your time.

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