The Asia InsurTech Podcast was speaking with Vivek Mannige, the founder and CEO of AccelTree Software, about how to increase insurance penetration in rural India, how to build an innovation culture and about life long learning.
Here is the transcript of our conversation.
Michael Waitze 0:00
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 how technology is reshaping the insurance industry. We are happy to have Vivek Mannige, the founder and CEO of AccelTree Software on the show today. Vivek, thank you so much for doing this. I trust you are doing well.
Vivek Mannige 0:30
I’m doing very well. Thank you, Michael. It’s also good to be on the show.
Michael Waitze 0:34
Thank you so much. Before we jump into the main part of the conversation, we like to ask our guests what they think the biggest trend in insurance and InsurTech is, we can say in India, but frankly, it’s globally. What do you think?
Vivek Mannige 0:49
Technology has been used in the insurance industry for many decades. Okay, so technology and insurance gone hand in hand. However, it’s been used mainly in the backend to manage issuance and servicing of policies. And in 2010, tech solutions emerged that digitize many manual processes of insurance, distribution and servicing. That’s around the time, the word InsurTech was coined. 2010. Today, these processes have mature and used widely to contribute to carriers efficiency, and provide indirect benefit to customers. However, today, most people view insurance with a level of skepticism and few purchase it. Probably because of a feeling of safety in the present, that keeps them from thinking of possible adverse events in the future. I think that InsurTech 2.0 is what’s coming shortly, and will focus on the customer by making insurance distribution more tailored to individuals, and also transparent. At AccelTree we call this care of one digital strategy.
Michael Waitze 2:14
You brought up too many things now for me to go backwards. But what do you think changed technologically that made this type of insurance for one or personalization, which is what I’ll call it or hyper personalization possible? Right. And let’s go back to 2010. Because you bring up a good point. You know, back then there were there’s there were tons of technology already. And insurance companies looked at what they had and said, this process is manual. Let’s digitalize that and make ourselves more efficient, this back end process that nobody really sees, but we know exists, is also manual. Let’s digitize that. What changed between 2010 and today? I mean, I know there’s a lot where they said, Wait a second. Now we can digitalize and personalize insurance almost down to one.
Vivek Mannige 3:01
Well, interestingly, in 2010, Samsung introduced a seven inch tablet, okay, that changed the way people looked at mobile devices as a means to work as computers. Till then mobile phones were looked at also as pure devices for communication in when the tablet came, businesses saw the tablet as a small computer. And new products were introduced new software products were introduced on mobile phones. That was the beginning of the digitization that went out of the office onto the field.
Michael Waitze 3:45
Interesting. So there was this low cost idea of combining Android, right, because the iPhone, and I think actually the iPad was also introduced in 2010. But this idea that Android on a 7 inch tablet was now way more affordable, you could fork Android so you could do a whole bunch of other things with it that you may not have been able to do initially. With iOS, or back then it was may even still have been called iPhone OS. So you’re saying it was that thing that said, Wait a second, I can now take this powerful computer with me remotely or anywhere. And then I can serve other things on it and insurance companies figured this out.
Vivek Mannige 4:19
Right. So essentially, they could then take it and face the customer and actually sell to the customer while facing the customer. Insurance selling well, most of insurance sale in those days, and probably even now is done by individuals, agents, producers who actually face the customer and close the sale. Accepted digitization and the Internet has allowed customers to buy insurance, but it still, you know, I don’t know the exact number was probably not more than 10% of insurance premiums.
Michael Waitze 4:59
Yeah, I mean, to be fair I just bought health insurance myself. And I did it through an agent who had a tablet. That wasn’t an iOS tablet. It was an Android tablet. And we did it all face to face, but it was all done digitally on that tablet.
Vivek Mannige 5:12
Absolutely. That’s what changed InsurTech if you ask me, and that’s the exciting part of it. And that’s changing continuously.
Michael Waitze 5:21
So back in 2010. What was AccelTree doing? Like was, when did Excel tree get founded, by the way?
Vivek Mannige 5:28
AccelTree was founded in 2002. That’s 20 years back. And in 2010, we introduced the first tablet based, complete end to end solution for sale of life insurance.
Michael Waitze 5:46
Okay, but here’s the interesting part for me, between 2002 and 2010 you’re developing software, you’re doing stuff you’re in that business, right? What happened? I’m really curious about these internal meetings when the tablet comes out, whether it’s an iPad, you know, an iPad, or a Samsung tablet, you looked at it, and you said, What can we do with this? Was it driven by internal innovation? Or was it driven in partnership with external life insurance who said, how can we use that mobile computer that’s almost as powerful as a laptop, but much more mobile? Like, how did that work? What was that timeline?
Vivek Mannige 6:21
Okay, let me go back a bit to 2002. AccelTree was formed with the objective of accelerating growth of companies. That was the word AccelTree. We had experience in the space of banking and lending. So we said, Let’s build a platform to help us build mobile solutions to deliver mobile solutions. We built a platform, and it took us some years 2002 to 2005. And when we brought it out, and we showed it to venture capitalists, they said, oops, sorry, we cannot invest because we’ve lost a lot of money in in tools. It was soon after the DOTcom Bust. Marty, smarting from it? Yeah. So they said, Sorry, we cannot nobody is going to invest in you for this. You got to know the money yourself. So then we decided to use that platform to build our own mobile solutions. We build them for the financial services industry. And we had a loan origination application on the mobile phone. Okay. So this is all the way between 2002 and 2009.
Michael Waitze 7:36
But back then, between 2002 and 2009, the biggest thing that happened was the iPhone was released in 2007. And then Android kind of copied it and mirrored it a little bit after that. But between 2002 and 2007, if you were building on a mobile platform, you’re likely building on Symbian or Nokia, I’m guessing,
Vivek Mannige 7:55
Even bidding on Nokia 120 pixel by one to 20 Pixel phones. We actually had business solutions that were used for many, many years on those phones. In fact, there was one customer who said, when Android phones came in, they said, We told them why did you switch over? We thought we could sell in more software. I don’t need to and I’m quite happy with this. And it’s cheap. The phone is cheap, and it serves my purpose. So we had those candy bar phones, they called feature phones today. And we also delivered on Symbian. And also on BlackBerry, don’t forget BlackBerry was quite prominent in those days.
Michael Waitze 8:32
I remember it well. So then you saw this change into these mobile devices. Right. And you started building applications. You said for banks and for lending, when did you make the switch over into insurance?
Vivek Mannige 8:43
Okay, in 2010, or thereabouts, I got a call from a company that was hosting solutions back end solutions for an insurance company. Okay, so they asked me Look, there is this insurance company they want some software are you do? Are you interested? So he said, sure. Let’s talk. So they got us got me, an audience with the chief executive of that company. And he told me that look, I’m interested in a sales solution for giving to my sales agents. It was a life insurance company. Do you have one? So I have done a little bit of study of what sale of insurance involves. So I told them Yeah, sure. We have. So what we did was, we went back and we tweaked our loan origination application. The sale process is pretty close to insurance selling. So we tweaked it, we changed it, modified it. And we put it on that seven inch tablet. And two weeks later, just two weeks it took us to tweak it. Two weeks later, we went back to the CEO and he said, here’s what you need. It had signature capture on on the screen. It had location to track the seller. This gentleman was really keen on it. And, you know, it was an instant decision. He said, Okay, you buying it? So that’s how we got into insurance. And of course, we made that much richer product.
Michael Waitze 10:21
Are you an engineer by training? Do you not? I mean, are you a software developer by training? Or what is your background?
Vivek Mannige 10:26
When I studied engineering? I did engineering an IIT Kanpur, okay. Okay. It’s, well, a good experience. And in those days, the computers existed in a center, you know, we had IBM 1620, and 370, and stuff like that, you know, using punch cards. So I learned programming in that. Yeah, punch cards.
Michael Waitze 10:56
So did I. Go ahead.
Vivek Mannige 10:59
Well, that’s my basic education. I got into software, because I joined a company that was in two manufacturing, automobiles. In those days, again, there was no computer science. So they just sort of internally identified individuals and picked them up, who would contribute to the computer systems. So I got into their, what was called a management services division, MSD and built stuff software there. And then after 14 years, I decided to get into having my own company and doing something new. So India’s first computer aided software engineering tool was built by me.
Michael Waitze 11:45
So what was that?
Vivek Mannige 11:47
It was a tool, which was used by software designers to design the system that they were wanting to create. Today, you know, believe it or not, there’s so much of automation that those tools have become obsolete.
Michael Waitze 12:03
For sure. But you’d be surprised. I bet there’s still people out there using them. It was called a case to case tools. In 2010. How many people were in AccelTree?
Vivek Mannige 12:16
Oh, gosh. About 25- 30?
Michael Waitze 12:19
And how about today?
Vivek Mannige 12:21
Under 100. And we always wish to keep it that way. Because we felt that if we were small, we could be nimble, we could be innovative, we could actually create something exciting.
Michael Waitze 12:37
So I want to talk about this internal culture to. For a company that’s been around for almost 20 years, to continue to be innovating, right. How do you create internally that culture of innovation where people aren’t afraid to come and say, even to you, Vivek, I think that the development of this stuff is changing. And I think we need to do this, do you not? I mean, how do you maintain that culture? Because stuff is changing really fast? It’s accelerating, right?
Vivek Mannige 13:02
Yeah. Actually, I think I have tried to do it by leading by example. When AI came in, I told people, why don’t you learn it? But the first thing I did was I took an online course myself, AI and ML. So people ask me, Why are you doing that? I said, Look, if I don’t know how to use it, then you know, there won’t be any fun in getting it made. So I actually did
Michael Waitze 13:31
But also, how can you manage it? If you don’t know? I think there’s a whole division of people doing or working on artificial intelligence, machine learning, if you don’t even know the basics of it. It’s got to be impossible to manage it. This was always my feeling when I was at Goldman, like, if I don’t know how to do your job, how can I manage you through that job?
Vivek Mannige 13:49
So I used to spend weekend studying, my wife said, look what’s wrong with me. I’ve gone back decades, and become a student again, but it was fun.
Michael Waitze 13:59
I love it. I love it. I love it. Let’s talk a little bit more about InsurTech. And when you think like at the core, from your point of view, and you’ve been at this for a while now, right? You’ve seen a lot of changes, how would you characterize how digital insurers and insurtechs are just changing the way insurance is getting done wholesale, yeah.
Vivek Mannige 14:21
Well, there are two aspects to it. One is improving the distribution process making it more transparent to the customer and focusing on the customer. So I believe that till now, we have done a lot of digitization if I go to any insurance company and tell them I will just give you a POS they say I got it we’ve added for years. Then I tell them okay, I can feel better POS they say I don’t need but what’s interesting is all such systems are focused on the on the carrier is solving the carrier’s performance, improving The carriers efficiency, very few of them look at the customer. So I feel that very shortly, insurance solutions will offer customized products to each individual something that will be offered the best coverage at the lowest cost, and continue to be transparent about it.
Michael Waitze 15:20
So when you when you look at customers, when your firm looks at customers, right, because I think you said this earlier. Go back to 2010, a lot of insurance companies were saying, we need to digitize this, we need to put this in digital form, we need to become more efficient. But a lot of it was looking internally, just as you just noted, right? And how do you that there are two things here really? How do you look at the customer experience? And try to figure out what’s going to make that customer experience so good that it can be personalized? And then how do you convince the big insurance companies who will always do this? And I know this from my own experience, whether it’s insurance companies, or hamburger joints, they’ll always say, Oh, we do this internally, we can fix that ourselves. You know what I mean?
Vivek Mannige 16:04
Sure. And that’s the tough one. We start with talking only to midsize companies who are open to something new. Yeah. For example, in the US, we are bringing AI innovations to a midsize brokerage, not the insurance company itself. Because the brokerage has producers who are actually talking to customers, they are the ones facing the customer, not the insurance game. So we introduced new solutions to such a brokerage.
Michael Waitze 16:36
And when you talk to those brokers, they give you examples of how their customers want to interact with the software. I just got health insurance. And I sat with my agent and went through the process of using the digital tools to fill it out. And because I’ve always been involved, even as a trader sitting on a trading desk at Morgan Stanley or Goldman Sachs thinking, if the software was built in this way, based on my workflow, I could fix it and make it better. Right? So always really interested in user experience and that workflow, do you sit with them when they’re with their customers? Or do they explain to you how that works, that you can build better software for them?
Vivek Mannige 17:14
Yeah, well, just remember, we’ve been in the insurance space for 12 years, yep. And we’ve been on the front end, we’ve not really looked at the back end processes, we have always been on the front end, we have been one step away from the end customer, we really not talk to the end customer, we’ve been one step away. But let me give you an example. Okay, when you bought health insurance, and you sat with that insurance seller, and filled up the form along with that person, you know, digitally so many questions that are asked about your health. Now, if the seller is really wanting to push the sale, and you have some pre existing condition, you tell the seller, you know, I’ve got this thing, I’ve got to ask the man, but it’ll say now, how much? Not much? So he said, Skip it, you know, forget it. Don’t need to disclose it, it’s mind. He just didn’t know that. That is bordering on necessarily. Because if you have to go to hospital, and you’ve got asthma, yep, the first thing they’ll do is they’re gonna say you didn’t get this overnight. So you didn’t disclose it properly. So what happened there was a gap between the seller and you, or there was a communication, which was not complete. It’s a good point. So we want to bridge that gap. Using technology using AI, we thought of AI bound transactional communication, like a virtual assistant, which talks to you soon after your body and asks you, look, have you done this? Have you got any health problems? And if you do disclose them, remember, you will not get covered? If you’re not if you have not disclosed something like that?
Michael Waitze 18:57
Yeah. And again, I dealt, so the insurance that I bought, my agent was really awesome. But I dealt with a few agents before that. And they said similar things to me. Oh, just don’t say it. And I thought to myself, but it’s gonna be pretty humpy it’s when I go in for a checkup what I do and don’t have, right?
Vivek Mannige 19:14
yeah, I looked up a lot of complaints online against health insurance. And I classified them and one of the biggest one was about pre existing conditions not having been covered, right, biggest.
Michael Waitze 19:29
Yeah. I want to talk about India, specifically, if you don’t mind. Yeah. And I look at a lot of things in the context of GDP per capita, right? The big cities in India, Mumbai, take, for example, the GDP per capita in Mumbai is about seven and a half times on average larger than it is in the country as a whole. Right? Which must mean that outside the cities, tier two, tier three, and even the suburbs of those places, just are a different place than the big cities in India. Can you talk a little bit about how How those sectors are now sort of getting insured or getting related to these insurance businesses, particularly through technology.
Vivek Mannige 20:09
Right? Firstly, there’s something being done by the government for reaching out to rural India. But it’s not adequate. It’s rather slow. You know, whatever the reason, governmental processes take time. Today, about eight to 9 million people only are insured under that scheme. Okay. Okay. Some a lot. That’s not a lot. That’s nothing. I mean, we’ve got
Michael Waitze 20:32
1.3 billion people, 8 million people just literally a drop in a drop in the bucket. Yeah.
Vivek Mannige 20:37
Right. And more than 60% of them are in rural India. In fact, that’s, that’s a next, let’s say, project or it’s not a project, it’s my next wish to be able to deliver insurance to common man in rural India, at low cost. And the only way can reduce the cost is to reduce the cost of distribution. But that’s one of the large highest costs. And the second is to educate that person, because he, that person does not understand the true benefit of insurance, you know, what happens if he comes under a truck? Then who’s going to look after his family here, those things don’t occur to people, right? There is a level of insurance in rural India for crop insurance, it’s there. But then the poor person who’s taken insurance doesn’t know how to play it. It’s it’s a matter of education. So just recently, I was discussing with my colleagues, and we said, We’ve got to first educate them. Give them an app by which we can push them information about how they can get benefits through insurance, and make it exciting. So you’ll probably see that coming out soon.
Michael Waitze 21:47
How do you do that? So again, just a few examples. This idea of financial literacy, financial inclusion, I like to now start calling it insurance literacy, but at a higher level, right? It’s just like, well, how does finance work? And why does it matter to me like you, and I also think that people have what I call, like the fallacy of right now, right now I’m healthy right now, I’m not getting hit by a truck right now. My crops are fine. So why do I need this insurance thing? But once you become financially literate, you understand the benefit of $1. Today is worth more than $1 In five years, and all this other kind of stuff, right? Discounted cash flows, and all these other things that are important. But how do you create engagement? That is also educational, right? If I look at a company like life, pal, and Indonesia, they literally have 500,000 followers on Instagram, and 4 million people read their blog every month, they’re trying to educate people about insurance in a way that’s both informative and fun. How do you attack that?
Vivek Mannige 22:46
Well, it’s a little different out here, because logs are not really looked at rural India. A phone is used for communication. To most people in rural India, even today, use those feature phones, those candy bar phones, because they just want to talk to their loved ones. That’s it, or for business purposes. So the only answer is talk to them.
Michael Waitze 23:13
Really, but you said you were building an app. Right? So what does that app do? that’s
Vivek Mannige 23:17
That’s when you know, AI comes in. We’ve talking about AI based transactional virtual assistant, which is like a chatbot. But talking Chatbot. Okay. And we believe we can we can deliver content to them and make it exciting, make it fun. And this is all on the phone, not on a computer, not on not on a tablet, not even on an Android phone. because not that many people have Android phones. And even if they do, it’s the younger generation. Right. And once they have get they sort of move to the the younger generation tends to switch to urban jobs. Yeah, they move. Yeah, so not 60% is still back there, but it’s going to change. And the only way to make it change is to give them literacy, give them information and make it fun.
Michael Waitze 24:11
So do you build your own conversational AI? Or do you partner with companies like Unifor that are that have been doing this for a while
Vivek Mannige 24:17
We partner with a company in which there’s a cross holding that means the promoter of that company is in invested in us is an early investor in us. This is a company founded in the US in California called Predictika. They think like we do. We also create our own technology engines. So they created this AI engine from ground up. They didn’t take what was readily available out there. So they have a multi agent engine, something that can take a very complex question asked, split it up into multiple questions and answer them in sequence or together. It’s a very interesting company and we have been working with them for the last four years.
Michael Waitze 25:00
I’d love to be able to talk to them to learn more about how that works.
Vivek Mannige 25:03
I can introduce you to, to them. The person was my was a one year away from me in college. So he did a PhD in, in today what we call AI. But back in 1987, it was you just not called AI?
Michael Waitze 25:23
Oh, sure. You talked before about distribution? And how do you think the entry of companies like PhonePe, right, that have 500 or 400 million people on their platform, using the payment rails in India, to connect to people, and then distributing insurance to them? How does that change the tenor from your perspective for this distribution, that is really important to you.
Vivek Mannige 25:56
As I had mentioned earlier in this conversation, selling insurance is still something that is done face to face, phone pay is attempting to use a mass consumer base to not sell them insurance, but to offer them an ability to purchase insurance. That’s so difficult. I mean, I buy it only if I need it, and I don’t need it. So I don’t buy it. And when I need it, it’s too late.
Michael Waitze 26:23
Do you want to talk to me about some of the new things that are coming from Excel tree. Like we already talked a little bit about this idea of moving into some of the rural places and some of the technology that you’re building there, what’s the next big idea coming?
Vivek Mannige 26:36
Then I thought this was the next big idea. You know, talking to the customer getting using AI to actually focus only on the customer, we call it care of one digital strategy. And that’s our approach, we are not pushing conventional digital tools, but pushing solutions which will sit on these tools. Interestingly, we also introduced during COVID. Actually, it was introduced before COVID, a tool by which a seller could talk to the customer and share the screen. And it’s not sharing a screen, I actually do not do it. So server, I allow you the customer to get on your device and see and get a form which is exactly the same as what is on my screen. It’s like a peer to peer information sharing and all the logic sits on my tablet. So you can use your phone, you can use anything you want. And no data is lost, we got a patent pending for this. And we believe that this is going to make it’s going to be a somewhere in between face to face silly and remote sell.
Michael Waitze 27:46
So you’re saying is, again, let’s go back to my health, health insurance purchase experience, I sat with my agent in front of her tablet, you know, mess around with my finger on the tablet, right? Did all that stuff signed to my name. But what you’re saying is it’s because of COVID Maybe because of COVID. But even without it right? If I’m in a major city, but I have a client in a small town, I can then show them my screen, we can work on it together almost like a Google Sheet kind of thing.
Vivek Mannige 28:14
It’s almost like that with a difference. All the logic is sitting only on my tablet. And what you get is only the user interface to my tablet. So actually you’re putting it into my tablet without realizing it. And it’s getting an all the validation, all the underwriting everything is done on my tap. And interestingly, there are two aspects to this one is voice is available on the same map. So I’m talking to you. And if you wish, you can enable video call also. Within that, we found that using smartphones a video call is really pointless because it becomes like a one centimeter square on the screen, which is absurd. Yeah, but it’s actually duplicating, duplicating 100% duplicating your experience with your health insurance seller. Except that now he’s sitting at a different location, everything continues exactly the same. You fill up the form you sign, in addition to signing, you can you can upload documents. When you upload those documents, they don’t go into a server, they come to me, they come on my tablet, so privacy is maintained,
Michael Waitze 29:24
which is really important. So the last topic I want to cover you is this idea of transition. Right So you started Excel tree 20 years ago, you weren’t originally in the insurance business. It sounds almost like you were building software and banking now in insurance. But now it just seems like you can build anything. Is there a move into just being kind of like an idea firm as opposed to a specific type of technology firms that makes sense.
Vivek Mannige 29:57
Actually, you have always been an idea firm only, we produced a first transactional loan origination system on the internet. And I demonstrated it, believe it or not in 1998, in a symposium in a Gartner symposium in, in Orlando, and we had this booth over there, and we are showing people this and everyone, everyone came to me and said, you know, you cannot do this on the internet. It’s not possible. Nobody is going to use it.
Michael Waitze 30:34
Why, though, because it wasn’t secure, because they didn’t trust it. Why?
Vivek Mannige 30:37
You did not it because it was not adequately secure. Because in those days, only content was displayed on the internet, you know, website, stuff like that. So they could not believe that you could have transactions of this nature workflow based solution. Fair enough.
Michael Waitze 30:56
Yeah. Yeah. I mean, back then, it was just like reading the New York Times or Time Magazine.
Vivek Mannige 31:01
Exactly. So you have been you have been innovating and trying to be innovating all along. You know, in fact, my colleague called it IDR. Tech. So instead of saying InsurTech, because we’ve been producing new things in the, in the space of technology over the years, and that’s what makes it fun. You won’t believe the number of products get thrown away. And shared Oh, yeah, we have shared products. We’ve done some exciting things. I just didn’t find buyers, because whatever it was, most often it was because it was too early. Yeah.
Michael Waitze 31:39
It’s really interesting how timing matters on some of these things. I mean, this transactional engine that you built in 1998 was early. It really was because people looked at it, it was almost like magic. Like you can’t do this. The only thing you can do here is display things. Which wasn’t actually true, right?
Vivek Mannige 31:54
Yeah, actually said it’s impossible. I mean, forget it. And today, you know, I’d like meet the same people.
Michael Waitze 32:04
Oh, my God. Okay, that’s that sounds unless there’s anything else you want to cover. That is a great way to end. Is that cool? Oh, that’s cool. Okay, let me just thank you. I’d like to thank Vivek Mannige, the founder and CEO of AccelTree software. That was awesome. Thank you so much.
Vivek Mannige 32:21
Thank you, Michael. This was an excellent experience. I enjoy. Thank you.