The Asia InsurTech Podcast spoke with Sorabh Bhandari, a co-founder of Riskcovry, about how insurance can be integrated in other business models and how contextual insurance is changing the game.
Find the transcript of our conversation below.
Michael Waitze 0:00
Hi, this is Michael Waitze and welcome back to the Asia InsurTech Podcast. We are joined today by Sorabh Bhandari a co-founder of Riskcovry. I love the name of that company, by the way. Sorabh, thank you for coming on the show. How are you doing today?
Sorabh Bhandari 0:16
Thank you, Michael. Thank you for having us. Thank you for giving me a chance to come on the show and share our thoughts. I’m doing really well. And hope you’re doing well as well.
Michael Waitze 0:27
I took a COVID test today. And I passed. So that means I don’t have it. I was stressing out a little bit because I’ve got to go to somebody else’s office tomorrow. And yeah, I was just stressed out a little bit. But otherwise, I’m fine.
Sorabh Bhandari 0:39
Well, that’s, that’s perfect. I mean, you know, wishing you stay healthy. And all your near and dear ones staying healthy as we go along. We’ve come to some tricky times. But yeah, it’s been an we’ll we’ll share some of the interesting journey that that led us to as an organization at Riskcovry.
Michael Waitze 1:00
Let’s do that. But before we jump into the main part of this conversation, what do you think is the biggest trend in InsurTech and insurance in India, and maybe, by extension, the rest of Asia.
Sorabh Bhandari 1:13
My personal view, for the last four years plus, we’ve been added, as a team to kind of address the InsurTech sector in India, every single day, trends are kind of dynamically kind of moving towards a different direction, but it’s all going towards one point, and going towards the vertex. And I’m going to explain myself when I say that, if you if you were to take a few steps back, you know, insurance by virtue, when it started was all for social good. You know, as fundamentally, it was all social good. And, you know, we understand that the community came together to pool resources to help the weakest members of the society in the hour of need. But actually, as it progressed, it was 180 degrees away from that, literally, you know, as the industry kind of an impervious inherent complexities that came by, by virtue of not being more consumer centric, and being more policy centric, as the insurance companies kind of started building their businesses around it, what it led all of it to become was created a trust deficit, that trust deficit became a little deep rooted concern for the category per se. And what I see as a trend in recent times, that the InsurTechs are kind of helping solve for is catalyzing that change for the large trust deficit that has been built or few decades during the industry, and getting the consumers closer to the category as opposed to where it used to be. And more I see this, interestingly, as a magnet, having its opposite poles and trying to be, you know, flipped over the other side. So that’s where the InsurTechs playing a very, very holistic role, whether it is helping the manufacturers, insurance companies, and right well, whether the claims being solved for whether it’s the compliance is being enabled. And last, but not the least, distribution being disrupted. So distribution being at the center of play, because the inherent nature of the industry is distribution led. And we will talk more about that, why that becomes central play, as well. But that’s where I see the next decade becoming very important. As far as the Indian and the neighboring markets, geographies, trends go.
Michael Waitze 3:40
I like this idea of distribution at the center of all this stuff. And I want to get back to that in a second. Because I do think it’s really important, but maybe you can define for the listeners this difference, like what is the subtle and the nuanced difference between being policy centric, as opposed to customer centric? What’s the difference?
Sorabh Bhandari 3:57
At the heart of it, when when insurers originally started creating the category, way back, it was all about underwriting the right risks, and hence, having the right wordings that back it, it was driven from from that side of the of the spectrum. As opposed to where the customer set on the other side, were actually what the consumers would want to kind of consume and be protected for. So that’s where the gap started emerging where you were kind of building for a larger population, and then the overall sense, the consumer centric approach to to be able to underwrite and create a right solution kind of got lost along the way. And that’s why we had some of these big bold products that got created and got replicated over the years. Right. Which which was far from what the consumers typically would want. Right? So I mean, we it’s not trying to dig holes in the in In what happened, but it just so transpired over the years. So that’s what has become the problem statement per se, which is adding to the mistrust that exists, because if you want to see the legacy products that exist, they were well adapted for preservation, right, you know, you want to preserve a particular set, you want to preserve particular risk that is associated yourselves. But it did not take in the change in lifestyle that happened over a period of time. So we kind of know, there was a little bit of loss of chronological crunch that was required to be kept keeping the pace of the consumers in mind as we went along.
Michael Waitze 5:42
Can we talk a little bit more about the distribution as well? Why do you and your team did the distribution? Because you use this word complex? Right? Why did it look so complex to you? And then, from your perspective, and the team’s perspective? How do you address the complexity and I guess, remove it with technology.
Sorabh Bhandari 6:03
The complexity in distribution is just, again, going back to my point, which I was making earlier, and I’ll kind of bring a personal story and how I experienced insurance first time in my life, coincidentally, when I joined the insurance sector, way back in 2004. And moving moving in from a consulting background, right, so I was working with doing m&a advisory with one of the big fours in Anderson and EY, and then flip over to the industry side, because this excited me, as far as India was concerned with just Mason times then and I thought, why not? Let’s give it a shot. It’s the, it’s the sunrise sector, so on so forth, and moved into the company and coming back to the situation close on the heels. 2005, we all know that there was a huge flood that happened Mumbai, just a few months prior to the floods, and few months into my job, I take my first insurance policy with my house, very first policy in, in 30 years of my life. And I kept questioning myself about the fact that had not done that. So And nonetheless, I had done it at one point in time. And few months later, there was this big flood that happened, I was right in the center of it. Because living on a ground floor was deeply impacted by it. I was happy about the fact that I had a policy, but very sad about the fact that was inadequate.
Michael Waitze 7:31
Did you have specific flood insurance?
Sorabh Bhandari 7:34
Yes, I did. Because the home insurance did carry carry the flood insurance in it. And and the reason I’m kind of bringing this back here is, you know, the good and the bad of how the industry has evolved. This is a complex product per se. You know, home insurance has various risk categories that are involved in it, which includes your structure, your contents, what I’m trying to allude to is product categories, like assets, like home, health, are complex categories, even life for that matter, that is investment related stuff. And they’ve evolved become even more complex, when the products by themselves are complex, consumers tend to say, you know, choose the easiest path to choosing the best possible cover, because the interest level they limited out here and in risks, as far as the society is concerned is non existent, because you know, everything that’s going to happen to anybody is going to be the neighbor not themselves. That’s what they believe so, so you know, God is going to save them. And that’s where the society hence the under penetration in the Indian markets, and to be add to the problem with a complication on the products and, and the legacy mindset of insurers, was kind of pushing the industry to grow at a very trickle pace, the distribution, the categories that grew were only the ones which are mandatory, like motor insurance, and which we all aware of because they’re mandated, hence, it’s purchased, might not be the best solution. But nonetheless, it’s mandated, it needs to be bought, and it was bought. And that’s where, you know, we come back to the complexity issue. So if it is not forced, and if it is something that consumers have not experienced themselves, this very rare situation where a consumer would proactively get up in the morning and go out, and the first thing that they would think about is getting insurance policy. But mind you, that’s changed in the last two years, on the back of the pandemic, right, which is where the brighter side comes in for everybody. As far as insurances category is concerned as far as digitization is concerned, and we kind of going through a double tail wind as an organization. We’ll talk more about that as we come along. The interesting part was that needed to be solved was how do you make these products more simplified in terms of the way they can get understood and they can get consumed by the end end consumers and that’s where the channel are at play, they’re interacting with consumers become very important. Whether they’re an assistant digital channel, whether it is an direct DIY channel where consumers are buying it themselves, or it is an embedded insurance where it is being embedded as a part of the core product or service, where the consumers would want to consume contextually all the three categories need the insurance that they that has been purchased to be simple.
Michael Waitze 10:29
What is assisted digital?
Sorabh Bhandari 10:32
So interesting question. Assisted digital is, when you have a sales person or relationship manager of an organization, trying to assist the end consumer of insurance via a digital platform at places a tablet or handheld. So that’s the assistant digital estimate, it’s a very big, that’s what we call as the phygital. In other way, channel, which is at play, and that’s, that’s gonna be a very pivotal channel for the markets, which are very heavily dependent on, you know, physical support. And in in India, insurance is still consumed, fairly assisted in a really assisted fashion because of the complexities that that exists in the products per se, it’s not easily understood. And I’m sure you will have your own experiences around that you cannot go into the fine print beyond a point. So that’s where the distribution becomes extremely important. And for us, if you solve for the journey that the consumers are going to engage with, whether it is digital, direct, or assisted, or embedded, will make making more important become the most catalyzing factor as we go along to change and transform the face of insurance as a sector. If you see the larger disruption that happened in the entire value chain, it happened where the distribution set. So you saw a lot of aggregators mushroomed, yep, over the last two, three decades, you saw a lot of platforms that were enabling, you know, the right product creation, product, solicitation, fulfillment processes, so there’s all distribution centric disruption that was happening digitization that happened, as we went along. And that was just because the category is still is, is a sales driven, it’s a it’s pushed category. And if you do not enable distribution and solve for the distribution, complexities to start with, you will not see the cascade effect coming in, from the value chain standpoint, all the way back to the underwriting. That’s where the critical mass sits. And that’s where the benefits would also accrue to the manufacturer who is underwriting the risks. So you have to kind of balance that out. And hence, distribution. enablement becomes very, very important.
Michael Waitze 13:03
So you just said a key word here, distribution enablement, right, I want to talk about this a little bit. In the old days, the idea was that whether it’s an aggregator or like a bank, with bank at Bank assurance, we have these very traditional places where people would go to insurance, whether it was being pushed or pulled. We can we can argue about, but there were certain places you could go to get it, and other places you couldn’t go to get it. But if it’s going to be contextual, or embedded, at least in my mind, it sounds like you should be able to buy insurance anywhere, at any time, particularly time dependent, right? Because Oh, no, I need insurance now. But I’m not near anything or associated with any thing where I can buy it. But how do you fix this idea with technology that kind of anybody can sell insurance, if that makes sense? Do you know what I mean, not just the bank, not just the traditional distributors. How does that work?
Sorabh Bhandari 13:55
Interesting that you bring that up, because our tagline of Riskcovry is enabling insurance anywhere. And, and I did not make the make that up right now. It’s been in there for since since the time existed, but
Michael Waitze 14:13
you use that word enable, and it just triggered this thing in my head. I want to understand how everything can every place can be enabled to sell insurance. So go ahead. That’s interesting. That’s right.
Sorabh Bhandari 14:21
That’s right. You touched upon you spoke about banks being the dominant, you know, what we call as the affinity players in the space and the lead, let the market in that space and we had the motor dealer distributors, which were the second or or our larger, equally biggest affinity play that exists in the insurance market where all contextual distribution happened. Now, you know, over the last half decade or so contextual insurance is kind of taking a fair amount of getting a lot of interest or by a lot of new green shoots distributor. So, at Riskcovry, we add that in for a plus plus play that enables any business, whether it is in business, you know, distributing products or services, etc. Where there is an contextual use case of insurance being added, as a value add to enable their own core products or service for their consumers or as an independent fee income process. But nonetheless, it is a category that these businesses would want to, you know, build and take out for the end consumers, for example, you know, we talked about mobility sector or the the cabs industry that is kind of, you know, grown heavily. All across the world. Yeah, with the Ubers. In the old days, kind of working out here. And, and that’s one of the use cases on contextual, you know, where you have these ride insurances that are getting bundled into every ride, because he was we were able to take is one of the good examples that comes from contextual consumption. And similarly, a few few years prior to that was when you bought your airline tickets, and even on the checkout by the domestic or international travel insurances along with it, or just your baggage insurances along with it, etc, are important documents, coverages, so on and so forth. So all those contextual use cases, can get enabled just via the API stack platform that we’ve built.
Michael Waitze 16:39
So that’s what I want to ask, right? So if, let’s say, I’m an eyeglass company, and I’ve got, you know, 25 locations throughout the country, or 250, India is a big country. So 25, definitely not enough locations. But let’s say that I do. Do I just connect via an API? So I have my POS system connects via an API to your system? And then boom, I’m like an insurance distributor. Is it that easy? What if I don’t have my own tech team? You know what I mean?
Sorabh Bhandari 17:03
Right? So we would want to be, you know, evolving into a very low tech, no-code, kind of an environment where, you know, low-code, no-code kind of environment where adoption of our platform becomes very simple. Having said that, it’d be good for me to say that as a marketing statement, but we are not there, it’s going to be a few years before we get there. And I don’t see any competition doing that either. But we still have a very low-code environment. What does that mean? It means that with just doing a basic one integration or a few integrations, by the partner, we we can be up and running for as many as n number of products across life, health and general, across the three channels, the three dominant channels that exist of distribution, which is where we said embedded, we spoke about that we spoke about assisted digital, and we spoke about DIY, all these channels from many categories, many products, all powered by just a couple of integration points via the platform, and that enables opens up the universe for partners to do a faster, go to market on experimentations. What is this enables is that partners can keep on experimenting on new product categories, bite size, insurances solutions, that they would want to kind of learn on the back of doing some POCs and then see what sticking and scaling, and then building on top of that. So that’s that’s what we bring one of the things that we bring to the table for the newer, new to insurance category distributors, because they would want to experiment very heavily. And most of these guys are digital first players, right? If you may.
Michael Waitze 18:44
So when you talk about these digital first players, I just want to geek out for a second if you don’t mind, and we can just ignore this if you’re not interested. But I had this conversation about six months ago. And I asked a bunch of people about this About This Mach right software infrastructure. So it’s Microservices, API first, Cloud native and headless, all this stuff. Sounds really interesting to me. Do you think about these concepts when you’re building your API’s a way for people to do this in a way that’s cloud native? Yeah, not just migrated to the cloud, because it’s different, right? If you put your microservices there from the beginning, the way they can interact with each other, it’s just much more different. It’s much different. Plus you can build things and add them in a way that was unlike you could five years ago, right? And if it’s headless, it means I don’t I can have any front end on and I want. But the back end is using your services. Do you think about things in these terms as well?
Sorabh Bhandari 19:36
Absolutely, yeah, hit the nail on its head. That’s how we think about it when we build our the architecture of the platform is exactly the same. We it’s decoupled our API’s on the backend are decoupled from the front end partners, we completely build on the cloud. It is very simple for us to integrate with any of our distribution partners. In fact, we encourage our partners to you know use our infra as much as possible, so that they don’t need to kind of, you know, NVB, very stringent about the way they maintain the protocol because we work with a lot of data is at the center of place right out here. consumer data is extremely sensitive matter. And we work with enterprises that are banks and regulators and entities. So we ensure that that’s kind of taken care of, by the way, we architecting ourselves from the data security standpoint, but from scalability point of view, Mach is the way we kind of think and build distribution for our partners, we’ve tried this, where we’ve asked our partners to, you know, go ahead and build their own front ends, right. And that’s how flexible our architecture is. And and partners do get excited about that, that they can do this. But more often than not, they do end up kind of defecting into the glossary of journeys that we have at our end. And that’s what we’ve got, we’ve got a bouquet of journeys, for different use cases and different channels. So partners end up kind of using that.
Michael Waitze 21:11
Sorry, have you had any surprises in the sense that customers or clients that you didn’t think would come and use the platform or want to use the platform, and have figured out a way to use it in a way that you hadn’t anticipated? Sure, if a bank comes and signs up, and then connects to the API’s, yeah, I get it. But are there other instances of this where you thought, okay, that’s kind of a neat way to look at this? You know, what I mean?
Sorabh Bhandari 21:35
Right, we had a little bit of an idea on how the gig economy would adopt this, as we go along. That was of interest to us all along, when we saw adoption come by in that segment, and it kind of spiraled, you know, so that’s, that’s where the interest for me to kind of bring it back to the audience here and to you, is, when we saw an enterprise that served the logistics play and had a huge gig force with them, they wanted to kind of ensure to give insurance as incentive to all the employees or the network users when they showed up on the job. And it was embedded into their what they call as I didn’t attendance signing, as a process. So when they signed in, they got for the hours that they were out, delivering the goods doorstep to doorstep, they were being covered for the set of risks. And when they clocked out, they were completely off the risk. So the the enterprise ended up paying just for those hours, or for the day for that for that user that came on board. So that was an interesting use case that came by.
Michael Waitze 22:51
If there a regulatory not requirements is the right word. But is there a regulatory restriction anywhere? In other words, if anybody can use the platform and connect to it? What is the regulatory environment say like, Could a podcast become a distributor of insurance? Do you know what I mean?
Sorabh Bhandari 23:05
Yeah, from the regulation standpoint, the regulator does not regulate the tech at play out here in India specifically. So the platform is not regulated, what happens is that though, when you have any licensed intermediary, which is the Insurance Regulatory Authority of India, licensed could be these, these could be brokers, corporate agents, so on and so forth. And they using the platform, they would need to go in for an certification, which is called the ISMP certification from the regulator for using the platform, under their own brand and the license, which we would have powered independently, and then take it out to the end consumers. So that’s a process that needs to be followed. However, if it is not consumer facing when a consumer is not interacting with the platform directly, and it is being used as an assistant play, then you do not need any, you know, certification, or an approval from the regulator. Okay, so that’s the distinction. And hence, a fair amount of adoption also happens in the assisted side, where there’s and regulatory approvals are not that tough to come by there is a standard protocol to follow and, you know, those things can fall in place very easily.
Michael Waitze 24:27
I just, I’m always wondering like whether the podcast can be an insurance distributor. Since so many people listen, go ahead.
Sorabh Bhandari 24:34
For sure. I was just gonna come to that. It was a very interesting thought, Michael. Podcasts can become distributors if you’re, you know, you have a lot of listeners. And now by virtue of podcasts being you know, having a set of a fan following. You can create a insurance solution just could be more contextual for your listeners, right. For example, most of your listeners will have a particular interest in they come from particular demographic, and, you know, background where they would be digital first, obviously, cyber insurances and certain other insurances, which are more more dominant and prominent would be a common use case for them. And what what could be done is you could create these bite sized consumable insurances that would come via cohort of podcast listeners, which is only accessible via you via the platform if you have a platform, and then that links into these secretaries that are available for all your universal podcast listeners, whether this would be the MW, you know, I’m just saying for the example of this branding is an MW Podcast insurance bouque, and that has cyber, ADA has, for example, COVID insurance, for example, you know, a ride insurance, I’m just giving you the interest, bicycle insurance, or you know, adventure sports, insurance, travel insurance, whatever that would be the most logical set. And it comes with a set of insurance benefits that could be availed simplicity, simplicity. So the complications on underwriting are removed. So the whole idea here is when you Sasha sexualizing, the whole process and making it bite sized, consumers are not averse to paying the right price, they will not they definitely do search for price competitiveness. But it’s a recurring need. But when it is, the moment of truth is at the time of claims. And as far as insurance is an intangible category, if you do not serve it, well, for the lack of interest of consumers when they bought it, they still cannot be punished for the fact that they didn’t pay attention when they were buying. So at the time of claim, you need to have the right coverages that were potentially perceived to be given to the consumer is there. And that’s what you need to take care of when you’re pricing these solutions and bringing in putting them out there. So digital interaction, we put a lot of onus out onto the distributors, and the agencies and players like ourselves, for us to be able to kind of ensure that we are enabling the right insurance solutions for the consumers because the transition from the existing environment and culture to a seamless environment where they were able to consume that insurance, presuming a few things will still remain as a habit unchanged, will be will be always kept in central place. So I probably answered two questions in one piece out here.
Michael Waitze 27:32
So you did and you answered really well to0. Look, let’s say insurance in in the ideal world, let’s say that the distribution gets a ton better, right? That people use Riskcovry that every company that can becomes an insurance distributor. And then it’s almost as easy as just like using Apple Pay or whatever it is to pay for stuff, right? Let’s just say it becomes that easy. Boom, you just swipe it, you have insurance. What does this democratized world of insurance look like to you at scale?
Sorabh Bhandari 28:00
I would like to say that, you know, at scale, this would mean a fair amount of leaning back and to two or three things that come to my mind here. One, our dependency on data would be very heavy, and continues to be really, so as we go along, we would need to kind of ensure that we are kind of using all kinds of data that comes across at the time of fulfillment of insurance at the time of claims, and any surrogate data that is available, which helps us right price and white experience the whole insurance process for us. What that would do would be able to help bring out, you know, simplified processes, as we were talking about in consumption. So you you’re capturing limited data, when you’re actually trying to underwrite or help a consumer buy a policy. Because if you already know by what you have a few set of questions or a few data sets that they that you will ask them to kind of approve access to. You can underwrite many, many more complex categories of risks for them without them knowing. And that’s what needs to happen as we go along. So while the industry is kind of building on it a day at a time, that becomes very important, how well are we able to harness this data, and hence making it seamless not only at the time of purchase, but at the time of claim as well. So those two elements, which will be very data driven, as opposed to kind of just help transition and transform the recent under the existing state. So that’s, that’s something that you need to be mindful of. We would need to take those steps but also take those leaps as we go along. Because outside of that, otherwise we’d be losing time to it comes to the shock when you change things very suddenly for humankind. So that is one part of it. The other side I was I was coming to was what that would look like would mean that insurance companies would then put typically then remain more underwriting focus. So if you were to see if that evolution would happen, then it would emerge in two or three ways you would have insurers hyper specializing in only becoming specialist in creating right insurances and powering them to you would be having a separate category of distributors, which are insurer tech plus, plus, players are working with the existing or the new age distribution partners. And taking these things out to the end consumers, whether it is contextually whether it is assisted or whether it is embedded. All of that would become a play for very hyper digital ecosystem on one side, and typically as we go along. And the third bit would be the cultural change that will bring about for the consumers, which is where but I come back to the reflexive to more responsive approach, as far as insurance as a category would come by, and actually the magnet flipping over, right, right? You need the magnet to flip over right now. It’s repelling the consumer the other way around. So I think that’s what’s going to happen. When when when you say that, you know, if it were to become that simple, and ideally, it should, with all the efforts that are going around. So we’ve seen a little early signs of that. But you know, it’s all going to come together. As I said, we’ve been going around the vortex, and we’re very close to getting the vertex here.
Michael Waitze 31:32
Perfect. Okay, that’s the perfect way to end. I want to thank you. Sorabh Bhandari a co founder of Riskcovry that was awesome. Thank you so much for doing that today. I really appreciate your time.
Sorabh Bhandari 31:42
Thank you, Michael. It was amazing speaking to you, and we’d love to speak to you again and wish you best.