EP 170 – George Kesselman – Chief Commercial Officer, SEA at ZA Tech – Ambiguity, Uncertainty and Speed

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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 170 countries and his company, Michael Waitze Media produces some of Asia’s most popular podcasts.

George is a recognised fintech leader in Asia. Following a successful insurance career, he has built both InsurTech Asia Association and a recently acquired startup Anapi. Now, George is a Chief Commercial Officer for ZhongAn Tech - the technology venture created by the global online insurance leader, ZhongAn Online. With Softbank as one of its key investors, ZA is leading insurance innovation and has recently become a unicorn. George is passionate about sharing his knowledge through speeches at leading events, and his views are regularly featured across global publications. George contributed as a co-author of “The InsurTECH Book,” published by John Wiley & Sons in 2018. George holds an MBA from the University of Western Ontario and a Bachelor of Computer Engineering from the University of Manitoba.

This episode is brought to you by:

The Asia InsurTech Podcast spoke with George Kesselman, the Chief Commercial Officer for Southeast Asia at ZA Tech and the founder of the InsurTech Asia Association, about what it means to work in a startup, what we can all learn from InsurTech in China and what to expect from ICT Asia June 7-9.  

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Michael Waitze  0:00  

Okay, because 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 in Asia. We are lucky today to have George Kesselman, the Chief Commercial Officer for Southeast Asia at Zhong An Tech, ZA Tech. People call it a bunch of different things. I kind of like ZA Tech, I don’t know why maybe I just liked the letter Z. George, it’s great to have you on the show. How are you doing?

George Kesselman  0:35  

I’m good. Thanks, Michael. It’s a pleasure to be joining you. I’m also an avid listener of the podcast. So I’m really happy to join you here today.

Michael Waitze  0:45  

Thank you very much. Before we get into the main part of the conversation, what do you think is the biggest trend in InsurTech in Asia? And frankly, by extension, maybe to the rest of the world? Yeah.

George Kesselman  0:56  

The biggest trend that we see happening across Southeast Asia, and I guess, by extension to the other regions, is that the insurer tech is starting to impact the main shop the core of the operations of the insurance. And what I mean by that is that what used to be a by the way, topic, an InsurTech that touched on the digital aspects of insurance is now becoming much more focused on the traditional distribution, traditional products. And omni channel is kind of the trend that keeps coming up and being a bit of a buzzword around that. So to me, this is both very exciting and overdue part of the InsurTech. Because we definitely were excited about this couple of years ago that it’s gonna revolutionize insurance. And we were a couple years behind on that trend. So now I think finally we’re catching up on this mega trend.

Michael Waitze  2:01  

Yeah, I mean, I think this falls into my category of everyone’s had overnight success. 10 years later, like even the stuff we know is going to matter. Sometimes it just takes longer than we think. Can you give our listeners a little bit of your background as well for some context?

George Kesselman  2:15  

Yeah, for sure. So my background has been in insurance across Southeast Asia across Asia, actually, for about a decade, and worked with life insurance companies, general insurance companies, variety of different roles. And after that, basically started my own venture, it was early days of InsurTech. We started off as a more of a events platform, we call it InsurTech Asia, then from InsurTech Asia became an association and from then on as run my own startup, and most recently, I joined Zhong An as as part of their tech venture.

Michael Waitze  2:59  

What was the startup that you were running?

George Kesselman  3:02  

It was called the Anapi which is recently acquired.

Michael Waitze  3:06  

I was gonna ask you that so Anapi and I always pronounce it wrong, but that’s my problem. I don’t know why I thought of it Anapi. But maybe that’s like my Japanese background? I’m not sure. But it was recently acquired. So congratulations for that. Because all of this stuff is hard work, right, building something from scratch? What was it like, when you found out that Anapi was going to be acquired?

George Kesselman  3:29  

Thank you for congratulations. Definitely it was a bit of a mixed feeling when that happened, we were building it for for about four or five years, and had a big dreams for it. And you know, as with every entrepreneurial venture, you have a roller coaster ride, where one day, you expected it to be, you know, revolutionize the world next day, you know, something else happens. And sometimes they happen happens in the same day. But when we found out about this, I think it was it was generally a very positive feeling. It felt like a conclusion to what we were building. And the company that acquired it was was like minded and I think category is similar worldview. So it didn’t feel generated kind of like negative outcome. It just felt like it was good conclusion. Everybody just said okay, wow. Like it has been a long journey. But as with with startups, you you basically need to have some sort of a conclusion to it. And this was the conclusion that everybody was looking for.

Michael Waitze  4:38  

So this is a really open and honest answer actually. And I really appreciate it right, because we know you know from your perch at InsurTech Asia having this Association but also from running your own company and now being at a larger company like you see in the ecosystem, not just in Asia, but globally. There’s all this hype right. And I think and you said this really nicely. Sometimes it’s in the same day you have these differing feelings. And I don’t think we talked about it enough. So I really appreciate you actually going through that and saying there was at least closure. But it’s mixed feelings associated with Yeah, we sold it or, you know, oh, maybe we didn’t do we want all these things like all in the same day in the same moment. And I really appreciate that. But you know what I mean, right? Because there’s so much hype out there. And, you know, the thing about running a startup is that there’s this always this battle for resources, right? I know this, I came from big corporate background. And inside of a big company, you feel like you’re at Goldman Sachs. And you just think, okay, I need some more resources. But somebody in the fixed income group is trying to take away some of your tech team. And there’s that battle there. But it’s very different in a startup where there is no massive team, but you’re just trying to figure out, how can I just get any resources to build the thing that I want to build? And maybe sometimes it’s better after the idea is fully formed to just say, let’s give it to a place where there are more resources that can actually push this thing forward. Right?

George Kesselman  6:07  

Absolutely. And I think that I’m exactly on the same page with you. And it was kind of like a massive learning, going through it, as well, because we, I started it off after being couple of years and ecosystem and working with a lot of startups and helping them and insurers and I kind of thought that it prepared me well for what it was about to come. But it’s kind of I guess, like reading and talking to the people who are more in the trenches, I don’t know if that’s a good analogy, but it was it was really kind of a full on experience. But it was definitely a it was a fantastic experience. And I think the other thing I’ll say is a lot of people fantasize about startups, and they really romanticize this whole notion of the startups. And a lot of the times I kind of these days having a conversation with people to say, hey, maybe before you leave a corporate and jump in to startup to to run your idea. Join one of the startups that’s already you know, growing and the experience this, experience is transition, experience very different ways of working. The whole ambiguity, uncertainties, the speed, and then I think that will give you a much, much easier transition into the into the world of venture in InsurTech,

Michael Waitze  7:25  

I think you just nailed. I just think you’ve nailed the hammer on the head. The ambiguity, uncertainty, I’m writing it down actually. And speed. It’s really hard to figure out right? Like you can go to an F1 race or even to like a stock car race and sit in the sidelines and just think that just driving in a circle, right? This is easy stuff. Why is this even a sport? But get behind like the wheel of an F1 car in Monaco and try not to kill yourself? It’s a very different thing. Right?

George Kesselman  7:53  

Spot on? I think that’s a better analogy, probably.

Michael Waitze  7:56  

Because it feels like that, right? I mean, it’s so dangerous. And yeah, like going out and getting the experience first and a startup that is growing, is the is a really good way to experience and just to see, can I deal with this? Right, because it’s hard. Anyway, now that you’re at Zhong An Tech, ZA Tech, if you don’t mind me calling out for the rest of the conversation. When you look at it from the other side, and a lot of your partners are either sort of growing startups or incumbent insurance companies? How does it change the way you look at partnerships with those companies? Because the whole notion of ZA Tech is to partner with other companies, joint ventures and stuff like that, right? How does it change your notion of the way that’s supposed to work?

George Kesselman  8:38  

So I think that’s a very good question. And the the interesting thing for me was that there was a lot of parallels between what we’re trying to do at Anapi in the early days to what ZA Tech is doing. So the scale is obviously very different than the you know, with the backing of the soft bank and Zhong An Online, it really kind of brings the firepower that you need to to build a tech to execute to kind of prove that this is something that that’s really working. And I would say that the biggest proof point that became a catalyst in Southeast Asia, in my mind is actually Grab when Grab decided that they want to go into insurance in a big way. And they, you know, as usual, the first couple of years, it was a lot of experimentation, but they’ve really they nailed the product and it became this huge proof point to any digital business that is looking at insurance looking at kind of this add on components to say that actually InsurTech is a very meaningful value that can be both generated for the customers as well as for the platforms themselves. So when we go and talk to the platform’s now, it is with a proof point, that Grab has already delivered tremendous value. In fact, during the pandemic InsurTech was one of the biggest contributor to profitability, where others were generating very low margin. InsurTech was something that, you know, it was a distribution play. So it generated a lot of a lot of momentum and Grob themselves got very excited around that. And that word, very quickly got out, obviously, in the startup ecosystem, and everybody said, look, a InsurTech base is very powerful. B, it’s very versatile, it can adapt to a variety of different proposition. It’s not just travel insurance, or conservation insurance, it there’s a whole variety of different cases. But it’s also the with with Zhong An with ZA Tech, it could have been there as a supporting partner and enabler partner. This is something that allows you to experiment with the products allows you to to iterate to a point where you can find something that really scales,

Michael Waitze  11:09  

Right, I think it’s this iteration, that’s one of the most important parts of this right grab has done a very good job of experimentation. They have this platform of pick a number, I don’t even know what it is anymore. 150 – 200 million users regionally, right, 6-10 million drivers, and able to use that platform for distribution. And it’s been great for Zhong An to be able to test this idea of can we joint venture with a platform company that has distribution that we don’t have? And then build products that are specific to them? Where do we see this going now that this sort of micro insurance test is kind of over? And how do we move that into its next stage have bigger policies and more profitable policies for the insurance companies and the underwriters as well? Right?

George Kesselman  12:03  

Yeah, I think that is a valid question. And I think this is a question that most of the platforms, we’re also tackling right now, we kind of, I guess we can kind of separate the world into the embedded insurance. And I think everybody agrees that that proof has been delivered. And it is, in many ways how a lot of the innovation starts, it starts with being tiny, something different from what it was before, and not competing with a corporate position, and then gradually migrates to the main set of products and really started to reshape it. So the fact that we’re right now are at the point where we’re talking about, you know, hundreds of millions of embedded policies being issued in Southeast Asia, it basically validates that proof point that it has reached maturity has reached the scale. And the question about how do we how to, how does that transition into the main shop or traditional products Bigger, bigger profitability, is something that we’ve seen the early, early learnings based on that. And this is where I come back to the omni channel point that I made earlier is that if we look at the embedded space, right now, it’s still probably accounts for you know, call it 0.5% One person, right, like it is way peripheral, then it’s not a discounted at all, because it’s growing, you know, at a very, very fast pace, and it is doubling tripling year on year. So tremendous momentum in that space, but it still will take some some years until it reaches a significant share of the insurance. But omni channel is starting to come in through the main main type of products. And this is where I think the biggest learning for everybody in fact, is that you cannot cross sell traditional insurance on the back of the embedded insurance. The initial hypothesis from grab from from ourselves was if somebody buys 30 cents insurance, then they’re a good candidate for $100 insurance. And they you know, because they’re really experienced and insurance, therefore, it’s gonna be an easy upsell cross sell type of opportunity. reality though is obviously didn’t it didn’t doesn’t work.

Michael Waitze  14:37  

But can I just jump in for a second? Because I made this note to myself and I think you made this point earlier. I want to make it again even stronger. Right and that is this Zhong An-Grab partnership as a metaphor for the rest of the stuff that’s going on right in the in the insurance industry and in the insurance industry. was like a was like a one way test. Right? Can we get a platform to disrupt Insurance in a way that’s digitally native that that test worked. But the flip side of that test is, can we get an insurance company to believe that that’s actually going to work? And now you’re this conundrum level where it’s like, okay, that worked. But it didn’t cross sell into bigger pieces of insurance and other testing goes back and forth. Still, how do we do that now? And that gets back to the other trend you were talking about before is that now insurer tech isn’t this kind of thing that’s happening over there. It’s now becoming part of this. I want to use your words, the core ops of insurance, because they’ve now figured out, hey, wait a second, they’re not going to disrupt us. They’re going to enable us. So if that’s the case, now, how does that work? So that’s, uh, now I’m gonna ask you that question. You know what I mean? Because now that this testing is going on back and forth. Now it’s kind of getting cool to watch, right? Because before was all a maybe, and now it’s not a maybe now it’s like, how does it work? No.

George Kesselman  15:58  

And absolutely perfect. Segue into where I was going, as we kind of have a crystal ball of where things will progress because, you know, as Southeast Asia matures, it does follow a similar path as China. So if we now go to China, and we say, Okay, what’s happening in China right now, it gives you a little bit of indication of what directionally where things are gonna go in Southeast Asia. And, you know, granted, obviously, there’s going to be different forces, different speed, and things will converge in a slightly different way. But what we’re seeing in China is that this omni channel with that it becomes, becomes a lot more integrated, like how, for example, the agents start to migrate to social media platforms. And instead of meeting, you know, one agent, meeting one person, they go out there, and then they educate hundreds of 1000s of people at one goal, right, they’ll make the video about, hey, this is a five things you should watch about your health insurance. And this is kind of things that you need to watch out for. And they will never say that we should purchase plan a or plan B or Plan C. But as a result of that, there is that trust. And I think this is where that fundamental thing about the core insurances that as a product get more complicated as they get bigger, that trust becomes super integral to the overall proposition. When it comes to the internet, you know, when you pay 30 cents, with small, small sums, easy black and white products, it’s, you know, the trust level can be much, much lower, and you say, okay, sure, enablers, but when we try to leap frog that into the trust heavy products, this is where the human inevitably has to be in the picture in some ways, because this is how the trust is formed. And this is in China is really, it’s really incredible to watch because you kind of see that overall experience, it doesn’t follow the same experience, as we’ve seen before, kind of had an array of fun conversations with the insurer with us. We’re also doing on the channel right now our agents use Zoom. So in that sense, I think the process right now as we think about it, is not a copy and paste of what you used to do offline into some somewhere when they bought online, I think there’s a remash of the whole process to make it such that the customers get what they’re looking for at the end of the day. And they get the experience that they’re expecting from all the services that they experience now. So that’s I think, Omni channel is why it’s so powerful is because it it kind of creates this mesh of the traditional products, traditional approaches with new types of platforms like tick tock and, and others which is you know, really take it out to a completely different level.

Michael Waitze  19:15  

Do you feel like sometimes you meaning George, because of your background, because of your experience because of the building of your own startup because of the sort of community building you have to do around InsurTech Asia and now your role at a company that has you know, that says overflowing with resources that sometimes when you go out to sell the you almost have too much information, right? Because this idea you made me chuckle right when you said we’re doing omni channel, we’re on Zoom. But to be fair, to the people to whom you’re selling we’re trying to partner with to them that looks like omni channel, right? I mean, I laughed, you chuckled as well. But to them that’s a big step outside of their comfort zone right and to get from where that is to tic tock is a massive leap of faith, right? I mean, I can go back to vine into YouTube into Snapchat stories into Instagram copying that. And now when to tick tock and just think those platforms are constantly changing, right? But the idea of engagement at scale is kind of new, particularly for insurance agents, but it’s never going to go away. And I agree with you. It took me six months to buy health insurance. And it really just came down. And I don’t think the policies were that different. It really just came down to me to which agent did I trust the most? Is that fair?

George Kesselman  20:35  

Oh, absolutely. And the thing to your earlier point about Is this too much information about insurers that they can get on board. I think the feeling for me right now is that maybe the pressure is not yet built up for the insurance to really move massively. And, you know, we kind of the pressure is increasing, but it’s still not at that tipping point yet. And this, all the things are pointing towards that, though. You know, when people say, okay, what are the what are the other big things happening in insurance, I bring up things like, for example, shopping, getting insurance license, right, other platforms are also looking at getting getting into the space, so it is gonna be a lot more dynamic. And I think this is gonna be the pressure point that will materialize fairly soon, I say, next two to three years, we definitely are going to see a much more pressure to do things differently. And this is right now I kind of see it as more about building that common foundation so that people understand like, Okay, this is potentially where things will go. And this is the things that you start preparing myself for, rather than kind of going out there and evangelizing and really kind of trying to change people’s mind about what what is the both of them?

Michael Waitze  22:00  

Yeah, and again, this gets back to this concept we had at the beginning, right, this thing takes time. And I think you’re right, I think we’re at the foundation, you’re still at the foundational level of this, right? If you look at insurance penetration in China, it’s obviously growing really fast. But in India, it’s still really low within Southeast Asia, it’s even lower. And the engagement helps, I think, right. But at some level, there’s I think, and I’m curious what you think as well, if you’re building the foundational level, do you have to wait for a GDP per capita growth to catch up so that the product itself can become even just affordable to people that it comes onto their radar? You can build all this foundational stuff? And if I simply can’t afford it, then it doesn’t mean much, right?

George Kesselman  22:46  

Yeah, I think that’s a also very interesting question. I don’t think anybody has a real answer to but if you look at, again, referencing back to China, people who are buying insurance, their GDP per capita, is quite a broad spectrum. So it’s not it’s not to say that it’s only for city dwellers, or for high net worth, affluent, middle class, people who are embracing it. It is becoming something that is embraced by much wider segments. And there are very, very different approaches to just a couple of weeks ago, when I was in Malaysia, we had a very interesting discussion about the government running a program where they subsidize some of the premiums and that has done really, really well. So that basically created that awareness in the in the segments that were usually not accustomed to insurance, this is probably one of the first times that they experienced insurance as well, because it was provided to them to say, Hey, this is actually something that’s very valuable, we’ll give you Forestier for free. And I think so my point is that, I guess, it’s hard to say where the catalyst is going to come from, is it going to be because people are going to reach a certain level of affluence? Or is it going to be the first time they experienced insurance, or the awareness and you know, their famous person that they follow on tick tock of a certain shirt says that you need to really help those because, you know, this is something that’s very important.

Michael Waitze  24:20  

So that it begs the question of is there a George Kasselman TikTok channel for insurance? And if there isn’t, should there be? Don’t you think, though, that it really comes down at the end of the day, we can talk about GDP per capita growth and stuff like that, but at the end of the day, you’re right, it’s the experience that matters, right? And if the Malaysian government in this case, is subsidizing a little bit of it, maybe it really only takes one person to have a health issue, or to have an accident, or to have some problem with their home and then get a claim and have them think, well, wow, that was kind of magic. Like I didn’t know that was the end output for insurance, right? I mean, the claim definitely matters. Yeah.

George Kesselman  25:00  

I absolutely think the claim is, as we kind of referenced as the moment or the truth of the insurance. So this is where the actual usage of the product is delayed from buying the product. And that’s why I think the whole trust element is so, so critical to the insurance. So if, let’s say, is a person in the village in Malaysia, you look at the insurance company, as somebody who is there to take away your money, and, you know, try to fight you on the claim, because they’re, they’re big and powerful. That definitely doesn’t help you to feel very confident about buying a force insurance product. And so it is about overcoming that mental barrier or mental preconception, that that will help us move into this territory. But I think this is really about trust and kind of building this next phase. But I guess the thing that I also think about and reference in my mind is when when graph was came in, when Uber first came in, in the beginning, everybody was kind of afraid, right? Or should I get into somebody’s car, but then it became something that it felt like, at least for me, it felt very exciting, like, oh, actually, you can talk to somebody, you know, there was this initial, early adopter kind of a feeling. And I hope, sincerely in my mind that some day, we will also have something like this for insurance, where people are gonna say, Oh, actually, this is really cool. And he’s worked. And it was a little bit of this magic moment of delight. I do hope that it will achieve it. And I know that this will be something that’s quite transformational for the industry.

Michael Waitze  26:39  

Yeah, look, I mean, it’s part of my goal. And I say this all the time to my guests, before we record when we’re recording after we record, that if any of them mentioned that insurance isn’t sexy, I tell them to stop saying it. Because it’s part of my goal. I mean, it’s hard to associate anything sexy with me. But it’s hard. It’s part of my goal to make that part of the conversation change. Because I think you’re right. You know, the first time you get into a grab, or the first time you get into an Uber, you just think is this, okay? It’s somebody else’s car. But then you realize, wait a second, there’s this entire tech ecosystem that’s built around it, to make sure I’m safe. And as the flipside of that example, I get into a taxi yesterday, and I changed my mind in the taxi, nobody knew I was in it. I had to overpay for it to just protect my own safety. And when I got out of the car, I felt so much better than when I was in it. That’s a true story that actually happened to me yesterday. Because it was more dangerous in that than it would have been in a grab where everybody knew where I was the whole thing was recorded, and I felt safe, and it was probably insured as well. I want to ask you about data a little bit. Do you see again, during your entire time in the insurance industry, this concept of data data gathering data analysis, getting to the point where it’s at some level, the companies that understand how to use data, the best are going to be the winners.

George Kesselman  28:05  

I think data is going to be definitely a very critical asset for the InsurTech. And I think as we talk about data, I also kind of smile in my mind because I recently had a conversation with the insurer where this, we also have a lot of data, its phone numbers, and addresses of our customers. So as we talk about data, I think, the data around the meta behavioral data, and all this kind of things that are super rich, and much more than just an address and a phone number that the insurance typically utilized. And definitely with that, I think this is the future of the insurance when I was in Bangkok last week, we had this InsurTech event and I had the CEO of ZA Tech with me there. And one of the things that I was presenting as the numbers that Zhong An is seen in China is just staggering. They’re seeing something like 10 billing codes per day, coming from all different platforms. And you need to make very quick data driven decisions, whether you want to issue it, and he said, Oh, by the way, sorry. Actually, there’s a mistake and a slide because now 10 billion was last year and now it’s 13 billion a day.

Michael Waitze  29:25  

30% higher. That’s good year over year growth. So can we talk about this a little bit? You’ve been traveling and promoting the you’re here for the InsurTech Connect Asia roadshow, I believe, how has that been going like what is the end? How do you feel like InsurTech to connect Asia which is what on June 7 to ninth in Singapore. What’s how’s the momentum building for this?

George Kesselman  29:46  

It is definitely a lot of excitement. That is pent up and a lot of it has also been you know, we’ve been cooped up for past two years with a lot of limited interaction face to face interaction. And so ability to actually meet somebody to share their ideas. And to discuss something, I think it’s something that excites people. And this was the reason why I’ve suggested to ITC that we should have this kind of a meeting experiences for for people around the region. Because honestly, like when I first got in front of 40-50 people that we had, and in Malaysia, it was something that was a really long while since I’ve done this, it was I had a couple of this, like pause moments where it just feels very unnatural. But you can clearly see that after the after we did this event, people stayed around, and they were just like, they were really, really intuitive. They really engaged and they were having a lot of very positive energy flowing. And I think to me, that’s what ITC can bring us in Asia, I don’t think we had up to this point in a platform to really bring everybody together, in the part that I specifically especially excited about is that for ITC, they’re able to tap people outside of our region. So it’s not just Okay, let’s bring people from Bangkok, KL and Jakarta to Singapore. Right? That’s good. But it’s it’s not going to be revolutionary. But bringing people from our region together with people from Europe, people from outside of Asia, America, like every everybody is doing innovation in a slightly different way. And it’s about colliding these different ideas to say how do we do something different. And that’s why to me ITC is a very exciting platform for it because it can unlock a lot of these ideas and a lot of this collaboration energy.

Michael Waitze  31:47  

That is the perfect way to end. Really George Kesselman, the Chief Commercial Officer for Southeast Asia at ZA Tech, InsurTech Asia founder, thank you so much for doing this today.

George Kesselman  32:00  

Thank you so much, Michael.

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