EP 204 – Raunak Mehta – co-Founder and CEO at Igloo – People Want to Be Protected


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.

Raunak Mehta

Raunak Mehta is the Co-Founder and CEO of Igloo, a regional full-stack insurtech company that enables smart, digital insurance products and solutions for the Internet economy. Raunak has extensive experience in the e-commerce and technology space, having held leadership roles at some of Asia’s biggest e-commerce brands like Flipkart and ZALORA.

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The Asia InsurTech Podcast had a great back-and-forth conversation with Raunak Mehta, a co-founder and the CEO of Igloo.

Some of the topics Raunak discussed:

  • The intertwining of health and economic well-being
  • How outlier events can set back families financially for years
  • Customer centricity as a core principle for building a business
  • Expanding the customer segment by reaching out to mid-income households
  • Artificial Intelligence across the value chain
  • Star Wars

Some other titles we also considered:

  1. You Have to Go to the Most Fundamental Aspect of a Problem
  2. Big Companies Survive on Sustainable Disruption
  3. Trying to Make Insurance More Contextual

Please read the best-efforts transcript below:

Michael Waitze 0:00
That’s, let’s go. Hi, this is Michael Waitze. And welcome back to the Asia InsurTech Podcast. Today we are joined by Raunak Mehta, the r and the CEO at Igloo, I always want people to hear the conversation we have before we start recording so they can know why I’m laughing when I’m just saying, Yeah, but anyway, Ruanak, it’s great to have you on the show. How are you doing?

Raunak Mehta 0:25
I’m great.

Michael Waitze 0:28
Yeah, thank you for joining us. And thanks for all the shenanigans around airpods and stuff like that. It’s not our problem. Anyway, before we get into the main thing, what do you think is the biggest trend or emerging trends in insurance and InsurTech in Asia, and I would say, by extension, the rest of the world.

Raunak Mehta 0:46
I think what we’re seeing in Asia, especially post pandemic is, people getting a bit more concerned about the personal well being, especially when it comes to health, savings, etc. So quite a lot of products, or other product categories that were having average growth before pandemic now seem to be having above average growth. So the usual events, health related, income related, the regulators also have seen to a certain extent, a slight shift in the consumer behavior and have now responded in terms of focusing a lot on digital intermediaries, which tend to reach out to a larger section of the population. So that’s, that’s, I would say these are, what do you call as the umbrella trends that you’re seeing? And if somebody wants to double click, I would say across the world, I mean, you know, what has happened? Right? In the last two, three years, a lot of businesses, a lot of retail, consumers have moved digital. And when you move on from offline to online at such a fast pace, of course, the infrastructure isn’t there to support from security standpoint and all. So there’s a lot of emphasis now on cybersecurity, for small and medium size enterprises, and also for retail customers.

Michael Waitze 2:10
There are so many things there. You know, you said health and income related. And I think maybe before COVID, if we had put those two things together and conflated them, somebody would have said, maybe not we were crazy, but that we were stretching. But do you feel like that’s really changed now? Where people look at their health, in the context of their economic health as well, not just their physical health?

Raunak Mehta 2:34
I mean, I would look at it from various dimensions, right. Gohan, as you mentioned, physical health. So you saw right, a lot of insurance and insurer tech companies are focusing on ensuring that their policyholders are in the best of health. Yeah, because they were in the best of health claims will be lesser, they will be able to pass on cost savings to their consumers. And it’s a virtuous cycle. Now, come COVID, you had a larger section of the population that you could say to a certain extent paranoia to a certain extent, they really got impacted their life savings and all got impacted because they ended up in the hospitals or in the quarantine centers. And all as a result of this, this thing really blew up. So people across the spectrum, I would say from I mean, the class, you could say the income class, that that has a very high penetration of insurance to the low to mid income class. Now you are finding that people some way or the other want to be protected with a certain health product, right? It doesn’t always has to be a full blown inpatient outpatient sort of thing. People are fine in getting a very, how should I say away infectious disease centered one away income protections and one but they need some sort of is just good industry, which is the industry because it drives penetration on its own, especially in a region like Southeast Asia.

Michael Waitze 4:02
Did you just say drives penetration on its own? Yeah, yeah, it does. Right. Look, one of the things that was said to me on one of the other shows that I do, I do a show called India Game Changer where we talk specifically about how technology is changing the game in India. This gentleman puce Jain, who runs this thing called Impact Guru said that, you know, India’s middle class and I would posit ages middle class is just kind of one hospital bill away from poverty, right. So, yeah, it can get really, really expensive. And then I had an operation. It’s almost two years ago now. And yeah, it was really expensive to do. I mean, I think thankfully, I could pay for it. But this idea of the mixing of your health and your financial health, your physical health and your financial threat, Franklin, your mental health is something that I think is super important, particularly out here, right? If you look in the Western world, it’s a little bit different. But frankly, those things are emerging as well, I think. Yeah.

Raunak Mehta 4:55
I agree. And I think one of the things that you mentioned right that you are one hospital visit away from going into poverty that actually happens that. And if you talk about the segment of the population, a good 70 1970 In some countries, then 75 to 80% of the population is in the low to mid income household. Yeah, right. In that segment when you are hit with certain outlier events, right, and when I say outlier events, it could be a fire, or let’s say, you having an accident and landing up in the hospital, what do you generally do, you tap into your single or multiple income sources that you’ve had, and whatever savings you had out of that, or you would end up taking a sort of a friendly loan from your family, wider family or friends. That’s, that’s the only way they can possibly be in a position to pay hospital bills. And then what happens? It sets you back by a good 345 years. Yeah, right. Your whole especially high? No, I mean, it sets you back three to five years. And on an average, and not just that, I mean, you’re talking about now you’ve entered a high inflation, sort of a macro environment, right. Yeah. Which makes it even more difficult for you to be able to service your whatever unstructured unsecured debts that you have taken over a period of time. So yeah, I mean, you get caught into what I call as a vicious cycle, which can ultimately be sort of a debt spiral for a lot of a lot of families.

Michael Waitze 6:33
Yeah, it can get really, really hard, right? And you’re right, because inflationary expectations mean that people expect prices to be higher in the future, which means that you’re paying back today’s bill with money that has less value in the future, in a rising interest rate, and what we can talk about macro until you’re blue in the face as well, right? Because I used to trade bonds. So I understand this, too. But yeah, it’s just a really hard situation. I’m just gonna keep making you laugh. Like, that’s my goal for the rest of this podcast.

Raunak Mehta 6:59
I actually wanted to hear somebody say that they have been trading bonds. And I want you to see how they feel. Especially, because if you have been trading long term, I mean, the long, long treasury bonds or any kind of such bonds, I mean, I totally get your pain, then.

Michael Waitze 7:19
Well, yeah. Because, look, I mean, we can spend a lot of time talking about the macro environment, and what the impact is of rising short term rates or overnight rates from the Federal Reserve on the federal we call the Fed path, right in the bond curve, the yield curve. And the idea that a yield curve is inverted, right? It’s different than an upward sloping, which is a normal type of environment yield curve. But in that situation, you should not be buying long term bonds to mitigate short term risks. Anyway, it’s a completely different conversation. But when I think that both of us understand it, happy to have that conversation whenever you want, I want to go back a little bit. You’ve been in the startup world for a long time. And you’ve actually been really, I used to use the word lucky. But I’m not going to say that because I think people make their own luck. But I’m very fortunate to work at some pretty cool places. When you go back and look at like the end of your experience that I don’t know, Flipkart, which was feels like yesterday, but it’s a long time ago. Now. What do you think are some of the biggest changes in building venture funded businesses between back then? And today?

Raunak Mehta 8:24
I have looked at things from that perspective, right. When I was at Flipkart, and this this goes back easily. 12 years.

Michael Waitze 8:30
Yeah. At the beginning, for sure. Yeah.

Raunak Mehta 8:33
Yeah. I mean, that is the Genesis, right? I mean, if you wish to think of, of startups in India, Flipkart was Genesis block. And in a way, I would say, the biggest difference between then and now is, at that point of time, you really needed the first principles approach. Because there were some, I mean, Flipkart was part of organized retail, organized, retail was largely offline, there are certain assumptions that were there. But those assumptions could not be in a way teleported from offline to online, which meant that you really have to go to the most fundamental aspect of a problem. Question it and it needs to have a binary answer. I mean, that’s, that’s how much you have to dig, to go to that fundamental aspect of the problem. If you rule for over 10 years now, there is quite a base of, let’s say, assumptions, of how things work in a, in a startup environment to which you can latch on to and be able to find those answers a lot quicker. You don’t really have to

Michael Waitze 9:46
say what are those things right, you’re right. 13 years ago, when Flipkart first started. AWS probably wasn’t as prevalent as it is today. So you probably had to build a lot of your own server environment. Right, exactly. It’s just time consuming and very expensive and you needed a different cut tie. above tech team, we can fast forward today and say that people that are on AWS can also use some of their artificial intelligence stuff as well. And those tools weren’t weren’t there either. But you mentioned the word first principles, right? And it’s kind of this axiomatic feeling of what are just the core things we know to be true. And then can we build on those things with other assumptions, right. But what are those things today? Because they’re very different than they were like you said, 13 years ago, when you were at Flipkart. What are those first principles today?

Raunak Mehta 10:30
First, first and foremost, I think across the 12 years, one thing that has stood out and has not, I think that has stood the test of time is customer centricity. Right? No matter what kind of business you are doing, if you are able to go back to the root cause of every problem, and try to solve it, using the lens or the dimension of customer centricity more often than not, you build something that that provides value to you with respect to serving your customers. Fair enough. So I would say, I would say that part has been there. The second part, one of the things that you mentioned, right? How much has technology in a way? And you’re right, 1020 years back from an enterprise perspective, a lot of things were being built in house. Yeah. Today. Today, Amazon using its AWS, Microsoft Yugen, as your and all provides you a ready made set of tools. And I will say feature set that you can potentially use. Right, right. And as you’ve seen coding itself has undergone such a massive change, right? I mean, now, I’ve got my engineering folks working on Gaulin, we are living in a zero code sort of an environment coding has become a lot more easier. Yeah. I would want to believe it. They may have different opinion. But I definitely I definitely think that a large part of, of what you try to do on your code base is now available as of some libraries, right.

Michael Waitze 12:01
How do you how do you navigate this? This idea that you’ve just said kind of offhandedly? Like, coding has just become so much easier. But the dev team may not think so maybe they do. But maybe they’re worried, right? Like how do you navigate this idea that you can kind of outsource I like to say abstraction, right? In other words, you said a lot of stuff was done in house. But what’s happening now is whether it’s the human resources function, and insurance function, or any function, big companies are looking and saying, How can we abstract that out, and then give it to somebody else to do and then they do it at scale, which means instead of paying $2,000 a month, on average, for x, we’ll pay $20 for it. So we can be 10 times more efficient by letting somebody abstract it out. And do it for the whole industry as opposed to just for us. But coding is this really kind of tricky thing where, you know, the salaries for people to write code have been going up exponentially for the past 10 years. And I choose the word exponentially on purpose. Maybe it’s not, maybe it’s really just in factors. But now we’re getting to a point where, like, all of human knowledge seems to be available through an API, and that includes the code writing, how does that change the way you build stuff then?

Raunak Mehta 13:14
So they’re doing looking at it, right? The way I look at it is 10 years, 11 years back, a large part of this was not available outside your company, right? Because you were building it, it was considered as core. Of course, you had systems of if I remember, customer service related systems, you could get from a vendor marketing analytics, or for instance, recommendation engine with just coming through. They were they were not there and they’re about all the warehousing management systems and order management systems are completely built in house right. Now, a large part of it could be available, as you already said, through an API call, and everything. But so that in a way, I think, oversimplifying the situation right now, what I see is that the pace at which coding changes and the pace at which your expectation from your engineering team, the delta, actually has a much steeper slope, because every I mean, let me give you an idea. 2017 2018 If you go back to the history of artificial intelligence, and all, it was around 2015 2016, that, that things really started getting heated up, right when, you know, Facebook, Baidu, and Google started having their own teams and Google I think, by that time, had acquired DeepMind in London, and they were coming up with their own sort of models and and Google came up with this TPU the tensor flow from the artificial intelligence side of it. 2018 igloo was one One of the companies that was using it for, for for something that today sounds like really trivial, right, which was object identification, how to focus on an object in a particular image once you have got it, how do you find whether that image is intact or not? Or whether it has been in a way tampered with? And all sounded very cool back then, right? Five years now everybody’s doing it. Right, right. And now, of course, the bandwagon has moved on to charge GPD, three, four, and multiple other mean, GPT sort of software. So I think now the change in technology is a lot higher, whereas things at your disposal also are there. But now the expectation is a lot more so smaller engineering teams, I would say, as I mean, if, if I had to look at it 10 years ago, for what is happening now, I would have to be required a team that was two and a half times bigger. Well, this, probably may have costed me a little less, but considering inflation and everything, I would say, I mean, when you have a lot of information at your disposal, you tend to move fast, right? So that is what is happening. And not just for the engineering team or the product team you need. Now if you’re a start that that uses technology as an enabler, you need to be very impressed with it, I would say.

Michael Waitze 16:23
So one of the things that we did when I was at Goldman Sachs was we implemented algorithmic trading for regular clients through a business that we purchase called Hole trading, rebranded to Goldman Sachs, algorithmic trading, GE said, we could see years before, as we were building out this automated trading technology, the algorithms right that we were going to be out of a job, we literally were building a business that was going to make us not necessary. We did it on purpose. And frankly, we didn’t care. As I got closer and closer to the end of my career, I was happy to automate myself. So that was fine. But what it did was it gave us scale, one of the things that we learned really early on was that the more technology we employ, the more productive we can become. And the more we could go from trading $100 million a day to $4 billion a day without missing a beat. And that’s the that’s the genesis really of a venture scaled business, right, is that if you, if you’re gonna get venture funding, you have to be able to scale it’s at size, right? And does all this artificial intelligence in the context of the coding, make it easier to do that as well?

Raunak Mehta 17:29
I’m glad you brought up that algorithmic trading example, right? And the way you looked at it that while you were building it, you thought that it’s going to take you out of the job, but it really made the humans more productive. Let’s put it this way. I think I have, I have always looked at technology. And I think even at its most emerging frontiers, I’ve always looked at technology as a way that adds productivity to us. I don’t think I mean, I’m saying it with a pinch of salt, that it’s not going to massively replace a large part of the human working population, there is going to be some amount of substitution. But it’s not going to be that it helps us upskill it helps us become better species is what really substitutes. manpower is, is globalization, which is a completely different topic, right? Where what is happening in one country gets starts getting done by someone in some other country attributable cost of better efficiency, that I think has resulted in more upheavals in, in the I would say, The job outlook in a particular country than technology.

Michael Waitze 18:43
I agree with you. And I’ve been saying this for years, I think technology is this enabler, it’s it creates a hybrid world. And I said, I was happy to beat myself out of a job, I was very specific with the terminology that I use, but it’s not gonna automate everybody who did what I did. And to be fair, the guys and gals that were great at the role that I had, were super powered. And I say this all the time, by the algorithms, because it allowed them to do 17 things at once, as opposed to seven things at once. And they got so much better at their jobs. And the service from a customer centric standpoint, became so much better. Because the mundane the mundaneness of the tasks, that stuff got automated, but the thinking part of it, the how can we take this piece of information that I just got through an automated system, and this piece and say, I need to tell Lisa about this because she was the one who was asked me about it two days ago, and there’s no way that the AI would know that. So I agree with you completely. The second thing, though, is almost as important, if not more important, is that globalization has moved tasks from high wage countries to low wage countries. But here’s the key question for you. Right, because India has been a low wage country, historically. But that’s also radically changing right as India starts to build not for the rest of the world on We but for India itself, and as it does that it starts to innovate, right. And what that means is that those salaries are going to start to normalize. So this idea of globalization being an equalizer for labor is happening. But this idea of outsourcing to a cheaper place like those places are disappearing unless we find people on Mars or on Saturn that are going to do low cost jobs. Is that fair?

Raunak Mehta 20:23
No, that actually, that’s a very thick, because I think you would also believe that everything has a start date and an end date, right? I think and it goes through crests and troughs, the kind of world we live in today, it is fair to say that countries are becoming a bit more protectionist, it happens, I mean, you go through some stages, and in I would say evolution and all. And I think that has had an adverse adverse impact on globalization. And of course, some low income countries like India, that used to be the playground of, of outsourcing and all their itself, there has been a humongous, I would say, move in terms of knowledge capital that people were holding, and thereby, I mean, India is one of those countries, you know, which, if you look at it purely from a financial standpoint, could be a completely self sufficient unit in itself. Yeah, whatever you produce in terms of products and services can be completely consumed within the country and play food. And they, exactly, and thereby, thereby, people across the skill spectrum, right, from the best engineers all the way down to somebody working in the Customer Service domain, can can find a job that that’s there. So but yes, I mean, we have a text center in India. And I can tell you that I not consider it in any ways that, hey, I’m outsourcing the job there. Because it’s largely from a skill perspective, I would say, because, again, going back to the startup discussion that we were having, because now after 12 years, or rather, I would say 1516 years of startups in India, now you’ve got a ready made base of employees who can actually come on board and hit the ground running rather than understanding the startup 101 principles there.

Michael Waitze 22:19
Exactly. And you’re also seeing this, what’s the right way to say this? I think part of the tipping point is when very well educated people from a certain country go overseas, whether it’s going to Australia or going to the UK, which is a popular place or going to work in Silicon Valley, or in Boston or Chicago, where they get there, they work there, and they look back and they’re like, Oh my God, that’s a much bigger opportunity. Again, whether it’s in India, in Southeast Asia, or just in Singapore, they’re like, I need to be there. instead. That’s the tipping point, you feel like, it’s not outsourcing anymore. We are in the midst of an AI and knowledge economy boom. And it’s happening in this region. And I think that’s what makes it so exciting for me, which is why I love these conversations with you. And with people like you because I can feel the difference. Like if you asked me, What’s the difference between today on the Asian short tech podcast, and 2019? I would say three things. One is all the conversations before used to start with insurance is not sexy. Nobody says this anymore. It couldn’t be sexier to is they would talk about like how they were outsourcing to low cost countries like Vietnam and India, and maybe even Thailand. Right. And the third was they were building for somebody else as opposed to building for themselves. And now all three of those things are reversed. People want to be here because there are more people, again, within a four hour flight of me and you then are outside of that flight path. And that’s awesome. Yeah.

Raunak Mehta 23:55
And there’s one more thing, right. And I think this is where I talk about destruction, a large part of outsourcing or if you speak of the 90s, or the first decade of the 21st century, right? Certain countries that were outsourcing hotbeds were largely adding incremental value to a value chain. Right. COMM startups, startups by theory, were looked upon, as you could say, platforms or channels of, of destruction and disruption in the proper sense that Clayton Christensen spoke about right, where you are actually identifying a completely new market, right? Or you are bringing a completely new product or you are starting at the at the lowest end of the market, and then slowly and steadily. You’re weighing out the incumbents and all right. So I think that disruption has happened quite a bit and people who have been, I won’t won’t even say it’s not about With the CEOs and the founders who who have been the champions of this kind of disruption, people who have been throughout this journey, have their learning curve has been exponential as compared to people who are doing that’s a very incremental sort of value add. And I mean, I think I guess people do incremental value add, because big companies survive on something I call sustainable disruption. I serve as this customer base, and I will keep serving this customer base better, I will keep adding more products, more services, thereby extracting more margins from this customer is I don’t think they have any incentive, nor are they pushed by their shareholders to be going out after a completely new market segment. Because going there may erode their financial, you could say performance, so yeah, I mean, I mean, that’s how that’s how it has always been.

Michael Waitze 25:49
And where does the igloo fit into this scenario? From your perspective?

Raunak Mehta 25:54
Oh, I might make sure about this. I think thankfully, I think igloo and I can again, draw comparison, right? You would agree that a lot of this column tech vendors, big, multibillion dollar tech vendors that you had coming out of India, and of course, from other parts of the world, were largely doing very customized development for the financial services segment, right. So yeah, digitizing the value chain, and so on. They were in creating a new consumer segment for you, they weren’t creating new products for you, their job was zero to one has happened, let me take you from one to two or from 50 to 51. I think igloo over the last four or five years, I would want to believe that we have really expanded the customer segment. Why because the customer segment we reached, we reach out to the low to mid income housing segment is where there is massive under insurance and uninsurance. I mean, you have people who have never been exposed to insurance, or you have people who have had some basic insurance policies against their name, I think we are reaching out to that segment of the population, and thereby really expanding the overall market size of, of the industry. So I would want to believe and I may have some bias towards it, that we are truly disrupting the market. However, not disrupting the market at the expense of the incumbents, we work hand in hand with the incumbents. Because at the end of the day, it’s a regulated industry, right? And you need and you need in the right, you need to have the right concoction of, of the incumbents or the traditional players and technology at play to be able to better serve your beneficiaries

Michael Waitze 27:45
gets a really good point, right? I think, again, if we had done this conversation in 2019, we would have talked a lot more about disruption and a lot less about cooperation. And I think that somewhere in the middle now, right? Where whether it’s an InsurTech of FinTech, neobank, or whatever it is, is that you’re looking at the incumbents, not you. But one is looking at the incumbents now and saying they’re slow moving, it’s harder for them to innovate. But they have a balance sheet that has like $15 billion on it. And we can help them, we can help them use that balance sheet in a way that they’ve never had access to before by building these other things on the other side to get access to a client base that they haven’t had access to before. And that’s awesome, right? Because that’s I think the way it should be. I’m curious as well about how the conversation has changed with these underserved and under insured households. Literally five years ago, if you’d walked in knocked on their door, they just would have been like, Who are you guys? What are you doing? Why are you talking to us? But now a lot of them are coming on board. Right? You can see the penetration numbers changing slowly, but surely, they are changing, not just you know, not just in Southeast Asia, but all over Asia. Bit by bit. People are thinking and maybe COVID Did part of this too. But people are thinking, I have a little bit of disposable income. And I want to protect the things that I’ve built. And then I’ve worked so hard for over the past four or five years. And insurance feels like the right way to do that. Are you seeing the sales conversations change over time, particularly as you go to the next uninsured household and say, like, can all your neighbors are doing this? You really should think about it. Are those conversations changing as well? Yeah. Again, it

Raunak Mehta 29:23
depends on the reference, right? What is your frame of reference? If we are growing at 3x year on year, of course, when you look at the GDP growth in countries, it doesn’t matter. Right. So the change is coming. I personally believe that change is coming and there are a lot of I would say both quite a lot of factors, right? Part of them are fairly micro in nature. Remember when the interest rates were low, people, people were not parking their money in banks or let’s say treasuries and all, which were the safest way of putting money, right. So thereby they were looking at, and money had become cheap. So they were looking at various ways where they can get a better bang for the buck. Right. And, and this, this, of course, would spill over to insurance that always tends to be very closely related to banking. And All right, so I think that definitely legs some upswing, at the end of the day, when you look at a country level, what you need is that the GWP growth is higher than the GDP growth, if that is happening, that means penetration is moving in the right direction. But when you double click on it, you know, I generally I don’t like average as a very good measure of central tendency, I think it’s abused a lot because of wide extremes, very similar to when when you do for a country, GDP per capita, its meaning doesn’t make any sense.

Michael Waitze 30:58
It’s meaningless. Because let’s be fair, just as just as an aside, in the country where I live, that GDP per capita in Bangkok is like the GDP per capita in in in Boston, exactly what the GDP per capita income can or in a smaller city is not like the GDP per capita in Charlottesville. It’s just completely different. So I agree with you please go ahead.

Raunak Mehta 31:19
Yeah. If you break down that GWP per capita, right, from the top to the bottom, I mean, in the in the bottom half, in the last two quartiles? It it’s like, absent. That’s the best way to define it. It’s just not there. Yeah, right. I mean, to give you an idea, Malaysia and Thailand, if I’m not wrong, the GWP per capita is in excess of, let’s say, 400 to 500. US dollars, right. But if you were to bring it to the below 50% population, that that will probably go down to $5 or $6. Now you have to ask yourself, yeah, maybe yeah, that is also a very, I would say aggressive that. Now you have to ask yourself $5 to $6. At a yearly level, is that good enough to cover you for all the exigencies that that you can come across. So. So I think that is where that is a segment we are target. What helps us target that segment is because again, as I said, for an incumbent who’s already having fairly steady balance sheet, if they have not written COVID products, if they are having fairly steady balance sheets, they would not want to go after this segment, for multitude of reasons, right? General, the general assumptions that you hear, Oh, this is a, this is a very high risk segment, right? distribution costs will be very high. And remember, insurance has always been a push industry. Right? Right? You first. So how insurance used to work is, here’s a product, we first make the product and then you push it right. And if you’re lucky, some people will buy if you’re not lucky, you will make some incremental changes, it’s never done the other way, like in a lot of industries, where you do a lot of market research and you come up with what is the latent need in the market. So the product market fit is is is not there. So that is what I think players like us are trying to resolve trying to make insurance more contextual. And as a result of which we are definitely seeing quite a lot of green shoots coming up in the gig economy segment in the MSME segment. I would say these two are the standout ones. Yes, we have done projects with respect to the climate change and all performing community in Vietnam and all. But that is still I would say in its between its infancy and growth stage. But it is actually the MSME segment and the UK economy segment where we are seeing massive uptake.

Michael Waitze 33:49
You’ve just made me think about something in a different way. And I want to make sure that I’m thinking about this in the right way. I did an entire what’s the right word event a couple of days ago about third party logistics, distribution, that type of thing. And it’s been my contention that big players like DHL Federal Express, pick whoever you want, right? We’re really, really good at taking a big pallet and a big box from let’s say, Taiwan, getting into LA on a ship in a very efficient and cost effective way. And then getting it from the port to some big department store or some distribution center. But the piece that they missed was and that was easy and efficient. And they made a ton of money doing that they never considered the E commerce side of this, which is everything that’s in that box if there are 600 things in here now get needs to get broken down into. Let’s just say 401 pieces, because 200 still goes to the store. Right? But 400 of them now need to go to individual people they never solved for that. And it kind of seems like what you’re doing in the insurance industry is the same thing is that big companies could give big insurance and big insurance policies to big groups of people, but that the fragmented groups of people, which is the commerce and put it in quotes side, that distribution died because it was so hard to do. And it required new companies in Asia like Lala move or E commerce or Ninja van to come up with models and technology to be able to do that. And I presume that’s what you’re doing in the insurance space. Do I have that? Right? Yeah, I

Raunak Mehta 35:24
actually got the analogy back on because I actually started my career with Flipkart logistics, right? This was exactly the problem, what you’re speaking about at that point of time Logistics was bulk movement, right. And we used to call it the problem of one item pick up one item delivery, that was virtually non existent, right, exactly like this, right. Today, you talk about an insurance industry, which for all things have been done has a very fixed way of bringing products to the market and serving a certain consumer base. Now, if you really want to reach out to data segment, right, you have to have the capability to be able to distribute a very short version of that product, which which is which is meant to serve a core need of the consumer, because, again, you have a look at it this way that in the financial services industry, one of the best ways of bringing down the entry barrier is pricing. Education comes later, no matter how you if the entry barrier, if if entry barrier has a very high index of pricing, no matter how much you educate people are not going to be able to pass on pass over that hurdle. So when you are able to chop the product into addressing a certain core problem that the consumer wants to be solved, you bring down the pricing and thereby more people get acquainted with the product, education becomes a lot more easier because it’s, it’s very direct. in that form. It doesn’t have a lot of you could say razzmatazz around it to be able to push through.

Michael Waitze 37:04
I mean, this is something we learn through Procter and Gamble, right? With sachet shampoos, sachet marketing, right. It’s in a way, it’s kind of the same thing. But just going from off the offline world to the online world. How can we make it small enough, but effective enough at the right price, so that people can afford to buy it, but they can they still want to buy like a full bottle of shampoo, but they can’t pay for it all at once. So let’s give them a week’s worth. And as they as their economic life improves, they’ll say I’ve been buying Pearl shampoo my whole life. Just in sachets. Now I’m just going to buy it and bigger in bulk in the same way that you should you would do that with insurance. I’ll cover myself for September because that’s my biggest Work Month. I have money left over. Let’s do October two. I made more money. Let’s do it for the whole year is kind of the way you’re talking right? Yep. Interesting. I love when there are these equivalencies from offline to online, but also when you can go back 25 or 30, or actually Procter and Gamble’s 4040 years ago. Wow. And just make those things effective today. Talk to me about Star Wars. Who are you? Obi Wan Kenobi like, where are you? Where do you fit in the Star Wars universe? You’re not Oh, good. But you’re not old enough to receive the original Star Wars in the theater? That’s got to be a fact. No. Yeah, you’re right, because I did.

Raunak Mehta 38:24
I’m not I’m not that old. Sorry. I mean, if you have seen it in the theater, I have immense respect. I mean, and I mean, I’m just a Star Wars fan, like diehard fan of Star Wars. I don’t think I don’t think I don’t think in our lifetime. We going to see a franchisee that that’s been there for like five decades now. I’m not wrong.

Michael Waitze 38:48
1970 something? Yeah. Because I was 11 years old when I came out. Yeah.

Raunak Mehta 38:52
Five decades and has so much of underlying wisdom has so much of how we are in reality. So I mean, if you were to ask, it’s very difficult to answer because there is there is that the dark side and the light side, right. I think I would be a mix of let me take the light side as I don’t know if you know this character called Ezra Bridger. I mean, he was an inhabitant of Lothal was trained by one of the last surviving Jedi is an all and he’s a very important character. I mean, he’s going to come into he was part of the Star Wars rebel, animated series, and he’s going to come again. And I would say on the dark side, that model.

Michael Waitze 39:45
But isn’t this true for everybody? Exactly. I think if you look at everybody you’ve ever met, there’s a good side and a bad side. There’s a light side and a dark side and it’s just what you do with them. That matters, right? I mean, this was the big conflict between Luke Skywalker and his father, Darth Vader. It’s like, can’t be all bad, can you? But then the flipside was, I have information you don’t have access to. Yeah, right. So you don’t know why I do what I do all you know is you don’t approve of it. Yeah. But don’t but don’t you think that there’s, but isn’t there part of, and I didn’t want to bring this back. But don’t you think this part of being a CEO that’s like that, you have this firehose of information seriously, that’s coming at you. And it comes just at you, whether it’s through your proxies, or through your assistance, whatever comes right to you. And sometimes there’s not enough time to socialize it and then give a response. Sometimes you just have to respond. And everybody else is looking going, that makes no sense at all. And they’re chit chatting in private about, why did we do that. But again, they don’t have access to the information you have, they don’t know that some competitors trying to shoot you kind of thing. And you just have to act on something. And I think in that sentence, you almost have to have the dark side to be able to succeed at some level, because you have to be Machiavellian to get through certain points of management. Is that fair?

Raunak Mehta 41:05
No, absolutely. I think the cost of the cost of taking a decision with whatever limited information you have on hand is always lesser than the cost of not taking a decision and waiting for that incremental information to come through. Right. That’s absolutely there. And I think that is why on my table, you will find a replica of Darth Vader’s helmet, the real helmet, actually, to which I get the inspiration and through which I think that that is why a company meets all the targets.

Michael Waitze 41:37
That’s why the company meets because people walk into your office see that help and just think the dude’s got a lightsaber somewhere. I feel scared, I’m gonna go out and meet my KPIs. My OKRs.

Raunak Mehta 41:48
Maybe, I don’t know. I mean, but yeah,

Michael Waitze 41:51
I like it a lot. Are there these kinds of latent discussions now that weren’t present three, even just three or four months ago about chat GPT and open open AI, inside the company where you hear people unsolicited, right and unprompted, asking, how is this going to impact what we do? And I guess the follow on to that is, are they all also coming up with things that maybe you hadn’t considered, but some great ideas for? You know, we’ve been working on this process. And if we attack it with AI, maybe we can do this more efficiently? Is that happening as well?

Raunak Mehta 42:24
100%. And I like the term you use unsolicited? Right? Yeah. So. So a lot of it, a lot of IT people across various departments are are looking at charge GPT as, as something that’s going to solve all problems for us. Good discussions, I would say discussion, because as you can understand, I mean, artificial general, intelligence is something that that can really help the insurance industry. I mean, you got a policy document, how do you generalize? How do you make it very general, for the consumer on the other side? I think that is where we are working towards? And I think you may see some prototype from us coming fairly soon in the, in the future, but I mean, I’ve got my HR team, talking about chargeability. Which, which, which I really find good. I mean, they’re, they’re saying that it helps them write better job descriptions that are JTC tells them exactly. I mean, you know, exactly the point that we were discussing, if it helps you become more productive. And it’s good, right, which gives you that much time to be able to reach out to better candidates, and with a better narrative of what’s really needed. I mean, I have nothing against it. I mean, the marketing department is looking at it in a completely different way. So, yes, as a company, we’ve always pushed at the edges of the frontiers of technologies, and I don’t think we’ll be left behind on the charges inside of you will probably see something coming out from igloo fairly soon.

Michael Waitze 44:08
Can not wait to see it, I want to thank you. I want to thank Raunak Mehta, a co founder and CEO of Igloo. This was awesome. I really appreciate you taking the time to do this. Let’s do more. Let’s do more. Thank you again.

Raunak Mehta 44:21
Absolutely. Thanks for having me, Michael. Thanks a lot.

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