EP 206 – Jeffrey Khoo – Vice Chairman APAC at Arbol – Why Am I So in Love With Parametric Insurance?

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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.

Guest
Jeffrey Khoo

Jeffrey Khoo is the Vice Chairman at Arbol Inc., a global climate risk solutions platform. Jeffrey previously held senior positions at various firms including a stint as General Manager of a SGX mainboard listed Guangzhao IFB, Agribusiness Director of private equity firm Caudex Asia and Deputy CEO of Green Agritech International. He currently serves as the Food and Beverage Chairperson at the National University of Singapore Society (NUSS) and was previously their Honorary Treasurer.

This episode is brought to you by:

The Asia InsurTech Podcast was impressed by Jeffrey Khoo’s energy level and his love of parametric insurance. Jeffrey is the Vice Chairman in APAC for Arbol, the future of climate risk management.

Some of the topics that Jeffrey covered:

  • Climate change and its impact on the agriculture sector and the overall economy as well
  • Data decentralization and blockchain
  • dClimate and the creation of a decentralized marketplace for weather data
  • Artificial Intelligence and the role it plays in the InsurTech stack
  • Parametric Insurance!

Some other titles we considered for this episode:

  1. Credibility of Data Is Very Important
  2. Not All Data is Good Data
  3. The Risk Experience Must Fit the Solution
  4. Doing A Lot of Good for Climate Change
  5. You Summed It Up Quite Nicely

Please read the best-efforts transcript below:

Michael Waitze 0:03
And now we are on. Hi, this is Michael Waitze. And welcome back to the Asia InsurTech. Podcast. Today we have Jeffrey Khoo, the Vice Chairman in APAC at Arbol. Did I say Arbol right?

Jeffrey Khoo 0:16
Absolutely. Right. Absolutely. Right.

Michael Waitze 0:19
Jeffrey, it’s great to have you on the show. Let’s just jump right into this. What do you think is the biggest trend or emerging trend of insurance and InsurTech in Southeast Asia? And why do you think that’s the case?

Jeffrey Khoo 0:32
I think, you know, with climate change is a story that will be repeating over and over again, over the new and old, all kinds of chat groups, I think that has driven a lot of what we call the green economy in this part of the world, right. So a lot of governments are getting used to it. And as a result of which, technologies like AI and blockchain have come to the forefront, because a lot of these can be utilized for mitigating climate change or spreading out the risk for climate change in a way. So in terms of the technology is at the forefront. Now. The discussions the forefront now will be aI about decentralization of data, and of course, Blockchain. So these are the few things that are upfront now in effect.

Michael Waitze 1:11
Got it? Okay. And can we also back up a little bit and just get some of your background? And then I’d want to talk about how you got from where you were into what you’re doing now.

Jeffrey Khoo 1:22
Okay, so this is a long story, because I’m of a certain certain vintage sort of thing is that? I mean,

Michael Waitze 1:30
What does that mean?

Jeffrey Khoo 1:33
Ah, certainly, this means they have a certain age, you know, I heard it from someone that that’s a better way to describe it, instead of saying you’re old.

Michael Waitze 1:40
You’re definitely not. So go ahead.

Jeffrey Khoo 1:44
So, okay, where do I start off? Right? So my interest in this space, I would say, started off in botany, or some people may call it agriculture. And for a small country like Singapore, this is a little bit of an oddity, right? I mean, we don’t have much space for any agriculture here. So I did a degree in botany, Honours Degree in it, and I did pretty well in school, got myself on the Dean’s List, etc, etc. And when I came out, it was pretty difficult to find a job that’s related to it at that point of time, right? It was 1994 1995. Right. So I ended up, you know, getting involved with stuff like manufacturing, or cosmetics and all that because I biochemistry background, but that’s for a short period of time. And after that, I went to fertilizer distribution, fertilizer manufacturing. At a certain point later, I became general manager of a listed company that was involved in forestry involved in tissue culture. And from there, I sort of evolved into doing agriculture investments. So I went around in APAC, looking for good investments, where you can pretty much good returns, I would say, in terms of, let’s say, plantations, livestock farms, and so on. Right. So I did a lot of that. And then insurance came knocking, right? So I ended up joining sushri.

Michael Waitze 2:59
Before we get to insurance, can I ask you this? So you, us, you study botany? You have to understand science and chemistry. You go out into the work world, right? And you start doing stuff in the agricultural space, also in the in the chemistry in the chemical space, right. But while you’re going through and doing this, are you thinking there’s something missing? Or you’re just going through and doing it trying to make a living and stuff like that? And then later on, you realized, Oh, I get it, we need something? Do you know what I mean? Like, when did this absolutely.

Jeffrey Khoo 3:26
Okay, this change, I would say that my passion for this triggered when I was the general manager of that listed company in Singapore, and I spent a lot of time in China, and a lot of time in Malaysia. And they are also actually exposed to weather problems, you know, when I had ran a banana plantation, and one day, coincidentally, I wasn’t there, the entire partition was basically devastated. Right. And so it’s sort of a little typhoon or heavy wind event going through, and then I lost all my trees. So they remind me very clearly, despite of all the efforts you do to grow that thing, right, keeping pests away using the right kinds of fertilizers getting the right guys to come in and work on it. Well, it was all gone in one fell swoop, you know, literally in two hours. Finished, right? Yeah. So months of work has gone. So I’ve realized that actually, weather played a very instrumental part in agriculture. So that that was a point when it hit me.

Michael Waitze 4:22
Okay, so then you said you joined Swiss Re, and what took you into the insurance industry? Because it’s a completely different thing at some level? No.

Jeffrey Khoo 4:32
Yep. I think it was just the right timing. At that point of time, we’re looking for somebody who was mixed between agriculture and understood a little bit about weather, right. So maybe I take a step back before I entered two, three, I was actually at a private equity firm called cortex Asia. Okay. And at that point of time, I was running around looking for investment opportunities in the agri space. And in particular, because when I looked at I faced the same problems right when I talk To invest in in rice farms, you wanted to know whether there was say, drought prone area, or whether they were impacted by various issues like disease and all that. So all these things came into play. So when when they started to talk to me and say, Hey, we want to do something for Asia Pacific, is this something you want to do? So yeah, by all means this again, affecting me, and if it can be insured, and it’s something that I can sort of market and it’s useful to farmers, I’ll do it. So I ended up mystery street.

Michael Waitze 5:28
What was the learning curve like though, right? Because as as, as a person who’s external to the insurance industry, you can go look at it and think, Okay, I have my own insurance policy of life insurance, maybe I’ve got a whole life policy, I have health insurance, maybe I have a family. So I’ve got health insurance for them as well. But you kind of don’t know anything about it. At least I know, I didn’t, until I started really getting involved in it. So what was the learning curve? Like when you got it? And you were like, I want to solve all these problems in the agriculture space. But oh, boy, this is a lot different than I thought it was.

Jeffrey Khoo 6:00
Very good question. And this is why I’m more or less in love with parametric insurance, which is the thing I talk about every single day, right? Because their learning curve wasn’t really, I will say much of a curve for me, in a sense is because at that point, when I joined to three, this was still rather in its infancy stage. So when nobody that was in let’s do 2015, okay, around 2015 Yeah, 2015. I was there. And then, you know, we did I mean, it was it’s a new, there’s a new setup necess that not many deals will close. And they weren’t close in effect. So when I came in, I started closing deals. Now maybe to answer that question as to you know, what was the learning curve was a little bit of difficulty, because insurance is a pretty complicated business and regulated right. But the beauty behind it, and I would say quite clearly, it is easier for someone who has Zippo experience in insurance to learn about parametric insurance than somebody who is sort of embedded with all the history behind it. And all the wonderful terminology behind it.

Michael Waitze 7:01
It’s such a good point, though, right? Because you come in and someone says, okay, parametric insurance, you take these parameters in real time, or close to real time, and then we do these calculations, then we can make some payouts based on some pre agreed payouts based on this thing. And you go, that sounds like it makes sense. Whereas if you’d been in the insurance industry for 25 years, you would have said, Wait a second, oh, how does that affect this system? And non-system and these other things, then how about that thing? And then what’s the risk? And what are the underwriters say? And how about the, you know, all these things, but for you, it was easier, just like, Okay, I get it parametric? Makes sense? Yeah.

Jeffrey Khoo 7:31
Yeah. It’s, it’s easy, and in the sense to understand and then the applications are, I would say, almost limitless, you know, to wherever they go ahead. Exactly. It’s a wonderful thing to be working with to be promoting and all that, right. It’s at the center. Of course, it’s difficult, because, you know, to change mindsets, is it’s not something that’s that simple. But the key if you want to work through brokers, and they say, Hey, you know, what’s the, you know, what claims procedure, for example, because there’s no claims procedure and things, things of that nature? Or can we layer it up, there’s no layering up, you know, it’s just a trigger, and it hits any piece. So sometimes because of its simplicity, it becomes difficult to understand for certain individuals. Let’s put it that way. Yeah.

Michael Waitze 8:17
Yeah. Because you’re just not used to it. When you when you first started doing this, and you first got interested in introduced to parametric insurance, then you went back to your connections in the agriculture industry. And you said to them, would you consider doing this right, because there’s a big difference actually in I don’t want to say claims but in the payouts that are associated with parametric and indemnity insurance, right. So an indemnity insurance could be a much larger payout potentially, whereas parametric is it happened, the trigger got hit, here’s a million bucks, even if there was $10 million of damage, and I’m just making up numbers, right? Yeah. What was the response from because before it existed, nobody kind of knew about it. When you went back to your ag tech connections, what was their response to this?

Jeffrey Khoo 9:02
Well, you know, because selling fertilizers for a long period of time and spoke to many different agriculture firms, of course, I went back to them and told them this. There are now doing this, you know, I’m going to sell this to you. Now. I depended on the client, right? So there’s a reality behind it. Let’s say rice farmers, rice, farmers barely make 1% net profit out of whatever they produce. So they don’t have enough money to even use parametric as a sort of insurance tool. Right. But if you look at larger firms, multinationals, that’s what we’re interested, right, because they had a budget to do these things. I mean, it’s not free, it’s parametric is not free. And cost is so simple in this way of paying out. But it also sort of affects the cost law. It’s not you will not be you know, that cheap per se. No indemnity insurance. There’s the ability to argue maybe there’s ability to claw back a certain amount, you know, so insurance companies might depending on the structure, the solution gives you a very attractive premium offer. But it comes with a lot of, you know, exclusions, what if, etc, and it’s all there. And so the insurance company has a possibility of maybe throwing back a certain amount like say, Hey, I can’t pay you this amount because of this. But in parametric insurance, where the policy wording is barely 1015 pages right? Now, insurance company has no choice but to pay. It triggers pay less, there’s no, there’s no what if, what if whatever, then I don’t pay right doesn’t exist, right. So as a result, sometimes depending on the structure, not always, the pricing can be more of a challenging, so it sort of fits certain clients.

Michael Waitze 10:37
So how do we make it so that the farmers that are most at risk, right? So I don’t want to necessarily just say smallholder farmers, but smaller farms, right, that aren’t industrial farms, and aren’t corporate farms, where if they miss a planting season, or if they miss a harvest season, like that really could go bankrupt, they could go out of business, where the insurance in this case could come in really handy, right, like a storm, you said, destroys your entire Banana Farm, your banana plantation. Yeah. Now how am I going to eat? Because I can’t even eat the bananas? Do you know what I mean? If worse comes to worse? Absolutely. How do you democratize it down so that it’s reasonably priced enough so that smallholder farmers can do it? And not just big corporate farms? Yeah. Yep.

Jeffrey Khoo 11:18
That’s a very good question. I work a lot with NGOs. I work with, you know, donors, that would be willing to actually pay up the premium for the farmers or even governments actually willing to pay out the premiums for the farmers are a majority, larger portion of the premiums on behalf of the farmers, get them on their feet. Yeah. So So you know, instead of, let’s say, a certain foundation donating billions after the event has happened, probably donate a little bit before the event has happened. And then then we can cover them for these, you know, major, I would say weather events, I mean, severe events, right?

Michael Waitze 11:52
So you were at Swiss Re but now you’re the vice chairman at Arbol what is Arbol? How do you get involved here? And then how do you just like, dig deeply into this?

Jeffrey Khoo 12:06
Okay, I was at Swiss Re for about five years odd. And after that, I moved on to a company called Donna. And they also had what we call them, mga as they call it, basically the right to write insurance deals for forestry. And I did a bit of parametric there. But there was during the COVID periods, so things are all, you know, difficult to do anything. So when I came out of COVID, I joined our board, the founder, the company gentleman called Syd Jha. So he connected up with me. In fact, he connected up, essentially, we knew each other. And while I mean, he did a wonderful job, the company just just grew exponentially. And he said, Why don’t you come and join us? Since you love to do this thing? And you’re the noisiest guy in APEC, always talking about this come in, come come on board. And here’s what I did. Right? I think I’m doing more or less the same thing, in terms of promoting parametric insurance. But what I really love about this company, is that, unlike when I was in surgery, and you know, that kind of ground, I also had the opportunity to look at new technology. What does that mean? Okay, so maybe let me let me explain a little bit about the technology, because Apple is not purely what we call an insurance company right? Now, when I was still in Swift, three, St. John, the founder of Apple approached me, we had friends, mutual friends. And so I shared with him what I was doing its history, right. And a couple of years later, to my big surprise, and joy, in fact, that he actually grew such a large company, and it’s grown exponentially. I think it’s one of the fastest growing tech firms around. And so he called me up about last year, and they said, Hey, why don’t you join us? Right now, you’re very familiar AIPAC. You know, you’re someone who is speaking very loudly about advocating about it. So and, you know, a lot of people in this place, right, and I speak a couple of Asian languages, so just as well. So I thought that was a great opportunity. But But what really attracted me wasn’t really this because, you know, I could have gone back to history come back to Munich reorder larger companies. The thing is that Apple had InsurTech. Now, it’s a common word to use. But the thing is that these guys really know what they’re doing. They have blockchain AI, and all the very nifty stuff. And they use AI to actually work out the premiums at times, right, and also to work out the, you know, there’s a lot of data that’s involved, you know, in weather, right. So, AI will come in to do the calculation, you give it, give it, give it some parameters, and then come up with the pricing is amazing. You know, they can do this, and of course, blockchain and everything else, so they were driven into that space. There was a company called D climate, which actually spun out of our board. And that’s the world’s first decentralized marketplace for weather data. They have a lot of data stored and all kinds of people contributing to it. So the climate was also invested by this famous US investor called Mark Cuban. So he put in some money to this, believing that it will grow big. And so far, they’ve come up with pretty good products at a very fast rate. So that’s one of the reasons and I think the main reason why I actually ended up in our board, right?

Michael Waitze 15:26
So when I was on a sales trading desk, right, when I sat on a portfolio trading desk, we would take a lot of back tested stock data, right? So we’d get a lot of stock trading information data, we would clean that data up to make sure that it was all right and valid. And then we would use that to build trading models. We didn’t call it artificial intelligence. But we did write algorithms that tried to understand what the patterns were, and then predict what the pattern would be today and also the next day and stuff like that. And we would build algos to then do trading for us. Are you suggesting that they are also gathering all of this climate data feeding that climate data that’s historic into our bowls, kind of actuarial information, whether they give it to actuaries or not is a different story, but into the artificial intelligence and then coming up with pricing for parametric insurance based on historical weather data, and maybe predictions about future data as well.

Jeffrey Khoo 16:23
Yep, you summed it up quite correctly. Yep. I see that you’re already part of this company. Yeah, I think, you know, let’s put it this way, where the data, generally speaking, is plentiful in mature economies, like the US mature economies like Australia, but no places, you know, far flung, you know, some places in Vietnam, some locations, even in India, you don’t really have good data, right? Okay, you need a workstation to do that. And all that. So data is something that the camera keeps on collecting. I mean, it’s all across the globe, it doesn’t also mean that all satellite data, it can be to ground sensors, IoT, so on so forth, but all this data can be, you know, used to structure products, as you said correctly earlier. And we do that, right. And of course, being parametric, you need that data to pay out or go to you got to ensure that the data is third party, which is one reason why, you know, in the sense that our boy and D climate are more or less separate companies in a way. Yeah.

Michael Waitze 17:25
Yeah. I mean, in a way, look, if you go look at Sid’s background, and I’d love to have him on the show as well. He comes out of an applied mathematics background. So taking a very different take on what that data means. Right, if you go back to the way indemnity insurance is built through actuarial mathematics, which again, is very sophisticated and complex, but actuarial tables as well, it’s different than taking applied mathematics, taking the real time data, and then being able to project forward about what this is going to be in a parametric way. The other interesting question for me as well, as you said, like even in countries like India, and Vietnam and stuff like that, because there haven’t historically been weather stations, is there a possibility that you go out and build your own weather stations to get this proprietary data that feeds into D climate? Because I presume you that company was was spun out so that everybody can have access to that data, of course, on a paid basis, but that anybody else that wants to do it, then can white label that data into their own analyses and create their own products? Yeah.

Jeffrey Khoo 18:26
Yep. Yep. I think the advantage of it being decentralized, so encourage more people to contribute data to it, you know, because they’re really far flung places to set up all these sensors. Yeah. And so there’s a commercial challenge there, right to make it profitable to mean to sort of companies and all that currently, I don’t think that’s in the, in the plan yet. But we do get a lot of disparate data from very far flung places on the globe, that, that we can sort of use and collect and analyze within within d climate.

Michael Waitze 18:57
Yeah, it’s just so interesting to think about what that business itself is going to look like,

Jeffrey Khoo 19:02
ah, that business, I will say, You got to be careful with it. You know, I’ve done this kind of, it’s not right for me to say which country and all that. I mean, you’ve got weather data coming from certain weather stations that, you know, when there’s a thunderstorm went through a typhoon has went through, and then the data reads nothing. So So I mean, the credibility of data is very important. Yeah. So I mean, I don’t know whether the guidance meaning the police are sleeping easy. So these are things that that’s the job of parametric insurance. Not all data is good data. So you know, I’ve done certain deals in Southeast Asian country for yield data. Right. And it’s amazing, same thing, that a drop down there, but the harvest was, what is, I mean, it’s not possible, right. Keylogger, right. So I mean, and you expect me to use that data as a trigger point to pay out? Wow, that’s going to be very difficult, right? Yeah. So the one part about the parametric design is to make sure your data is genuine. And to make sure that the way you collected the data has been similar in the entire time span, I mean, if you collected it differently 20 years ago, and you collect it now. So I mean, I wouldn’t consider the data I can use to price it, right?

Michael Waitze 20:14
Is there a tokenization aspect of this business as well, right to encourage people to contribute really clean data to it, they get tokens, and then maybe that they can use those as, like a source to be able to buy some parametric insurance, if that makes sense.

Jeffrey Khoo 20:32
Yeah, that sounds I think for for this part of the world, when it comes to tokenization. And all that is still still something they read on the news, they haven’t done it yet. So at least from my side of the fence, in the Asia Pacific is difficult because and to be very frank, right, in terms of just normal insurance, penetration within Southeast Asia and all these very low, yeah, so me tokenization they’re far from it, they got to get insurance. And they gotta understand the value of insurance. Let’s, before we get there.

Michael Waitze 21:02
So we’ve talked a lot about the benefits of parametric insurance. Are there any challenges or any downsides to this? And then how did those get resolved as well?

Jeffrey Khoo 21:10
Okay, let me let me tell you the challenges and the downside, maybe all at one go. I think that the challenge is we know, acceptance, right. And sometimes the cost, and sometimes even the understanding, so these are the issues that the challenges that we face, right? And data will also be a challenge to make sure the right kind of data, and not all solutions that you know, I mean, you cannot, cannot just come to find and say, Look, you know, let’s find out the x amount of rainfall you need, or X amount of temperature you need. All that is not really precise, a lot of work needs to be done to structure in such a way that is more precise, right? Because this isn’t as simple as if the more rains, I pay you tomorrow doesn’t rain, I don’t pay you. First of all, they may not be that sophisticated, but sophisticated enough to know that he may not pay out so so or even they think he’s gambling, right. So we have to avoid that. That’s the biggest challenge. Right? In, in terms of avoiding that. Now, in terms of, you know, another portion of that challenge, I would say is what we call patients risk, which sort of adds on to what I said earlier on your your your this solution that you create for them. I give an example the best way to wrap up an example. So for example, the client says you know, Jeffrey, I want to buy a category three typhoon cover, if a category typhoon, three, three typhoon hits my location, or near my location, I want to pay up. Now here’s the problem, a category one type of disease location and everything is wiped out. And I don’t pay him anything because it doesn’t get category three, right? So this is more or less what we call basis risk, right? The risk experience must fit this solution. If it doesn’t fit the solution what’s going to happen is going to walk away very very unhappy clients and to breach that is the problem. Now one thing to breach there’s a problem in certain places in this world not to mention which part of APEC category track three Typhoons are a norm every single year yeah. Now to ensure that it’s not a matter of insurance anymore it’s a guaranteed will happen kind of thing like the Philippines Hong Kong, we can insure those. Yeah, exactly. It’s gonna hit Yeah, absolutely. Right. And I know insurance, right mind will say okay, what, gotta do it, right. I mean, everybody we dumping their money in buying premium, but because the shopI out. So these are things that parametric insurance cannot do, it cannot insure something that is truly uninsurable, when you know, a certain as a sunrise that you hit then is no longer considered insurance, right, you got to find some other ways to mitigate that risk. So parametric insurance when talking about business risk, that is the part where you request skill, you need time to actually talk to the client to understand more, get the proper data, and then do the right analysis behind it. Right. So something interesting, I learned about parametric insurance and about pricing can give to two different underwriters using the same data in the same company, and you get two different prices. Sure. Yeah. So so so there’s a little bit of art involved in this thing, right? A little bit of business sense involved in this thing to actually get it right. So it is exciting in a sense, because sometimes you come up with a deal doesn’t well go back to the drawing board and try to to get to make sense and then bringing it back to the client. So there’s a lot of back and forth here. But through it all, the client learns a little bit more about a race and we also learn a bit more about how we should price deals for them. What’s the

Michael Waitze 24:23
right balance for a para indemnity insurance, right in the sense that you do want to have parametric insurance you can get that immediate payout but like we said, if the immediate payout is not large enough to cover all of your losses, you can also combine this with an generally accepted I mean indemnity insurance and say, you may actually get a larger claim in this case, it is a claim if it’s indemnity insurance, right. How do you package those two things together?

Jeffrey Khoo 24:50
Okay, well, it’s strange that you said this word right? Because this word I remember the rest is history. This one afternoon, and I was just fooling around with words and say Have you know how about this? We just call this paradigm Lila. And you know, strangely enough, put it on a LinkedIn and add a few people call me up, you know, because I’ve got a pretty large LinkedIn following and all that. But safe to say I don’t think that word has been going around much. But it comes out this way. It’s more like something to do with a mix between parametric indemnity. Yeah. Okay. The way it works, is this right? I think it’s a mixture, when it comes to the payout, a certain portion, actually would meet Vasa just to be involved. And it says a portion is immediate trigger. So for example, you’re talking about category three type of dating, right? Well, maybe the entirety of $1 million. You say, look, I tell you what, in this case, we pay a half a million first because your image needs to settle. And the rest will be using, you know, normal ways of people going down loss of justice and checking and everything else. So it can be a mixture of that. In that case, you can sort of control the cost, if you would, this way, by having other portions of it as parametric, instead of portions of it going to the normal claims adjusters and so on.

Michael Waitze 26:00
What are the biggest markets in Southeast Asia for Arbol right now? And do you get the sense that countries like Indonesia, I’m gonna leave China separate? Because I feel like it’s its own sort of domestic market? But if you feel like countries like Indonesia, with very large farming populations, but also India as well, I mean, look, to be fair, there’s also Pakistan, Sri Lanka, Bangladesh, right? Where those countries alone have almost 2 billion people in them combined. Are those going to be big markets for these types of products as well? And I know you said before, and I don’t disagree with you on this, that penetration for traditional insurance is still low, you have to get kind of past that hurdle. But these things are I think you’re gonna happen in unison, but you look at those big countries as the biggest opportunities as well.

Speaker 2 26:45
Yeah, they all do. I think that that opportunities, definitely, they’re different pockets. And I would, I would venture to say not only for agriculture, right permission can be used for so many things along the value chain. So if you’re just at the front end, where the farmers are, and all that, that sort of limits you. So you know, you know, simple, not simple, I would say things like factories, need to operate anywhere heavy rainfall, and you’re in an area that’s easily flooded, then, you know, you buy parametric insurance to for events, large scale football matches, concerts, and so on, so forth. And they could be badly affected if you suddenly have a huge thunderstorm in the area. And parametric issues can also be used in those cases. So we will not be limiting ourselves to just weather for agriculture, but also weather for industries, businesses, and all kinds of weather related kinds of research. So it’s not related or purely for agriculture. Yeah, so in that sense, we are sort of spread out. I mean, let’s put it this way. If there’s a heavy thunderstorm planes can fly off. Now, somebody’s got to pay that too, right. So we can come in and do something. But having said that, having said that, let me share with you something that I’ve learned in Japan, you know, I tried to sell some of this in Japan. And interestingly, I spoke to a broker. And interestingly, I experienced it myself. He said, what happens to Thai food business will be affected people cannot go to the shops can go to restaurants. I really understood that wasn’t correct. Because I was there for when they there was a typhoon category tree that hit in Tokyo about probably about four or five years ago, I was there in the middle of Tokyo in a hotel. And guess what, the next day, I read the news, I heard it on the news, two people passed away. And I was staying in the train station itself, you know, just text, the train station in the train station. And jolly well, next day, everybody was lining up to still go to work. So you know, it’s also partly due to the resilience of the people. So I’ve also realized that it works, you know, unless, of course, it’s much more severe. So, but resilience of people also means that, hey, they wouldn’t bother you still go to the restaurant? whatever it’s worth, right. So so it’s a cultural thing. And it depends on which country right, so for the Japanese kudos to you guys. Because, wow, I mean, even the toughest stuff, you still go and as a five, we’ll just carry on as normal.

Michael Waitze 29:01
Interestingly enough, I am going to publish an episode today. For the for this show. That is titled Japan is built for long term resilience. So I completely agree with you. The last thing I’ll ask you, before I let you go is this is that once you’ve built all these systems, right, they can handle parametric insurance. And once you understand the mathematics around it, right, so and you’ve gathered all this weather data, does Arbol look at other places where they can potentially use the same infrastructure, but not just for weather? Like maybe for connectivity, or for gig workers that can’t go to their job? Because they don’t they’re not connected to the Internet or because the weather is bothering them. Like are there other places where you can use us that aren’t weather related?

Jeffrey Khoo 29:50
Very good question. In fact, that’s one area we’re working on and you know, you know, the carbon markets, carbon credits and all the lingo for that. We’ve been doing a lot of work in areas it’s very exciting. The rate of climate change, everybody is going for this carbon credits, offsets, so on so forth. Now Apple is working very intently, we do have product now that we’re going to sort of promote. And that’s basically ability of using satellite data to look at basically the amount of carbon in certain forestry and plantations. You know, it’s amazing, right? Instead of having to go down there and say, how much how much carbon they have sitting here, right? And it’s almost real time, you know, because this satellites go around probably every day or two, and then you’ll be able to actually capture the information, right? So the biggest problem the carbon market is now is that people resell the same piece of forestry again and again and again sometime. Yeah, exactly. So it ends up hurting the planet instead, right doesn’t solve the climate change problem. In fact, it makes it worse. So this adds a lot of clarity. So the technology, Blockchain AI, is all utilized in this kind of solution. And we are slowly promoting it of this new stuff that we need to improve and tighten and make it a lot better. But that’s the direction that we are taking very seriously. And I say that it excites me because I think that this helps future generations, because we get it when it comes to analyzing carbon credits and making sure that there’s totally transparent and no double counting. I think they’ll do a lot of good for climate change. So I think Apple plays a very important role there

Michael Waitze 31:27
and love it. Okay, I’m gonna let you go. You are a great supporter of parametric insurance. Jeffrey Khoo…

Jeffrey Khoo 31:33
I love the business.

Michael Waitze 31:35
I know I can feel it. Jeffrey Khoo, the Vice Chairman in APAC at Arbol. Thank you so much for doing this today. I really appreciate your time.

Jeffrey Khoo 31:42
Thank you.

Episode 283
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