EP 89 – Victor Roy – Founder of Bindcover – How Can the Smaller Brokers Compete With the Biggest Brokers?


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.

Victor Roy

Victor Roy is Founder and CEO of Bindcover. Prior to Bindcover, Victor has more than 15 years’ experience in Insurance industry from Broking, Agency, Underwriter and Loss Adjuster. He hold various Insurance qualification such as ANZIIF (Senior Associate) from Australia, CIIB from Indonesia Association for Insurance and Reinsurance broker and AMRP (Certified Risk Management Insurance). The idea of Bindcover sparked when visited Lloyds of London in 2018.

The Asia InsurTech Podcast spoke to Victor Roy, the Founder of Bindcover.  Victor has almost two decades of experience in the insurance industry.  He has worked in brokerage firms, did some marketing and also opened his own agency, which is still active.  Running his own agency at the beginning was difficult because all of the processes were manual.  Even back then, Victor wanted to build an online marketplace for insurance, but the existing technology would not have supported it.

Victor discussed the impact of COVID-19 on the broker business and he noted that he and his team were trying to implement video meetings over a year ago and got a lot of pushback.  COVID-19 has obviously changed that dramatically, with the use of Zoom and other virtual meeting tools.  He also believes that the hardest hit area were those that sell travel and leisure insurance.

The inspiration for BindCover was built out of his own experience.  Victor did the job of a broker, which he describes in simplified terms as going to see his clients face to face, understanding their coverage needs and after reaching an agreement, he then goes and does a placement.  For his corporate clients, a typical quotation can not be made off-the-shelf because every situation has its own nuances and is unique.  This process requires a lot of manual documentation, particularly if the risk is split amongst multiple underwriters.  Victor was convinced the manual processes and the multiple pain-points could be solved with technology and make this placement process more efficient and less costly.

Check out the full transcript below.

Michael Waitze: [00:00:00] Hi, this is Michael Waitze. 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 and globally. Today I’m joined by Victor Roy, the founder of BindCover.

I love the name of this company by the way, Victor. It’s great to have you on the show. How are you doing today?

Victor Roy: [00:00:29] I’m good. Thanks, Mike.

Michael Waitze: [00:00:31] I’m really glad you’re here. Look, let’s just jump right in. What do you think is the biggest trend in InsurTech in Indonesia and by extension the rest of Southeast Asia.

Victor Roy: [00:00:44] In Indonesia, actually, InsurTech is just very, very new it’s less than five years I can remember. Okay. So the, the new trend will be all the marketplace because everybody here in developing countries, such as Indonesia, they do a full stack insurance, like B to C and B to C, but they are. Most likely is the aggregators.

They act like a broker or agent. And of course in marketplace is consists of the micro insurance and on demand insurance. And I think that’s the trend in Indonesia. Everybody become a aggregators,

Michael Waitze: [00:01:23] Right. And is that a good idea is doing that sort of aggregation. A good idea. What do you think?

Victor Roy: [00:01:29] I think yeah, for, for the start is a good idea.

But for, for me, as a insurance people, I worked in the insurance industry before I think, the. The marketplace. It’s not really valuable and it’s not really unique because you have so many market place in, in the market. At the moment we have, I think, five or six marketplace and aggregators in the, in the OJK is the financial service authority, authority say monetary FSA of Indonesia.

I think they, they have like 16 or 17 companies on the queue. Oh for me. Yeah. It’s not really unique.

Michael Waitze: [00:02:13] Okay. So look, you just said you’re an insurance guy, so let’s back up a little bit. Can you give our listeners a little bit of your background so they can understand your experience in the insurance business?

Victor Roy: [00:02:25] Yeah. So working in insurance business since 2003, so I worked in the broking firms and afterwards I work as a marketing, in the insurance companies. Then afterwards then, I, I used to open my own agency. I start become an entrepreneurs and I do several companies before, where I got, connected with the insurance and some doesn’t connect the related with the insurance company.

So I have experienced with the brokers insurance, loss adjusters, and agency. Got it. Yep. I made few companies before.

Michael Waitze: [00:03:04] What was it like starting your own agency?

Victor Roy: [00:03:07] The agency at that time was hard because, like. We don’t use the technology yet at that moment. I remember we just used the web, I think web 1.0 or web 2.0, it’s my, my thought was like, we want to make a marketplace like now, but back 12 years ago. So the technology doesn’t really support my ideas that time.

Michael Waitze: [00:03:33] Got it. Can you tell me a little bit about. What the impact of COVID has been, you think on the sort of agency business, the broker business and the face-to-face selling.

Victor Roy: [00:03:46] The COVID of course it’s, it’s affected many business because especially if you think, the usual agency, the conventional one, they have to meet people actually last year, when we, when we think that we want to build like the, virtual meeting, like the one that we do now, it’s actually people don’t really like it when you talk, like virtual meeting or something like zoom, zoom has been around for many years, but yeah.

Last year when, when we talk a video call people don’t really like it. They still like conventional way meeting coffee, lunch dinner. Of course it impacts a lot. It’s impacted a lot. They are not used to it, but the good thing, because insurance is once a year, I think they still can make it. But the one that may be hurt so much is related to the, travel, travel insurance that, travel industry.

Michael Waitze: [00:04:47] Yeah. I look at, I look at traveloka, right, and I worry.

Victor Roy: [00:04:53] Yeah. the, the business on the leisure, I think has been impacted a lot. And then a lot of insurance, they do everything, like selling cross-selling insurance when they sell the ticket and the hotel.

Michael Waitze: [00:05:06] Right.

Victor Roy: [00:05:06] But that’s the most, the most hit, I think the one, under leisure business.

Michael Waitze: [00:05:12] Got it. So let’s jump into BindCover. What exactly is BindCover and what was the reason why you started? Like, what was the idea?

Victor Roy: [00:05:22] Actually, the idea I hear was simple. I was a broker guys. All right. I used to work in the broking and I used to work in the insurance business. So what I do every day as a broker, I met the client. After I met the client. I do the placement. At that time I thought do the placement is normally easier. Right? How can it be hard if I have like plain insurance company just to place one hotel, they want the business. Right. So I thought it would be. Just like one or two days we’ll be finished, but ended up like one month. And then when I worked back in the insurance industry, I thought, how can it be so hard when I know like 160 brokers, I just come and I can just underwrite. And it’s not that easy. So the idea comes up when I, when I think about it and then I face it, it, Lloyds of London with a party, the association 2018, two years ago, then my idea was sparked.

Then I thought like even the Lloyd’s of London, they still do their manual ways. You know, people still bring a chunk of documents. They bring very thick document. They’re still meeting each other as it. Even, you know, these people, you need to send those documents online. Right. So that’s the idea come up and we democratize, we simplify the insurance placement.

Michael Waitze: [00:06:48] Can you tell me exactly what that means by placement? It’s just a word that I haven’t heard in this context before.

Victor Roy: [00:06:54] All right. Placement is actually when you, when you are an insurance broker, you have, account or you have on the client, normally is a corporate client is like, For example, they sending the cargo or they have a property like hotel. So it’s not like tell insurance, like housing work while you can buy off the shelf, you need to make a proper quotation from them because every of this is unique. You need to make a detail, every risk, whatever risk they have the claim history and everything. Then you put everything in one slip, then you call it normally quotation slip or placing slip.

Then you ask the underwriters who wants to underwrite this. And normally the underwriter wouldn’t take a hundred percent if there is too high or too big. In Indonesia, they have a capacity like standard insurance is about 10 million US dollars for the property. So if your value is like 100 million or 200 million, maybe you need few underwriters. Then the placement is pain. It’s going to be take ages.

Michael Waitze: [00:08:04] So what is like, what does the platform do? In other words, if I’m an insurance company or if I’m a placement agent, right, what does the platform allow me to do that I couldn’t do otherwise it’s scale. Does that make sense?

Victor Roy: [00:08:20] Yeah. What we do normally, the brokers, they, they using the manual ways they sending the emails to insurance ‘A’, and then they normally send not just one. They send probably couple or three to insurance company. They send two or three chose company by like emails. And then those insurance company will give a quotation back to them and then they negotiate within the phone, within the chat thing. And then they have to write down the email. So what we do. We replaced those emails with our platform. So once you come into BindCover platform, the broker, you can just use it. And then the insurance company, rather than you go around as a marketing, you go around from one broker to another broker looking for business.

You can just come to our marketplace and all the brokers all the risks all the placement is there. So you can just take it whichever you want. You can just underwrite and you can take you.

Michael Waitze: [00:09:21] Wait. So this is interesting. So that means. Again, if I’m a placement agent, right. I want to find out a way to underwrite this stuff.

And you said before it was all manual. So I’d send an email to, let’s just say five or six different underwriters and I’d wait for them to come back. Maybe I’d log it in an Excel spreadsheet or a Google sheet, and then somehow I would consolidate it and then figure out where the best bids were. And then I’d go back to them and say, okay, here’s the best.

Which of the three people that want to underwrite this, and now that’s all automated on the platform.

Victor Roy: [00:09:49] Yeah, we do everything within the platform. So you have a lot of gadget. You have a lot of platform, you have emails, you have WhatsApp, you have a, whatever you call and then face to face meeting, but you need to recap everything within the paper.

So what we do our platform, you can do like a project management within a marketplace, so everything done in one platform.

Michael Waitze: [00:10:14] So what’s been the response when you go to the reinsurers, right. And even the insurers and even the brokers, when you go to them at the beginning and say, look, I want to get you on the platform because I think this is going to make your placement and your ability to place and your ability to underwrite more efficient.

What is the, what is their response? And like, what is the sales cycle? Like? How long does it take for them to get this.

Victor Roy: [00:10:36] For the insurance company, the response is very, very good because no downside from them. Right? So for them, you can just join our platform. If there is a risk you can underwrite. If there is no risk, there is no downside on the insurance side.

Michael Waitze: [00:10:51] Sure.

Victor Roy: [00:10:51] But for the broker. Yep. They, they they’re asking normally. how is the data going to be like a privacy policy and all that, but after we can give them a confidentiality, and in the end everything, I think that they are, they are more confident and we are targeting on the  medium to small broker. They are more eager to use our platform because normally the incumbent, the big boys, they already have so many people that work for them.

And then they have maybe they need a system that can allow them to make a multiple placement and all that. So for, for me, the medium size. They are very good. The response has been very good and they can just come back to us. They say, okay, let’s try it.

Michael Waitze: [00:11:39] So this is what you mean by the democratization, right.? Of this part of the, of this part of the insurance chain, because it almost makes the medium-sized broker feel like, and look like one of the big brokers, right? Because now they have access to all this technology that they don’t have to build themselves. They can just use it on the platform. Do I have that right?

Victor Roy: [00:11:58] Yeah. Yeah. So our, actually one of our vision, how can be the smallest broker in town to compete with the medium sized broker or the medium one to compete with the big boys? What we do, we have to capitalize all these people together within our platform so we can make a better negotiation power to the insurance company.

So when they, when they come to BindCover insurance, we’ll look at it as a whole platform. AsBindCover network is not just like a small broker or a single brokers.

Michael Waitze: [00:12:35] Okay. So this is starting to get really interesting for me. Let me ask you this. When I trade a stock and you’ll see where this is equivalent in a second, I think. If I want to buy like 10,000 shares of Toyota on the Tokyo Stock Exchange, right. I just put an order into the exchange electronically. I have no idea who’s selling it to me on the other side. It’s just blind bids and offers we say, yeah, I come out of a stock trader background. So that’s why I’m saying this.

Are you suggesting that on BindCover if I’m an individual and the other thing that the counterparty doesn’t know is how big I am. In other words, they could be trading with the government of Indonesia, or they can be trading with some guy in a small town in, in Thailand. Like they just don’t know who their counterparty is.

Are you suggesting that on BindCover? Anybody can go in with a request for a quote to underwrite and it does the other side know who they are. And what’s the relationship between the necessity to accept that quote and trade on that quote. Regardless of your size. Does that make sense? In other words, is this like an exchange for underwriting?

Victor Roy: [00:13:42] Yeah, it is an exchange, but the way it works is a little bit backwards. It’s, it’s like a trading a stock market, but it, the other way around, if you play on the stock, if you play on the stock market, your seller, and the buyers, both are brokers, right? But this one, the, the, the seller is actually the, the brokers. They sell their risks and the buyers is the underwriters.

Michael Waitze: [00:14:07] Yeah, of course, but that’s just the nature of the, yeah.

Victor Roy: [00:14:12] It’s not that anyone can go into BindCover. BindCover is under Financial Service Authority in Indonesia. So we only do B to B. So, whoever in our member or our client must have the OJK  license or the license first, they can go into our place.

And then once they go in, they can privately place and they can have option to publicly place. What’s differentiated, private, for example, I’m the broker A, I just want to deal with insurance, Michael, so I can just put private placement just to Michael and that’s it. I can just place to one place, one person.

Michael Waitze: [00:14:52] Okay.

Victor Roy: [00:14:53] If I would like to have other options I can put in public. So in public means whoever that already signed with BindCover, whoever insurance that is that already sign, they can just look at it, this risk, and then they can, they can just, as fast as possible, they quote the risk and then once you accept, then you can, you can build your network like this insurance company, if you trust, then you can give a chance.

Michael Waitze: [00:15:21] Yeah. And does that happen in, in real time?

Victor Roy: [00:15:25] Yeah. Yeah. Yeah, sure. It’s real time. One, once you quote, you just press. Okay. And it’s uploaded in the marketplace. Once the insurance company accept it’s already done in your platform, you can, you can get a notification as well.

Michael Waitze: [00:15:44] And do you find that the bids that go out for public get better prices than the private placements?

Victor Roy: [00:15:53] Actually in Indonesia, if you’re talking about the property. We get the, the rate from the government. We, we, the rate is cap and for the property and for the motor vehicle, but for others like liabilities and all the other class. Yeah. It’s, it’s better because a lot of people that meeting lower and lower.

Michael Waitze: [00:16:15] Right. So even for this, even for the stuff that happens quickly and that’s regulated, like you said, like property and motor insurance then speed or paying attention is the key to actually underwriting the risk. As long as that risk is reasonable. So it means that somebody has to be hired or are they building systems on the insurance and reinsurance side that can connect to your API and then can automate the sort of risk placement side, the buying of that risk? You know what I mean?

Victor Roy: [00:16:44] Yeah in Indonesia, actually, when you talk about technology on this insurance company, the funny thing, only few of them that have the API at the moment. So. They, they don’t really have a system for placement and all that. They have a ERP system on their, on their company, but mostly on a context system for the broker, but for the insurance to produce the claim and the produce for the insurance policy.

But they don’t really have this placement process, this placement API that you’re talking about. They, they don’t really have it at the moment.

Michael Waitze: [00:17:21] So is that one of the services that you could provide them, maybe helping them build those APIs so that then they can connect to the BindCover exchange.

Victor Roy: [00:17:30] Yeah, sure.

We, we, we are, we are trying to do that, but, back again, the system, if you connect it with the incumbent or the existing company, existing, system is quite complicated. So our platform our system you just plug in, you can just go to the website, bindcover.com login and you can place that’s it it’s as simple as that.

It’s not connected to anywhere, but if you want to connect it, you can request to us. We can give a connection that API.

Michael Waitze: [00:18:01] Okay. So you have APIs, but it just depends on whether the insurance and reinsurance companies and the brokers have an API, but otherwise all of the transactions take place sort of ring-fenced inside of the BindCover environment. Yeah?

Victor Roy: [00:18:14] Yeah. Yeah. Okay. That’s right.

Michael Waitze: [00:18:17] So if that’s the case you must be able to, and how long have you been doing this?

Victor Roy: [00:18:24] We started the company legally on 2018, but actually we start operation on 2019. So it’s been a year or a year and half.

Michael Waitze: [00:18:33] Okay. So you must be able to gather some very interesting data. On sort of pricing and risk assessment and the desire for certain companies or certain entities to absorb certain risks and not absorb other risks. Right?

Victor Roy: [00:18:53] Yep. So we, we have, we have the data, but, again, with the privacy policy, we are not able to, to open or to see whatever, they put on, on their slips. But what we can get there is, the total amount of the, the placing the total amount of the value. And the total premium, we can gather because they have to key in the numbers.

And then we able to know the response time of the insurance company, and we know the portfolio size about one broker. They are playing on which field. So I think that’s, that’s a risk assessment that we have so far.

Michael Waitze: [00:19:40] It’s just really interesting what you could do with that data, even if the data is anonymized and you don’t know sort of every last thing that they’re doing.

And I think as you operate over time, there’s just some really interesting things that you can do with that. What’s the business model. In other words, you sit in the middle of two sides of a transaction. Do you get paid by one side by both sides? Like how do you guys make money?

Victor Roy: [00:20:03] Yeah, we try to monetize a percent section of per slip, a success fee, the insurance and the insurance will, will pay the insurance company will pay us based on a per policy.

And the broker, normally you can get it for free. They it’s like a freemium for, for the moment we give free for all the services. But, when we improve all the things it’s going to be upgraded with the freemium program.

Michael Waitze: [00:20:31] Got it. Does it, does anybody compete with you in this space? In other words, I haven’t heard of a company that’s built this type of it looks to me like an exchange if I understand it properly, I don’t see this in Vietnam. I don’t see it in Malaysia or in Thailand. Do you see other competitors? And even if you do, do you plan to expand to the rest of Southeast Asia?

Victor Roy: [00:20:52] At the moment in Indonesia, we are new and we don’t have any competitor yet. And in, in the OJK, the cluster that they opened for us, it’s called insurance broker marketplace.

And we are the only company at the moment. So I don’t think, I have, competitors in, in Indonesia. In South Asia, Southeast Asia, maybe. Yes. Maybe. No, I’m not too sure because I see some, in Singapore they have similar, but I don’t see any activities. yeah. But I think. We are, we are planning to, to give a solid ground in Indonesia first. Once everything is done here, we will build the reinsurance phase. Once we built, then we going to expand to Southeast Asia market because the business model and the way they do business is pretty much the same.

Michael Waitze: [00:21:43] Yeah. And do you see any benefit for you connecting to other sort of InsurTech companies as well?

Victor Roy: [00:21:52] It depends. It depends if the insurtech companies, they are the underwriters, the risk-taker, it may be beneficial for us, but if they are the brokers, normally they play on the microinsurance on affinity. They may plug and play with the, with the other products. I don’t think. it’s beneficial for them to connect to us because of what we play normally on the commercial side, on the corporate side, or while most of them they play on the retail side.

Michael Waitze: [00:22:21] Yeah. So you’ve got companies that are going direct to consumers. Right. So, and, and what do you think about companies like GRAB and GoJek, just as examples that are trying to build on top of their, you know, ride hailing businesses, this sort of alternative form of distribution, where, you know, they use all their members and their drivers as a way to distribute insurance. Is there any benefit to connecting to those teams as well?

Victor Roy: [00:22:50] It depends. If you see on the investment side to look at the valuation and all that, of course it’s attract a lot of investors. If you talk to the big boys like them, but for me, it’s very hard to sell or connect with the, with the marketplace, like a microinsurance because…

Yeah, we need the, what I mean, they, they, they are trying to sell the product that people sometimes don’t need and they, they need, they need a lot of effort to sell one policy. Right. So, what they do, they, they put affinity what, whatever you, you buy the product from them, like delivery or the, the riders and everything it’s automatically covered.

it’s automatically. But if you ask them, I don’t think the success rate is high. Because Indonesia, the literacy on this financial is still very low.

Michael Waitze: [00:23:45] Yeah. I don’t necessarily disagree with you. I’m just curious, because you’re so deeply involved in this. What do you see from a, what do you see from a funding perspective?

Has BindCover been funded? Like, how do you handle your day-to-day operations from a funding perspective?

Victor Roy: [00:24:02] We haven’t got funding yet. We’re still bootstrapping. We are looking for funding. We, we try to have a pitch with many VCs, but the problem with them now, they, a little slowing down after the  COVID they’re looking for the profit, the profitability, they looking for the big market.

They want to play safe. So at the moment we don’t have a funding yet, but we’re still looking for it. And how do we handle? Of course it’s bootstrap.

Michael Waitze: [00:24:33] That’s awesome. Look, the last thing I want to ask you is. The last thing I want to ask you is you deal with a lot of insurance companies and reinsurance companies.

Right. But you’re smaller than they are. And one of the things we’d like to know is what kind of advice would you give those insurance companies for how to deal with InsurTech startups and younger and sort of more nimble companies like yours? What would you say?

Victor Roy: [00:24:58] All right. We, we deal with a lot of insurance company locally in Indonesia, but we don’t really, we don’t really dealing with the big boys because, you know, the bureaucracy and all that is harder, the legal and bureaucracy reinsurance is going to be our next step.

We haven’t done it yet, but for me, the recommendation, like we, we are not the risk-taker. We cannot be like, like them. We cannot be as big as them, or we disrupt them. In a matter of fact, let’s do a collaboration because we, we are an enabler for them. It’s easier for them to, to reach out to the smaller market. For example, a small broker where maybe somewhere in Jakarta.

Or somewhere, somewhere in, in Papua  somewhere in Indonesia that they can, it’s not work for them to, to dealing or to do the distribution that far so we can do it for them. So actually it’s not a disruption, so we can do a collaboration. It’s not a disruption business for them.

Michael Waitze: [00:26:01] I love it. Okay. I really want to thank you, Victor, Roy, the Founder of BindCover for coming on and doing this today.  What a great discussion. Thank you very much.

Victor Roy: [00:26:10] Thank you very much, Michael. I appreciate that. Thanks.

Episode 126