TCS COIN™ podcast series Episode: 3
The future of insurance
Blockchain is going to be the differentiator in the global insurance landscape. Listen in to know why and how.
This episode of The Next Big Think! is a deep dive into what blockchain is and what it brings to industries—specifically the insurance industry. Ranvir Saggu, CEO, Blocksure, a startup under the COIN™ Accelerator program, explains how blockchain and distributed ledger technology (DLT) are different but often used interchangeably.
Blocksure has developed a technology platform that delivers tailor-made insurance products and schemes to over three billion people across the globe. As a blockchain expert, Ranvir believes that with insurance becoming an embedded feature in our daily lives, blockchain will bring a fundamental shift in the global insurance industry. It will change the future of insurance. How? Listen in.
38:52 / 38:52
guest
Ranvir Saggu: CEO, Blocksure
Ranvir Saggu is an experienced Insurance Executive with over 30 years of in-depth experience across composite insurers, MGAs, brokers, and claims TPAs—this includes driving growth and performance improvement for business units as part of his CEO duties; and CFO and IT director roles in turnaround businesses. Saggu developed a technology platform that delivers tailored products and programs for over three billion uninsured people across the globe. He is accomplished in change-management, delivering large transformational programs, and building high-performance teams.
EPISODE TRANSCRIPT
Speaker 1: ‘The Next Big Think’ – a shout out to the future presented by TCS Co-Innovation Network, powered by TCS Pace™.
Speaker 2: Hello and welcome to ‘The Next Big Think!’, a podcast where TCS futurist Kevin Benedict is in conversation with start-up CEOs and founders, to bring you insights and stories from the world of technology with an eye on the future.
Kevin Benedict: Welcome to The Next Big Think! Podcast, where we give a shout out to the future. I’m your host, Kevin Benedict, a partner in Futures here at TCS. And I want to thank each of you for listening. Today’s guest is Ranvir Saggu, CEO of Blocksure. Ranvir, thanks for joining us today.
Ranvir Saggu: Thank you for having me. It always makes me giggle when people introduce me as the CEO of anything.
Kevin: What, how’d that happen? So let me ask you this. So, I’ve been reading your bio, and went through LinkedIn a few times just to, you know, see, kind of what you have listed there and your profile. And so, you’ve spent a lot of time in insurance.
So, let me just ask you this… as a child in school, did you just say, I really want a career in insurance?
Ranvir: Of course, mate, I didn’t. Like many people I know, fell into it. But having fallen into it, I wouldn’t change it for anything. It’s one of those interesting things where I’ve worked in other industries where you’re in, let’s say, loss, adjusting where it’s per unit cost, and you know, what you’re going to charge people.
Insurance is just so much more interesting than that, because you price something up, and you don’t really know whether you’ve you priced it. And then the complexity that goes behind underwriting risk management, distribution is so different, but I’m glad I did it.
Kevin: Ah, that’s… how fun. It's always interesting to see, you know, in hindsight, how did we end up here, on this day, talking to each other? So, it's quite fun there.
So, you've done both consulting within insurance and have leadership roles in various components of insurance. How have you seen the insurance industry change within your career timeframe?
Ranvir: Um, for me, when I look back on it, I think it's consumer expectations and how customers look at insurance. I look at the millennials now when I talk to them, and they basically go, “We've got no interest in insurance, and if we could do away with it, we would.” But they need it. So, I look at that, and I go, they’re more aware of what's going on. And even around the claim side, people are more aware of what they can complain about, or what they can claim for, what they can complain about. And there are a lot of claims that come from that side, or complaints that come from that side.
Now, that just changed. And what's really interesting for me is how people have built products to meet those requirements. So, brokers have become very adept to developing schemes which target niches and people have used technology. We have the direct players that came in, I worked for one of them in the UK called Direct Line. And then the aggregator came along, because there was a need to find cheaper insurance, because that's what people wanted.
But the really fascinating one for me is what I call the rise of the ‘insurtech’, how these businesses identify a niche people, like lemonade, and they go, there is a real lead here. And they fill that need and all the businesses like the direct players and the aggregators and the ‘insurtechs’, they've grown to be very, very big businesses that have met a consumer need. I think it's that matching of consumer needs and then the people and the players that are coming out to match that, and really doing it well. And how these new players and the incumbents don't seem to be able to do that as well as these new players.
So, for me it is that, and it's that growth of these new players meeting customer needs… it's been the fascinating thing.
Kevin: It is so interesting that incumbents struggle with innovations, especially if it's a whole new, out-of-the-box way of approaching the industry. And that's always been the case across all industries. But it still is a fascinating subject to me.
You know, they're just so resistant to thinking in new ways. So, do you see that as a useful tool then to come from outside of that into a new market, in insurtech?
Ranvir: Oh, I do. It's one of the, sort of areas that, we as a business target to say, well, we built a DLT platform, and one of the segments that we're really interested in is, if you've… if you've got a new idea, or if you're within a big incumbents and you want to change something or do something differently, we've created something that absolutely allows you to do… or let's say, target that need and say we want to do something differently, we want to do it quickly. Let's go and have a go at it. Rather than thinking, “I've got to build it on my own technology. And I've got to go through the buying process of this.” So, we're sort of building something that allows anybody to create their own ‘insurtech’ if I really wanted to.
Kevin: Ah, that's fascinating. Because, boy, the amount of friction that you can experience if you have a great idea, but you're within a big organization, just to try to do things differently. So, given that capability, I can… I can imagine there's all kinds of opportunities there. And we'll talk more about that in a moment.
Let me pause for a moment here and do an acronym alert. You said DLT. For those of you that are newer to the blockchain-distributed ledger technology space, DLT is distributed ledger technology. How would you explain that in a sentence or two, Ranvir?
Ranvir: So, the first thing I would give is a warning. If you're new to the space, you may come across the battle of DLT versus blockchain and people say, well, blockchain is different, and DLT’s something different. And the evangelists on both sides have their views.
But for me, they're both the same and they both deliver the same benefits. And it's a whole decentralized way of delivering services and processes. So, for me, DLT and blockchain are exactly the same. It's just what they deliver, how they can benefit end consumers in the supply chain. That's really, really important. And that's what people should focus on when they look at this.
Kevin: Thank you for clarifying that, Ranvir. So, when did you… you know, because blockchain emerged, I don't know how long ago, was it? It was less than a decade, or was it about a decade ago? Anyway, when it first started coming up… at what point did you say, “hey, this is interesting”?
Ranvir: So, I’d heard of it from about 2009, 2010 onwards, but I was sort of looking at ‘insurtech’ businesses for a previous employer. But what really got my interest was February 2014, Mount Gox got hacked. And I thought, well, this is interesting, someone's been hacked and somebody’s stolen $460 million in crypto. What's that all about?
And in doing that, I was more interested in the technology and what had been hacked. And in doing that, looking at it and doing a deep dive, I found that there were some very, very good attributes to blockchain. And this would be really, really useful across the insurance industry.
And as I got deeper and deeper into it, I went, “this is the kind of technology that the insurance industry has been waiting for. It could radically change how we work across our global insurance industry base. And it has many, many benefits for us.” So, it was really the Mount Gox issue that made me look at it. And I came out of it going, “wow”, light bulbs moments all over the place.
Kevin: So, you… when I look through your career, Ranvir, you have done big companies, you've known small companies. At this stage in your career, why did you decide to jump back in and accept the leadership role at Blocksure?
Ranvir: Why indeed… why indeed. Sometimes, I ask myself that question. Well, because a leadership role at Blocksure was all about finding the technology, and then saying this can really help in the insurance industry. I know it's going to be a long haul because it's brand-new technology, a lot of people have got to be proven. But it was a chance to help the industry from which I got a lot out of, put something back into it.
But then as I looked at it, there were lots of use cases and things like micro-insurance. So, helping people from emerging economies, and building insurance for them, which more and more research that I do shows that it's difficult to deliver. But then there's also people who were…lifestyles are changing, don't want insurance the same way. So, it's the… it's the possibilities and the potential to change an industry that I spent a lot of time in, I've got a fondness for, but then helping them to do things slightly differently, and make them more efficient for the end consumer and provide a lot of benefits for those end consumers.
But also allowing them to target niches, where they've not been able to do it so well before. And driving benefits for those. And micro insurance was something that's really close to my heart. Because my family comes from India. I've been there, I've seen what it's like in the villages and sort of the poverty is there. Now if we can build something, and we have built a product there that can help people get out of that poverty and make them economically better off, then that's something that I'd love to pursue.
So, in sort of summary, it's about transforming or helping to transform an industry that I spend a lot of time in, but then helping consumers in that industry by building better products for them.
Kevin: So, some people might look at blockchain as basically a new kind of platform or infrastructure in which to do transactions, and things like that. But what, actually, does it contribute to making insurance be able to be delivered in ways that it hadn't?
Ranvir: So, the first place we have to look at is all the back-office processing that happens across the insurance supply chain. And in this, we've got to sort of look at the relationship between brokers and managing general agents or wholesale brokers and insurers. And there's a lot of back-office processing, which delays the transfer of information and documents and payments across the value chain. And it slows it down. And things can take months to happen.
So, what blockchain does is, it transforms all of that so it can all happen in real time. And by making that happen in real time, one of the things you do, is you take out the cost and the back end so that, either that can be transferred into savings for the consumer, or in the parties involved in transaction can start focusing more on the front end, and how can they deliver better value. So, it's just a transfer of value from back-end processing into actually, sort of service, and consumers.
But one of the big things that happens is… as a result of this real-time transfer information, you can then start building products in a different way. Whereas, at the moment, if you look at insurance products, they're usually an annual policy. So, why not have policies that are much shorter? So, people who work in the gig economy, who may only work for a week, they can then buy policy for that week. And, if anything happens in that week, then their insurance partner, if they buy through a broker will know straightaway exactly what's happened in that policy. If they want to make a claim, some of the delays that happen are not there.
So, you can have things like… we can have weekly policies, or you can have insurance just turning on and off without the sort of charges and the costs that go with doing that. So, it allows the insurance industry think more flexibly about what it can be building for those consumers and meet those demands, and tailor things better than it has done conventionally.
Kevin: Fascinating. Living here in Idaho, up in the mountains, we do a lot of backpacking and hiking and alpine fishing and things like that. I can absolutely… matter of fact, I do, I have a GPS device, where in the summer, we can turn on extra insurance.
So, that if something happened to us in the high mountains, we could have a helicopter come and get us. So, is that the kind of thing - where you can actually have activity-based insurance that you can turn on and off?
Ranvir: Yeah, absolutely. So, where that's probably with a direct insurer. This is where, for exactly that, for, let's say a commercial business. Some of the things that we talked about are more around businesses rather than personal insurance. But it is absolutely that.
There's a project that we're working on with a helmet manufacturer, and they’re putting sensors in there, to say if a helmet is damaged, if it goes past a certain point, then that helmet needs to be replaced. So, what would happen is, every time a helmet has an impact, it would be fed back to the insurance company and the broker that's selling the policy. And they would know exactly what's been happening with that helmet. And when it goes past the point of damage and needs to be replaced, an automatic helmet is sent out to the rider. So, it's that kind of stuff, where I think it becomes very, very interesting what you can do.
And blockchain for me is… it's the plumbing that brings together lots of other things because there's lots of people working across discrete parts of the insurance supply chain. But that data only goes from point to point. Whereas what blockchain allows you to do is start then connecting it all up. And you connect the various parties up with their own instances of an insurance system. And then when something happens in one part, all the interested parties will have the relevant information from that device.
So, your GPS tracker would send, not just a notification to be picked up, it would also send your insurance company a notification that it's happened so that they can then pay the rescue company directly. And if it was bought through a broker, the broker would know. And then if anything else was needed, you would have various parties, all on the blockchain, and they would all be updated every time something happened, and they would get just the relevant information. But they would…they would know exactly what happened and that one event on your GPS would trigger lots of events if the smart contract is set up right.
Kevin: Now, that's fascinating, because as we all know, especially when there's legacy systems, kind of in the mix, there's always bottlenecks and friction in the system. And if you could avoid that, that would be certainly…it would certainly offer a lot of additional value.
So, even before blockchain and distributed ledger technology, insurance industry was already going through digital transformation, like just about any industry. What were you seeing happen even before blockchain? How was it being transformed?
Ranvir: Um, so before blockchain and before COVID and everything, there were a number of things happening. And I think there's been an evolution of the customer and their needs. And people are bringing in, like I said, different bits of tech. So, you got artificial intelligence coming into targeting underwriting and claims and seeing how we can do better identification of anomalies, or we can cut out sort of road-to-road transactions and machine learning helping us to see patterns in claims, chatbots were being put in place for the front end.
But a lot of it seemed to be, for me, what was happening in the backend. And it was about the insurance industry doing things for themselves, rather than really focusing on the front end.
And then in the last 18 months with COVID, that's really pushed forward the agenda of well, the whole supply chain has got to improve. So, I think there's been lots and lots of innovation, but it's just happening in pockets. And this is where, like I said, blockchain is like the plumbing that can come along, and just connect it all up and then say, we've got all these great bits happening, we know how we can handle claims in isolation better, we've got data in enrichment coming in, so we can do underwriting better for information for external parties.
But how do we bring all of those instances and those innovations together so that it helps the wider value chain? And I think that's the sort of challenge we have now, but there has been lots of stuff going on in different pockets.
Kevin: So, to me, and perhaps even you, this sounds so logical. Are you still experiencing resistance from the industry for this? Or is everybody gung-ho and ready to embrace it and implement it?
Ranvir: Well, the insurance industry is traditionally very conservative. So, they take a while before they bring new ideas in. And there's still resistance because there's been a large investment in legacy technology, as I call it, compared to what blockchain is. And people have got new platforms in. But there's a, there's a big risk element of saying, “I'm going to re-platform from a… from something that's already got larger revenue streams on it, and actually works well to something that's new.”
So, we do get resistance. And with that, we actually say, well, what is it we'd like to do, which we are… we are conscious of that as well at our business. So, we try to ask any client say, find something new or find some that's low risk, and use that to test the technology. And that's how we're having success.
We don't want the insurance industry to go gung-ho into it. We want them to check that it works, it's useful for them, and then take the bigger steps in a very, very structured way rather than here we go. I mean, our biggest projects are in new product markets like micro insurance, where it's new start-ups or new players, existing players going into a new market and that really, really works for us.
Kevin: Thank you for listening to ‘The Next Big Think!’ We'll be back in just a minute. Stay tuned.
VO: You are listening to ‘The Next Big Think!’ – a shout-out to the future.
The TCS Co-Innovation Network or TCS ‘COIN’ brings alive the technology innovation ecosystem by partnering with start-ups, academia, and the business community. TCS’ COIN Accelerator program works with start-ups for at least one year. If you're a start-up that's looking to scale, or you're an established business looking for cutting-edge, emerging technology to meet your customer needs, the COIN Accelerator program is where you begin. If you'd like to know more about how COIN is connecting large businesses and start-ups the world over, email us at global.coin@tcs.com.
Kevin: So, let's talk about implementations. What does it actually take if a company said, “you know, we've identified a great PoC, a proof of concept, for digital ledger technology and blockchain technology?” What, actually does it require from an insurance company to implement?
Ranvir: So, one of the things is… we always come across this and people say, “oh, it must be really difficult and very expensive.” Well, the answer to that is—it's not. It's fairly…it should be fairly easy. So, if your supplier or… if it's going to be like ours, they've set up the platform in the right way. And the DLT platform will do all the work for you, and it should be programmed correctly. So, there shouldn't be any additional work there. And it should really only be about building a product on the platform.
And with a platform like ours, we've got a mobile front-end that comes straight out the box so that's already there for you and it’ll deliver all the insurance capabilities direct to a customer via a web link. And then the back-end platform does all the processing for you. So, it's really about just building a product.
And in terms of time scales, we say that it should be between four and six weeks to get a new product out to market, which, from my experience in the insurance industry, is far quicker than most people can do for you. And then in terms of cost, it's a lot cheaper than people think.
So, the sort of summary of it is, it should be easy to do. And that's… we've already got a platform that's in three languages because we've got some very good people who are well versed in this, so to convert from one language to another is a piece of work, that's about four weeks, the only big glitch in that can be a payment platform, because the platform is all encompassing, it does all the processing. So, if you're an existing market, where we've got payment platforms, and the language, then there’s nothing stopping you being up and running in a very, very short period of time.
Kevin: So, it sounds like your organization, Blocksure, and your team are prepared, and you're checking off all the boxes of what the backend insurance company would need. What about the front end? Where would the end user, a customer that wants to buy a policy… where would they get value?
Ranvir: So, with that… we sort of looked at, what is it they really want? And, that's this is really where the 30 years of experience comes in, especially four years working for a large Chinese conglomerate, in looking at insurtech businesses. And, we've said that we want to build front ends that are really, really flexible. So, rather than it being, here's the same policy, and if you work in a certain industry, then this is the policy for you. And we'll take a few things off. It's about given the flexibility and a menu-driven approach so you can tailor that product consumer.
And you can build products, which are much more complex, in terms of what the flexibility there is in there. But the cost of delivering that and the speed of delivering that is no different. Because what we've done is we've detached that from the back end. And, we sort of… I describe it as if you went to one of the websites… one of the website companies that are out there. So, you go and pay your $99 and then you go and build your website. And that website works because they've got all the drag and drop and the widgets to make that website really, really useful for you. So, that's what we've done with product building.
We want product building to be a really, really simple exercise for any product manager in any insurance business, big or small. So, they can very quickly build that and then they can build a product that allows the risks to be catered for, and the needs of the client or the end customer to be catered for.
And, we're getting to the point now where I think those products that we build, don't need to be the same. And, an example of that is, if you have two people living in two houses next door to each other. One is a consultant who travels for every week, Monday to Friday away, and he's a single person, or she's a single person. And next door, there is a family of four or five, parents with children. Now the risks may seem the same. But a consultant being away probably has a higher step risk because he's not around, the family at home probably have bigger accidental damages. And what we should be able to do is build products for those people that are different, and it matches their risk requirements to what they're actually doing. And we should be able to do that in commercials. So, that's the kind of thing that we really want to do.
The product being matched to the exact needs, and the cost being an acceptable level. And, then the person being able to choose what they want. And, actually, if they want to change it, so that the person who's living on their own, gets married has children, they should be able to adapt that product to their needs very, very quickly, without really having to requote a product.
Kevin: You know, with all the data, both public and private, that's available to companies and insurance companies like that, you can… in fact, if you choose to ride your bike on one route versus another route, the risk factors for each of those different routes can go up based upon intersections and streets and bypasses and all that kind of stuff.
So, I can see that, as data starts being used and you have systems that make it efficient to have these kinds of policies, that your day-to-day decisions that really do impact your risk level can start being built into processes. Into policies. What do you think about that?
Ranvir: Well, that's… that's exactly where I think the future for insurance is. It's…it's people getting insurance without having to do anything. Everything is in our hands nowadays. So, we have our mobile phone, and it has all the data we need, we can track… location services are on, we can tell when we're booking a flight, we can tell when we're not in the house, when we're outside the house.
So, for me, insurance just becomes embedded in our daily lives. And I think that's really where insurance should go. Because when you buy something like a car or a home, or if you're at work, you got to buy insurance, you've got to buy your office insurance separately, I think there's got to come a point where you do something at the beginning of it―so you buy a car, you move into an office, and after that, it should automatically change, depending on what your behavior is, because it's all embedded into the… it's all embedded.
So, you buy the policy as part of doing something else. And then your behavior and your movements automatically change your insurance requirements. Like you said, you're away now in Idaho, and you've got this GPS, so you're not at home. So, there should be a change there in what your insurance requirements are for your home. And then also because you're away, and your travel insurance… it should automatically be working for you.
Kevin: Oh. That's brilliant. So, if I put on my investor hat, and I look at this industry of blockchain, I see hundreds of companies with great ideas emerging in the space. And, then I talk to you Ranvir, about your competitive advantages over somebody else. You know, what kind of barriers to entry are you building in? What's your response?
Ranvir: So, for me, it's about, we're one of the first to get out there, one of the first…we started, we've got a platform that's already built and can be used. But then underneath that, it's how we want to align ourselves to our client base. So, we believe very much in that, if you're going to be on a DLT platform, or a platform, whether this type, it's all about our successes aligned to your success. So, we're very much on a usage-based model. We know that we're going to save our partners money in, sort of back-office costs, and hopefully help them grow their front-end revenues. So, we just take a small transaction fee. So, we're aligned to them. So, that's the big thing is - like cost is usually just very, very good and it's very efficient. We've got a speed of delivery.
And then… and below that, the next level is also about, we’re industry professionals, so we know our industry. And we match that with technology specialists who know the technology very well. So, we talk the language that our customers want to talk and we've cut down that delivery time even more, because we know some of the pitfalls, we know the kinds of things they're trying to achieve. And, our focus is then on segments where there is few players at the moment.
So, micro insurance is one, manual schemes, which are being developed by brokers out of necessity, because they are innovative. Brokers are innovative in that they react to consumer needs. But then that means technology doesn't allow them to do what they want. So, we put in place a technology platform that allows them to be flexible to react to those needs. So, it is that matching of needs and it's a cost of usage, really.
Those two things and being sort of the first player out there - those are our competitive advantages that we want to, sort of, keep ahead of the game.
Kevin: So, what's going to be Blocksure’s biggest challenges over the next three years. So, you've got it this far and you look to the next 36 months. And you know, you're sitting there in your CEO chair, what's going to be your biggest challenge in the next three years?
Ranvir: So, I think the biggest challenge is overcoming the complexity that people think is associated with DLT or blockchain and their adoption of it. And that's the key thing for me. And then getting people… getting the industry or anybody who wants to sort of understand what DLT can really do for them. And it's really interesting, when we get somebody sat down in our offices, or I go to their office, and I do a demonstration of what DLT technology can do for them, and it all comes to life, and they go past this – “Okay. Blockchain is very complex. And we go well, it's not really that complex. And actually, do you really need to know what blockchain can do? Here's an insurance platform. And this will show you the benefits of it.”
And once they see the benefits of it, and they see it working, their eyes light up and they go, “Well, I can use it for this, I can use it for that.” And then all of a sudden, the brain starts ticking, about the possibilities for it.
An anecdote of that is―we had a large insurer, which we were involved with, and we won their regional final in the Middle East for their international business. And we'd had the three meetings with them, the technologist kept coming on board and saying, “Can you please explain what blockchain is to us?” And that's the third meeting, I thought, “How do I get over this?” And I said to them, I said…” Do you know how the internet works?” They all went, “No”. I said, “Well, why do you need to know how blockchain works?” And that sort of ended that, and we moved on.
Kevin: Well, it would have ended it for me, that’s for sure. Oh man, that is awesome. Well, this series, Ranvir, is called ‘The Next Big Think’. So, I like to ask this as kind of a wrap-up question in our podcast series. In insurance, what do you see, if we have a time horizon of let's say, five years… what's going to be the big next idea? Is it a variation of blockchain or is there something even bigger that you think will come in and just transform the industry over the next five years?
Ranvir: I mean, in the next five years, I don't know if anything's going to transform radically. But I think there's going to be a movement. Or I want… with what we're doing and what other people are doing, I wish there to be a movement away from this… you buy something, and then you buy something else. And it's like, can we embed insurance into how people live? So, that's the first move.
And I think the second big ‘think’ for me is really providing coverage for… there's about three and half, four billion people out there that probably could do with insurance, that could help them. And I think blockchain and other solutions will allow that to happen. And that's not just people in developing economies, where there's more farmers with small holdings, like we've got one that's – ‘Seaweed Projects’ in Indonesia. And we're protecting them so that if anything happens, the farmer, their family has got enough to get themselves back on their feet. And for them to have insurance, traditionally, is quite expensive. Or, for the insurance to be delivered, it's quite expensive. So, we drastically reduce the cost of that so that it becomes affordable for them.
So, it's not just tho
