EP 64 - Why Are Legacy Systems Still Holding the Insurance Industry Back?- Robert Lewis - CEO at INTX Insurance Software

Speaker A: Hi, this is Michael Waitz. And welcome back to Insurtech Amplified. Business transformation in insurance rarely hinges on just one piece of technology. It's about reimagining the entire software foundation that supports it. And yet legacy systems continue to frustrate carriers with outdated interfaces, difficult implementations, and limited flexibility. So what do insurers actually want from modern software? We're going to find this out. Faster performance, seamless integration, lower costs are something deeper than that. In this episode of Insurtech Amplified, we are joined by Robert Lewis, CEO of Intex Insurance Software, to try to understand why does current insurance software often fall short. What pain points are insurers actually raising most frequently? And how can modern software actually address these problems? And how 25 years of experience on both the tech and leadership sides of insurance, how this shaped Rob's vision for a better solution. Rob, thank you so much for joining the show. How are you doing today?

Speaker B: Very good, thank you. Good, good, good, good to be on the show. Thanks, Michael.

Speaker A: It's great to have you here. Look, let's just get right to it. Does the insurance industry really need to reinvent itself? And if so, why?

Speaker B: Uh, I think without a doubt it needs to reinvent, uh, itself. I think it's been pretty moribund for the last 30, uh, years. Probably pretty much since the history of time. Um, it's lagged the rest of the, the financial, uh, services industry. Um, certainly in terms of cost reductions and the use of technology. It's definitely not known as the most, uh. I think it's dangerous even saying the word sexy in insurance still today. I think it's not the most.

Speaker A: Come on.

Speaker B: If I'm being polite. It's not the most seductive industry in the world. So, you know, um, most people don't leave, uh, sort of high school and go to college to study insurance. So I think it definitely needs a big reinvention. And I think technology is a good to modernize the industry and create a little bit of, uh, interest in it and, and definitely get us to where we've gone with banking and equity trading and the like.

Speaker A: Okay, I do want to talk about this. Right. So when I graduated from college, it was now, it's now a while ago, um, you know, a lot of the guys and gals that I graduated with wanted to either work on Wall street or work for some kind of consulting company. And frankly, even back then they wanted to go to Madison Avenue and work for the, um, the ad agencies because that seems kind of cool. But the more I think about it and, you know, I'VE done hundreds of recordings in the insurance industry over the last like six or seven years. Like the insurance industry, just from a pure math perspective and frankly even from an earnings perspective isn't that far away from like what's going on on Wall Street. Why do you think it ended up being not as sexy as, you know, trading equities or, or you know, becoming a mergers and acquisitions guy or gal?

Speaker B: Yeah, I think that that's a very interesting point. I mean if we go Back to the mid-80s, the investment banking industry wasn't super seductive as it were. If you look at the likes, um, of Michael Milken, Ivan Boeski, that era just started attracting people and I think it was just a perception. Things started moving a little bit quicker in the industry in that equity trading and M and A business. And um, I think they just marketed themselves very well. I mean typically if they were out hunting for graduates, they'd find a handful of people. And I think the insurance industry, it's just really not known as anything that exciting. And unfortunately there's not much succession planning and I think as an industry we could certainly push it hard, you know, push it hard to graduates to enter the industry. It's certainly very lucrative. There's a lot of opportunity, the numbers involved are massive and it is quite an exciting industry, despite what we probably say about it. But I do think one of the entry points is, and if I look at our team, they're very young, quite hard to keep up with an old man like me, you know, to keep up with them, I've got to break their legs or something to keep the pace here with them. But this some youngsters coming in and I think it's all around the technology side that's attracted them and hopefully, you know, some of the changes that we're seeing now, obviously, you know, the, there have been some, some moves of the large language models, predictive modeling, etc, which has created some interest, created a lot of opportunity for youngsters and you know, the old guys who've sort of been running the industry, you know, playing golf every day, kind of moving. It's definitely shifting, that's for sure.

Speaker A: So I want to talk about the equity markets a little bit because I operated in the equity markets for 20 something years and I did see a massive technological transformation. Like I actually automated myself out of a job.

Speaker B: Absolutely.

Speaker A: And I knew what I was doing when I was doing it and I was not upset about it because I'd been doing it for a long time and I'm like, if I keep Doing this in this way, I'm going to be automated out. But uh, we did employ a lot of technology and I'm curious, right? Only because you brought it up. If you look at the equity markets and see what's changed in the past 30 years, what are some of the things you'd like to take away from that experience and kind of add into the insurance industry? And I'll ask you this too. It's kind of a two part question. Something like $60 billion has been invested in insuretechs in the last 10 years.

Speaker B: That's phenomenal because I don't think we.

Speaker A: It's just a gigantic number.

Speaker B: So like massive number.

Speaker A: So the first question is what would you want to bring over? Like even if it's just the thought process or the mindset. But the second thing is if all that money's been invested, why hasn't anything? Why at least from your perspective, why do you think not a lot has changed?

Speaker B: I think, listen, a great point, I mean and I came from a very similar background. I came from a stockbroking background when I initially started my career was open outcry, market making and the like. There wasn't ah, screen trading I can tell you in 95, I think it was when we switched across to two screens and trading, you know, pretty much, you know, electronically. It changed everything. Volumes went through the roof. The ability to do arbitrage was phenomenal. So you've seen that and exactly. You said I was what, what they would term a sales trader. I traded my way out of a job, ultimately ended up starting an online stock brokerage and again, you know, I became less and less relevant in the picture. Um, but I think interesting enough, you know, 60 billion is a phenomenal number. I do think again the industry is very reluctant to change. Um, and I think because it is very, very painful making these changes. If you look at a lot of the legacy software to do a switch across can take up to three years to do an integration. And I think that's largely around very dated uh, technology. Even though you've got these insuretechs coming in, to integrate those insuretechs into the software is a challenge and it's expensive. Companies are reluctant to do it. But I do think there has been a change. A lot of what we're seeing, I know we probably jumping a little bit ahead of ourselves. A lot of what we're seeing in terms of AI and the changes we're seeing and the um, adaption of new technologies is probably being held back more by the incumbent PAS providers versus the carriers. The carriers are looking for opportunity, but they want less pain integrating it and, and less cost because it is super, super expensive, you know, to bring in new software. But the, you know, that, that, that 60 billion number is astounding. And as you say, you definitely haven't seen that in terms of efficiencies and you know, translation into making life easier for carriers or their clients. Um, but I do think one of the other things is that insurance is a fairly, you know, it's, it's a very old industry. Obviously, you know, the pricing of risk, you know, is fairly subjective. Um, but at the same time, um, I do think that, you know, the volume of large language models, the ability to, you know, manage those processes is certainly here with us, so that it will be far more automated. And I do think there's a standard coming across the board where you will have standard wordings or forms. Um, certainly we've seen the likes of Accord making progress with regards to standardizing things for brokers because that's a real pain point for brokers and carriers at the moment.

Speaker A: Can we talk a little bit about risk? Just because again, it's something that I've experienced over time and I think you're right. You know, one of the things you mentioned was that in the early 80s, when, you know, Ivan Boesky and I forget the other guy's name, you mentioned the junk bond guy, Milken. Yeah. Before those, before those guys showed up. Right. You have to remember Milken, I think, graduated from Wharton.

Speaker B: Yeah.

Speaker A: And there weren't a lot of other Wharton guys. And frankly, back then it was mostly guys, to be fair, sitting on trading desks or sales trading desks in, um, on Wall street. It was mostly a bunch of wise guys from Brooklyn and from Staten island,

Speaker B: to be fair, 100%, 100% smart guys.

Speaker A: Super smart guys, but just not as well educated and not as into the finance and the financial engineering side. When Milken showed up, he was like, you know, we could just charge higher interest rates on this stuff and we can actually pay it back out of, out of, um, income.

Speaker B: Yeah.

Speaker A: You know, out of revenue. If we can grow these companies fast enough. Right. So, you know, that, um, I forgot where I was going with this. But, but that also meant that the pricing was really subjective. Right. The pricing of risk was kind of. And because spreads were so wide back then, it was just like, yeah, I don't know, I'll pay you 100 for that, then I'll have a burger kind of thing. Right.

Speaker B: You Absolutely nailed it. So, so I was. But, yeah, carry on.

Speaker A: But, but, sorry, let me just finish the thought. But what happened over time is Once all these MBAs started coming in, once all these like PhDs in physics started coming in, they were like, um, we can make risk pricing way more objective and we can make it way more math based and we can put a whole bunch of mathematics around it and say it's no longer going to be really subjective. So is that possible? Particularly with all this new technology that's coming out there, whether it's artificial intelligence or just the machine learning side of it to say, and even alternative data and just say, wait a second, maybe this pricing shouldn't be so subjective. Maybe it should be really, really objective.

Speaker B: I think we are going there. I think one of the things that's happened is that there are so many middlemen in this equation of any insurance ecosystem. Start off with just you've got your retail broker who arrives, he's got the risk, he takes it. He could take it to an mga, hands it across to the MGA to price the risk or price the risk per se, that then goes, this could be another broker between them and a fronting insurer. The fronting insurer is then a wholesale broker that puts it into the reinsurance, into the reinsurance company. The reinsurer then retro seeds it with another wholesale broker between. Everybody's eating away at that cake. And unfortunately the ultimate risk taker, which is the reinsurer may have done all their scientific work and may be exactly those Wharton MBA types who understand risk. They've got lots of actuarial input to get to them. There is so many middlemen along the way and it's a distribution situation and that's the problem. You've just got these fat lazy guys eating away and being a little bit reluctant to change because they're getting their 20% commissions. What's really needed here is we really need a guard and just, you know, the technology will change distribution, get the distribution correct to make it a lot easier.

Speaker A: So how do we do that? And what role does software and technology play in this? Right, because you're right, we, I mean we kind of removed, but then we added back a bunch of different levels of middlemen in this, in the stock and securities trading business. Right. We can talk about high frequency trading, algorithmic trading and dark pools, which I think are horrible things. Right. Not good for clients. And uh, hopefully like none of that stuff happens.

Speaker B: Right.

Speaker A: Because I think as well. Sorry. And again, tell me where I'm wrong here. Where I'm just missing the boat. But I also think that there's a certain part of that kind of active trading of risk that could happen in the insurance industry as well. That doesn't happen as much today as it might where, you know, and because policies are, are not fungible, uh, in a sense, and they're also hard to transfer. Right. So if company A writes a policy, it's hard to then switch it over to company B if they think I want to take that risk on. Unless it's in this gigantic pool that then gets sold with a bunch of other things. So how can technology help remove the middleman, lower costs and do all the things that you're talking about?

Speaker B: I think ultimately if, if you've got, if. I mean, if you look at Lloyd's, the concept of Lloyds and multiple syndicates, um, competing on a risk, uh, putting their name down, putting a stamp down. It's, it's a great concept and it was an awesome concept 300 years ago. But, you know,

Speaker A: wooden ships were also a great concept. Sorry, go ahead.

Speaker B: And, and then we kind of advanced to the pub, I think, from the 60s and you know, there's not a ton more that's really changed from there. You know, you sign on the broker's back and say, there we go. I put my name down and off it goes. You know, get enough of those stamps and you. And you're home. Um, um. But I think the key thing is again, the distribution being able to take a risk, enter it into some form of marketplace, a secure marketplace that only the ultimate risk carrier can see, that will enable a massive cost reduction. How we get there is going to be a little bit of a leap of faith both from the broker side as well as the carrier side as well as the reinsurer side. And that is to be able to create that marketplace. It is steadily being created, I will tell you that. Michael M. Again, going back to accord, I've got no particular affinity to them or, you know, uh, association, but they're, you know, the, the concept is good and I do think that we're seeing a lot of consolidation in the industry, which is why we also seeing MGA's, you know, bouncing out because they're taking very much a broker role. But it's becoming. There's less and less large carriers around who able to provide balance sheet. That in many ways is a good thing because you've got the price competitiveness with the MGAs, then you've got these massive balance sheets which ultimately become almost the ultimate risk Taking house and that allows you to have some innovation because, you know, if you try and put an innovation in place and your next door neighbor says, ah, screw it, don't worry, I'll just bring the business on my books without, you know, actually looking at it very carefully, that's going to throw everything out the window. But with less and less large carriers around, I think you've got the ability to create a marketplace and as you say, these dark pools and, you know, some of what, you know, the way day traders are, uh, treated is not ideal. But that certainly won't happen in the insurance industry because I do think there's enough competition between brokers, between carriers. There's certainly enough large carriers around to create that competition.

Speaker A: Yeah, I just want to make sure that the types of things that happen because again, I saw all this stuff happening. I'm like, this is not good for clients. It's just not good for clients. I don't think the same thing's going to happen in the insurance industry. I think we need to be careful in some cases about how we implement technology. I'm a big believer and I was always the guy on the trading desk who said if we implement the right technology and become more productive, we can charge lower prices, do more business, have higher volumes and make more money. I mean, that's what made me famous at work. And that worked almost all the time until I wasn't there anymore. But that's fine. But that didn't bother me. I have a much better life now. Um, do you want to talk a little bit about. I want to back up. I want to back up. Right. We spent some time when we were prepping, talking about all of this business experience that you had, particularly this stuff that you did when you were in Africa. And I want you maybe to talk about that a little bit and then equivocate that over into what you're seeing now where some of the stuff that you learned there can be applied to what you're doing today.

Speaker B: I think. Yeah, I mean, you know, a lot of the experience I have is mainly around Africa and the London market. I must tell you, the US market is very different. I've only been, you know, doing a lot of work here for the last three years on a, you know, let's say on a full time basis before we were fronting into a lot of, you know, U.S. carriers, but I wasn't here full time. It's a very, very different animal. It is ginormous, this market. It really is big. But I think one of the things that we saw, if I just take the invention of the, uh, introduction of the mobile phone into Africa, it really took off a lot quicker than it did into Europe and the US for example. And I think the main reason for that was there were no landlines. So you didn't have the sort of, you know, people hanging onto the old technology. So I think one of the things that I've learned is that we actually had to be super innovative in Africa because you had to be a generalist. The market was too small one to guard and say, I'm just going to focus on oil and gas catastrophe. You know, you really did need to do everything from, you know, $5 a month auto, uh, liability policies up to offshore oil and gas policies. And I think this market is, is steadily getting to that point where you've got an underwriter who's not just looking at the underwriting aspect. They're also looking at the credit management in terms of the billing, they're looking at the allocation of reserves, how much capital is the business holding. And I think MGA's to a large extent have also forced your standard underwriter to look at the business more holistically, all the way through to claims, all the way through to, you know, you're reporting on the filing side. You know, if there's a large claim, there's a, and there's a data. If there's a large event and there's a data call, what does that mean to your business? It should be slowing down your underwriting? Well, it does slow down your underwriting, but it's got to get to the point where it shouldn't be, you know, affecting that. And, um, I think the Africa side of things has taught me that, you know, you need to look at the business far more holistically rather than just being stuck in your lane, which is very complicated in the States. And the reason for that is the volume of the market is just. It is. Blows everything else away. I would, I could honestly say, I don't think, uh, I'd say the whole of Africa probably accounts for about 2% of what the US turns over in terms of insurance premium in a year. Uh, but it's, but it, but there are some parallels and some of that really is around the risk.

Speaker A: Can I talk about this? Uh, because I want to make an equivalency. I like to think about this idea of the reason why the mobile phone took off is because there were no landlines, which is just another way of saying there was no legacy system, that it had to disrupt. Right. And that's important. And this idea of tech leapfrogging where they're like we didn't have the old thing so we're going to use the new thing as best as we possibly can because we don't even know how to use the old thing. So we have no innovation around it and we're not protecting anybody uh, there either. But the US is gigantic and has tons of legacy like all across the value chain. Right. So then it brings up this other question. I want to put these two things together because you talked before earlier about like why distribution is so important. So how do you look at and marketplaces? And I think these things go together really well and I hear a lot, I hear this a lot. But how do you look at some of the new platforms? Not so new but whether they're E commerce platforms or ride hailing platforms or just other digital platforms where people are interacting every single day. Even TikTok, right. Or uh, whatever. LinkedIn as places where you can now use for insurance distribution in a way that couldn't be used before that are also digitally native. Right. TikTok for sure. Young people are there like all these things that you want to change. How do those things fit together from a distribution standpoint?

Speaker B: I do think early advances are being made in that regard and I have no particular affinity to them other than I've looked at them fairly closely and that's an insurer called Hagerty that um, provides insurance to classic and you know, sort of slightly older sports cars. I mean they're pretty much any sports car they'll provide insurance uh, to. But if you're driving a 50 year old um, 1973 Ferrari and you need insurance. If you go to Haggerty there's a massive marketplace and an ecosystem around that. They've got a driver's club, they've got a newsletter that comes out. These guys get together and drive on the weekends. They've got you know, they got introductions uh, to motorsport, go kart racing with younger kids. It's quite difficult to almost get away from them. If you're uh, if you have someone who's signed up to them it's very, very sticky and there is a lot more communication around that. So that's got to translate to something in Tik Tok that maybe you know, younger people are interested in. I don't know what that may be but you know, whatever that ultimate connection is and groups, people and ultimately insurance is just a ah, collective of people putting money into a pot to take out one day. It's, it's the ultimate mutual. That's what we all, you know, looking for on the insurance side. So if you, if you like minded on the interest side and you've all got the same interests, you've got the same moral and ethical standards. Perfect. That's who you want to partnership into a mutual, that's who you want to partner with. So I think the likes of TikTok, Instagram, you know, it cuts through a lot of the trouble. You can certainly pick up if somebody's doing something wrong, somebody's drinking and um, they're posting it on Instagram and then a few hours later they go, oh, I've got a claim, you know, my car's in a ditch somewhere. You know, it's kind of obvious what happened. Right. So um, I do think that these, um, that these, you know, that that's going to be a big part leading into ultimately how that distribution works. But the distributions, you know, I think it's, it's getting there very quickly. You've got the platforms but you've still got your broker, your human element which is still fairly, and I think people like that aspect.

Speaker A: Yeah.

Speaker B: Um, and it's been difficult. I think the vision of just pumping in data into, into a website and just hoping you're going to get a decent quote hasn't really proved correct. And I do think there needs to be some, you know, element of human involvement and empathy, as it were, in that process.

Speaker A: Yeah, I mean I think the more complicated an insurance product like I can buy flight insurance and I don't really care, talk to anybody. I can, I can buy insurance for my Grab or for my Uber. I don't need to talk to anybody.

Speaker B: Correct.

Speaker A: But when I start getting into health insurance and even you know, building insurance and more complicated products, I want to talk to somebody because I don't know all the answers. And as great as AI is, we can talk about that in a second too. The AI doesn't know me yet and you know, I may have some edge condition questions that only a human could answer or they can actually go back and figure it out or use the AI to come back and help me. Um, I want to talk to a person and I think as well from a customer service standpoint, just again, while these AI agents are really great and super powerful, at the end of the day humans make visceral connections with other humans, not with uh, technology. And the technology should be like hidden from them. Right.

Speaker B: Yep.

Speaker A: Anyway.

Speaker B: No, I agree.

Speaker A: Sorry, go ahead.

Speaker B: No, no, I'm 100% in agreement with you. I think um, you know it. You'll be amazed at some of the massive risks that we've looked at. Let's say on the mining side, not so much the banking side, but you know, oil and gas where you'll have a really big player and they'll be sitting with, you know, fairly small, not being groggery but mom and pop, you know, insurance broker. And you know, you work out why aren't these guys with a marsh or an aeon. And I think it's just that human connection as it were and someone who's really going to take the time to go through things very carefully and you're not just in that sausage role or into a technology machine. I agree with you. 100 and I mean I've been in insurance I don't know how long. I'm 8th generation in my family and yet I still use a broker. Very happy using a broker. Pick up the phone. I'm a bit lazy also. That's the truth.

Speaker A: So same same actually. When I remember my. I think my dad's first job that I was even aware of was he was an insurance salesperson. He didn't do it for a long period of time. But I think part of the reason why now, the more I think about it is because my grandmother was an actuary. I hadn't actually put those two things together until just now. Um, but I think that's probably how my dad got it, got that job. I don't know that for a fact.

Speaker B: Um, you know what she realized people in the comments, she realized she. And back in those days she realized she worked really hard, she studied longer than anyone else. You know, your dad had some charm and he made a ton more money than actuaries in those days. It might be reversing today. But back in the days if you had lots of charm, certainly went a lot further.

Speaker A: My grandmother was really, really smart. She could do math in her sleep. Um, where do we think AI and predictive analytics fit in now? Like when you're looking at it and then maybe you can combine that with like when you're talking to insurers. Right? Where are some of the places where they think they want to use this? Where are the pain points where they think the stuff that they have right now is kind of falling down? And where do you think AI fits in?

Speaker B: I think it's just the correlation of all the data just getting all that data together. Because if you're an underwriter to try and go through all the Risk and all the historic issues that have arrived just on the most basic auto policies, commercial property, to try and get all that data together, old weather patterns. I think to be able to combine all of that and get access to that very quickly, I still think there'll be an underwriter making decisions along the way. Um, so I think that'll be an immediate big benefit. On top of which, then onto the claim side, I think one of the things that really kills the industry and is the fraud aspect. Um, and I think it's just, you know, one or two little things that throw off, you know, the entire risk model. And very often it's difficult to ascertain exactly how that happened. Whereas I think that will, you know, I will be able to pick up more of a pattern. Um, other than that, I think there's a lot of efficiencies around allocation of capital, you know, into which risks it should be allocated. Um, you know, there's lots of, you know, opportunities to take risk on a net basis rather than reinsuring it. And, you know, you buying insurance, buying a lot of reinsurance as a carrier and, you know, seeing a lot of your income, a lot of your potential profit flat, which I think I will be able to certainly create those, uh, predictive models which will make it a lot smoother in terms of capital allocation. But it's, you know, we're still early days. We need a lot of adoption from the, from the industry and we certainly need the data. And that's one of the issues at the moment that I think we as a company are trying to push hard, is to say, here's clean data that will enable you to put forward, you know, to create those models. That's really what. That's.

Speaker A: Talk to me a little bit about how you not just encourage, but, like, enable, because there's so much data out there, right? And a lot of the data, again, I go back to my time and, uh, I worked at Citigroup towards the end of my career. And if you know anything about the way that Citigroup was put together, it was literally like put together by like a hundred. It was like 100 different companies all, like cobbled together. And literally every backend system was different. And we used two systems on the portfolio trading desk that barely communicated with each other because no one had actually spent the time to do it. And the data, like, it scared me. Every single day I went to work because the data I was not sure was actually right. And that was in Citigroup. Hopefully someone's listening and hopefully they Fixed this. Sorry, go ahead.

Speaker B: You're right. Citigroups, I think Advanced itself, I do think they fixed it, but I mean, there's carriers which not long ago, uh, when I say not long ago, I'm talking five, six years ago, um, very large carrier also, same thing, cobbled together. A number of insurers cobbled together, had a chat to them about their PAS system. They said, listen, we're running about 35 different policy administration systems, 35 in one carrier. They're not communicating to each other. And on top of which it, as much as you look at Citigroup and God, these things aren't talking to each other. If you look at what's happening in the insurance industry, what has been happening is that everyone's going for what they call the best of breed. So you've got your underwriter and you say, okay, we've got an underwriting system that sits there and it's written on proprietary software. They haven't tried to do it on a standardized software that's then meant to communicate with the reinsurance system. To try and integrate the two is already an issue. You bought the reinsurance system from another provider. Uh, that provider hates the one who's writing the underwriting. The last thing they want to do is integrate. They don't even talk to each other. They spit on each other's graves. You know, I mean, they really are. And that's half the problem. Nothing. There's no seamless integration. It's not auditable. It's all going into data lakes that they need to get pulled out again. It's really backward and I hate talking like this because it's kind of pushing our brand where what we're saying is one seamless system all the way across. But, uh, at the end of the day, that is the biggest issue. And I've come from this background before. Where we started, and that's almost why we started this business 20 odd years ago, was because we just couldn't get communication. And then we went on to Excel spreadsheets and it actually worked better, but it wasn't auditable. And then what happened was we had a few smart guys who went and said, you know what, the numbers aren't great this month, let's quickly add one or two little things into the equation and bang, they hit their numbers. And then a year later we suddenly realized, oh sure, but somebody's changed something here. Um, and that's, and ultimately what we did is just create a, you know, a very auditable system that is seamless. All the way across the entire life cycle of an insurance policy, which in my opinion, if you're not doing that, you're dead. And I mean, I hear this constant comment from, you know, the great researchers, the great, uh, you know, analysts saying, you know, that's fine for a smaller company, but you know, the bigger companies can't, you know, you're just a bigger company, you should be talking, each department should be talking to itself, you know, more so than ever in a large company because there's so much more data and, and the data is very manageable. It's actually not that complicated. I mean, at the end of the day, actuaries do manage to get it all done, but, uh, there's a lot of manual processes. Your dear old grandmother was sitting there dragging data out of books. I mean, super smart. They've got the, they've got the ability to do, you know, why, uh, and why do they have to do it manually? I mean, it's, it's ridiculous.

Speaker A: So I don't disagree with you either. You know, I like to think that having this one sort of unified system actually is a superpower.

Speaker B: Yeah.

Speaker A: You know, and I'm not shilling for anything in particular, but just the idea that all these internal tools communicate with each other in a way that's seamless because that's the way they were designed is a way again. And I'm just looking at my notes just to go back and leapfrog everybody else, because they're dealing with legacy. It's the same philosophy we were talking about earlier. And one of the things I think about is do you think it's possible? And I think balance sheet is going to be one of the things that stands in the way. But do you think it's possible to raise enough money when you stand back and you think about it, to create a full stack insurer from scratch. Right. Starting in one vertical. I don't care. You can maybe start with auto, because I see it happening out here actually, where literally there was an insurer in Hong Kong, and you can laugh at this, but there's an insurer in Hong Kong who said, we want to be in the insurance market, but we don't want to compete with the gigantic insurers yet because we want to learn something first. And then they went out and started like a pet insurance business, which sounds kind of cute and stuff like that, but they still learned how to price risk, they still learned how to deal with their customers, they still learned how to do policy admin, they learned all of these things and I don't know if they built their own integrated systems or if they just bought a system to be able to do this. But over time they've now grown into, you know, property and casualty and I think they're also moving into health and stuff like that because they were able to learn about the business in a place like the United States, which is just like you said, just ginormous I think is the word you used. I mean I know interest rates are a little bit too high to do this right now, but with all this money sloshing around like private equity, right. Where Even companies like BlackRock are buying like rental homes, do you think there's enough money out there to actually start an insurance uh, company from scratch? So you have no dirty data, all integrated systems and have a balance sheet that's big enough to actually price and manage the risk like you were talking about before? Does that make sense at any level or is it just too complicated and it's too hard to do and, and not enough time? Right. Because if you look at all the insurance companies, they're all founded like anywhere between 70 than 150 years ago.

Speaker B: Yeah, I think there's, there's, there's a few, um, that's called fronting carriers that were, that were founded recently, um, probably ten years ago that have been put together very quickly. But I mean I must tell you we've had some frustration. You know, obviously, you know, try to, you know, bring in the concept of selling across, right, the way across the, the right. The way across the life cycle of a policy. And I, you know, I've got to the point at one, one point where after talking to a fairly large fronting carrier, he said, ah, you know, the data we get is so bad and uh, uh, but at the end of the day we don't really need a system. You know, we'll just carry on as we are to the point where I thought, should we just start something? You know, we should, maybe we should start our own front and carrier. Because it is so simple, it's so obvious that you know, all you really do need is the right software to, you know, to. You don't even need just the right software. You just need a very modern approach. Um, and rather than just looking at it along the same old lines, doing the same old thing, there's definitely got to be an opportunity. And as you talk about blackrock and the likes, I do think there is a bit of a status quo in the market, but I think there are a lot of eyes on the insurance industry at the moment. And that's a lot to do with the volume of money that's around. Guys like Warren Buffett that have, you know, really done incredibly well investing those funds, you know, on, you know, on behalf of, you know, policyholders, as it were. I think that's, that's brought a lot of eyes to the industry. And I think, you know, I think, I think the possibility of doing it is amazing. It would be incredible if somebody jumped into that, that, that, that, uh, into that space. Um, there have been times where I've thought maybe we should just start it on the fronting side. That was very much where we, we made our income out of Africa. Large carriers looking for a local insurer, which, you know, we did like to think we did it fairly, seamlessly and easily, which is also what brought us ultimately into the States because they were like, geez, I wish our local, you know, carriers could do this. And it was like, you know, it's actually not overly complicated if you've got the right access to data to control your risk.

Speaker A: But plus, you've already done all the work too, right? And this gets back to this concept we talked about earlier, where you've already built all the systems. I'm not telling you how to run your business, um, but I just like the idea of possibilities. And I also, like. Look, one of the reasons why I love living in Thailand and I love being in Southeast Asia is that the innovation that takes place here doesn't have to deal with legacy, um, because there's very little of it. And while there's not the same amount of leapfrogging that there has been in Africa, just because it's just a different market. If you look at places like Vietnam, like the Philippines, like Thailand, Singapore, not so much. You can build new things from scratch because one, there's a ton of money out here, so plenty of wealthy families who want to invest in new things. But two is you're not really competing with any legacy, so you have this opportunity to create something from scratch. I'd love to see this happen in the United States. I'd love to see it happen. Tell me what you think.

Speaker B: Yeah, I think it's, it's an awesome idea. I mean, you've, you've got a, you've got an appetite for, for innovation in, in, in Southeast Asia, that's for sure. And as you say, you don't have that legacy. You don't necessarily have the vested interests. Um, I think you have a little bit more courage, you know, in terms of, you Know, businesses are slightly younger so they, they'll, they'll be more open to, you know, taking, you know, taking, seeing an opportunity and taking it. I mean the old IBM adage, you know, nobody got fired for, you know, buying IBM. It's the, exactly the same in our industry. I mean there's a few old names here. No one's doing any favors buying, you know, doing themselves any favors, you know, by buying that software. But I think, I think the states, there is enough innovation. I think there's a younger generation coming through, as I say. I mean there, you know, people will talk about millennials being a little bit lazy, being not, not as smart. I find the exact opposite. I mean the young guys in our office work twice as hard as I worked and they, they're definitely a lot smarter, you know, that's for certain. And I'm talking about when I was in my 20s, you know, they definitely work harder than I work then. So I think there's, there's, there's an openness. I think also a lot of the old guard, a lot of the old way of doing things is being looked at very closely in the States and I think it's a matter of time before, you know, these things change. There is obviously a little bit of a process, but I think it's changing fairly quickly. Um, interestingly enough, I mean in the last, I would say last month, two very large Tier 1 carriers have approached us and they haven't signed up, that's for sure. I'm not saying they've signed up, signed up by any standards. I mean most of our low hanging fruit is NGAs and you know, slightly more, more more aggressive and younger companies more cost conscious. But these two large carriers, we've had a lot of conversations. Both of them have said there's nothing going to happen, certainly not this year, but, but they're certainly going down the road of looking. And just the fact that they are eyes on it at the moment, yeah, gives me quite a lot of hope. And the youngsters working in there, I mean we've got a, uh, woman who's talking to us. I met her at the same conference where I met your colleague. She's in her mid-30s, super switched on, open to anything. I'm not, as I say, I'm not saying they're diving onto our software, but they're looking at what's out there, what's potential, um, and are they able to adapt and change. And I think it might be a steady change, but once they start seeing how, uh, well, it Works I think that could snowball very quickly. So I was quite pleased by that. And both of them are quite old school carriers. These aren't guys who came about in the last 10, 15 years. These are as you say, the old century old insurers.

Speaker A: But we saw, I'm going to make an equivalency and then I'm probably just going to let you go unless there's some other topic that you want to talk about. But look, we saw the same thing when I was at Morgan Stanley and Goldman Sachs. The guys and gals that had been there for a while were really afraid of change and definitely afraid of technological change. And these young guys would. I'll tell you a funny story, okay? There was no electronic trading or very little of it when I first joined Morgan Stanley in Tokyo. And we hired this guy who just understood how electronic things worked, it's hard to say, but also could write software. And he was looking at the printer because what would happen, and I think you'll appreciate this, what would happen is if you traded a future on the Nikkei or uh, on the topics, they would send back a message to your printer and it would print it out, a dot matrix like that, and it would print it out. And he was like, okay, if they're sending a message over a wire that's connected to the printer, if we could split that wire, right? And he's not telling anybody about this, but he's like, if we could split that wire and we could write the software to understand what was coming back over that wire, then we could then take that trade and put it directly into a system and all of our trades could go directly into that system. And then we can analyze like what our positions are, what our software, what our P and L is in real time. And he did this and it was like voodoo magic. But nobody told him to do it, right? But once he did it, everybody else who was around there was like, we didn't know that type of voodoo was possible, right? And I think that that's probably what's happening in the insurance industry right now. Not the voodoo part of it, but just like the technology magic where people are thinking, I've been doing this for 35 years or whatever, I didn't know that thing was possible. But for guys like you, and I would also say for guys like I am, that are so open minded about how technology can make things more productive, once you see that, you can't unsee it. And then you're like, how can we do more of that thing? And that's what you're up against. Not up against, but that's what you're finding when you talk to these really switched on ladies at that conference you were talking about where she's like, we could actually have a whole bunch of stuff that talks to each other, let me see what I can do kind of thing.

Speaker B: Yeah, I think it's, you know, it snowballs very quickly. This, this business that we're in now, it started in Africa. Um, we had no clients for the first three years. We only had the carrier that my brother and I owned. We had two carriers that my brother and I owned. And he knocked on every door. The guy, our partner knocked on every single door. Super smart guy. I mean, he knew his way around technology, exactly the same as you explained. And everyone is just like, this is rubbish, this will never work. And it, and everything was working really well. We had a great team. In fact, it was our team and our carriers that said, split it out into a separate company. Got to the point, one of them was working in Mozambique with us and she said, you know, I've done my time, I actually want to head back home now. She headed back, got a job with one of the big carriers in South Africa. And just the next day the phone rang. It was like, hey, listen, you've got the software, which is incredible. You know, our new underwriters just told us this. Bang. We had our first client. And uh, that, that was literally the come to Jesus moment. Everything just, you know, fell into place at that point and that business took off. And I think it's the same thing here. We've got guys working it, they look at the system, they go through the demos, doing our early integrations, you know, our first clients going, and everyone's like, wow, this is amazing. But, you know, it's installed into a series of MGAs. We obviously want to get into those bigger carriers and it's just a matter of time before one of those guys leaves, enters, uh, goes to work for, you know, someone smart and big and says, hey, listen, we hear you've got the software. We want to just try it in our pet insurance division. You know, let's see it there, you know, and there we go. And then, and that's, that's it. And I do think that it's just, you know, the evolution, you know, ticks along, ticks, and then suddenly there's this massive one big change and it, you know, and then it all kicks into again, goes very quickly from there. So, I mean, uh, it is interesting how you say exactly how he thought. You know, the data is going to this printer. Why not just split it off into, you know, sort of, uh, into data center, where we can just pull that out at any point, you know? Um, and that's. And it's exactly the same. It just takes a little bit of a leap of faith, you know, from. From a few of the carriers, and suddenly it's all there. It becomes the norm.

Speaker A: Yeah, it was. It was awesome. And it was an awesome innovation. Okay, I'm gonna let you go. Robert Lewis, CEO of Intex Insurance Software, thank you so much for doing this. You're welcome. Come back whenever you want. Um, and thanks for your time today.

Speaker B: Yeah, Michael was awesome talking to you. Some of these interviews can be a bit slow and tough, but, uh, you've asked me some pointed questions, some of which got me thinking more than, uh, I would normally think, but excellent. I really enjoyed it. Enjoyed myself. Thank you.