128. News: Cost-of-living crisis hits insurtech, while Zopper raises to tackle India’s insurance problem

Speaker A: From11FS, this is insurtech Insider news. Today we bring you the cost of living. Crisis hits Insurtech startups as, uh, deals dry up. Hurricane Ian threatens Florida's already unstable insurance market. And Zoppa raises $75 million to solve India's insurance problem. All this and more on today's show. Hello and welcome to INSURTECH INSIDER, Episode 128. I'm John Bean. Today's show is a new show where we'll be talking about the most interesting happenings in insurance and insurtech from the past few weeks. Joining me today is Nigel Walsh, managing director, uh, of insurance at, uh, Google. How are we doing today, Nigel?

Speaker B: I am tippity top and in fine voice as you heard me sing earlier.

Speaker A: Would you like to recreate for our listeners or should I move on immediately?

Speaker B: I think you should move on immediately for the sake of our listeners.

Speaker A: Next up, we're also accompanied by some amazing guests. First up, we have Janthana, the CEO of Tapoli. How are you doing today, Janthana?

Speaker C: I'm good, thank you. And very, um, pleased to be on this show.

Speaker A: Well, we're delighted to have you. Uh, we're also joined by Nikki Daniels, founder and director of Easy Insurance Solutions. How are you doing today, Nikki? Are we going to get a sing song from you?

Speaker D: No, certainly not. And I'm delighted that Nigel only singing once. Good to be back. Hello, everybody.

Speaker A: It's great to have you back.

Speaker B: Can we call Nikki Simon Cowell now just for the record or Sarah Cowell?

Speaker D: It's a no from me.

Speaker B: Darn it. And I'm nasty, Nigel.

Speaker A: Oh, yes, well, definitely, definitely are. Let's, um. Oh, God, I lost it then.

Speaker D: That's cause he's too young to remember

Speaker A: Narcissist through me completely.

Speaker B: You are too young to remember it. Well, it's better than knockoff Nigel from the old TV show. Tv, uh, TV adverts.

Speaker D: Yeah.

Speaker B: God almighty.

Speaker A: A little bit of both, I imagine. Anyway, let's get on with today's show. Thank you all for joining me. Before we get into it, I wanted to say a big, big thank you. We've reached a very important Milestone. InsureTech Insider, 500,000 downloads. So a huge thank you to all the hosts and production crew that made InsureTech Insider what it is today. But the biggest thank you of all goes to our listeners. We literally couldn't have done it without you. So big, big thank you and a huge round of applause. Today's episode, I'm sad to say, is also our, uh, last for the time being, uh, so we'll try and make it a good one. The podcast will be going on hiatus after this episode for a short period, but don't worry, it's more see you later, uh, than a goodbye. Your support means the world to us. And in the meantime, why not check out other podcasts in the 11F network, including FinTech Insider, Blockchain Insider, and our 11Fs explore videos over on YouTube. Or you can pick up previous InsureTech Insider, uh, podcasts on the site as well. We hope to speak to you again soon, but for now, let's get on with the show. Uh, we've got a cheery show today. We'll try and make it as cheery as possible given the topics. Um, the first up is cost of living crisis hits Insurtech startups as deals dry up. The report from Verdict is the cost of living crisis is to blame for Insurtech deals running dry following the pandemic. And we're all worse for it. Ben Carey Evans, insurance analyst at Global Data, made the claim in a new podcast, quoting figures from the company's own data at the end of July, seven months in, it's 49.5% of the 2021 figure. Kerry Evans says, so the 2021 figure already saw a, uh, 79.6% decline from 2020, and we anticipate that figure in terms, investment is going to be even smaller again. In other words, it's going down and it looks like it's heading down. The news comes after the pandemic slowed the flow of investment into Insurtech industry, with the venture capitalists tightening their purse strings in response to the volatile market. I guess first up, I'm going to fire this one at you, Nigel. Do we think the level of investment is down to the cost of living crisis, uh, or do we think there's other factors at play here?

Speaker B: I think absolutely, uh, categorically there's other factors at play. I think it's all too easy to blame the current thing that's in our, um, rear view mirror or our, uh, windscreen. Yet there are a number of things that are going on, as we'll see from some of the other stories later on. There's a whole host of goodness going on across the industry. Uh, and whilst there may be a crunch right now, it's a calming, not an emptiness in my mind. So cost of living is a factor, but it's not the primary factor that's going on. And having spoken to a whole bunch of folks over the Last week or so, it's almost a case of we've got to start demonstrating the returns for what we have invested first and foremost, so we have the ability to reinvest going forward. Uh, so for me it's a no, as Nikki said earlier.

Speaker A: And, uh, what are your thoughts on this, Nikki? Do you agree with Nigel?

Speaker D: That's sad to say. I do agree with Nigel. I do think we have a habit of let's blame Covid or let's blame this. And actually I think this is about those investors looking and saying we've made a bunch of investments, we should be starting to see some return. They're looking for the confidence in the sector which will enable them m to invest further. And that's going to be tough. Startups are by their very nature a riskier investment now. They know that. But nonetheless you're expecting your one in five or whatever it is to succeed. And I think as an industry we have to show them that return.

Speaker A: And do you think with those figures, sort of the 1 in 5, 16, do you think with the market the way it is now, I mean, and I get the growth at all costs is kind of out the window and they want to see sustainability and they want to see profit. But do you think it's harder for InsurTech to demonstrate that value in the current market?

Speaker D: Not well. And the problem is insurance is such a wide space. So if you're specializing in niche, and I mean, um, Tapoli will know this only too well, out of adversity comes opportunity. And if we look at the last recessions, because Nigel and I are certainly old enough to remember them, um, in actual fact, we saw more new businesses start up than ever before. So if you're servicing a market that will enter growth in recession, then you're going to be able to demonstrate that. So, you know, whereas if you're talking about starting up home insurance in Florida, that might be a different subject. Might.

Speaker A: Absolutely. We'll come on to that in a second. Janthana, I'm keen to get your thoughts on this. I mean, you know, as a past Insurtech or an insurtech, you know, is it a case of insurtech demonstrating value or is it, you know, buckling up and riding it out?

Speaker C: I think in this current economic climate, writing it out seems like a good, um, tactics to deploy. I think it's very difficult for insuretech company to raise money and therefore to drive growth in this market is harder. And like Nikki say, depending on your value propositions, if your target market is Actually growing during, um, recession, then obviously the company will grow. And you can probably demonstrate that. Whereas the rest of insuretech that may be impacted by the entire hot market may not be. Yes. So I think the opportunity is always there. Considering that we are at the consolidation stage. Obviously when credit crunch hit investment bank, the first thing that happened was that bigger companies trying to acquire smaller and vice versa. And that's exactly where we were in the last two years. And after consolidation, then you see growth, um, and I expect the growth stage to be going up. Um, and one of the things that I think, um, positive angle that come out of the whole pandemic and war in Ukraine is that when there is uncertainty, when there is, um, volatility in the market, that's always made for insurance. So insurance is always that mechanism to ensure people to mitigate the business and individual risk. So I see opportunities in this market.

Speaker D: I think that's absolutely right. You know, in adversity people look to insurance and whether you're traditional or whether you're insuretech, you know, if people can't get new cars because of a supply chain issue or people can't afford to get new cars, we will see increase in breakdown, cover and warranty insurance and so on and so forth. The question in my mind is about the difference between what's happening in insurance generally and what's happening specifically in Insurtech. And I think that in insurance maybe we're going to see a hardening market. But frankly, people like me have been trying to talk ourselves into a hard market for 20 years. Um, but we will start to see some differences and we also have to accept that InsurTech has grown up. So what we have is we have a situation where some insurtech has almost become establishment and so they're, you know, making acquisitions, controlling headcount, all of the things we expect to see from a more traditional space. I don't know if Nigel would agree with that. Do you think some of it is Insurtech's grown up?

Speaker B: Uh, I do. And actually I was just pondering a thought as you were talking there. I mean, the one thing the cost of living crisis might do is it might rethink people's desire or ability to afford insurance when you add in things like energy and mortgage rates and everything else that goes on. So maybe on the consumer side we might drop some of our insurance levels or choose to renew at a lower rate or reduce the amount of coverage. But the flip side is the one thing the Insurtechs have above, um, and beyond many of the incumbents is speed to market and the ability to launch new products really quickly. So if there's a new product that fits a short term gap, whether it's temporary cover or reduced cover of something else. I was talking to a carrier the other day that said it takes them two and a half years to launch a new product, whereas most insuretechs I know will have something launched in four to 12 weeks. So actually you could read this story either side of the coin quite quickly to go, hey, we can launch something that's fit for purpose very quickly like we did when Covid came out and address an unmet need and uh, move quicker than a traditional incumbent. However, the incumbent's got a longer Runway to actually uh, weather that storm that's currently going on.

Speaker A: It's an interesting one. I mean if you look at what happened with energy companies though, a lot of the startup energy companies folded as a result of the pressure, um, and people started turning to the brands that had been around for a long time that they trusted that had been there. To your point, it could go either way. On one hand you've got Insuretex with speed, but they might not be well established. If people are looking for security, do we think they would turn to Insurtex or do we think they would go back to the incumbents for the well established brands because of the security and the long term nature? They've been around for a while.

Speaker D: I think actually it's the underlying insurer. So when people are seeking reassurance, you know, they're not necessary. I understand what you're saying, but if the brand was, you know, widget cover, underwritten by Aviva, then I don't think the public will care. I think the real concern is, is that we don't force the consumer into a trap of being underinsured because Nigel's right, people will look to reduce cover or to change cover. But what we cannot do as an industry is leave them underinsured for when they have a claim. So I think it's going to be a bit of a tightrope for a while because everybody's bills are going up. But as I say, there will be opportunities out there as well and we mustn't lose sight of that. You know, more small businesses start during times of need than at any other time.

Speaker B: Nikki, I'm going to disagree with you on your first point. Second point, I agree with your first point. There was about brand. If it's underpinned by a large carrier, I would agree with you for people of our age, I. E. Uh, early 40s.

Speaker D: Oh, I love you Nigel.

Speaker A: I know.

Speaker B: Um, but for the next generation, for the folks that are coming out of university and getting their first car because they need to be able to drive to work or whatever they choose to do or getting their first renters insurance, I don't think brand matters one bit.

Speaker D: And you could be right. You know unfortunately I am in the over 40 bracket and so I can't cob it. Perhaps our other guests, uh, thank you. I mean you know, what's Tapla's experience of that?

Speaker C: I think for our uh, market segment we focus on micro SME and freelancers where pride is um, one of the key factors. So I would say you know like they care less about the brand and more about the price first and brand later. More like a cover, you know, if you give them like great cover with for less they will go. But then on the other hand, you know, like our uh, market segments, um, um, made up of slightly younger professional as opposed to more like established profession.

Speaker A: Yeah, I mean it's interesting that point about because I agree with you certainly if you look at the price comparison websites, aggregators, I do think it's sort of price first, brand second and I wonder uh, with the economic crisis, with the hard times, whether that will continue. I mean we've got brands like Honcho which buckled under the pressure of rising inflation, uh, and intense competition and closed its reverse auction insurance platform. And I know Nigel, we've talked a lot about looking at aggregators. It's looking at basically trying to shoe you, horn you into a product that they have as opposed to what is it the customer really needs. And, and it's a real shame because I felt Honcho was fulfilling that gap. Um, do we think, you know, we are primed for basically that continuation of price first over exactly what customers need?

Speaker B: I think of this, I mean with Honcho, I was, I would like you, I was upset because it was a great idea and put the power back in the consumer's hand in my mind rather than just comparing based on price. But it also proves I'm learning this the hard way in many cases across here and the U.S. it also proves that this industry is really hard to change because for 20 years, maybe more actually I've been brought up to use a price comparison website to buy a personal auto, personal home and every other insurance you can get. We've commoditized it in North America. There's been pretty much um, under uh, tapped in terms of price Comparison websites. But instead of that, you've got the agent and broker population that's got a very firm grip on the market. And I'm not sure if or how or when that will change. The flip side to be, I think there's going to be a balance between the two. There's got to be a place in which there's a place for automated technology both on the acquisition and on the claim side. And there's certainly a place for humans. But I think that pendulum swings left and right depending on situation, age group, attitude to risk, and so much more. And at the moment we seem to have one size fits all or both. We're at either end of the scale. It's either all agent, broker or it's all price comparison website. And the only thing that seems to change how that is done right now is regulation. Outside of that, the desire to change is everyone's keeping a very firm grip on what they have today and not letting go of it.

Speaker A: Yeah, it's so interesting because so many times we talk about innovation, white space, changing the model as it's been disrupted in other industries, and yet to your point, we always seem to land back where we are today in terms of the model. I mean, uh, do you think, I mean, just to close this out. Last comment. Uh, Nicola, do you think the model will change? Um, are we stuck here for a long time?

Speaker D: We're stuck here all the time. Underwriters remain unchanged. I think, I think that if we talk about, if we talk about innovation and insurance, some of that has to stem from underwriting. It has to stem from consumer demand. But the consumers don't know who to

Speaker B: demand it of or what to demand.

Speaker D: True or what.

Speaker B: And I think we always talk about education. So I think once we change education, we inform our buyers in a better way and they understand risk management in a totally different way. And Jantharna will know this from the freelance segment and from SMEs or micro SMEs, because they turn up and going, I've never bought insurance for my business before. What do I actually need? Do I need liability? Do I need cyber? I mean, uh, I don't want to speak for you, Chanthana, but I think that's a whole, hey, I'm one man in a van. I'm a small shop. I'm a small business. Just get going. How do you educate a new sector? Entering this for the first time?

Speaker C: Yes, I think, you know, Nigel, you just nailed it. Um, being a startup in, um, serving micro businesses and freelancers, you actually take On a lot of educational work. Insurance company. Because that is exactly the question that we get often, uh, asked by customers, what do I need? I'm just starting my business for the first time. I never heard of professional indemnity. So that's the basic questions. And you can imagine the um, benefit that the insurance company have in working alongside all of these small brokers, insuretech, the serving customer. So that by the time, um, insurance are uh, serving the customer, the customer already know what um, cover they need. So also we play a big and important role here in the value chain.

Speaker A: Absolutely. Uh, I couldn't agree more. And I think we do come back to repeatedly on this show it's about education. But what we've highlighted is the industry is stubborn, it doesn't move very quickly. But there is a hell of a lot of space for innovation and changing the course. I guess what we've got to kind of work out is, is the cost of living crisis just going to delay that innovation and delay those changes or is it going to accelerate it? But that is a question for another time. Hopefully in the future when the show gets back on the road, we're going to move on. So for now we're going to take a quick break and we will be back very soon.

Speaker C: Here at 11fs we believe in explaining FS without the BS. That's why we created our 11fs Explore series. Weekly Videos that break down a complicated financial services topic into something everyone can

Speaker A: get their head around, such as onrampy, Buy now, pay later, um, the cost of living, ESG, stablecoins, telematics insurance and inclusive design.

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Speaker B: Welcome back. Let's get on with the show. Uh, next up, Ian threatens Florida's already unstable insurance market. No, not my friend Ian. Hurricane Ian. Uh, and for those that have seen the news, uh, devastating sights and scenes have hit both Florida and the Carolinas recently. Uh, Florida's property insurance market was already in peril. And now comes hurricane Ian. The massive storm that barreled its way into southwest Florida delivering catastrophic winds, rain and flooding is likely to further damage the insurance market. In a state which is strained under billion dollar losses, insolvencies and skyrocketing premiums. There is concern it could exasperate existing problems and burden the state insurance program that has already seen a sharp increase in policies and homeowners struggle to find coverage in the private market. The private insurance industry has lost more than a billion dollars each of the last two years and hundreds of thousands of floridians have had their policies dropped or not renewed. Average annual premiums have risen to more than $4,200 in Florida, triple the national average. More than a dozen companies have stopped writing new policies in the state and several have closed shop entirely this year. One company was declared insolvent and placed into receivership this week. As in churning towards Florida, this is not a good sign, folks. Uh, one other report I saw earlier this morning talked about a $57 billion insured loss. So where do we even start? Maybe John, if I'm going to come to you, I mean, Florida properties insurance market was one of the most volatile in the US before the hurricane and will most likely become even more unstable in the wake of the storm. Uh, that was from Mark Freeland, the communications director, Insurance Information Institute. What's your take on what you see in the news? First and foremost, before I jump into some of the questions.

Speaker A: Well, firstly, I mean, it's a tragic event and you know, my heart goes out to all those people in Florida suffering from this. Um, I mean we talked a couple of shows ago, um, about climate change and climate. I think we're in a situation where this is becoming more of a regular event in the UK And I don't know Florida's insurance market particularly well, but certainly we've looked at floods. I mean you could argue do we need to have more legislation, more regulation in parts? One argument, stop building homes in floodplains. But I don't think that's going to wash anymore. The devastation seems to be hitting more and more areas and more and more landfill. So it's what can we do as organizations to help mitigate that? I think in the UK we have things like flood re. I don't know whether we have to get state intervention or whether we actually need to do more. There was a coverage, uh, later on in terms of a new build that's been launched. Uh, and I think this is the way that has to go forward. I think a combination of the state and insurers working together, a bit like the flood re scheme in the uk.

Speaker B: Nicky, let me jump to you. What's your perspective? And take here.

Speaker D: It's tricky, isn't it? I had friends who evacuated, two sets of friends who evacuated and it's frightening if you're in that position of a hurricane barrelling down towards you and hitting land at ah, number three. I think this stems back much, much further than we anticipate. You can look at the different build quality of homes and see the different levels of damage. So maybe it's a case of insurers using slightly less of a broad brush when they're either offering or withdrawing cover. And where then something akin to flood re steps in to assist those whose homes I'm going to say brick and breeze block. You know, so brick and breeze block tends to, uh, withstand water ingress far better than the paper and wood versions. So maybe there's some opportunities here to offer some differing levels of coverage. Um, but I. Whether it's climate change or, I mean, there have always been hurricanes rolling through that west coast, um, and it is something that the insurance industry is going to have to get to grips with and they're going to have to understand. Maybe it's an understanding of what they're actually underwriting. I know premiums are high, but maybe they're just not high enough. If you want to live on the

Speaker A: beach in Florida, I mean, I've seen a couple, I saw a couple, couple of insuretechs start launching parametric schemes. To your point about, um, do we look at things differently? Their view was releasing funds. When you've got this hurricane, this grade three barreling down upon you, as you say, releasing funds instantly, before it's even struck. So actually you've got the money to try and shore up your fences, shore up your home, get your boards up, get your sandbags in place. And I think we can't just be reactive to this because to your point, Nigel, the numbers are catastrophic. Uh, we have to get in there with some level of prevention, whether that's individuals doing it themselves or, uh. One of the legislations that had been brought in was, um, the provision of creating a 2 billion reinsurance program that insurers could buy into to help insulate themselves from risk. So as long as they reduced rates.

Speaker B: I'm going to put into context, I'm actually going to read out, um, off script a, uh, quote or a post from a friend of mine, Margo Giles. She was at ITC in Vegas the week before and, um, a few days ago posted something on LinkedIn and she said, you know, uh, less than 48 hours after landing in Tampa from Vegas and I'm back on the road this time for a very different reason. Packed up everything dear to me, kids, pups and hubs, and loaded the doomsday van, which we had to use an actual doomsday van way too many times, in my opinion, and left behind a home, not knowing if we'll be there when we get back. And there's a picture of her and her kids and the dog and Everything else online, I mean you can all jump on and see it and it's really heartbreaking to see that we, this is where, this is the state that we're in. So almost one in one in one side of the coin is about how do we ensure and get you back to pre loss condition post event. But actually these are the times that we're living in and it's really crazy to think actually how much displacement is going on. Two million people were evacuated or were told to evacuate um, uh during the hurricane Ian. So it's a crazy number of people that you've then got to go and rebuild. There was stories I was reading about uh, beaches and properties and bridges that will have gone and will never be back to the way they were before. Not saying never but it's a, it's a really really hard thing to actually experience even from an outsider looking in. I mean I don't live in Florida. One of my colleagues was asked to evacuate and stay put in good old fashioned uh, and was fine but some of the pictures that she was posting were just horrendous and that just takes a long time to get back to where you were and that's with people that potentially can afford it versus people that can't afford it. So it's a really interesting one. Uh the citizens property insurance was created by the way in the state legislature in 2002 for Floridians that are unable to find coverage from private insurers. Um, I guess given climate and your point earlier John, will it only get worse here? Never mind flood, hurricane and other than that Cat Janthana, what have you seen in the press and what have you seen from friends, other industry observers to be honest.

Speaker C: You know like when it comes to insurance pricing, um, we all know that insurance pricing are based on historical data and that's the issue. Um, in order for us to be able to price risk adequately we need to have a more future looking uh and forecasting model which we then currently have or we should have um, especially like in the uh, home uh space for example where the price may not reflect the uh probabilities of this type of event happening like hurricane um as you know Nikki mentioned that it's going to be more severe more often is not going anywhere it's getting worse. But our pricing model doesn't really reflect that. So I think that is the first point that we also need to address apart from other you know like thinking about the current cover and how we can offer service to customer in a better way using technology Will help some of course, you know, like. But uh, parametrics, um, there are some, you know, parametric, uh, data out there and telematics and all the other um, gadget that we can use to measure certain damages. But again, if we are talking about providing the COVID then I think pricing is what is going to make it easier for insurance to kind of work out whether this is the risk and the COVID that they could provide at that level.

Speaker B: I would challenge and argue though that parametric is great for dealing with the process post event, but insurance is about dealing with unknown and almost to the comment earlier, these are no longer 1 in 500. They're almost 1 in 5 or 1 in 2 type events that are taking place so frequently now that the historical data is building up quite nicely. But unfortunately, now that we know these things are happening in the same that we see with Wildfire year in, year out, it's causing levels of COVID I mean one of the things that was noted um, by Desantis during a news conference ahead of the storm noted that flood claims, as we mentioned a minute ago, could be a leading problem from Hurricane Ian. However, home insurance policies, including those in the state scheme, do not include flood coverage, which is handled under a federal program and a separate issue from the insurance market. So it's a much more complicated beast to try and wrestle down even something that we're able to predict or at least um, have insights on. It's coming more frequently. I'm not sure how we deal with something like that.

Speaker C: Um, I think having step in, I think it needs to be a uh, collaboration between the insurance industry and the government. Obviously as we know insurance company are risk uh, at worst by nature. And in, you know like some risk may be too high for individual insurance company to actually take on like hurricane, flood risk may be too much for insurance company. And that makes sense for the government to kind of step in and say look, you know what, I'm going to support insurance company that want to insure this risk. Uh, same thing with you know, like pandemic for example. And if pandemic should be something that should be included in all of our policy, then of course I reckon that insurance companies probably would have to lean to the regulator and the government to support them on that.

Speaker A: I think so. I mean when you go back to this first conversation we had about the cost of living crisis and you were talking about the pricing Janthana, uh, is if pricing goes up because these are happening more, we don't look at the historical events, they're happening A lot more. Back to your point, Nigel, the 1 in 5 prices are just going to shoot through the roof and everybody's not going to move out of Florida.

Speaker B: God, no.

Speaker A: So we get to the point where we've got to keep the prices reasonable, otherwise people won't buy insurance and then we'll end up in a situation where more people are underinsured, therefore there has to be some level of government scheme.

Speaker D: But then you are cooking up the perfect storm. If you don't allow insurers to price correctly, then you've got to come at it from the other side, which is mitigation. So if, for example, everybody who bought a home in Florida had to sign a declaration that they owned 25,000 sandbags and a sump pump, I have no idea what is necessary. I mean, you, you look at that devastation and it's horrific. But there are some houses that miraculously stand in the middle of the destruction. So, you know, is there an onus on new home builders? Is, is there a, you know, do we need to be putting some emphasis on some building regulations? Any mitigating factors which will enable underwriters and, and just think, this is right. You've got to look forward, not backwards and we've got to get better at modelling. What do we think will happen if a four hits here or a two hits here or a tornado? I mean, you know, there are vast tranches of the states that are wiped out with tornadoes. So all of this, some mitigation, some proper price modeling and some price prediction, otherwise people won't buy and will rely on federal government to resolve the issue.

Speaker B: Post event, you've reminded me of two things, Val, run very quickly. Number one is there's a great image, uh, going around Twitter that shows a set of glass sliding doors with water probably three or four foot up them. I've shown that. No, I've seen that, but it's brilliant. And I think someone posted something that said along the lines of, um, if anyone wants a reference from my work, look at this please. I mean, it's a great building reference, but that's almost like fire though. There's no point having a fireproof house in the middle of an area that's surrounded by, uh, other things that will burn and uh, whatever else in a completely sound or surrounding way. The other adjacency here reminds me of is health insurance or travel insurance for those with health conditions. And again, the only way that this was resolved a number of years back, at least in the uk, was through regulation that said you can't overcharge for someone with diabetes or cancer or something else in case they need to be repatriated or whatever else may be. And you had the birth of organizations like All Clear and others that dealt with special conditions, but the FCA in the UK came out and said you can't treat these people unfairly because of certain conditions going forward. And that might be the case that we get to with situations like this. It's not just hurricane, it's not just flood, it's wildfire. And that's now affecting us world over given the changes in climate that we're seeing. Let's wrap it there. Uh, John, over to you.

Speaker A: Brilliant. Thank you Nigel. Next story we have Zoppa raises $75 million to solve India's insurance problem. Since 2018, Zoppa has been working on a new venture from scratch. That business and API platform for insurance infrastructure has raised 75 million in new funding. The New Delhi headquartered startup Series C funding was led by cre Aegis. Apologies, uh, if I pronounced that wrong. Zoppa, an 11 year old startup has raised $96 million to date. Zopper works with insurance providers to create bite sized personalized products that it then supplies to distributed partners. This approach differentiates Zoppa from many of its competitors in India. They're aggregating coverages from different manufacturers and attempting to cut out distributors and directly reach consumers. Reading this it sounds like to me they're almost going down the we Fox European route, uh, as opposed to the direct to market sort of aggregator British route. What uh, are your thoughts Nigel?

Speaker B: Well one of the comments in here is uh, I think the penetration in India for insurances, uh, 3 to 4% which what a population of 1 plus billion is significant, but nowhere near if you look at what Europe is at like 14 or 15% uh, penetration overall. So the Indian and developing country market is gargantuan beyond all recognition. So in some of our commentary in doom and gloom earlier about investments are disappearing actually in developed markets where it's already saturated and mature, it might be slowing down but in underdeveloped markets, um, there is masses and masses of opportunity still. I think this is just a um, tiny start into some of the huge things that could go on in India. We've talked about South Africa in the past and the Cadogan Society and so many others. So this for me is great. I think we're going to see much, much more of this going forward. It's actually probably better for Janet given some of the things that they're Doing how they're manufacturing net new products take to these markets.

Speaker C: Yes, certainly I see this as uh, uh, you know a great opportunity for Tapli and Tapli equivalent platform out there. I think embedded insurance, personalized uh site a bite side insurance will become a norm because I think there's enough gap in the market for this to work. Um, the issue is that the distribution, you know like you say you need a large distribution to be able to make it work for insurance company and for us as insuretech. So that is yet kind of to be seen in a very fragmented uh, micro businesses and freelancers market.

Speaker A: I mean it certainly seems to be the way, I mean they seem to be the ones that are pioneering uh, over in Asia um, sort of the embedded revolution. Nikki what are your take on this?

Speaker D: As Nigel says it's a huge market and I think that they have an opportunity that perhaps we don't have here or it's harder for us here in that because there is so little penetration. And they've started by offering what we're calling bite sized chunks of insurance. It's a lot easier for somebody to recognise they need that bit and then they want to add a bit more when they've got a bit more. Whereas here we're told you've got to have this chunk and we're then fighting to unchunk um, our insurances down into the bits people need. So I think uh, what I think I also find really interesting about Zopper is there's no hurry, there is no, there appears to be no particular drive for speedy delivery or speedy goals. It's nice steady acquisition. They know they've got a huge market to go for very little competition, uh, certainly within India and I mean I think they were talking about, you know we'd like to reach a billion in five years which is also quite interesting for insurtech companies to actually not be in a hurry to do something in 18 months or in two years. So I actually think, I actually think they could crack this. Really crack this.

Speaker A: Well, especially given the size of the penetration. I mean do you think, I mean we were discussing earlier about innovation and how you know in established markets were sort of one end or the other. Uh do you think there is a lesson here for Europe in the way that Zopoli has approached this or embedded in general in terms of how successful it is over there and the bite sized chunks. Do you think this is a lesson for the more mature European markets? Nigel?

Speaker B: Look, uh, I think we should look at it but we have to realize Both Europe and India and other places are starting from a different starting point. I would argue that we're very much here already and actually we have some great examples of insurers and insuretechs doing things in this area that have just had a different base to start with. And I think India's lesson in the same as M. Pesa in Africa and other things are starting from a different point. And actually the other is true, the opposite is true. We could learn from the mistakes that we've made in Europe or western and developed countries by taking some of those things and not falling into the same traps and jumping straight into the. Actually let's provide insurance in micro size or micro bits that people actually need.

Speaker D: I mean I always draw a comparison with the well known brand Unilever who um, actively send small tubes of toothpaste and small bars of soap out to very, very rural and remote locations. Because once somebody has felt the benefit of soap and toothpaste, if you have a dollar to spend, you'll want to buy soap and toothpaste. I mean, you know, I can Travel the world 20 days on the trot. As long as I've got clean underwear and toothpaste, I'm happy. So if you think about that as insurance, we need to, I think there needs to be a way that we can encourage people that insurance does benefit them, that it's a responsible thing to do when you start to gain possessions. But we do tend to bundle people in to these overarching products where they have little comprehension of what the product is doing for them. So maybe there's a middle road to ride somewhere in here, get people used to insurance. We had a great guy on the show. Do you remember the sneaker guy? Phil? Yeah. Yeah, great. I mean, you know, what a niche. So though a lot of people who'd not really thought about renters insurance but had got a collection of sneakers, you know, we need, we need to encourage people to, to buy insurance in our market for whatever they hold dear most just to compare.

Speaker C: By the way, uh, I am Thai by origin and you know people in Thailand don't really grow up with the concept of being insured. Whereas you know, as a um, as a schoolgirl growing up in Sweden, on the other hand, I was practically insured. I have life insurance, health insurance, I grew up. As soon as you were born you got insurance, you know, like from the day you were born. So um, uh, from that angle there is less gap from the product side and also from the kind of personal needs side because there will be some insurance that will cover, you know, majority of the risk. Um, that I grew up being uh, accustomed to having those cover here in Europe. Whereas you know, in Thailand, you know, where people don't even have insurance, that's where you have more opportunity to offer something new. But the price of course is very difficult and like Nikki said about, you know, like offer them too big of a chunk of insurance that they may not need and would be far too expensive for local. So it makes sense for us to kind of break it down into like smaller chunks like for example, Covid insurance, which were very well, uh, received by the um, um, Thai populations. And that kind of caused some insurance company to default during COVID because there's too many claims. But that's, you know, an example that how um, the uh, conversion rate and um, insurance penetration will happen because the insurance maturity in emerging market is nowhere near as mature as in Europe. Therefore the opportunity is all there. And it's very much like Nigel said, it's very untapped.

Speaker B: Actually, just thinking aloud, I do love the Unilever soap example. I think they sent out was a million, a million plus, maybe even more, uh, bars of soap to areas that wouldn't normally have access to them. And I was reading about this a while back. It's interesting. You bring it up and they're sent out free of charge and they're used and the level of disease and whatever else goes down, it encourages people to buy that, as you said, as a thing that they need going forward. What can insurers learn from that that we do in a new economy? Do we give out insurance free of charge now and then let people pay for it on second claim or third claim or whatever it might be? I'm sure it's not the model that's uh, out there, but I have seen some insurances given out free of charge. And look, let's all be clear. Nothing in this world is free. So there's always something behind it that says at some point we expect a return for it. But maybe there's something there.

Speaker D: I think there is something there. I don't know whether any of you have been inundated with free leak bots recently, but I think every single major insurance policy has, has offered me a leak bot. This is a little something you clip around your in pipe and it tells you whether your water usage has suddenly gone awry. So you have a leak. Now those are being issued free mainly with insurance policies or from your water company specifically to mitigate a future escape of water claim. So if we go to Nigel's example, you know, if you can do that. Yeah. And you say if you install one of these, you won't pay anything for flood, you know, leakage of water claims on it. There must be a way of doing that. It'll need to be thought about. But you're absolutely right, Nigel. There has to be a way of doing that.

Speaker B: Well, I've always said, and Craig Foster, then the team at Homeserve behind LeakBot now on DOE, have done a phenomenal job, but it's been years and years in the making.

Speaker A: I agree.

Speaker B: Um, none of these things is like the same reasons why US carriers send out videos of how to cook your Thanksgiving, uh, turkey, which is coming up, isn't to help you be a better cook, it's to help you stop, please burn down your house so we don't have to make a claim. So this is the same thing for escaping water. Invariably one of the largest perils in, uh, any homeowner's, uh, policy. Uh, a super, super interesting area. I'm not sure we're ever going to get to the, uh, end of it, but I do like the Unilever model. I wonder who's going to pick that one up first. M. Um, right, next up, we have a couple of stories that we didn't have time to cover in the show in full. Jon, let me start with you.

Speaker A: Yeah, I'll give a quick roundup. So insuretech goes niche. Uh, recently, Boundless Rider and Coventry each raised millions of dollars to provide insurance for very specialized products. Boundless Rider was founded specifically to serve riders of motorcycles, E bikes and powersport vehicles in particular. The company sees huge potential in the E bike market, which is expected to surge in the coming years. Coventree's only focus is on residents of prefab and manufactured homes. PI Insurance also had a massive $315 million Series D raise. In today's environment, where investors are pulling back and venture funding has slowed considerably at 315 million dollar raise stands out. That company too had very specialized focus providing workers compensation insurance to small businesses. And last but certainly not least, Mark Shaw, who co founded the activity and fitness tracking app Strava. You'll know that one well, Nigel.

Speaker B: I will indeed.

Speaker A: Uh, an insurance software company, Guidewire, raised $15 million for his latest venture. Inclined, Shaw's third startup lends against the whole life insurance policies which with the goal of digitizing many of the traditional time intensive operations involved in the process. I think my view in terms of a quick roundup, it was exactly what we were discussing about earlier, which is we're starting to see people chunk up insurance into smaller bits. We're starting to see these niche products almost be a direct result of that. These could be bigger, they could be smaller, but it's that what is the actual customer need and can I provide insurance just for that to fulfill that as opposed to these one size fits all. I think we're starting a trend towards more personalized, more direct, more driven by a discrete customer need. And um, companies and markets are responding to that.

Speaker B: Let me take one now if I may. And by the way, I think anything that Mark Shaw does, whether it's Guidewire or Strava, both huge fans of mine, uh, will be interesting to watch. So definitely um, one to watch going forward. I spent far too much of my life with both those things. Um, in a positive way. I will say next one is XA Group rolls out blockchain based motor insurance platform and I always hear and see the roll of eyes in the last year or two at least when I see the word blockchain. Uh, Dubai based XA Group has launched Addenda, uh a blockchain based digital platform that will allow insurers to reconcile motor recovery receivables between each other. XA UH Group said that launching Addenda would help put an end to a decade old industry challenge caused by a decentralized and paper based process. Several UAE based insurers have joined the platform upon launch including uh Abu Dhabi National Insurance Company, Emirates Insurance Company, Yastikafor and Oriental Insurance Company. The platform, available in English and Arabic, can be accessed for free by all motor insurers based in the Middle east and North Africa for a six month period. Uh XA Group said it plans to further enhance Addenda by integrating existing products into the platform, assisting Addenda in its aim to manage all the key touch points in the motor claims. So the motor claims value chain by linking insurers, brokers, repairers and customers. Um, for all my joking around blockchain, the actual concept of this sounds very, very interesting. I look at folks in the UK like mib M and others that look to bring a common repository of insights to make insurance better for the masses has uh, to be a good thing. Uh, they've got a decent six month path to give it a go and hopefully in that six month period you can prove or not whether or not there's going to be value by reducing the administration burden which is a disaster in most insurers that I've seen between UH communicating and engaging in each other. So I think this could be very, very interesting and not just required in the MENA region, but world over.

Speaker C: Could I make a small comment on this by the way?

Speaker A: Yeah.

Speaker C: Ah, blockchain based anything. I always wonder how do people make money from this and the reason for that. You know, as you know utility bills go up and to power a blockchain based platform would take a phenomenal amount of power. I'm not so sure whether this would be a cost cutting. Yes, I'm, you know, like I'm clear about the use case and the benefit but I'm um, uncertain about the technology itself, whether it could be used in a more um, environmentally, um, and cost effective way today.

Speaker A: I don't have an answer for that Janthana, but we do have a show called Blockchain Insider where we get blockchain experts potentially. We can get you on that because I think it's a great question and maybe we come at it from that show where we've got certainly the relevant speakers. I couldn't give much of an opinion on the blockchain and the cost of it, but I um, think that would be a great one for debate. Next up and hot off the press for Those uh, on LinkedIn or just in general insurance bonds. It was quite a big story that landed yesterday. Um, Lemonade partners with Aviva amid UK launch from Reinsurance News US based InsurTech Lemonade has launched in the UK entering a long term strategic partnership with Aveva. I'm not sure if that was the best known secret or not, depending on who you were following. Uh, Lemonade states that residents across the UK can now get access to its insurance contents in instantly from anywhere on any device as well as files claimed and get paid in seconds which is its big uh, marketing cell. Daniel Schreiber, Lemonade co CEO and co founder commented, Insurance as we know hails from the uk as do I. So both professionally and personally, bringing Lemonade to the UK is a homecoming of sorts. The market entry follows previous launches over the last few years in France, Germany, the Netherlands. Nigel, you've got a Lemonade policy. Great to know your thoughts on this.

Speaker B: I'm, I've been a fan from day 1m. I think they shook up the industry. I am a big Daniel shy and Lemonade fan uh, in that I think they're a wonderful uh, storyteller of what insurance should look like. My personal experience of using Lemonade and the acquisition of policy was blissful. It was so easy to go and do and use I've worked with insurers world over that have always talked about how do we get a lemonade type and style experience. So I do think they set the bar high. It's nice to see them hit the UK finally. It's been talked about for a long time. Uh, I think it's, um, is it the fifth country they've entered now, as you said? Uh, so it's a really, really interesting one to, uh, come and see the partnership with Aviva from a reinsurance side. I think I saw one comment saying it was going to be competition. I don't think it's competition at all. And I think Aviva's mass markets slightly, uh, different area, probably appeals to a very different group. People do, do renters, insurance, but then I think most people do as well. So I, uh, think it's a really great partnership. It's a great opportunity, and it's nice to see it finally here. Looking forward to see how it, uh, pans out over the coming months and years.

Speaker A: Yeah, I'm super excited. I mean, we've used it as a poster child for the insurtechs for a long time. I know it's had a bit of, you know, for all its positive, uh, press, it's had a bit of bad press with regards to its, uh, financials and its operating ratios. So, you know, I can't wait to watch this space and see what happens over the coming months and years. Next up, and finally, uh, a model wants to ensure her schwarzenegger legs for 174,000 as her body is a temple. Uh, that's none of us on this panel. Bodybuilder, athlete and model Anne Lima wants to keep her Schwarzenegger knees safe. She hit the headlines after her boyfriend said her knees look like bodybuilder and actor Arnold Schwarzenegger. The model said he saw Schwarzenegger's face in my muscle. I was so embarrassed. Despite her being embarrassed, she now wants to insure her legs for 1 million Brazilian RIAs, which is around 174,000. I mean, Nikki, over to you on this one. I mean, just insuring body parts appears to be nothing new these days.

Speaker D: No, no, apparently not. After the last one, I think it was a slightly different location. But, um, it's. It has been happening for decades and decades. I am old enough to remember, you know, people have insured their faces, their lips, their legs, their. Well, every. Every part of their anatomy. It's a gimmick, frankly. If somebody wants to take their premium, good luck to them both. That's kind of where I stand on it. I. I'm not sure I particularly want to look at her knees in case I do see Arnold Schwarzenegger in them. But, hey, there we go.

Speaker A: And Janthada, what are your thoughts? I mean, do you think this is just a celebrity trend or do you think this is ever going to make it into the mainstream population?

Speaker C: I think this is not just a trend. And if you think about it logically, you know, like a lot of us or a lot of celebrities and certain professions are, uh, using, whether using their body to make money, um, masseur, for example, use their hands. So if I were a very famous sport masseur, I would like to insure my hand just to make sure that, um, I can always make my living. So that makes perfect sense. And similarly, for all these models and celebrities, where they need to look good and they use their face or skin for, uh, commercial, and they make money from it, they need to have certain guarantee that they can maintain those.

Speaker A: I could see a theme appearing on this show, which is, um, breaking down. We talked about breaking down insurance into chunks. And to your point about your hands, whether it's your legs, your Schwarznicken knees, uh, we talked about Miss Bum Bum last year in November, uh, insuring her bottom. I think what we're finding is the theme is we are getting more niche on what we offer, uh, in terms of insurance companies, and it is more tailored and personalized to the individual, um, to their exact needs.

Speaker B: If that's the source of your income and your livelihood, then you should be able to protect it and provide cover for it so that you do all the right things. I always remember watching footballers not be allowed to do certain things in case it precluded them from being at the top of the game. As a professional sports person, uh, ensuring one's legs is not new. Uh, Betty Grable, born in 1916, had her leg legs insured for a million dollars plus, as has, uh, Rudolph, uh, Nurev, the ballet dancer. Michael Flatley, my fellow Irishman for the river, uh, dumps. And of course, Mr. David Beckham. So not new. And it's a great news story, but kind of run of the mill, no pun intended.

Speaker A: To close out today's conversation, you know where this is going. If you could insure any of your body part, what would it be and why? Come on, this is the last show for a while. We've got to give our audience something, something to bring them back, uh, from our little hiatus. So, Nicky, over to you first.

Speaker D: Oh, my goodness me.

Speaker C: First.

Speaker D: Do you Know, oddly enough, if I think I could insure any single part of my body, it would be my nose, because it's central to the way I have always looked at myself and other things have looked at me. So if my nose were to drastically change shape or. Or I were to lose part of it through injury or illness, I think that, uh, yeah, I would struggle with that.

Speaker B: So. Nikki, Nikki, you are like Jimmy Durant, who insured his famous schnozzle under Lloyd's policy for $140,000. And Ilya Gort, a Dutch wine maker, has also ensured his nose, or rather his sense of smell. There you go. Sniftering. I wasn't sure was the word he would use, but let's go with that. Let's rename sommeliers to sniftering, shall we? Thanks, Nicky, for that one.

Speaker A: Uh, Chantharna, what about yourself?

Speaker C: I think my skin would be number one. And I think that's the secret of looking useful. Younger looking is your skin. So if I can ensure anything definitely be my skin.

Speaker B: I have no examples of someone else insuring their skin. But I did read the other day that the skin is the largest organ.

Speaker C: Yes, yes. And it's the most important one.

Speaker A: And for those. I mean, you can't. Those listeners, you can't see Janthana, but your skin is glowing. Particularly glowing.

Speaker C: Yes. And I'm 40 plus as well, you know, so I'm certainly, you know, like, among Nigel and Nick is.

Speaker B: No, hang on.

Speaker C: And I don't feel a bit older than 25.

Speaker B: I was going to say something. I probably just won't. It's probably just easier.

Speaker A: Uh, Nigel, your skin is glowing, but in all the wrong places.

Speaker B: Um, that's because my hair is retreating.

Speaker D: It's too late to ensure your hair, Nigel.

Speaker B: Okay. Handset. Procter and Gamble hired Troy Polemu, a football player, to promote head and shoulder shampoo and the ball players long flowing hair, which P and G opted to insure with Lloyd's for a million dollars. I am a wealth of useful information. As my dad would say, you can't grow grass in a busy patch. Now you see where I get my wit and humor from? Uh, John, I will be insuring my heart.

Speaker A: Uh, why?

Speaker B: Because I love what I do, and I always try and pay it forward, and I always try to help out with all those that know me. And the heart is the very thing that pumps the blood around our entire body, and I want it to go on forever.

Speaker A: That, uh, is a wonderful response.

Speaker B: What's yours?

Speaker A: Uh, mine is you know, I'll probably go hare. Right. I've still got mine, but, uh, I am definitely facing a losing battle. Uh, both my granddads were bald. My dad is definitely receded a lot. Uh, whilst I've still got it at the moment, it's inevitable it's going and I will insure it before it does.

Speaker B: I'm told a quick holiday to Turkey will solve that, if you don't worry.

Speaker A: Well, that wraps up the news for today. Um, it's been an excellent show. Uh, thank you ever so much. Uh, where can our listeners find out more about you? Uh, Jantharna.

Speaker C: Yes, they can certainly visit our website@papilly.com.

Speaker A: brilliant.

Speaker D: And, uh, Niki, uh, LinkedIn's probably the easiest place to find me. Nikki Daniels.

Speaker A: Great. And Nigel, I will be on the

Speaker B: next British Airways flight to Turkey to sort out my hair. No, I will be on, uh, you can find me on Twitter, Nigel WALSH or on LinkedIn.

Speaker A: I will be jumping on your companion voucher. And you can find. Find me John bean, uh, at LinkedIn or here at 11FS.

Speaker B: Uh, big thank you to John. Sorry I have to say, hair today, gone tomorrow.

Speaker A: Cut that one out. Right. Thank you to all my guests. It's been a fabulous show and thank you for listening as always. If you want to join in the conversation, you can find us here on social Media. Just search for 11Fs or InsureTech Insider. You can find us on Twitter at Insider Tech Insiders. Or email podcastslevenfs.com and tune in to our sister podcasts, FinTech Insider and Blockchain Insider, which we now have some subject matter for. Uh, thanks very much once again, and remember, this is not goodbye, it's just see you again soon. Take care.