246: How Alyve Health is Boosting Insurance Access with User-Centric Solutions | Shashank Avadhani (Co-founder, Alyve Health)

[00:00:00] Hey Shashank, Welcome to the Startup Operator Podcast and Insurance is a Necessity, It is not luxury. You could say 70% of India is actually covered. But the real challenge is not coverage, it is the under coverage.

[00:00:13] The demand is a mother of entrepreneurship. Keep sort of built an ecosystem which has both the demand and supply side. Without demand, there's no access.

[00:00:22] For people in a hospital, the first thing they want to do is just get home.

[00:00:26] Yeah, right.

[00:00:27] The last four to five years have been a little bit of a sit-over. How do you make sure that you are doing what you have to do?

[00:00:32] For entrepreneurs, whether it's 2021 or 2022 or 2023, what I tell my team is the first priority to run a business profitably.

[00:00:40] Why don't insurance companies focus on the customer next day and I'm going to do this.

[00:00:55] Hey Shashank, Welcome to the Startup Operator Podcast. Thank you so much for making the time.

[00:01:00] Thanks, Rootan, for having me, New Show. Awesome. So of course, I like to mention, we should have met, I mean, we should have spoken at least a long, long time back.

[00:01:10] We have multiple connections and so on but better late than never.

[00:01:15] Super happy here, finally.

[00:01:18] So Shashank, I think your background is interesting. You've been a consultant, worked at places like Accenture, BcG and so on.

[00:01:27] So I have this theory that there are two types of start-up founders, right?

[00:01:32] One who pursues like a problem that they experience and then try to solve for it and the other who kind of look at the market and perspective figure out whether gaps are in, you know, do that whole Excel,

[00:01:43] or a time and whatnot and figure what they can do, right?

[00:01:47] Yeah.

[00:01:47] Now which of these founders are you?

[00:01:49] And in that, while you're covering that, you could also perhaps talk about the founding journey of a life.

[00:01:57] Yeah, sure, sure. No thanks for the question. The short answer is it's a bit of both.

[00:02:04] And I sort of explain that to you, right?

[00:02:06] So I used to be a partner in insurance in BcG, specifically worked in consulting but largely in the insurance space.

[00:02:16] You know, I started my career with ENY, went to Accenture, went to BcG.

[00:02:22] So lots of lateral movements in the same space, some work in banking but predominantly in insurance.

[00:02:28] So from that perspective, you know, it was very clear to me that a health, the health insurance market was going out strip motor which was the largest line in the general insurance space, right?

[00:02:48] And that actually has happened just after COVID. Right? COVID is sort of accelerated that but it was bound to happen.

[00:02:55] The other thing which I experienced when I was working with some of these large companies is that everybody was speaking about a healthy system, right?

[00:03:07] And trying to build customer-centric products and insurance.

[00:03:11] Insurance, one of the most you know, hated categories.

[00:03:14] The lower sent-ups across everything.

[00:03:18] And as at BcG, we used to look at every space, right?

[00:03:22] To give you a sense, the insurance sent-ups in the country and I'm talking about just before we started alive was 13 to 16 percent.

[00:03:33] And as Indians, we are very generous in giving ratings.

[00:03:39] So for example, when you open savings account, so that particular journey, the NPS for private sector banks were 40 percent.

[00:03:47] Right? It's not like anybody is wowing you today but you know, we are generous.

[00:03:52] Now to do poorer than airlines, take some special effort for sure.

[00:03:56] And interestingly, when it comes to claims which is called the moment of truth in health insurance, the NPS is about 6 percent.

[00:04:05] Right? So basically large market, you know, the total healthcare expense in the country is about 250 billion dollars today.

[00:04:14] It's multiple lakhs if you do them.

[00:04:18] The product itself is very restricted.

[00:04:21] Like, you know, you need to get hospitalized and you know, we're a period of time.

[00:04:26] They've kind of moved from a 24 hour hospitalization to daycare, right?

[00:04:29] But you basically have to undergo an event which is quite emotionally draining.

[00:04:36] And the experience at that point in time is not very good, right?

[00:04:41] So a lot of the companies, it's not a new concept.

[00:04:45] Health ecosystems have been spoken about, you know, as early as 2010, 2015, there was a wave.

[00:04:52] But what happens, erosion is that capital in the insurance and anything, as in any industry moves towards the most near-term benefits and short-year shareholders.

[00:05:04] And in insurance industry, insurance distribution was the main guzzler of capital, right?

[00:05:10] So every insurance company which got set up, and including the new age ones, you know, the first thing is, you know, can you actually set up distribution to sort of go out to customers because insurance was always sold.

[00:05:24] I think that's a key point to cover, right?

[00:05:26] So one is that insurance is sold and not bought.

[00:05:31] Nobody wakes up one day and just like impulse buys an insurance policy.

[00:05:36] It's usually someone who calls you or like an ad, you see, and so on and so forth.

[00:05:39] Yeah, yeah, absolutely.

[00:05:42] So a lot of, you know, when I was part of many of these board discussions and, you know, CEO discussions, you know, everybody wanted to, you know, design and build a customer centric product, right?

[00:05:54] And it's that, therefore it's not a new thing.

[00:05:56] But immediate priorities were not to do that and till date, that's the thing.

[00:06:01] So it was very clear to me that this takes an entrepreneurial effort to sort of, you know, do this, to actually build a complementary product to the overall health insurance, you know, traditional product which is out there, which can actually be customer centric, which can see customer pull, right?

[00:06:22] And I'll come to, I'll come to this in a bit, right?

[00:06:27] In terms of penetration and where we are today as a country, right?

[00:06:32] So this is the, you know, I would say the market view, which I came in with then, you know, early 2018, 2019, I started thinking about it.

[00:06:43] And this is an idea which is, which is not a brain wave or it's not like an overnight, you know, you're sleeping and suddenly you wake up and sort of start this.

[00:06:52] This idea has been brewing for many, many months because, you know, because the way the market is evolved and and what have been hearing from, from the market, right?

[00:07:04] Personally, 2018, 2019 was very tough because my father went through multiple hospitalization events, right?

[00:07:10] So when you, when you do that, what happens is any event actually has several, you know, connected events.

[00:07:20] You know, for example, when your loved one is hospitalized, you know, you typically have to get scans, X-rays, MRIs, which probably is out of hospital.

[00:07:29] You will need to consult with start with a GP then you move to experts and more often than not, you have to sort of navigate through multiple multiple experts multiple pathways.

[00:07:44] And what I realized then was that, you know, the cognitive load on the user and here I am who's sort of been working in this space since 2008, right?

[00:07:56] And I generally felt a sense of helplessness moving through this journey, right?

[00:08:02] Even with your level of perspective exactly.

[00:08:07] And what I basically, you know, reflected upon this and basically thought was, if I was going through this after, after being privileged enough to have worked in this space for such a long time.

[00:08:19] And insurance is a necessity. It is not, it is not a luxury that means, you know, imagine people who don't understand this space, right?

[00:08:31] What would they do? And I took you in example of this, right? My father is obviously well educated and, you know, he's, he was retired at that time.

[00:08:39] But he needed me to fly down from Mumbai to Bangalore every time. So every event, I took time off, you know, one sabbatical as well to come here and figure this out.

[00:08:53] And he's been paying, you know, an insurance company and the ideal entity in my mind to sort of hold this experience is a, it's, it's, it's the insurance company because for them, it's a subscription product

[00:09:06] And keeping you healthy, keeping you out of hospital, keeping you happy actually makes a lot of sense for the insurance company.

[00:09:14] But here you are, you've sort of looked paid premiums over say 20 years, 30 years and then you're sort of getting into this experience.

[00:09:21] Where do you have to stand in a queue? Right? Everything else in life has become so easy, you know, like if you look at even, you know, booking train tickets used to extend cues earlier now it's like click of a button,

[00:09:34] booking ordering food is easy ordering, but healthcare is very, it was a very tough experience right?

[00:09:40] So that's when I kind of made up my mind. Why do you think that is the case? Because it's always sort of puzzled me that why don't insurance companies focus on the customer experience more right?

[00:09:52] Because if you think about it, it's a recurring product right? I mean, it's a recurring purchase. Sorry, every year, you know, you have to renew it and this is maybe 20, 30 years of, you know, business right?

[00:10:07] So why don't they focus on it? I mean, at the time of renewal, you'll perhaps get one call and one email which is literally happened to me last week.

[00:10:16] But otherwise there is no check-in in terms of like, hey, you know, can we do something? Has there been an event that we can help you with so on and so forth right? So why is there no not enough incentives for the insurance folks to do this?

[00:10:32] Because I also notice that if you look at persistencey ratios, which is the number of people who are on the same policy three years, four years down the line, they're pretty bad for, you know, most of the companies right? So why isn't that fixed?

[00:10:49] It's a great question. See, it all starts, you know, like if you think now the other end of spectrum like there are incumbents giants in the industry, who are earning profits, you know, so it's a profitable industry. Many of them have gone to an IPO.

[00:11:05] The businesses are actually and look at it. It's a category which is growing at 30% year on year for many private sector players right?

[00:11:15] Now what has happened in the country is that look, you know, out of the $250 billion of healthcare expense, the only about $100 billion is actually in scope of the current product.

[00:11:28] Okay, more than 50% is actually out of scope. When you say in scope, I mean this is like the hospitalization expense and so on and so forth.

[00:11:36] So something like outpatient, all of your secondary tertiary services will not be covered.

[00:11:42] That's because insurance is defined that way right? The whole industry follows what is called the insurance act, which was drafted in 1938.

[00:11:52] It's gone through I think one of the elements after that. That's all right? Now insurance is defined for events, okay?

[00:12:02] So the whole thing is about the probability of the event and the severity of the event, right?

[00:12:09] The insurance itself, you know, the concept is basically for events which are low probability and high severity, okay?

[00:12:17] So for example, you know this studio, you know, you could sort of ensure it against earthquake for example, fire, right?

[00:12:25] It's low probability but severity is very high and that's what insurance meant for.

[00:12:30] The word insurance and the entire industry is actually following the letter of the regulation and the law.

[00:12:37] So by design if the probability is low, nobody's going to come knocking on your door and say hey, can we do something about it?

[00:12:44] It's like an umbrella you don't want to use basically. Exactly. And which is why out of the $250 billion, only $10 billion gets paid from private insurance, you know, the entire industry, crazy.

[00:12:57] Accounts for just, you know, 4 to 5 percent of the total healthcare expense.

[00:13:05] And we've been, you know, in this place for decades as a country, right? As a, you know, as a world as well, but as a country, you have more than 4 million agents, slash, feed on street people trying to, so we, we discuss it's a sole product.

[00:13:24] Not a lot of people are trying to sell it, right? And despite all of that, we have achieved a healthcare spent penetration of 5 percent.

[00:13:33] You know, I'll give you another, I'll call it all right. I mean for great products, right?

[00:13:40] Did you see as a, as a model actually should work, you know, insurance would have been flying off the shelves of the online aggregators.

[00:13:50] It doesn't happen. So even when insurance is sold, sold online and you're looking for, you know, as a person, you've gone through a healthcare event, maybe, you know, of a loved one and you feel now, time has come to cover my rest of the family, right?

[00:14:06] You go online, do all of the search and you know, as per the research that we stood in BCC, a lot of people actually search online.

[00:14:15] But when it comes to buying the straight through, so hardly anybody just adds insurance to cart and sort of, you know, get because it's, it's a product where you're buying it with the hope of not using it at all.

[00:14:32] That's the problem, right? You're like the umbrella that you never want to use and the person, the companies which sell it also don't want to use the product because they'll have to pay out.

[00:14:43] Yeah, so you know, world where every other product, you celebrate a purchase, you buy a pair of sneakers, you unbox it, you know, you gift it, right?

[00:14:53] This is, as emotionally, as a product, as the traditional insurance stands, it's a product that is almost, you don't want to touch it.

[00:15:03] Right? You bought it and you have some, you know, some policy document lying there and, and you hope and pray that you never have to use it, right?

[00:15:13] And which is, which is what we as a live are trying to change in the product proposal.

[00:15:18] Yeah, I mean people talk about the fact that, you know, there's so many jargons and stuff to figure, you know, go pay and sublimit and all of that stuff.

[00:15:29] But think about a car, right? I mean, there are thousands of things in a car that I perhaps don't understand, right? I mean, if you ask me, but I use it because it's got a certain utility to it, right?

[00:15:41] So when you think about India, right, and you mentioned penetration also, I don't know what it is, maybe around 15% right now. And the two, I think within that if you eliminate all the companies that have to, that are mandated to provide insurance in so on, I mean, it'll be far less a rise of course.

[00:15:56] If you compare this ecosystem to, let's say the US or UK, where it's primarily driven by, you know, insurance, right? I mean, I think only perhaps a very, very rich and affluent folks will be able to do something outside of it because healthcare expenses are so high, right?

[00:16:13] Do you think we're headed to that, that place? And, you know, of course, I mean there are certain challenges with, you know, those places as well, right, with healthcare expenses getting jacked up and so on and so forth, right?

[00:16:26] I mean, they say that, you know, doctors really don't make money, the insurance folks make money. And we've seen like, insurance in US at least has become super consolidated, right?

[00:16:36] I mean, there are maybe like four or five of these folks there. So if you could just compare and contrast these ecosystems.

[00:16:45] Yeah, so broadly, you know, broadly there are two types of markets, okay? One is the on-minute market, which you see in UK for example, right? So they have something called NHS, National Health Services.

[00:17:00] If you're a UK citizen, whether it's for a scan, you know, which is outpatient, you know, anything which happens outside of hospital, any kind of outpatient care, doctor consultations, etc.

[00:17:15] Or it's, for example, if it's a pregnancy or it's a, you know, hospitalization event, NHS actually covers it, right?

[00:17:21] Now, this model is predominantly for countries where, you know, and we're talking about, you know, public hospitals, largely about even private hospital joining in, you know, things like, you don't have to pay for your healthcare.

[00:17:39] This happens when the country has a certain level of influence, a certain level of policy where you're moving significant amount of taxes collected into healthcare.

[00:17:49] And you can afford to do that. Right? So this is one model. The other model is, where it's largely, largely private paid, right? So the US market is an example of this kind of market.

[00:18:02] Some of the European markets are examples of this kind of market. Where you have public sector coverage for the very poor, so for example, there was a lot of debate when you know like Obama care was launched in the United States, right?

[00:18:19] It's, it's private based. And even if it's private based, what the models which have come out is in terms of group coverage, it is actually the organized labor markets which cover people, right?

[00:18:35] Because it gets over a period of time and like you rightly said some of these markets, the insurance premiums have just got gotten weight-to-expensive, exorbitant, right?

[00:18:46] India is very unique. In the sense that we've discussed, you know, that health insurance today mainly covers the hospitalization part and that's what sort of the product was designed to be like that.

[00:18:58] But it's also unique because India is actually many countries in one and we've heard that. So there is a Singapore and India and there is also like an African and here in South Korea.

[00:19:05] So what has happened here is the bottom 50% are covered by a scheme called PMJ by. And this bottom 50% identified by what is called the SEC classification, right?

[00:19:35] And out of them, as per the last data that I saw about 30-35 crore cards have been issued or a weight-to-crore. So it's a massive initiative in that sense, right?

[00:19:48] The top very top half of a percent of the point three percent you can argue that they don't even need insurance, right? I mean they can afford a pay, correct, they don't pocket, right?

[00:19:56] Probably sort of an essay here or something. Now the middle India, which is you know, you could say Massaflo and affluent Blas.

[00:20:10] And roughly so if the way we divided it is there is India one which is about 150 million lives. And then there is India two who don't get the Padhan Man 3 scheme

[00:20:21] and who also don't have the resources to kind of you know maybe purchase their own policy and so on so forth, right?

[00:20:30] So think about our drivers or the house help that helps us all of them do not necessarily get a Padhan Man 3 you know, RBS scheme, right?

[00:20:40] So this is India and within this as well, as of date you know you have group insurance which is corporate sponsor and then there is retail which is both individually bought as well as you know individually bought but subsidized.

[00:21:01] So if you are a customer of a bank like public sector private sector bank, they'll typically run what is called a group retail scheme. So as per data even that is part of group but it is bought and then it discounted and so forth, right?

[00:21:14] So this entire the premiums collected is roughly about 10 to 12 billion dollars has updated, right in this in this entire space. So so India whether it will move towards the US model or the UK model my short answer is look you know for India for government to start covering everybody.

[00:21:35] B.S.A. country are not have that privilege or resources as of now, only about two crore Indians pay income tax, right?

[00:21:45] About 10 lakh crore of income tax is paid from by two crore people, right?

[00:21:50] That's not enough to kind of cover everybody, right? So it's a start. They were also talking about covering people who are above 70 years of age and you know like the senior citizens which also is a good thing.

[00:22:03] But the real challenge for India is not just coverage if you look at this this metric, you know how many Indians have a policy in hand by all these government and there are other schemes I won't get into it now.

[00:22:16] You know employees stayed insurance schemes also. Only about 25% or 30% of Indians do not have insurance policy in the hand that's it. So if you go by this metric on paper you could say 70% of India is actually covered.

[00:22:32] But the real challenge is not coverage it is the under coverage, right? To give you sense you know if you look at all the government schemes as well.

[00:22:42] Wow 70% have some policy because government is anyway covering a 50% of the population and out of the remaining 50% you know the coverage is 15% of that, right?

[00:22:52] So I'm saying 70% have something in hand, right? So the problem is not coverage. Problem is under coverage both in terms of value and the network.

[00:23:05] So in terms of value the coverage like we discussed is you know say if you have a one lakh cover and you have to get hospitalized for it.

[00:23:22] So the government's chances outside of hospitals, right? So which may not be covered at all, okay? So this is one. So value of coverage is one second is the network, right?

[00:23:31] So if you look at all the government schemes it's been it's been tough to convince the private sector networks to sort of join join forces because the

[00:23:42] the prices as per billing court you know that's the key point of discussion debate is agreement, you know whether it is economically viable for the network to join in.

[00:23:54] So we have a lot of government hospitals where healthcare is you know essentially free.

[00:24:00] Then you have quasi government or some of the private sector hospitals which are actually joined forces with them.

[00:24:08] Where these policies can potentially work but you know how much of your expenses can these policies cover today?

[00:24:19] That is the real problem that is the real problem.

[00:24:24] Okay, you see this massive problem, right? And then need to build a customer centric product.

[00:24:31] How do you go about doing it because sometimes when you when you see such a massive problem, right?

[00:24:36] I mean you know you might bite off more than you can chew, right? You might get overwhelmed, right?

[00:24:42] So what is that which that you saw which is like an entry into solving this product?

[00:24:49] I mean solving this issue rather and yeah how do you go from idea to product to company?

[00:24:56] Yeah, so this was actually the toughest thing for us to be honest when we started right and when I took convince my co-founders to join in.

[00:25:07] The toughest thing is like you said where to start right?

[00:25:11] So what we basically said was look we'll start with a customer. Let's look at the customer and let's target for example customers who

[00:25:22] Who will definitely be interested in an outpatient coverage and sort of a left-knit plane that, right?

[00:25:31] When you look at India like you know if you look at India 1 to 3 India 1 is you know 150 million lives right?

[00:25:38] Most of them have some type of policy. It's not it's not that they are not insured but they don't have a customer centric product right?

[00:25:49] And they they have enough healthcare expenses so to give you a sense in not typically about 8 to 12 percent of any household expenses is on health care.

[00:25:59] It's quite substantial right? Even if one doesn't get hospitalized because you have vaccinations if you have kids for example,

[00:26:06] you have regular vaccination regular visits to doctors and then preventive care, check-ups and so on and so forth right?

[00:26:14] So pretty sort of why it's so we basically said that looks as the first thing we said we'll target will go to area will go to the segment where there is demand.

[00:26:24] That is number one. Number two is unlike most

[00:26:30] Most startups you know most startups basically start off saying look there are incumbents which cannot work in for you.

[00:26:38] I am an alternative option right and the alternative to the incumbent.

[00:26:43] We basically concluded and this is again coming in from the years of spent.

[00:26:48] We concluded that the incumbents actually are playing a very important role right? They have a massive distribution footprint.

[00:26:57] They are already selling at traditional product which is actually required. It is not that everybody's got the sphere of hospitalization right?

[00:27:06] So you need to get covered and we as a early stage company we don't want to you know, reinvent that part of the wheel.

[00:27:15] But what we want to do is we want to sort of be able to collaborate with incumbents and take to market a much better product.

[00:27:26] Right? That's the that's the route that we took. That's a route that we took and because I spent years and years I have a lot of respect for what the incumbents are doing right?

[00:27:38] There is a reason why it is hard for incumbents to get into categories like outpatient plans and coming back to the definition of insurance.

[00:27:48] We operate in high probability and high frequency right. So for example, you know, will most of our members actually visited doctor in any given year absolutely yes.

[00:28:04] You'll have a visit right?

[00:28:07] So in that way to be very honest with you, you know, under the extreme definitions of insurance this is not actually insurance right what we are doing.

[00:28:17] It is the way we like to look at it as it is it is a it is a health plan which is a massive complementary product to the regular insurance products which are there.

[00:28:28] Because it just sort of differentiates the offering you know, annex.

[00:28:34] But hang on how to get the if you are not, you know, writing these policies yourself right. How do you get the incumbents to sign off on like outpatient as such?

[00:28:46] Because and why haven't they done that, you know.

[00:28:52] See there is I'll there are two questions in this right.

[00:28:58] The answer to the first one is really, you know, demand is a mother of entrepreneurship.

[00:29:05] There's no there's no substitute for demand if there is demand, you know, and then we and then we we've sort of built an ecosystem which has both the demand and supply

[00:29:16] And that's the way to go.

[00:29:17] Without demand there is no ecosystem, okay, there is no business.

[00:29:22] So over a period of time, I think what has happened is and then certainly Covid has been a tailwind, right?

[00:29:31] The demand for outpatient care first are emerging in, you know, companies such as MNC groups which basically said that look.

[00:29:39] We follow a certain comprehensive healthcare policy elsewhere and you know, you'll have to follow the motherships policy right.

[00:29:50] So demand started emerging from there right.

[00:29:53] And as demand emerged, insurance companies, you know, receive this demand from the other stakeholders like brokers for example right.

[00:30:03] We also work quite closely with some of the largest brokers and so on and so forth.

[00:30:10] And we as well receive that demand right because if when there is demand you have to fulfill that demand, right?

[00:30:15] What do you do as an insurance company?

[00:30:18] You need a platform which which which is basically designed to fulfill this demand right and and in a way, because we, you know, we saw this coming now.

[00:30:32] Maybe it's accelerated a bit because of Covid, but this had to happen in the country, right?

[00:30:38] Because what has happened is the API economy sort of, you know, came, came together.

[00:30:45] Now from the government side, health stack is sort of coming together, right?

[00:30:50] All of a sudden it was conceivable to actually build this ecosystem, right, which can potentially fulfill this kind of demand right.

[00:31:00] To answer your second question is, you know, like I said earlier building this from scratch for any insurance company is possible.

[00:31:11] It's not that it's not, but it is almost like building a company.

[00:31:17] People might even pay higher premium rate.

[00:31:19] I mean because if it's a high frequency, relatively a high frequency purchase, is that.

[00:31:23] Then yeah, I mean people might pay more, no?

[00:31:27] That's that's how it's transpired today, right?

[00:31:30] So in the in the choices, so if you're a income and insurer, you know, in terms of the choices over here, you have, you have build by your partner, right?

[00:31:42] A lot of people, so it happens in any industry, right?

[00:31:45] So when there are early stages of demand, you know, coming in, your capital allocation model is not designed for this demand coming in.

[00:31:53] It's a niche, right?

[00:31:55] So what you typically end up doing is you start partnering, right, to start with.

[00:32:01] In the future, people may consider buying, right?

[00:32:05] But it's already very clear that, uh, build from scratch model is a massive entrepreneurial effort, you know,

[00:32:13] to the extent that you literally will need to create something like us.

[00:32:20] Because it's not just, you know, it's not just tech, there is tech, there is customer experience, there is a new way of designing products.

[00:32:29] For example, what we're able to do today in terms of the health plans that we offer is we are able to look at a very micro segment and customize a health plan based on that segment.

[00:32:40] But are you writing the risk also on this?

[00:32:44] So most of a business is actually in collaboration with insurance companies.

[00:32:49] So in that way, it is the risk is on the balance sheet of the insurance companies as on date, right?

[00:32:57] But there are models and I won't sort of get into it in this conversation.

[00:33:00] There are models which are linked to, you know, either a profit sharing or a risk sharing models, which are sort of coming up now.

[00:33:07] Okay.

[00:33:07] Early, early days yet.

[00:33:08] So it's the same policies but you have opened up this outpatient sort of avenue, right?

[00:33:15] Now if I go to look at it from a carrier perspective, what's in it for me?

[00:33:20] Like, you're not helping me get new customers, right?

[00:33:24] You're helping me service my existing customers and you're saying that there's a higher probability that I might have to pay out like claims.

[00:33:32] So the answer to that is what you just said, like, you know, a few minutes back, right?

[00:33:38] These policies when the premiums for these policies are not the same premiums, right?

[00:33:45] The premiums is an add-on premium.

[00:33:48] Go ahead.

[00:33:48] So this is an add-on basically.

[00:33:49] It's absolutely an add-on, right?

[00:33:51] Okay. Now it is also not true that it is the same customers.

[00:33:55] It's actually opening up new markets, right?

[00:33:57] And the regulator is actually gone about and they've sort of issued circular decently.

[00:34:04] And they promoted what is called the value added services as a policy, right?

[00:34:10] So I can have like a primary health insurance plan somewhere somewhere and then I don't know.

[00:34:16] Maybe I had like a diabetes policy exactly.

[00:34:19] That's from somewhere else and an old patient policy from that point.

[00:34:23] That's the point.

[00:34:23] And it's not just for health.

[00:34:26] This policy is also for life insurance.

[00:34:29] So life insurance market is much larger than the health insurance market, number one, right?

[00:34:34] All of a sudden what it opens out is the income and carriers with the power of their distribution network.

[00:34:43] Having this power to say, look, you know, I can actually fulfill the demand.

[00:34:48] You know, it may have started in the corporate world.

[00:34:51] But it's soon going to sort of move to the retail world which we've seen today as well, right?

[00:34:56] So all of a sudden it opens up this entire demand for both health insurance as well as life insurance.

[00:35:06] So to look at this and say here is an opportunity for us to sort of meet this demand.

[00:35:10] And this is where we as alive, you know, one of the calls early calls we took is that

[00:35:19] Like I said, we are here to actually collaborate in open architecture way, which means we actually work with multiple general insurers, multiple life insurers, multiple brokers.

[00:35:30] And we're in fact enabling this, right?

[00:35:32] All within the framework of the regulation of the country, right?

[00:35:38] It is an important part because every time a carrier goes to market, they can only go to market if a product is filed with a regular company.

[00:35:47] Right? And when it's filed, the design of the plan is also encompassing how is the plan going to be fulfilled?

[00:35:57] Because it's very easy for like you'll make a certain room and write a policy out.

[00:36:01] We'll cover the doctor consultations.

[00:36:03] But how does an end user, you know, access this? That's where again, alive comes in.

[00:36:08] We are the front end layer, clear, clear service application, not just a concierge.

[00:36:17] The three parts of a product, right? So first is, you're an integrated ecosystem.

[00:36:22] So anything that you book on a live, the product promise is that you can access it in a cashless manner.

[00:36:30] Right? So you've got a doctor consultation, you can walk in, walk out from the clinic, right?

[00:36:36] And it's comprehensive. And you know, that's the first one.

[00:36:39] Second is, it's a short service, which means there is a concierge. There's a care guide who's a scientific order, who's actually guiding you through the entire episode.

[00:36:50] So if you book an annual checkup, somebody will call you the previous night and say, you know, please fast from so on.

[00:36:57] So time, the test will only start at this time, right? And so on. So it's an assured experience where there is 100% transparency in terms of what are going to go through.

[00:37:05] And there's a care guide. And third and most important for us is it's proactive well-being, okay? So one of the things that we want to change is, before alive and after alive, how active and healthy are a members, okay?

[00:37:23] And then this is where I think you also alluded to that, personalized health plans like, you know, manage your diabetes out here.

[00:37:36] Or, you know, get 50% off on your gym membership starting today, till whatever date, right?

[00:37:44] And this is how we engage people to do things. And then we actually wanted to be a high frequency low severity, which is why you need tech, because if this were to be run manually, this can never make money, right?

[00:38:03] You need tech to sort of reduce your effects to the same level as, you know, a profitable business. And you need tech to, you know, look at data and say, okay, you know, what should a particular member be doing?

[00:38:21] Okay, at any point in time. And you need tech to also be able to help the insurance companies price a plan out, right? So so this is what we actually collaborate with the large incumbents and help them, you know, meet these demands through very custom-made health plans, right? So that's what we offer.

[00:38:42] Man, when I listen to the business at a whole rate, I mean, I see there are so many moving parts, right? I mean, on one side you have to partner with the carriers for the product. On the other side, you have to partner with all of these folks, whether it is hospitals or whether it is like gyms or, you know, whoever else to actually service the demand.

[00:39:02] And then there is a customer itself at the center of all of this, right? How do you manage a customer experience when the end, what does that mean? Like the last mile is not in your control per se.

[00:39:17] So I just take you through, take you through what are the parts of this ecosystem, right? Just to, you know, be a good sense. Like I said, we have a demand part and a supply part, right?

[00:39:29] On the demand part, I have sort of walked you through various demand channels which are there.

[00:39:36] And once a customer is onboarded, they actually use an application. It could be, you know, you could be logging on to your carriers app, but we would probably be integrated out there, you know, so you move into a single sign on kind of environment into the alive environment, right?

[00:39:55] Now comes the supply side of things, a supply side and this is why the, this was something that we thought about for a long time.

[00:40:07] And exactly the question that you ask like, how do we sort of build the supply scale supply? The approach we have taken is, it's a dual approach, okay? So one has we've got integrations with suppliers who are aggregated in the world.

[00:40:25] And it does themselves, you know, so you could have a gym aggregator or, you know, a daily consultation aggregator or an inclinic consultation aggregator, format home, right? So you have most of the reputed branch of the country actually supplying to us.

[00:40:40] And this works, this works through APIs, okay? Which also gives, give some members, the assurance that, you know, their requirements sort of taken care of, you know, can track your,

[00:40:55] OK, until the time, you know, the reports are fulfilled or till the time you get your medicines at home, right?

[00:41:01] In some categories, for example, diagnostics, right? We have had to also forge partnerships ourselves because some of the supply categories are fragmented by default, right?

[00:41:17] There is no pan India, diagnostic by hemorrhate today, like especially when you look at at center, right? So, you would look at Apollo as an option,

[00:41:29] because Apollo also has an Apollo and then sort of we work with Apollo a lot. But when you look at India as a whole, India is a super complex country, right?

[00:41:39] If you look at for example something like a Vishakapatnam, a sudden print code. And in our philosophy, we don't want any of our customers to travel from one half an hour to reach a center, right?

[00:41:50] So, there are regional, regional champions, okay? So if you go to Mumbai for example, there would be somewhere like a suburban or an medical, right?

[00:42:00] If you go to Hyderabad or Telangana for example, there would be a VGA diagnostics. And they are champions in their region, you know, for example.

[00:42:10] So, it's a very deep understanding of you know what is the supply side, okay? Now comes the point as to how do we sort of ensure great experience, right?

[00:42:23] The way we look at Asyls is again open architecture is the key word. We want to be able to give the end views of the choice, okay?

[00:42:40] But we want to know what are all the labs and hospitals that you can potentially offer, right? We will also tell you these are covering a plan.

[00:42:48] But for example, if you go for a high and hospital, same edantah, you might have to pay a little bit extra.

[00:42:55] Good job. That's an option, right? So the way we look at Asyls as a product company is it's very similar to what insurance traditional insurance has been doing.

[00:43:07] Because they basically tell you that these are the cashless hospital network and you can sort of go out there.

[00:43:14] And then you're chosen the hospital, you're chosen the doctor, it's, you know, you're going to your family physician. That's what happens, right?

[00:43:21] That's one. Number two is like I said, we track every order, okay? So today roughly we do about 2,000 or 3,000 transactions a day.

[00:43:35] Okay? That's the scale we are in. And we track every order on our internal dashboards, okay?

[00:43:43] And the key point here is whether the member has kind of interacted with the provider.

[00:43:50] For example, has your flabbo reached you, something that we can see and you know, what's the delay for every order?

[00:43:57] And if there is a delay take some more to make it.

[00:44:00] No concern collects your sample whatever that is blood sample and it's going to correct.

[00:44:05] Similarly, if you've taken a gym membership or purchased it from us, right?

[00:44:13] Whether for example your voucher code is active, your QR code is active, you know, is active, you actually, you know, leverage it, right?

[00:44:21] So this we track on every order basis on a non-name basis. It's something that we are very clear about.

[00:44:32] We don't want to know who's doing it, but we want to know whether an order is getting fulfilled in the right manner or not.

[00:44:39] If it is not, if it is not then we take some actions. We work with our supply partners.

[00:44:46] And everything there is a parito, right?

[00:44:49] While we are a massive horizontal platform, you will see that 80% transactions are with 20% providers.

[00:44:56] Right? And most of them would be aggregators.

[00:45:02] It's not easy. Like I want to sort of, it's not a solved problem yet.

[00:45:06] You know, I'll be foolish if I came here and said we have sort of done it.

[00:45:10] But it is required. So if the forward true customer centric health plan experience, you need to do this.

[00:45:20] And when we started, you know, and we pretty much got a lot of most rooms, right?

[00:45:27] How can you, you know, combines ports and a gym and a doctor consultation in one plan, right?

[00:45:36] But we somehow had that conviction that an NBS consultants, like my co-founder, Sushaant as well, we need, you know, we are all from consulting background.

[00:45:47] And our only advice used to be do one thing and do it really well, right? So go deep into something and that's the typical startup advice as well.

[00:45:54] But here, this is an ambitious horizontal play, okay? And unless you do this horizontal, that is, this is the reason why, you know,

[00:46:06] our traditional companies have a low in PS2A, right? Because they restit themselves to low frequency, high severity.

[00:46:14] And then, if you're getting into the high frequency game, then you better have options for the customer. So we are open architected in terms of demand, we are open architected in terms of supply, right?

[00:46:25] We work with multiple providers and we give the choice to the, so much so that, you know, we've just launched a new, you protocol, a live pay where you can actually walk into any, even your family physician scan the UPI QR code out there.

[00:46:40] And your insurance or the OPD wallet will actually get debited. So it's not coming from your bank account, so UPI at transaction which happens, which basically removes the network out of the equation, right?

[00:46:55] So whatever we are networked, anyway, I have a pretty big network, but for a user, I can actually walk into my doctor's office and scan and come out, right?

[00:47:06] And that is the philosophy which you want to build this, give maximum choice to the user and make it as scalable as possible for a user.

[00:47:16] Right? So a few follow up questions, so one is like, when you look at insurance in general, I mean the incentives are so misaligned right?

[00:47:24] Obviously, the insurance companies want you to buy their product but not use it because then they'll have to pay for it.

[00:47:30] Right? And similar with hospitals as well, there's friction between hospitals and carriers and then you know, there is TPN between and it's again question of how their incentives are aligned and so on.

[00:47:44] But you as a platform, your turn of bring all of these different elements onto one simple seamless experience for the customer right?

[00:47:53] How do you get these people to kind of like work and row in the same direction?

[00:47:59] See, there are two worlds out here. Now one is the impatient world and the other is outpatient world right? As of now, we control or we, you could say that on the outpatient world, you're very confident about the customer experience and what we have to offer a product promise out there right?

[00:48:21] Because that is something which is which is completely designed brought to market by us right?

[00:48:29] Now very interestingly, for the impatient world, what we allow you to do, we allow any company to just connect their group medical policy.

[00:48:37] It might have been bought by, bought by them directly or through another broker. It doesn't matter to us.

[00:48:42] Okay, we've also integrated, economically with you know, four of the largest TPAs. We're also integrated with some of the largest HR management systems right?

[00:48:56] So that when you register a claim, you know, you get a real-time claim registration number or for policy which is not source by us at all.

[00:49:08] You know, we are not a broker. We are not an intermediary in that fashion. We just let you connect it right?

[00:49:14] We also have a service where you can talk to our claims expert and just get an understanding of what happens.

[00:49:23] We don't process the claim right? Understanding of what happens and that that facility is also there right?

[00:49:31] So in the impatient world, this is what the product is today right? Now with health claims exchange coming in and and we are sort of looking forward to or hoping to also integrate ourselves with the health claims exchange as well.

[00:49:50] You know, we have to explain that a little bit here. So what happens today is that the interface between the hospitals and the insurance companies is I'm not say a hospital any provider you know there is no real one interface between the hospitals and the providers right?

[00:50:10] If you go to a hospital and many of your listeners might have sort of gone through hospitalization experience, you have something called a TPA Deskata Hospital.

[00:50:20] TPA stands for third party administrator right? Even though it's called TPA Desk the person the staff out there is actually a hospital employee okay he's just helping with the with the insurance is.

[00:50:31] Ask your questions in terms of what your policies whether it's corporate retail etc. Then he does bunch of all tabs you know so there's so many windows which are there so he keeps going to the window of that particular so he can imagine there are 33 general insurance companies in the country any of them do health as well.

[00:50:49] So so many windows are typically open and he's then at that point in time he's actually checking you in right and to add to the complexity every hospital follows their own.

[00:51:03] Electronic medical record EMR systems which is different from what insurance companies follow and therefore this person is actually uploading PDFs on this screen.

[00:51:14] So if your insurance companies insurance ABC the ABC window will open he will sort of you know keep uploading the PDF on the other hand there is a doctor or a claims processor whether it's from a third party that the insurance employees or themselves.

[00:51:32] They look at all these PDFs and they try to form a sense of what this claim is about and try to adjudicate this takes hours and there is a lot of to go and flow which is why even after a doctor else you that you can get discharged now.

[00:51:50] You know most people who have not done this before think it's done right there they it's like swiping a car you know just say this is my insurance cover said but it takes on average anyway between two to four us.

[00:52:02] On average sometimes it could even take a day and there's a lot of friction because while two to four hours for people who have not gone those experience seems very low.

[00:52:11] For people in our hospital the first thing they want to just get home.

[00:52:17] And at that stage if you're a door that no you can't and there is no clarity and there's a lot of to one through happens.

[00:52:25] And after that to one fro then they say that look this is what the insurance companies willing to you know pay up and the reason why they don't let the patient get discharged is because the financials are not settled.

[00:52:40] Right then how do you recover so in case it doesn't get settled what happens how does the hospital recover the money right.

[00:52:46] So with the health claims exchange what's going to happen is all of this windows will be a single window clearance right.

[00:52:53] I think the first phase is just just that this is a single window clearance but the true disruption over here is if the and this is moved by the government is just moved by the government.

[00:53:07] So interestingly there is there is there's a health ministry and the finance ministry so national health authority for example the Pradhan Manthri insurance team actually comes under the health ministry which is the governing body is the NHA.

[00:53:24] And many of your listeners might also have got something called an Abhaid which is a unique health ID which is again a concept mooted by the health authority.

[00:53:32] So they've used the technology that the using in the PMJ wise sort of that triangle leverage that on the health claims exchange.

[00:53:42] Most of the insurers have signed up so there is collaboration between ministries between the NHA, I add a and so on so forth right we've multiple sessions that they have sort of taken so insurance companies had to sign up for this and over a period of time the idea is to move all claims into what is called the national health claims exchange right.

[00:54:04] So at least you know put out there that health tech companies such as us can potentially get connected with this kind of exchange.

[00:54:14] So that say for example our member wants to register a claim they can register irrespective of whether that policy has been you know sold on a live or it could be insurance company 1-2-3 it could be a TPS third party administrator who processes the claims for many insurance companies.

[00:54:32] And it could be a hospital ABC right so you could potentially register the claim through a health tech any health takes not just not just us.

[00:54:42] Now the and very important insight here is that the real value of this entire thing is when building courts are harmonized.

[00:54:52] So what happens. What happens Russian is every hospital follows a building court system for example if even example like removal of appendix is say a building court 1-2-3 on hospital could be 5-6 and some other hospital right.

[00:55:08] So if that is harmonized then you can actually process a claim in real time.

[00:55:14] Okay it's almost like everybody's using their own charger you know iPhone and Android and you know what not.

[00:55:20] And here are the only two or three but imagine the compatibility.

[00:55:24] So with health claims exchange I think the logical next step and I hope that you know this happens in the country is when there is a standardization of the building courts.

[00:55:35] So you can imagine now that you will have a building court 1-2-3 customer ID ABC going to the health claims exchange.

[00:55:45] The provider provider has you know has a core the insurance guys so everything is codified which means even the policy starts getting codified right so all your exclusions today which probably run into pages.

[00:55:58] Can come in and say if it is removal of appendix I pay you up to one lakh is already codified in my policy. So I compare the policy with what are receive a seclaim and then it's real time.

[00:56:10] Wow right so without this building court harmonization it's an incremental step in my honest view right but it's an a serious step to move to the to the ultimate.

[00:56:23] Now what I also hope will happen is that first thing is after the impatient you know these harmonizations and sanitization will also move to our patient should move right when you will start seeing that there is you know enormous efficiency in the system.

[00:56:43] You know anybody is claiming from anywhere and sort of you know is if you remember you can sort of just claim and if whoever is the insurance company based on the policy there is straight through processing and maybe only 5% or 10% get into a manual manual workflow right.

[00:56:58] So things are changing very fast and I think it's for the better but time is of essence you know because health stack and health claims exchange you know these are concepts which were being spoken about since 2018-19.

[00:57:15] But it's I think it's actually the right step for a country and with this amount of time and cost which can get saved in the system is enormous right so so that's the digital probably can cross up to that we're building is just phenomenal right.

[00:57:28] Absolutely my is ahead of anyone else actually add a question on tooling right because you know I have some experience of you know working with the technologies of all these insurance firms and so on most of them are running RK systems.

[00:57:42] Yeah, right you said that it's an API so you're pulling inventory from somewhere you're pulling customer details from somewhere and you know passing into other systems and so on.

[00:57:52] Yeah what's the tooling like you know and how much hair did you lose you know trying to net all of this together on one interface.

[00:58:00] Yeah see for us as of now honestly because it's almost you know you could say it's almost in your category that is getting built.

[00:58:16] This is this is not.

[00:58:19] This is not a very big challenge when there's a new category I'll explain why see every product which an insurance company launches is filed and when you file it there is a.

[00:58:43] Yeah but the way insurance companies also managing this is they they've also smartly over a period of time.

[00:58:52] Said that there are these legacy systems that that they have right so you typically have a core system okay.

[00:59:00] They've tried to relegate that to a system of records.

[00:59:03] That's only system of records. Then I try to manage my my API hits on a system which which is which is probably on top of this and which is built to sort of talk to my core system okay.

[00:59:18] And most insurance companies have released pretty good API kits okay.

[00:59:24] Where you know where you know somebody like us can actually collaborate with them and and and and do this.

[00:59:35] This also you know takes me back to my experience with BCG where I've actually seen some of these you know older systems have seen some of these insurance companies trying to sort of you know take it to the next.

[00:59:46] Next 7 terms of tech and a lot of people lot of them have traversed fair bit in terms of just being you know like startup friendly.

[00:59:57] Having said that having said that.

[01:00:02] Like what where they find it a bit tough is if you have to personalize in real time.

[01:00:09] So for example, motion comes on alive and and we've sort of built that tech to say okay based on what you're doing with us.

[01:00:17] You know we can actually tell you what you know you ought to do or what you should do give you an offer on that right.

[01:00:25] And that is where I feel that there is a certain dictionary out there that insurance companies are built.

[01:00:33] Which can with the buildings such that you can cover pretty much everything and if we operate within that dictionary and working along with their tech folks.

[01:00:42] We are okay, we are okay and we should be okay.

[01:00:45] And therefore what what the net result of all of this is that customers actually get a great experience.

[01:00:51] The product is an insured product right so you have the trust of someone who's backing this product.

[01:00:56] And the platform is us the platform is us right so in a way think about it this way I think.

[01:01:06] You you've got like you know parallel is banking right so banking has core banking and a lot of banks have done a fantastic job in releasing the mobile banking apps and so doing that.

[01:01:17] And then there are new banks of sort of come in and you know.

[01:01:20] But in insurance actually because of the low frequency there is no no equivalent of a mobile banking app there is an insurance app but you probably use it only when you claim right and which is which is where again.

[01:01:33] Somebody like us comes in and says that look we are the gateway to high frequency low severity right.

[01:01:42] We have these integration toolkits sort of built out.

[01:01:46] We it's almost like we are providing this platform as a service to many of these many of the carriers and working within the ambit of the regulation of the country right.

[01:01:57] So if you were to abstract away from everything that you're doing right and you see things in perspective.

[01:02:03] What are like you know two or three things someone should keep in mind while building a platform business.

[01:02:08] Yeah, where you're trying to get various stakeholders together you know incentives may not always be aligned.

[01:02:15] The customer is at the center of things and you have become that one throw to choke for everything right that you may not control.

[01:02:23] So for someone who's listening to this perhaps watching this you know if they want to build a platform for something else right I mean wherever what are some two or three pointers that you would give.

[01:02:34] I think the first first thing is.

[01:02:41] Demand right you you have to be very very compelling demand right yeah you have to be very sure and and here it's not it's easier said than done you know it's where use you know there's a famous court where you're to skate whether or goes to right when we started.

[01:02:58] And a lot of people said you know like who will offer OPD right I mean.

[01:03:07] So the world is full of and that that is that is why sort of it makes sense to start with a lot of people don't don't have the same view but you need to have a pretty confident thesis on the demand right he's there demand and demand not just now but.

[01:03:25] And then the moment in demand or at least you know I'm sort of shaping up now right so so that there's a moment of demand right that demand is going to grow by 5% or is it like demand double said every quarter.

[01:03:37] Right so it's a difference there.

[01:03:40] Second thing I would say is see these some of these things are somehow so often misunderstood like you know what is a platform what is any co-system and many times.

[01:03:50] Like like builders may get caught in you know in the jargon world right.

[01:03:56] Honestly doesn't matter so for us when we looked at it and a lot of people ask us who's your customer it is is insurance company customer for us is we are very clear the end user is the customer right.

[01:04:06] Because end user determines demand if there's no demand insurance companies also cannot sell this product right corporate cannot offer it to the employees even all the employees say what is this year for me right.

[01:04:19] And so on so forth right so I think it's very important to kind of be clutter it's so if it's so happens that you build something to meet that end user demand and it is called a platform and ecosystem great you know but I would say.

[01:04:36] Third is when you're starting off it's very hard very hard because I think you also alluded to this in the initial part of the conversation that the supply side will ask you where is the supply where is the demand.

[01:04:54] The demand side will ask you where is the supply right and and you need honestly you need to be very fortunate here because there was COVID the only supply which we needed were any consultation RTP CR.

[01:05:08] You know and we could kind of try to double down their you know generate demand you know fulfill the demand with a good customer experience so luck plays a role.

[01:05:24] And very important role.

[01:05:26] Again I think there longer you stay at it the lucky you get I feel right in business because you started in 2018 no no.

[01:05:37] So interestingly I quit my job just before COVID okay so FAP 2020 is when I quit quit my job.

[01:05:46] And and the three of us came together around August 2020 so and then we started building and then we went to market in 2021 because we had to build a basic.

[01:05:55] And then we started building a basic product and basically the process in the board market so we've been in business since 2021 so it's been about about three years.

[01:06:03] Little more than that yeah but instead of doing all of this stuff wanted to win easier to just build another insurance company for outpatients.

[01:06:15] In a way.

[01:06:17] Because I'm assuming that you are earning some brokerage from each of the partners that do work with right and in order for you to increase your margins at some point of time you will have to think of your own product.

[01:06:28] Considering that I had AI has especially under the new direct investor partner rate I mean they've been very very forward thinking in figuring out new ways of insurance and so on and penetration is like a huge priority for them.

[01:06:42] And I wanted to have the con and easy on to do that yeah so that I think two three things one is as I've said you know we were very clear about where where what the missing piece was which is OPD.

[01:06:56] We built our technology a product centered around this missing piece right we were also very clear that there's no point in reinventing the wheel you actually work with the incumbents right.

[01:07:07] Now I've had discussions with you know for example the ministry regulator and they're very forthcoming so first thing I want to tell you listeners is that.

[01:07:21] You know it is a wrong notion to kind of maybe a thinker in your garage and think that the regulators or the ministry minister ministry is actually not forthcoming yeah they give you time and so on so forth.

[01:07:37] So there are two or three aspects here one is till date you know what the what we do is actually not part of the insurance act right so in a way what the regulator is basically said is that.

[01:07:53] It is a great product which goes which goes very well with with insurance right so.

[01:08:01] It is it is insurance companies can do it it's not part of the insurance act as of no but insurance companies are encouraged to add these value at its services and they've sort of allowed them to experiment in a big way right.

[01:08:14] Second is from our perspective you know we we are all ears to figure out you know how the country wants to sort of take this forward right in terms of regulation and because there are a lot of things which happen.

[01:08:32] In which it's in the probabilistic domain which is which is not insurance and which is not regulated you know and I just to give you some examples.

[01:08:41] Like we do apple care right if you break your screen for apple that's that's a product right but it's a probabilistic product.

[01:08:50] But is it insurance maybe no right kind of an insurance kind and this and I you know for me one of the reasons why I decided to also build my career in the space of insurance is because it's linked to probabilities for the studies.

[01:09:06] And there is probably study everywhere around around us if you look at it the world is probabilistic exactly so if you if you go to a restaurant which does thalies.

[01:09:15] You know that also is a plan.

[01:09:17] Okay, what if somebody goes and eats everything in times over right that also is a plan but is it is it insurance answer is no right.

[01:09:27] In the in the Mumbai local times very interesting thing is you know there's a ticket checker who comes once in a while right.

[01:09:33] So what I've at least heard is there is a pool of you know travelers who pool the risk and say if a ticket checker catches somebody we will sort of.

[01:09:44] Yeah, we will sort of put the bill so it's not legal but there is probability almost everywhere okay.

[01:09:51] Now all of that is actually not insurance so for example Netflix a subscription more you watch Netflix.

[01:09:59] Higher is there you know tech costs because video play is very expensive right electricity which requires the maintenance it was very expensive right.

[01:10:11] YouTube now all of these aspects are actually subscription products which have probabilities which are built into them right.

[01:10:18] So where I look at what we do is is is is in that sense customer centric offering.

[01:10:26] Which is linked very very well with data and probabilities.

[01:10:32] Now I don't know for example whether the regulator would want to regulate or if they want to right but we are very clear in our minds that this is the space we want to plan and we want to be in a space where we can actually collaborate.

[01:10:46] And then we can actually create with other carriers because those are there is demand out there right.

[01:10:51] And maybe because of that concept you know the regulator may be looking at it carefully and you know that's that's the sense I get right but there is some way to go for because you know if the first step is it has to be part of the act.

[01:11:04] Right now the in what form and shape it becomes part of the act so bill has to be sort of passed and act has to be sort of you know confirm.

[01:11:11] And then comes the regular regulator follows the act like that's how that's how the framework of our country works right.

[01:11:20] So what we are doing in the interim is obviously talking to every stakeholder being very kind of about what we do right.

[01:11:28] How we sort of are actually helping meeting this demand right.

[01:11:35] And if there is demand and there is there is a way in which if people want something and we are we can sort of deliver that at at good level of customer experience.

[01:11:47] There is a profit pool right and that's how that's how we once are built right.

[01:11:52] You mentioned working with the idea and the fact that they're forthcoming and so on.

[01:12:00] What's your general experience being like working with these folks.

[01:12:04] I understand they have a supremely hard challenge right.

[01:12:07] I mean there's often second or third of the consequences to things that they do that you know it's it's impossible to a phantom all of them right.

[01:12:15] So they were really hard job by field.

[01:12:17] So yeah what's your experience like working with these guys and if there is one or two policies that you think should come into being right what would your wish list be.

[01:12:29] So I mean the wish list is not only for idea I think I had one wish which which unfortunately this budget didn't get full faith which was to kind of remove.

[01:12:41] And so we have a way of GST in insurance or health plans whatever we do because what happens is when you actually go to a hospital directly there's no GST or if you go to a doctor directly there's no GST.

[01:12:54] But there is an 18% GST yeah when you go through a plan right and for a product which is absolutely necessary.

[01:13:02] You know the finance ministry should consider waving of the GST or at least you know reducing it quite a lot because 18% is a pretty big.

[01:13:14] Tax to pay and ultimately the end user is paying the tax right now coming to I add a.

[01:13:24] To be honest it's it's not it's not that you know we are working with them because.

[01:13:29] No you can imagine from there perspective there are so many entities which are out there right but.

[01:13:36] I would like to sort of highlight that they I was extremely pleasantly surprised you know when I.

[01:13:44] So I just dropped a drop an email and and I received a call from one of the senior most officials right as to you know what what what do we do and how can we so that's how we can start it talking.

[01:13:59] And I think that is the point I like to make you know in this podcast that.

[01:14:04] And like everybody else even the regulatory is trying to figure out.

[01:14:12] Stuff and like you rightly said you know it's very easy or convenient for everybody to say hey know which there should be decision.

[01:14:20] Out here etc but it's not that easy for the regulatory to make a decision because they'll have to consider every aspect of you know what the decision might.

[01:14:27] And that's what I think it's not that. Having said that you know one example that we could look at as the banking regulation where very quickly.

[01:14:36] You had specialized licenses come in.

[01:14:40] You know banks and yeah so like small finance banks for payment banks, small finance banks even for P to be lending the least.

[01:14:49] And if you look at CB for example for.

[01:14:54] Alternate investments that will is separate you know separate regulation different grades of licenses right.

[01:15:01] So I hope that for.

[01:15:04] If at all this product you know and and if the regulator considers this this to be.

[01:15:11] And then this is part of the act etcetera's consists of this to be insurance.

[01:15:16] I do hope that there is there is a there is a specialized license because you know a company like us.

[01:15:22] Is not in the business of taking very large risk right.

[01:15:27] For example regular insurance company you know I think you are steadier unfortunately there were the landslides in why not these natural calamities.

[01:15:37] They get a reinsured and there's a that is what insurance was traditionally meant to be and in the right spirit that's what it should be.

[01:15:45] For somebody like us the capital requirement is actually much lower right.

[01:15:51] The the risk profile or any any risk we take in right now in the future is actually you know it's a low risk that we take.

[01:15:59] So yes so that is something that is worth considering that you know whether there should be a specialized licenses for.

[01:16:09] For somebody like us and you could name it anything name it health plant take or health take and the other.

[01:16:15] And I think that even the regulators are trying to figure out as this whole in telling between the health.

[01:16:22] Ministry and the finance ministry so the health there is a health regulator the financial service regulator.

[01:16:28] And generally we know there are businesses and not just as there are businesses which probably you know come somewhere in between right.

[01:16:36] So that is another thing that they're honestly trying to figure out in my conversations.

[01:16:42] So so yeah no no clear answer but if there is I think there should be a thought about you know taking on at least you know bringing to market.

[01:16:54] You know specialized licenses.

[01:16:57] And then more I see the last companies which actually received licenses were.

[01:17:01] I call and digit right many people have applied now.

[01:17:08] You know some of the industry sort of like galaxy is just received it's not from.

[01:17:14] Dr. Davies shit he just received it received the license so now what happens to.

[01:17:21] Early stage companies who are actually adding a lot of value.

[01:17:26] And and therefore and and this again goes back to the point that maybe there is a case for.

[01:17:32] Specialized license for for the for the kind of work that we do right.

[01:17:37] Maybe there's a case in that that is something that I'm sure will be kind of their thinking about it looking at it quite closely.

[01:17:44] Yeah.

[01:17:44] You know I think you know I happen to read this sometime back that.

[01:17:50] Hell's get is so complex you can't have speed affordability and quality right you'll have to pick two or three most of the times.

[01:17:58] And it's particularly tough to provide this when it is completely straight jacket right so you need newer and more specialized forms of.

[01:18:06] Delivery to you know various interests and segments and so on right.

[01:18:09] And that's a great example for example for instance that you brought up right correct I mean if I'm you know five 10 kilometer radius of Naran Rudelea it absolutely makes sense to buy one.

[01:18:21] Right and it's pretty very very affordable as well we'll have to see like still a minute since it's a new product like how things will pion.

[01:18:29] But stuff like that ensures that you know insurance and health insurance particularly I mean.

[01:18:35] It becomes easily purchaseable right and and more relevant to a person's daily needs for sure right absolutely in terms of a growth I assume that you know there's a typical corporate sale.

[01:18:48] You might perhaps look at some affinity groups as well like you know I let you be US they have this veterans and so on here perhaps I mean maybe apartments or societies or certain alumni or whatever.

[01:19:03] So that's that's that's the usual route that you've taken so so will you really more to the B2C side sometime okay so good question I think.

[01:19:14] See the two markets we operate and we are like you rightly sort of said we are need to be a acquisition right but in the beginning we'll be there are two markets we operate in one is.

[01:19:24] And groups of employees which is the corporate group right and this group itself is a very large.

[01:19:32] I think to give you a sense roughly roughly about three crore three and half crore life's are covered through employees teams right still very small but it is a it is a large enough group and that's what we started off with because that's whether demand came in and it's.

[01:19:48] So obviously the other type of group we operate in is customers of you know customers or anchor anchor groups or anchor companies right so think about customers of health insurance company.

[01:20:04] And it's it's quasi detail in that way right or customers of a life insurance.

[01:20:10] You are let's say like a budget, a little and health insurance holder then you have you know exactly okay exactly.

[01:20:19] So now this customer angle what we have seen is it's actually a very very large market and this also is called affinity by the way.

[01:20:27] As per the regulation around the insurance products right so it's a very large market because as you can imagine.

[01:20:34] In general open up like bank as a channel for example is one of the largest channels right for life specifically for life but also for health right.

[01:20:46] Again, banker is banker assurance and basically an insurance and a bank collaborate where the bank access kind of a customer acquisition channel for insurance basically.

[01:20:59] So it opens avenues for banks and we have sees MFI is to look at this and say you know can we embed the health plan.

[01:21:09] Any of them so for example take a credit card could be a premium credit card what you get today is like lounge lounge access and you go to the lounge you know you pretty much don't get a space to sit.

[01:21:20] So is there a different potential and lot of banks and a thing about this and we're talking to bunch of them today right similarly.

[01:21:29] If you have if you if you if you have a loan for example right and would you and all of this is voluntary.

[01:21:39] That the customer can say I want or don't want unless of course the bank face for it or then BFC face for it.

[01:21:46] Then in that case it's a sponsored product right but this this market for us we call it affinity or alliances like business alliances right.

[01:21:55] And we have seen that use cases emerge because there was till date there was no platform to kind of you know talk to this demand and say okay, you know here I am sort of you know you want to sort of get a plan for us.

[01:22:11] But use cases are emerging you know thick and fast in this and and this is this is a new kind of market for us just launched this year right.

[01:22:20] I have this is wondering right I mean so much of the front ending from a group insurance I'm proud insurance perspective has been taken away start up so right I mean you know we've hosted the founders of plum earlier and there are a few other says well right when you guys sit at the table I mean.

[01:22:38] And each of you have your own differentiation as such but what are you here from the other side.

[01:22:45] In a way.

[01:22:49] A lot of lot of folks are doing different things right so there are folks you know like I've told you my story there are folks who like plum for example many others who basically started off by distributing the current products to newer markets right.

[01:23:07] So you could look at the startup market or a semi market which perhaps was never under the fold of insurance there was.

[01:23:15] There was COVID and lot of people were looking for products which could cover small team members right.

[01:23:23] In a way.

[01:23:25] We are actually not competing but we are you know it's a complementary offering we don't work with.

[01:23:32] We are not working with the startup because you know our target corporate as well we work with very large groups okay which which basically have at their policy level to say I want to give a comprehensive cover to my employees and I want to be able to manage that through a.

[01:23:49] So in that way we are markets may not match but are you know in terms of our products.

[01:23:56] We are actually compliment to many of these you know in short X startups.

[01:24:03] We we actually collaborate with brokers right so and you know many of these many of the in short X startups are actually in the broken.

[01:24:11] We have a difference in point of view in the sense that right from the beginning we never want to distribute an existing product which.

[01:24:20] I generally believe this doesn't have product market pit right.

[01:24:25] You could find the new market but you combine all the startups it would probably be less than 2 or 3% of the market right today right.

[01:24:32] So fundamentally the our whole thesis is on how do we improve coverage in India you know from our $10 billion to $100 billion for example.

[01:24:44] And that will happen now can be accelerated that right if it happens over 25 years can be bringing down to 80 or 10 years and that is where we that's where I think as approaches go.

[01:24:56] We came in with the different approaches doesn't mean that you know we are in conflict of you know completely many of the companies.

[01:25:03] They're actually and then we are also like I said you know we are also not playing in the same exact same markets at least largely right there would always be.

[01:25:13] So look to come back to a question I think for us the we don't look at you know the way we look at D to C we already at our.

[01:25:21] You know more than a million members you know 1.2 million members today we want to be able to offer these members.

[01:25:30] Add on and to meet all their expenses right so these members have been acquired because you know their corporate might have thought you know let's give them something right but no corporate can cover all your healthcare expenses themselves they will have a budget.

[01:25:46] But you know can can these members actually add on add on a plan in the OPD preventive space and over the period of time we want to be able to.

[01:25:59] Shift spend stores prevention right so I was just telling somebody you know I was in Singapore with my wife and kids.

[01:26:07] I think two weeks back and over there it is a matter of office discussion whether you've done your vision checkup or record checkup right.

[01:26:18] Here we are still far away from that culture right if you ask people around you know in general you will find that people don't do a lot of these checks right.

[01:26:28] At the max they would you know because there is awareness they would probably do a you know help checkup which you know probably this is a basic one right.

[01:26:37] So we want to be able to move both awareness engagement the motivation to sort of take care of yourself and then that's the that's the path we are on.

[01:26:47] Through through health plans which are customized to every individual right.

[01:26:51] So so that's the path you've taken.

[01:26:54] Interesting.

[01:26:57] When I when you think about it as a start of founder right I mean the last four figures have been a little top set of you you had like you know unbridled exuberance in 2021 where everyone and their uncle were raising money.

[01:27:10] And then the boat loads of fit at ridiculous valuations and suddenly the market corrected as it does right I and suddenly like you know profitability sustainable growth all of these things are back in fashion right now yeah now for a founder right i mean if you run.

[01:27:27] If you run a business of a significant scale I mean you'll go through these cycles multiple different times right so I wonder how you keep an even key level things right so how do you make sure that you're always prioritizing the right thing for your business.

[01:27:40] perhaps I mean the market can influence that to a certain degree, but how do you make sure that

[01:27:45] you are doing what you have to do? Yeah, I think you know like I have a friend who's a pilot

[01:27:53] and you know the lead only thing which matters to pilots as you know you'll fly the plane first.

[01:27:57] Right so for entrepreneurs whether it's 2021 or 2021 or 2022 or 2023 you know the way

[01:28:10] you know right from right from day one right in the sense that at least you your your

[01:28:16] objective should be to attack profit pools okay. You know often you know like sometimes

[01:28:25] the priorities could be look you know how much of your A is to but honestly speaking you know

[01:28:34] I always considered the capital which you know to accounting terms reliability right

[01:28:39] because your shareholders have to sort of honor it in the only way they honor it and as if you can

[01:28:45] show them any and even the IPOs have sort of proven that right I think we are at a stage where

[01:28:52] last four four years or especially last two two or three years have seen many IPOs from from

[01:28:58] early stage companies and there are both winners and losers out there and what is very clear is

[01:29:04] cash flow and profitability matters right so you're in the business of this first first thing is

[01:29:13] to understand you know what are the demand drivers how do I you know fulfill that demand profitably

[01:29:20] to be very candid everything else you know at at a at a formal level is a little bit

[01:29:28] a sense of the way to the business exactly because the cash flow fee cash flows oxygen for the

[01:29:34] business and the idea needs needs to be that you have to be independent as companies may

[01:29:40] independent you could at attract a lot of investors but the ultimate for a company is that you're

[01:29:49] dependent on anybody else because company as a definition is a supplement and entity right

[01:29:59] so survivability profitability I think those are core aspects which we to be very honest you know

[01:30:21] unfamiliar yeah so at that stage to be very honest with you we we didn't we didn't press the fundraise

[01:30:32] button very early in our you actually bootstrap for almost two years you know understood what it takes

[01:30:40] to what you know where is the demand how do you fulfill it what are the what are all the moving

[01:30:45] parts how do you get control over it right that's the other thing I would advise any

[01:30:51] any founder who's listening to this that your default should ideally be yourself and bootstraping

[01:31:01] that should be a default right over the middle when necessary exactly over a period of time

[01:31:07] hopefully you know there is some luck whatever you thought through has also resulted in some

[01:31:15] success it will attract investors because any good business will attract investors right

[01:31:20] I and I genuinely think that 2021 was a little bit of an aberration if you like it it was crazy times

[01:31:27] because 2020 I you know I quit my job and there was COVID and you know I was sort of frozen for a month

[01:31:35] as to like what to do now right what to build and in so on so forth it was fortunate again that we chose

[01:31:43] space which had the elements in a lot of spaces just folded up then and yeah very

[01:31:48] very surprised presently surprise when this you know there's a capital boom right in 2021

[01:31:55] nobody could project that in 2020 everybody wasn't maybe nurse discussing like I was an

[01:32:01] a busy alumnac all and you know like the only constant thing was nobody knew what's going to happen

[01:32:07] right and people are talking about all sorts of curse you know V shape you shape but nobody knew

[01:32:11] what's going to happen so lot of things are not in our hands whatever is in our hands is

[01:32:18] is the business that we are running if we focus on frugality so we've been a very very low-cack

[01:32:24] position model right from from day one that is something that you know we and then you know lot of

[01:32:31] the fundraise questions are like you know why do you need this money we always struggle to answer that

[01:32:37] right because our our model is that it's largely groups it's we are actually helping somebody meet

[01:32:45] a demand and because we're doing that you know it's this you know literally we were at near zero

[01:32:52] cat we have a small cat now but it's a it's a very very low cat model that gives sort of built out

[01:32:59] and that is something that is again by design by by also maybe because you know now I can say

[01:33:06] there's an all the all the all the three of us are 40 plus now so we we're a slightly different

[01:33:12] kind of company that way right we started off when we were nearing 40s you know we are all we are all

[01:33:20] right so maybe the what experience teaches you also shapes you know what you build as a

[01:33:29] so founder absolutely I think you know that's one of the primary lessons I learned from my

[01:33:34] founding journey which is to ask yourself what do you want out of this experience right I mean

[01:33:39] yeah and then pivot everything around that yeah hey so this is been a fascinating discussion

[01:33:47] read got to understand many facets of insurance uh right and before we let you go any books or

[01:33:54] podcasts that you would suggest to the audience yeah so I like to read a lot of nonfiction

[01:34:00] erosion and and I like to read things which are not exactly you know what what I do in my

[01:34:10] day to day life but around that you know for example I think it seems to be an important

[01:34:13] trait right I mean to be able to like have these adjacents because it kind of guidance your focus

[01:34:21] a little bit right absolutely and especially you know like I've said in you know in the

[01:34:27] place discussion as well it would have been wrong for us to say that look we we are insurance only

[01:34:34] right the word insurance has a lot of you know preconceived notions so we said that look you know

[01:34:40] let's look at what the customer wants and so you have to you know be broad enough in the business

[01:34:46] as well come back to the books you know right now I'm reading this book called the chip war

[01:34:53] by Chris Miller I would really recommend that you know given how the semiconductor industry shaping

[01:34:59] up and it's a very asymptotic industry in the sense that few people cover you know control the

[01:35:05] supply demand etc I've also been like you know I've just finished reading a few books around

[01:35:14] a little bit about philosophy but a little bit about business and a little bit of a life as well

[01:35:21] so there's this book called a guide to the good life right by William O'vine so I would sort of

[01:35:27] recommend that it goes back to the ancients or a Greek and you know what their philosophy about

[01:35:36] leading good life is especially when the chips are down and you know everything seems

[01:35:43] desperately bad right so what do you do then right so so really would recommend that

[01:35:52] there also some very nice books by Clay Chris and Son who I sort of claim Chris and Sonia

[01:35:59] how do you measure life how to measure life then for folks of building in health care

[01:36:06] there is a book called the innovators prescription which is actually which actually didn't sell too many

[01:36:12] copies but for folks of building in health stack or health care it is something that is a very

[01:36:19] good perspective of course I know better series you know better's dilemma in a better solution

[01:36:24] how do you measure life right so those are those are some things that I would recommend

[01:36:30] podcasts of course you know I think there I try to be in sync with the start of work

[01:36:39] so most of the venture firms they run good podcasts I love this podcast around business

[01:36:46] rounds right coming from a consulting background and it's very very well done right they take

[01:36:55] both of the little listed companies companies which are sort of around the world right and they

[01:37:00] break it down into their atomic elements yeah so business breakdown is something that I follow

[01:37:07] and I love some of the episodes from your podcast as well so very kind yeah

[01:37:13] I really like the work that you're doing here so we should have best as well awesome

[01:37:20] thanks Sashank this is fun conversation yeah we should all the best for everything that you have

[01:37:27] coming up and hopefully we catch up again hopefully hopefully we will be really happy

[01:37:31] we're really happy awesome thank you so much thank you so much for joining us on another episode

[01:37:36] of the startup of the podcast if you like this content don't forget to share subscribe

[01:37:42] to all of the good stuff I'll be back on another episode with another interesting founder

[01:37:46] and another interesting startup