Interview Bolttech

Spotlight on bolttech's Journey: Unlocking Insurtech’s Potential for Global LeadershipGiven the significant market opportunity for embedded insurance, how does bolttech foresee its growth trajectory in the coming years, and what regions or sectors present the most promising opportunities?

At bolttech, we are focused on making insurance more accessible for end consumers. Traditionally, insurance has been quite rigid and often not readily available at the moment of need, whether it's  purchasing a car, home, or any valuable asset. Our approach is to operate within a B2B2C model, empowering our business partners to seamlessly offer insurance products to their customers precisely when they need it most.

Imagine walking into a retail store to buy a new phone, or a dealership to purchase a car. At these pivotal moments, insurance coverage is essential. We're advocating for embedding insurance directly into these customer journeys, ensuring that various insurance options are readily available for purchase. This vision guides our growth trajectory. 

We see immense potential, particularly in regions where there's a growing demand for embedded insurance solutions. Industries such as automotive, telecommunications, and real estate present particularly promising opportunities for us to innovate and make a significant impact.

We want to be at the forefront of growth for the insurance industry by collaborating closely with our partners and leveraging cutting-edge technology, to offer seamless and tailored insurance solutions that meet the evolving needs of consumers in today's fast-paced world. 

How can a company founded in 2020 differentiate from other players, and how can you become a global leader in device protection when it seems so easy to be identified and managed by any incumbent? 

While it's true that entering a market that has been heavily invested in for the past decade poses challenges, we believe our unique approach sets us apart. Unlike established players who may be entrenched in legacy systems and processes, our advantage lies in our fresh perspective and agility. We're not bound by old ways of thinking, allowing us to approach problems with innovative solutions.

Our core strength lies in our dedication to forging strong business partnerships and building an ecosystem that benefits everyone involved. Rather than competing head-to-head with industry incumbents, we act as an enabler, collaborating with them to enhance their ability to offer insurance products in novel ways. This collaborative approach allows us to leverage their expertise while bringing more insurance offerings closer to the end consumer through innovative channels.

Our mindset is deeply rooted in understanding and solving the unique challenges faced by our business partners, whether they're telco operators, car manufacturers, dealers, or insurance companies. By aligning ourselves with their objectives and helping them address their pain points, such as improving sales, expanding consumer access, and enhancing the overall customer journey, we create value for all parties involved. 

Ultimately, our goal is to foster win-win relationships where businesses thrive, customers are satisfied, and we, in turn, derive success through our facilitation role.

In summary, our differentiation lies in our ability to innovate, collaborate, and adapt quickly to the evolving needs of the market. By focusing on creating value for our partners and improving the overall insurance experience, we believe we can carve out a unique position as a global leader in insurtech.

How did you become a global player since the beginning in a highly regulated industry?

I'm thrilled with this question because it delves into our strategy. Let's start with soft skills. First, mindset is crucial. You need a strong sense of determination, especially in an industry as competitive and regulated as ours. Building relationships is key here; you need partners who understand your business model and can help you gain traction. This creates the flywheel and a positive momentum, attracting more partners, expanding product offerings, and increasing distribution partnerships.

Second, onto the hard skills. We've strategically obtained insurance licenses and intermediary licenses, such as broker and agency licenses, across 90 different jurisdictions worldwide. This expansive coverage across fragmented markets, spanning the entire 50 states in the United States, Europe and Asia, gives us a significant advantage. Navigating the regulatory landscape in regions like Indonesia, Vietnam, and Taiwan requires perseverance, but having the necessary licenses in place makes it easier to forge partnerships.

When it comes to technology, we've taken a unique approach. Unlike traditional monolithic IT structures, our platform is modular and flexible. There’s a single API to plug into our tech but we have more than 220 different microservices on the platform. There’s a payment gateway component you can use, there’s a CRM tool, there’s a broker tool, there’s a comparative radar, and a frontend design. We typically kickstart a partnership by working with a partner to ask them which “lego blocks” they would like to use and which ones they don’t. They then have the flexibility to pick and choose different things – for example,  someone might have their payment gateway so they don’t need ours, but need our broker license and CRM tools. We bring it all together and then they have one single no-code API - much faster and easier to understand than spending 12 months on IT integration because it’s difficult to plug into the existing insurance system coded in a 20-year-old language.

Furthermore, our vision is ambitious. We aspire to be the go-to platform for anyone looking to sell insurance, globally. With 20 million active policies and customers worldwide, we're well on our way to achieving that goal. Our track record speaks for itself, and we're committed to leading the way in embedded insurance solutions.

In summary, our strategy revolves around a combination of soft skills, regulatory expertise, technological innovation, and a bold vision for the future. This multifaceted approach positions us to enable the global insurance landscape from the outset.

In the evolving landscape of embedded insurance, what challenges has bolttech encountered, and how has the company addressed or overcome them?

bolttech’s journey began with its fair share of challenges, particularly in the realm of product innovation. For example, one significant hurdle we encountered was when we sought to launch our COVID-19 protection programme. At the time, many insurance carriers were hesitant to provide capacity for this new product due to a lack of data on COVID-19. Without sufficient data, they were unable to price the product effectively or offer us the necessary capacity.

However, as time has passed, we've built a strong reputation and gained trust within the industry. This trust has opened doors for us to explore more innovative programmes, such as bundling device protection with travel insurance or integrating travel insurance into home insurance policies. We've seen a shift in attitudes, with more stakeholders now receptive to these discussions, placing us in a better position to introduce new offerings.

One of the ongoing challenges we face is overcoming the reluctance of existing incumbent insurers and distribution partners to embrace change. Some may feel they can handle innovations internally, while others may be resistant to change due to their established revenue streams. To address this, we continue to engage in open dialogue with them, demonstrating the value and benefits that our solutions bring, not only in terms of financial gains but also in enhancing customer satisfaction and happiness.

Additionally, we recognise the need to educate stakeholders about insurtech and embedded insurance. It's not simply about clicking a widget to purchase insurance; there's much more sophistication required. We aim to educate our partners about the diverse capabilities we offer, such as increasing customer engagement and sharing valuable customer data. By helping them better understand the potential of our solutions, we empower them to leverage these tools to enhance their offerings and drive business growth.

In summary, our approach to overcoming challenges in product innovation involves building trust, fostering open communication, and educating stakeholders about the multifaceted benefits of insurtech and embedded insurance solutions. Through these efforts, we continue to enable the industry.

Considering the importance of API integration in insurance partnerships, how does bolttech approach collaboration with distribution partners, and what efforts are made to ensure smooth integration processes?

API integration is indeed the cornerstone of our work with distribution partners. It's the heart of our technology stack, and while it's complex, it's also a crucial aspect of our business model. As we've evolved, we've streamlined our approach to API integration, moving away from customisation towards a standardized API framework.

Our focus now is on providing a single, comprehensive API that partners can integrate with ease. This eliminates the need for partners to navigate multiple APIs, simplifying the integration process significantly. On our end, we've invested time and resources into building a robust API ecosystem, with over 230 insurance carriers integrated globally.

Our API is designed to be user-friendly, employing a no-code approach that allows partners to drag and drop functionalities as needed. This not only accelerates the integration process but also enables partners to launch their offerings quickly. A prime example of this success is our partnership with telco AIS in Thailand, where they were able to launch their platform in just three months, serving a massive customer base of 38 million.

Our approach to API integration revolves around simplicity, efficiency, and speed. By providing a standardized API solution, supported by a user-friendly interface, we empower our distribution partners to seamlessly integrate our solutions into their platforms, driving mutual success and growth.   

We’re seeing all the insurers building their own B2B2C platforms like Chubb Studio, Allianz, Zurich,.. But even in this they’re collaborating, investing or even acquiring insurtechs. Why is this happening?

This is a fascinating trend, and it's quite natural given the evolving landscape of the insurance industry. Incumbents are feeling the pressure and are exploring various strategies to stay competitive. They're attempting to navigate this changing landscape by pursuing multiple avenues simultaneously.

They're investing in developing their own B2B2C platforms to maintain their presence. However, they're also recognising the value of collaboration and innovation that insurtechs bring to the table. Let me illustrate this with an example involving one of our partners, Allianz. They ultimately realized the benefits of collaboration rather than competition, and chose to partner with us. This learning curve is evident across the industry, and it's driving incumbents to explore new approaches.

From our perspective, we welcome this trend and see it as an opportunity for “coopetition”. We're open to partnering with insurers on certain initiatives, leveraging our expertise to complement their strengths.

However, I believe that simply investing in small insurtechs isn't enough to drive success. It requires a fundamental shift in mindset. Insurtech is about more than just making small investments; it's about fundamentally transforming the customer experience and adding value at every touchpoint – it's essential for traditional insurers to remain agile and responsive in a rapidly changing market.

The key to success lies in collaboration and partnership. To change your entire ecosystem,  you need to change your entire underwriting engine to be an agile company and it’s not easy with 120 years of company history and legacy technologies. The easiest way is to partner up and build together as you move forward. By working together, insurers can leverage the strengths of both traditional expertise and innovative technology to drive meaningful change and deliver more value to customers.

Embedded insurance has succeeded in simpler products like device protection, but some industry leaders are skeptical due to complex claims processes. How does bolttech address this complexity while maintaining the agility of its embedded solutions?"

This is an excellent question, and I believe it's essential to address it from two angles: the sale of insurance and the claims process. Firstly, let's consider the sale of insurance. While some may perceive complexity in the process, the key lies in relevance. Regardless of the product's complexity, if it meets a customer's needs at the right time, the sale can still be made successfully. For instance, car insurance, despite being more complex than device protection, becomes relevant when a person buys a car and realizes the need for insurance. Thus, our focus is on creating relevant protection for specific situations, which drives customer engagement and sales.

As an example of enhancing relevance, we're planning to launch a product that embeds device protection into travel insurance. This integration ensures that customers remain protected even when they travel across borders. As an example, if you purchase device protection for your travel to Spain, you are protected if you lose your phone in Spain and you can get it replaced, but as soon as you cross the borders to Portugal, you’re not protected anymore because you only have Spanish coverage. This is where bolttech can come in with value-added services. When we look into your data, and switch roaming on your phone because you are in Portugal, we can embed your device protection into your travel insurance so that if you lose your phone in Portugal, you’re also covered. That creates relevance.

Now, let’s delve into the supply side and the complexities of claims processes. There has been significant progress in automating these processes, reducing complexity and improving efficiency. In device protection, for instance, our claims automation stands at an impressive 96% and why is this relevant? Because you have a faster turnaround. In the past when you had a traditional device protection product, you sent the claim to the insurer and you got an automated response. Someone then calls you in two days and you may need to wait for weeks or a month before your issue is solved. In our automated process, the claim is already handled and a new phone will be delivered to you wherever you are within six hours. That’s a different customer experience and the reason why our Net Promoter Score (NPS) is so high is because it is relevant. It’s complex at the start because you have to adapt the journey with lots of data but once you do it, you get better and better.

While addressing complexity in claims processes requires feeding data into automated systems continuously, we've made substantial strides in this area. Starting at 80% accuracy, we've since reached an impressive 99.99% accuracy through continuous refinement and data integration. Our automated process ensures that claims are handled swiftly, oftentimes within six hours, significantly enhancing the customer experience.

Looking ahead, we anticipate challenges in embedding insurance into more complex products like cyber or mobility solutions, particularly with the evolving nature of technologies such as electric vehicles.

With the emphasis on trust in the insurance customer journey, how does bolttech leverage branding and partnerships to build trust and enhance the overall customer experience?

We primarily operate in a B2B capacity, so our brand visibility may not be as prominent. However, we excel in white-labeling, prioritizing two key elements: Business partner satisfaction, gauged through CSAT scores, and end customer satisfaction, monitored via NPS. We continuously track these indicators with dedicated teams, ensuring proactive analysis and resolution whenever there's a dip.

Currently, our NPS ranges between 70 and 80, which we consider satisfactory. Achieving this relies heavily on building trust with our business partners by addressing their genuine pain points and optimizing the overall customer experience. We remain agile in making adjustments, whether it's altering font sizes or refining customer profiles based on demographics, to enhance satisfaction levels. We analyze customer profiles - it could be a 27-year-old female versus a 50-year-old male parent owning a pet - iIf you already see that the attachment rate is not working, and sales are not picking up, there is a problem but you don’t have much time to solve that problem. Fortunately, our system is fast and we can make changes pretty quickly. Nothing is perfect so we’ll have frequent interactions when our NPS is performing as expected and we work to improve it.

In the realm of claims processing, a critical juncture for any insurance service, we make strategic decisions based on product specifics. For instance, in device protection, where we have full control, we've developed an end-to-end claims management system. This decision stemmed from challenges in finding suitable solutions with traditional insurance carriers. By streamlining the claims process and reducing turnaround times, particularly crucial in regions like Asia, where rapid responses are appreciated, we've observed a positive impact on NPS.

Conversely, for products like car or home insurance, where we opt not to assume the insurance risk, we defer to insurance carriers for underwriting and claims management. However, in specialized areas such as health tech, where we offer hearing aid protection, we take a hands-on approach. Here, data collection plays a pivotal role in decision-making, enabling us to tailor our offerings effectively.

Trust-building hinges on a combination of strategic partnerships, responsive customer service, and proactive adjustments tailored to specific product needs. Through this holistic strategy, we strive to continually enhance our relationship with our business partners and end customers.

Distribution partnerships are highlighted as a cost-effective way to increase sales and revenue. Can you provide insights into the cost-benefit analysis bolttech conducts when entering into distribution partnerships, and how these collaborations contribute to the company's profitability?

Distribution partnerships serve as a pillar of our strategy, offering a cost-effective avenue to expand sales and revenue. Unlike the costly customer acquisition methods prevalent in the B2C model, like Google ads, our B2B2C approach allows us to tap into existing distribution channels with millions of customers. This significantly reduces our customer acquisition costs, making it a financially prudent choice.

While we strive for close to zero customer acquisition costs, acknowledging the need for on-the-ground sales support, training, and NPS optimisation, our approach remains markedly more cost-effective overall. This is further reinforced by our scalable technology infrastructure and services. Operating on a global scale across 35 countries and 4 continents, we adopt a hub-and-spoke model, centralizing our tech infrastructure for scalability and efficiency. So we don’t have replication in every single country in which we operate because it is not possible for us to have the same setup everywhere. This centralized approach enables us to leverage our technology effectively across different jurisdictions, eliminating the need for replication in each country.

Moreover, our technology empowers us with agility, a crucial asset in today's dynamic market landscape. Legacy systems, which often struggle to provide timely and actionable data, may not be equipped to promptly identify issues like a loss-making programme and it could take up to a year or more to recognise the problem and make informed decisions. Our streamlined processes allow us to swiftly identify and respond to emerging trends and challenges. With the ability to pivot within a week, we can make informed decisions to avoid programmes that you’re seeing are good for the partners but bad for yourself because the loss ratios or fraud cases are too high.

As a result of our strategic approach and operational efficiency, we're proud to share that bolttech is currently one of the few EBITDA profitable insurtech companies. This profitability underscores the effectiveness of our distribution partnership strategy and the robustness of our business model in delivering sustainable financial performance.