443 – Tony Lew
Will Bachman 00:01
Hello, and welcome to Unleashed the show that explores how to thrive as an independent professional. I’m your host Will Bachman and I’m here today with my friend Tony Lu, who is the founder of InsurTech and why, Tony, welcome to the show.
Tony Lew 00:16
Thanks for having me all excited to be here.
Will Bachman 00:20
So we got so much to talk about today, because I think you have this really cool business that you’ve created that I want to talk about just your business model. I want to learn about insure tech and what it is and what are the subcategories and so forth. But I think a good place to start to help listeners understand just how you know about this whole space is tell us about your business and your kind of conference business for insure tech, and maybe give us a little brief definition of what is insure tech?
Tony Lew 00:53
Sure, yeah, maybe I could start with us. So the short tech is a short for insurance technology. And it’s a category in the venture space, right. So you see, you got fintechs, which is like financial technology startups, there’s like ag tech and insure tech is like, kind of like that, because that this focus on the insurance industry. And it’s a relatively new york term, they’ve been turned it over and exists like five years ago. And it is one of them more up and coming startup space, and spin actually few unicorns that’s been developed over the past couple years, it’s still sort of in its infancy, another complete infancy, but it’s maybe the teenage years is still a lot to go in terms of growth in this sector. So you know, so basically what we do is we help those in the insurance, the ecosystem net with each other. And we do this through our puggy public events. We also host a early stage startup competition, accelerator and private events, where again, our goal is to just connect everybody in this ecosystem together and, and hope that you know, there’ll be partnership and things that will happen.
Will Bachman 02:09
And I think that your, your startup competition is a fascinating business that you’ve created. And let me just play back what I heard last time, and then correct it and fill in the details. So I think it’s kind of cool where the individual startups get attracted to it, because there’s some prize money if they get selected as the best one. But even more importantly, it’s a chance for these startups to get in front of their potential clients, the large insurance companies, and the insurance companies are paying you to run this thing, because it gives them a chance to get early access and awareness of all these startups that they might want to invest in or buy.
Tony Lew 02:58
Yeah, that’s, that’s exactly right. So I just in terms of our business model, there’s basically we want three different lines of business. One of them is essentially what you describe, which is that we really support the incumbent insurance companies with their open innovation program. So a lot of the incumbent insurers like you know, big companies like nationwide on the world, Liberty Mutual, these companies, they are are recognizing and they started recognize a few years ago, they need to be more innovative, and leverage technology to do so. So obviously, if you’re innovating you can do it yourself. Or you can actually leverage other players who’ve actually you know, built their own kind of technology and leverage that right so that’s internal versus external innovation. And so when it comes to external innovation, they need to work with based essentially like startups or times or startups are who has the latest technology and trying to solve the most important problems. So what they often do is partner with organizations like us to help them find the best startups and then also he they can actually get some education on the trends that’s happening the world in venture take ecosystem as well. So you know, this is the open innovation program we support them with their goals in terms of finding startups we also have a another line of business which is a kind of a separate business is a public events as business where you know, you can think of event business up sell tickets, there’s sponsorships specifically for that. And then third line of business which you just started as a farm so we started a venture fund to invest in the startups that we need as well.
Will Bachman 04:46
Wow. So interesting, how you’ve managed to, you know, basically create a business by curation and creation of a forum for for the people who want to connect with one another That’s, that’s very cool. Tell me teach me about insure tech. So one way that I might like to learn about it is, what are the major categories? Or sort of sub sub categories of it? You know, or what’s the taxonomy that I should think about within within this category of insure tech? Sure, yeah.
Tony Lew 05:23
So at a high level, we will group them into two subcategories, and then there’s you can divide that further, right, but there’s insure Tech’s who are actually selling insurance policies. So these are in some respects competing with the incumbent insurers of their own. So they could be a renter’s insurance, like lemonade, and they’ll be competing with other incumbents who’s who sell our could be insurance who is selling auto insurance, they’ll compete with Geico is right, so these vary, we call them a to like distribution. Or there’s, we also there might be a carrier themselves as their, like, digital carrier digital broker. And we that’s one category and a lot of the the unicorns and those who went public actually in that category. So that’s, that’s one group. And then the other group are essentially software or data providers, who actually can support the incumbents to be better, more effective. So there are companies using AI technology to help them with underwriting or it could actually use IoT device for faster claims process. So you can think of them as like a SAS type of players who, you know, help, you know, corporations, and a lot of times insurance is one of the verticals, it could be it could be also helping other verticals, outside insurance as well.
Will Bachman 06:52
Okay. I don’t know a ton about insurance, could you walk me through the major parts of the insurance, like value chain or process or parts of an insurance company? So so that that we can then double click and talk about what sorts of technology might be enabling each of those different, you know, sub parts of a company?
Tony Lew 07:14
Sure, yeah. So I think if you think of the whole value stream, there is the distribution. And then there’s, like plumbing system that goes within Yeah, there’s like policy admin of core systems is a technology that helps you go from distribution. And then but then actually, before distribution is part of his underwriting. And then there’s courses and then there’s also claims. So those are the high level, and I can kind of explain what that actually means. So in terms of distribution, a lot of insurance products ourselves, are sold to brokers or agents. And these are basically groups of people or companies who all they do is sell us their domain name job, right. And his model multiple lines of insurance products out there. So they have different types of brokers agents who do that. So for example, for life insurance. Actually, an agent might not even call themselves an insurance person could be like a financial planner, but they have licensed to sell insurance prior life insurance products, for example. And or in some cases, the distribution can be done by the employer, because the employer is actually a distributor to a to an employee who’s buying health insurance, right. So there’s different types of brokers and agents who are actually selling the product. And then behind that is actually people who are actually underwriting which is a basically basically means they’re actually coming up with calculating the premium to kind of sell the price of actual insurance product by end the premiums are basically a money they take to figure out what the actual total potential claims could be. And then, you know, the is like a monthly or yearly premium they’ll Garces based on the risk factor that they have calculated. And so then, I mentioned there’s a lot of policy admin core systems slide of that back office kind of system that happens there. And then there’s also claims process where you’re trying to, you know, improve the claims process that happens in the back end. So for example, if your car got into accidents, and you want someone to you want to actually go to your insurance company to get your money back, right and, and a lot of times that process is very broken, it’s just super slow. But he’s a claims technology, all that could be done automatically using your mobile phone, for example. So you know, those are kind of the areas that there’s, you know, there’s a lot of definitely innovation that’s happening across all four
Will Bachman 09:54
areas. And then I guess there’s probably an investing area where they have to invest all those premiums that they’ve closed Until they have to pay him out.
Tony Lew 10:02
Exactly, yeah. So I just, it seems like you definitely know. But basically how insurance companies typically make money is not necessarily do like higher price premium, like premium is supposed to just break even in terms of claims, right how they actually make money is really by investing in the premium flow, we call it a float that they get from the customers, and they invest in that. And usually they invest that in, you know, lower with, you know, kind of investment with bonds and whatnot. So that’s how they actually make money. And there’s not a whole lot of innovation on that space is small, typically just estimates. So, you know, investment is, is not a super human intensive type of activity. And I think it’s just has it has been something that they’ve been doing it since probably the same similar process they have in the past few decades. So there’s not a huge amount of innovation, I think the investment, but there’s definitely a lot of innovation, the underwriting or they’re using different types of data figured out that for price premium pricing, and figuring out the risk factor is definitely a lot of innovation in the distribution space, where they’re using, basically mobile or online digital ways to actually sell as opposed to just using human people.
Will Bachman 11:25
Could you walk through some actual examples of specific companies that illustrate some of these different points?
Tony Lew 11:36
Yeah, sure. So, you know, one company it is, it could be, this will be somewhere in probably, you know, it’s sort of meeting that upfront area, the distribution center area. So it’s a company called trust layer, they actually confirm whether a potential a company has actually insurance or not, so like, let’s say, you know, you are a working in a building and, you know, you want to, you’re moving in, right, sometimes, like when you’re moving in, the building owner wants to see, hey, like whoever’s moving, you do to actually have insurance, right? And you would have to do have to, like, send it in PDF, and then they share the information with the building owner and building was like I don’t, I need to actually have that information in this particular format is a lot of like, manual process. And then it’s also unclear whether whatever they share with them is actually real or not, like, there’s no proof that it’s actually real insurance document, it could just fake it. And so what Trusler does, for example, is they would actually, they have a system in place where dalla, you’d actually certify that I should insurance is actually real, and that they actually have insurance, and it’s all automated, and they can actually prove that that vendor actually has insurance. So as one example, there’s examples where, you know, they actually provide a different company, they provide, you know, health related data that is not collected, and normally, and then they use that information to have a better underwriting process. And there’s companies like Timmy D, where they would actually work with different customers directly to collect data about their health information. And then that data can be used to for life or health insurance to better underwrite and also have better engagement with the customers. Now the problem carriers have is, is I mentioned, there’s distributors who actually sell the product carriers are the ones who actually underwriting the product, but they don’t often have a relationship with the customers record. And so sometimes they don’t really know what’s going on. And so they’re always looking for ways to engage with the customers as well.
Will Bachman 13:55
That’s fast. Keep going.
Tony Lew 13:57
Did you somebody? Yeah, yeah. So there’s, there’s also like, different I just talking to a company called ice. They provide the hashtag 14 satellites, you know, that they own. And what they do is they take the imagery of the different geographic regions, and they’re able to share this data with ensure when there’s like a big hazard or flood or what have you, right? And so they can actually assess what is actual damage, and then they can use that data to share basically claims, right? So that’s kind of automating some of that process, instead of having to send somebody actually to where the flood zone is, and things like that. So those are some examples like that. They share some examples. And then in terms of distribution, there’s a lot of different plays, for example, is a company called clever genius. They actually help insurance companies sell their product to non non traditional means. So you would take that, hey, if your insurance company, you have your own digital channel, and then people have to go to their company website and find buy. But what happens is that does happen. But if the insurance is actually part of an existing buying process, it’s like easier, right? So for example, you probably seen this a lot. And maybe you bought it maybe you haven’t bought, for example, like you go to kayak, or you buy some kind of like flight. During the buying process, it asks you, hey, do you want to buy travel insurance, right, just in case like, You don’t? You can make it can you? You know, do you want to take insurance on that? And sometimes I die. Sometimes I don’t usually I don’t buy that particular product. But you know, a lot of people do, and that there’s this coverage in yes helps. Basically, carriers distribute that product, to those type of non traditional digital channels where they’re just kind of buying it as part of the process. We call that embed insurance is like a new term that’s been out there. I mean, it’s something the industry has been doing for a long time. But it’s become a lot more prevalent, and it’s become more important, especially because of kind of the advancement of digital technology.
Will Bachman 16:14
Yeah, like Amazon tries to sell you insurance on anything you buy, like an electronics, even if it’s a computer mouse or something. Buy a mouse for $14. And it says, Oh, do you want to buy like a $5? azurion? You know, LLC insurance? No, no, thank you.
Tony Lew 16:32
Exactly. Yeah. So those are all embedded insurance plays. And as you mentioned, and you know, there’s probably like, we’re still like in the beginning stages of that, and there’s probably better ways we can actually explain the benefits and like why it’s actually helpful or not. But there’s that’s definitely one of the big trends that’s been talked about in the tech world is invalid insurance.
Will Bachman 16:57
Interesting. Yeah. What? What sorts of things? Yeah, I’m not a blockchain expert. In fact, I’m the most, you know, naive person about it. But I know it’s a lot more than Bitcoin. What what sorts of things around blockchain are happening in insure tech?
Tony Lew 17:14
Yeah, so I so blockchain is like one of those things where it was kind of like hot A few years ago, and then it sort of died down. I, you know, I have to check, you know, in my team to figure out like, which one, which startups actually focusing a lot on, actually, the company I mentioned trust layer was actually initially going to use blockchain technology due to the certification. But I’m not sure if they started. They they focused on that, or they’re using different technology. But blockchain hasn’t been like the hottest topic and they should take at least for the past couple of years to come back. But it’s been sort of like not not to say it hasn’t been a hot topic. If this was a cartoners, like graph, where is this a trough of like loosely distribution men or something like that? I think it’s kind of on a downward display could come back up, but not not like, what are some of these? We haven’t we haven’t seen yet some of the other ones. Yeah, so like, embeded is a hot, big. I mean, IoT is definitely still hot. There’s, you know, technologies that allowed us to have sensors and everything, and gathering the data, using different sensors as allowed insurers to have better understanding of risk and also be able to provide better claims data as well. So IoT is definitely one of the hotter areas. RPA has been something that’s been around for some time and continues to be, you know, it might just spell it
Will Bachman 18:48
out or just for listeners, that’s robotic process automation, right? That’s like, yes, connecting systems with each other seen often double entry data and so forth. Right?
Tony Lew 18:57
Exactly. Yeah. So it’s, some technology has been probably around at least 10 years, if not longer. But it’s still relevant in the insurance industry because, believe it or not, the insurance industry still uses a lot of paper. And I in fact, like just last year, I was trying to buy a business liability insurance and I was working with an agent and the agent sent me a PDF that I needed to print out and like, you know, it’s not it wasn’t even like a PDF where it was like created on a PDF program was just literally a paper that they just like took a photocopy half and put it in PDF. And this was I’m not gonna name who which company buys one of the bigger insurance companies out there and that they’re not alone like manual them use paper. So automating that process is still very relevant in insurance industry. And, but you know, those are some of the technical AI obviously is very important to especially in The underwriting space. It should they, you know, actuaries are the ones who actually do kind of assess the risk and whatnot. And you know, they have used most traditional, mostly traditional type of data, but they’re always interested in accessing new new data to help them be a better calculator or risk. And, you know, there’s a lot of data out there AI always helps. So they’re leveraging different kinds of models and data space to be a better risk assessor. So those are some definitely technologies are hot.
Will Bachman 20:35
I’m curious, turning, turning to your business a bit. I can see now that you, you know, that you’re established how you’re able to kind of be at the center of this ecosystem. How do you continue to, you know, stay informed of new startups that are being created? Are? Are you now well enough known that, you know, that people definitely want to get on your radar screen? So they’re reaching out to you? Or? Or do you actively, you know, call VCs and solicit pitches from angels or from startup founders? How are you kind of continuing to find out what’s the latest, the newest startup that’s coming out?
Tony Lew 21:14
Yeah, no. So this is definitely something that we put a lot of focus into, essentially, throughout the year, we do have basically three avenues to get information about the startups. So we own the early stage competition, growth stage accelerator, and we also run our events. And a lot of startups actually attend our events, to learn about the ecosystem, but also to network with the influencer. So through those mediums, we’re able to get a lot of startups, like in our community, but we also do a lot of reach out to get them to participate in those, those different activities we have. So we have our own database, we’re continuously updating our database, looking at other databases that are out there. And and then we also do get all inbound who wants to connect with us? But you know, we can’t just rely on so we’re always doing outbound and inbound and trying to kind of continue to expand our network.
Will Bachman 22:14
How did you initially develop enough critical mass that it was worthwhile for more people to join? Because that’s the tough part about building an ecosystem is, you know, once you have you know, these things events happening, and people are already know about it, but how did you going to get it started?
Tony Lew 22:32
Yeah, so. So maybe kind of going back to three years ago, when we first started this, actually, my partner and I, David grits, we actually form a consulting business. And this was actually around the time I was working with you will, as a consultant as well, helping some other corporations. But you know, basically, what we said is, hey, like we should, we should create this product Consulting Group, because that’s my expertise, product strategy, Mike Davis expertise as product management. So we wanted to kind of create this consulting services and initially focused on startups, because that’s kind of the area we want to work in. But we we said, we should also have a niche industry that we can kind of focus on. Not that we’re against other industries, but it’s just better to have more of a niche. And this is based on our learnings from our I think collectively, independent consultants, like glucose they get it feels who’s always telling us to focus on area area. So we focus on insurance, mainly because my, my partner just had a lot of connections and knowledge there. But we also thought that just not opportunity to space because there’s It was a kind of a lagging type of industry in terms technology, and they just have a lot of needs. And a lot of startups also eventually have a need to meet, get our help to help them in industry. But because that was kind of our focus VCs for tech startups, we wanted to actually go meet them and the best way to meet them was actually visiting other events. So other inshore tech events. So that’s how we actually basically got our clients but what we realized was there was not many events like that in New York, even though Europe was actually has probably the most number of insurers and insurtechs globally, like in terms of like, a density wise, right. And so, we first thing we did is we actually hosted on events just to see what happens. And sure enough, like every, we sold out our tickets in two weeks. And, and then we were like, Hey, this is kind of interesting. Like, you know, maybe you should do more of this. So we started hosting like, another event. Basically an event like per month for the next three months, every one of them sold out. This is pre COVID. And we kind of knew that there’s just something there. And so at that point, we decided to just put all our energy into running the shirts again, like community versus consulting. And so we kind of stopped pivoted from the consulting business. But like how we knew when we long hair? Because I haven’t answered your question, how would he know we had enough mass? I think we kind of knew in the beginning that when we, when there’s so much interest in the events, we just knew that there’s something there. And when you continue to just successfully solve our own events, as we just kind of knew that we had enough of a foundation to build off of. Yeah,
Will Bachman 25:47
and how did you tell me about that first event? Like, who did you invite? How many people did you invite? Was it? You know, what kind of what was the venue? What What was the agenda? Was it just networking? Or did you have a content agenda? Curious?
Tony Lew 26:04
Yeah. So one, one kind of reason, or the what allow us gave us confidence to actually run is is is that my party that actually had blindness, similar events, business, and he worked for other founders in Silicon Valley, that they had a similar type of event business there, and he actually worked for them. So he learned a lot about how to run the business in the event space, and what to do, what not to do. And while we just based on that learning, we knew that we needed to have speakers we need and really good speakers, you can talk about what’s going on in the space panel, we knew that we need to have a panel, I don’t know if I forget if we actually had a TED talk. But now we actually have basically two types of speaking, which is like a panel. I know yarn was a TED talk, style and presentation. And then we also knew the networking was also important. So we I believe we have all three of them the first event, we just knew, we have to do it. And so first thing we did is find the venue that was most important, because if you don’t have a venue can really do anything. And so we are I was actually talking to people in my co working spaces, believe there was a guy named Alex actually runs a VC for the health sector. And he knew a lawyer who is in this space as his partner at a law firm. And he actually had a space for like 75 people. And he was willing to kind of let us use it. And it’s, it’s good for him because he wants he actually makes deals with startups. So you’ll kind of bring startups to his office, which is good for him for his sales. And so we made a deal with him. And then once we had the venue, and we kind of knew what kind of event we want to throw, we actually go and find speakers, who would actually be a good speaker for for these panels and Ted Talks. So we lined up one or two. And then from there, we just had to market it. So we created that price site, added some discussion there with some speakers. And then we started reaching out to our network. And some people we knew some people we didn’t know, in there, there’s different ways to actually get get contact information, and we kind of started reaching out. And that’s how we got people to attend events.
Will Bachman 28:28
And it’s not easy to get people to come to an in person event, even if it’s something that they’re interested in. Because people are busy, you know, kids were cetera. So I mean, I’ve found that even if it’s like a super compelling event for people, you need to maybe reach out to 10 of those people to get one person to show up. Right, you know, typically, so you must have reached out to 1000 people or something.
Tony Lew 28:55
Yeah, I mean, I don’t know exactly how many people reached out to you. But that sounds about right, probably email, marketing more. And it’s, it’s, you know, we didn’t just like do one, reach out, we probably did multiple reach outs, right. And, and we also, now we do like multiple multi channel campaigns. So we don’t just do email, we do think then we have other partners to help us. So there’s like multiple ways that we can actually get people to come. But yeah, getting people to come to events is not the easiest thing. But if there is interest is a little easier. Right? So that’s what we learned is that there was a lot of interest in interesting events in New York and New York Region. So that that that really helped us. And they’re just basically kind of amped up demand for it, essentially.
Will Bachman 29:45
So did you do it? Have you found that what what have you found works best for events in terms of like date and time and location? Is it better to do it in the evening or the weekend or do you actually just do it during the day and afternoon or morning or when are your events and what have you found works best.
Tony Lew 30:06
Most events were evening a set for our like all day events there has to be all day. But we try to keep it like after 536 after people finish work and then they it’s more like a cocktail event they come network have just had a cup of wine and listen to speakers a little more networking and then listen more and then networking, usually two, three hours. It’s kind of a format for the in person events, pre COVID and then three COVID we also did a lot of virtual events. So we switched had to pivot to virtual world right? So some of the virtual events we actually did it again, people just didn’t want to do anything after 5pm or 6pm that’s what we learn. So we try to do everything during the day and like one to five but having said that our next event I don’t know when the podcast is on the air bar next event is our first in person events in over 18 months it’s going to be October 21 we’re actually doing that from one to 5pm so we’ll see how that goes. There’s a lot of interest in that already so hopefully be successful. All right,
Will Bachman 31:17
well we will include a link in the show notes because the episode this episode will go live here in early October. Right. So for folks that will include that link in the show notes for people that want to follow you or learn more about what you’re doing. Where would you point them online?
Tony Lew 31:42
Our website so e shirt tech ny comm so how you spell insure tech is AI n su r t ch ny.com.
Will Bachman 31:52
Fantastic. We will include that link in the show notes. Tony it’s been great having you here very cool business that you’ve developed. Thanks for the intro in the one on one primer on insure tech. It’s been great speaking with you.
Tony Lew 32:05
Awesome. Thanks for having me. It was a lot of fun.