In an interview with e27, Igloo Co-Founder and CEO Raunak Mehta explains the challenges that the insurtech company faces as a late-stage startup and how they are tackling it.

According to him, on the external front, the success of insurtech players have led to increased regulatory scrutiny
of the insurtech space. However, Igloo views this as an opportunity to engage with regulators and to focus the entire sector on delivering solutions that truly benefit consumers.

There is also a challenge in the form of increased competition as traditional insurers moving into embedded insurance space. “This will naturally have downstream implications on pricing and margins,” the CEO notes.

On the internal side, Igloo faces the challenge of scaling operations in a sustainable manner, without ballooning
operating expenses and sacrificing the financial prudence that Igloo has come to be known for.

“Where an early-stage startup looks at validating its business model and makes adjustments and improvements to its model and operations to get to product-market fit, we find ourselves now sinking our teeth into solving new problems and trying to deliver innovation and solutions at more parts of the insurance value chain,” Mehta says.

“For instance we are looking to double down on motor, health, climate-related products, underwriting and claims digitisation and AI and blockchain technologies. We are also now positioned to actively look for suitable M&A targets that will help us scale horizontally or vertically.”

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Marching forward, tackling challenges head on

So, what are the strategy that Igloo is implementing to tackle these challenges? What are the different components that it includes? According to Mehta, the company’s core business centers on developing technology to digitally distribute general insurance products across the multiple distribution channels of embedded insurance, sales intermediary, brokerage, and direct-to-consumer.

Its core growth strategy focuses on growing share in these spaces across the six markets: Indonesia, Thailand, Vietnam, Malaysia, the Philippines and Singapore.

“In embedded insurance we count among our partners major regional and local online players within a wide range of consumer-facing industries such as e-commerce, consumer finance, consumer electronics, and others. The next frontier of growth is to increase penetration of the offline space by partnering with bricks-and-mortar retailers and offering to digitise the way in which they provide insurance coverage to their customers. We have already begun to offer such
coverage to physical retailers in Thailand and The Philippines,” Mehta elaborates.

He says that the company views its sales intermediary business as a growth driver in the next 12-18 months.

“Sales intermediary distribution in Southeast Asia (SEA) is still a very manual industry and hence is well-positioned for digital disruption . We will make a major push with our Ignite app for agents in all our operating markets,” Mehta explains, adding that ignite has been popular in Indonesia and Vietnam with over 35,000 agents onboarded over the last two years–and Igloo aims to introduce the platform in Thailand, Philippines, and Malaysia.

“We intend to support the growth of our core businesses by expanding upstream into underwriting and are actively pursuing M&A opportunities that will allow us do this. This lets us own more of the insurance value chain and deliver scale economies which will eventually benefit the consumer in the form of better pricing and coverage. We believe that we can set ourselves apart from traditional insurers due to our deployment of technology and big data in the underwriting process,” he continues.

“Finally, we will also grow additional streams of business via the productisation of certain aspects of our product & tech ecosystem. For example, our Ignite solution is already seeing a lot of interest from insurers who want to digitise their agent network.”

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When asked about the kind of adjustments that Igloo has to make to become a sustainable business, Mehta says that one of the most important is focusing on its engineering, commercial, strategy, and insurance verticals to drive innovation and efficiency.

“This approach ensures our technology infrastructure is scalable and resilient to handle demand and continuity, maintains our competitiveness across markets, drives revenue growth, and enhances our ability to serve customers and collaborate effectively with partners.”

New frontier in insurance

What other areas of insurtech or novel tech innovation does Igloo aim to explore? As expected, the company wants to deploy Artificial Intelligence (AI) and machine learning into “as many of our processes as possible.”

“For example, we have started to develop AI-powered models to automate underwriting and pricing. We are now testing these models in real-world applications with a couple of our insurance and distribution partners across the region. As mentioned previously, these models will be a key differentiator for us when we move upstream into underwriting,” Mehta explains.

“We believe that there are countless potential applications for AI ranging from micro to macro use cases. Micro use cases consist of tasks such as automating the verification of agents’ onboarding documents in Ignite. Macro use cases consist of tasks such as automating fraud detection as part of the claims approval process. We believe that there are many other use cases for AI and machine learning which we will discover only in the years to come.”

In the next years, Igloo wants to centre its growth plan around its core distribution business while complementing it with a move upstream into underwriting.

“This is a key evolution of our business model and will open up multiple new consumer segments for us. Allied to the move upstream is the continued strengthening of our brand recognition among consumers. This will support the growth of our direct-to-consumer distribution channel and will open up yet more consumer segments to us,” Mehta closes.

“We will look to deploy portions of our product and technology offering as a white label or licensed solution to various companies within the insurance ecosystem. While this is a very new strategic initiative for us, we have already generated a healthy amount of business development traction. As we deepen our engagement with such partners, we will adapt our technology to what suits the market and serve use cases which we do not yet serve. This initiative supports our mission of digitising and democratising the insurance industry.”

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Image Credit: Igloo

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