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Tech insights: Louw Hopley, Root – Innovating the SA Insurance Sector During COVID-19

Louw Hopley, Root – Innovating the SA Insurance Sector During COVID-19

By Anthea Hartzenberg

During a fireside chat, we spoke to Louw Hopley, Co-founder and CEO of Root, about how South Africa’s lockdown has affected the insurance space, and how Root is taking the opportunity to help their clients innovate. We also chatted a bit about how his team has adapted to the new normal and picked up some tips on how they’re staying sane and productive. Check out what Louw has to say here.

Transcript of the discussion

Candice [00:03]

Hello everybody! I think I’ve met a few of you online. It’s nice to be here and participate. So, thank you for being our guinea pigs for our first fireside chat. I’ll be officially introducing Louw in a second, but I just want to explain a bit how it’s going to work. First, I’m going to introduce Louw and ask him some questions just to get us started, and then we’re going to have a Q&A, where you guys will get your chance to ask any of your burning questions. Please feel free to pop any of the questions you have in the chat throughout the session, we will give you an opportunity to unmute your mic and ask him personally once we move on to the Q&A portion of the evening. Okay, cool. So, to get us started: With a background in Electrical and Electronic Engineering, and having founded an iPhone app development company based in New York, it’s no surprise to me that Louw loves to build great products. And, lucky for us, for his interest in simplifying complex domains led him to come back to Cape Town to start Root, which we all know is a programmable banking and insurance platform. So, Louw is here tonight on very popular demand and is going to be telling us a bit about what Root is up to now, and answer any of your questions. So, officially welcome to Louw and thank you for joining us here tonight.

Louw-Hopley--Root---Innovating-the-SA-Insurance-Sector-During-COVID-19_Inner-Article-Image@2x

Louw [01:53]

Cool, thank you. It’s funny – I feel a bit guilty for only joining this weekly call now after so much time, but we are quite deep in the trenches on the Root side.

Candice [02:08]

We forgive you for starting a programmable bank. It’s okay. You get one out of jail free card.

Candice [02:21]

Rather late than never, hey.

Louw [02:25]

You know it is quite cool to see what’s happening in all of this and to see how people are taking it forward. And applying it and playing with it and testing it. It’s cool. It’s awesome.

Candice [02:36]

Definitely. For those of us who maybe don’t quite know, do you think you could give us just a brief explanation about Root, specifically your mission, and what your team cares about?

Louw [02:42]

Cool. Okay, good question. So, I think for everybody that doesn’t know Root yet or do not know the details essentially, our mission is to enable other developers like yourselves to access or get access to the complex stuff in financial services. We’re trying to package all the compliance and hard regulatory things, trying to go through this pain ourselves and make it easier for other people to apply that and innovate because our big finding is that it’s just generally insanely hard. I think you guys are all experiencing it, and that’s why this call is happening. In general, it’s really hard to get to any sort of financial services, call it, infrastructure to do something with it. Even though we’ve got many ideas and things we want to do out in the market, it’s practically impossible for all intents and purposes – you need a lot of capital and skill and know-how and domain knowledge and context in the domain and all those things to make it happen. In short, that is Root – we’re trying to package everything behind an API. Very simple, easy to use API, so we always have to dumb down and simplify things just to stay sane.

Louw [03:57]

To answer the question of what we are focusing on now – our team has been aggressively pivoting towards the insurance part of our platform. A lot of you might have seen this or heard this somewhere in the grapevine. We started out the company as a programmable bank, primarily trying to figure out how you could bridge the gap between banking and developers – what is the grey area where nobody’s been? The EU is digging out PSD2 laws and all those things. We just tried to jump straight in and figure it out. And then, over time, we learned there is a lot of friction and pain in the insurance space, which is kind of our findings – it is a much bigger problem than we can personally address and solve than in the banking space. We kind of started playing there, testing stuff and then pivoted. I don’t even know how long ago, we pivoted the company completely to just focus on that. So, this is why this Investec banking mission is also quite cool to see how this dream kind of lives on and is now involved in a proper bank. Not sure if that answers the question or not.

Candice [05:03]

Yes, definitely, it answers especially what you guys are currently up to now as well and it’s quite interesting to see how you have pivoted and why you care about that. I’m also interested in finding out with COVID-19 obviously, where everybody has been affected, companies, people, individuals, devs – I wanted to find out what the biggest challenges are that you have to consider in the FinTech industry right now in general and maybe even specifically to Root.

Louw [05:39]

I can answer the Root one a bit more accurately. I think the FinTech industry itself is quite broad. We used to package them into loans, credit, insurance, investments, normal transactional banking and all those spaces. All of them are facing different challenges, and some are suffering, and some are excelling in this environment. I think that what we’re facing now in the insurance space directly is quite hard. Our value proposition speaks directly to helping customers or companies that sell insurance to go digital. It’s all about the APIs on top of insurance products and how they can embed it in their existing customer flows, which is something that nobody out there can do, for some reason. I think it is just legacy and stuff that happened in a 20-years-ago world. That is now catching up to everybody insanely fast so when people were forced to stay at home, forced to engage digitally, which for us was the norm in most parts of our lives, it turns out that was not so for others.

Louw [06:39]

Insurance is primarily call centre based or broker-based and neither of those two are working well in a lockdown environment. I think what we’re seeing is quite a lot of chaos, people are running around like crazy. Call centre agents are being sent home and they’re not allowed to go online. One of our enterprise retail clients bought laptops and 3G dongles within two or three days before the lockdown to take their call centre of 500 people and let them work from home. The problem was they didn’t have proper signal where they were stationed. A lot of them were in townships and whatnot, and they didn’t physically have the cellular infrastructure that could handle it. Even though they tried they still got bit on that.

Louw [07:24]

The other interesting thing we see in insurance because everybody’s trying to go digital superfast is a move on that. The other one is that there’s a bit of interesting behaviour happening on claims. A lot of insurance products in the country are credit life products, so this is primarily retrenchment. It’s not funeral cover or death-related stuff but rather people losing their jobs. So firstly just some background.

Louw [08:04]

The regulations in the country are that any credit needs credit life insurance with it. You can’t give out self-credit without that. Then credit life insurance is regulated to force you to sell retrenchment cover as part of the credit life insurance. So, any credit that you see out there, whether it’s home loans or microloans at Capitec or anything like that is tied to retrenchment cover. With a lot of people losing their jobs, it’s chaos – claims all over the place from people that were retrenched that now need to claim for that. A lot of insurance companies don’t have enough capital liquidity and stuff for that. So, that’s what we’re observing. But the fun side is that there are a lot of people trying to go digital and trying to innovate on their products. That’s our domain so it is quite exciting for us personally.

Candice [08:40]

Definitely. My next question then is how your team has tackled that problem of helping everybody be able to use your services and your products, with the caveat of also having to work remotely. How does your team navigate?

Louw [08:57]

I think on a team level it’s actually not that hard for us. Our team was generally quite remote-friendly before COVID. We had screens up in our office that had live streams, we had work from home days, we had a lot of sync ups and touch points that helped the cadence of the team. And all of those things set us up to be quite remote ready. We went full remote a week before COVID I think about the same time as OfferZen, maybe the same day, if I remember.

Louw [09:38]

It was quite easy for our team to adapt to the new norm. It was almost as if our machine kept on running as normal, but everything around us was burning. It was a very weird experience, we didn’t really know, it was this existential process where you’re okay but everything around us was not okay. We didn’t know how to deal with that. I think we are doing good. We’ve got some nice hacks in place. I am not sure if you saw that guy from AngelList – he did an article and one of the things we got from him that was quite useful is a daily “aloha”. So, we do a daily check-in every morning. Our whole team does a quick “how are you doing, what are you excited about” with the whole company and that itself keeps the team super engaged. Other than that I think we’re doing fine.

Louw [10:32]

I think most of our experiences are the same. Productivity levels are strange in the sense that people work much longer hours or much more focused hours, so people are closer to burnout. So we are far more aggressive on calling it, so when it’s done at the end of the day, you’re done. It is generally hard, assuming everybody in this room probably experiences the same friction there, how do you switch off.

Candice [11:01]

Especially when everything is online as well outside of work.

Louw [11:04]

When you have team members who don’t have different work environments and stuff, it’s quite hard for them. If your working environment is your room, where you sleep as well. There’s some other stuff as well.

Candice [11:15]

No, No go for it, please share.

Louw [11:27]

The other thing we do also, which the AngelList guy said, but he also said it would not work in most companies. Our company is quite aggressive on public by default at least internally in the company not in public, but internally. We share most things internally, which makes communication on Slack and everything a lot easier. The other thing we also implemented was a “hi-bye channel”, which is kind of strange but it’s basically if you log in, you say hi and when you leave your desk you say bye. So, whenever anybody pings you and you’re not responding, they can just go check and see “oh crap, they’re offline”. We thought it might not work, as people may not want to share their exact movements, but it’s working extremely well in our company. Stuff like that helps as well.

Candice [12:19]

It’s nice to find these little tricks that help you work better. Have you noticed especially having to work with other people who haven’t gone remote? Are there any challenges that you’ve had that maybe you had to adjust to, things didn’t go so well and you had to adjust and pivot and try to figure out how to help them work with you because they’re not used to it?

Louw [12:45]

I would say Skype for Business is one of my biggest learnings. If you get that link, just forward the Zoom link at my expense. Every time I’ve been on a Skype Business meeting, I struggled. And I think the bigger thing is, other company cultures aren’t set up for this type of environment. This is something we generally do for our clients, and we focus a lot on helping them culture-wise in terms of how to operate. So, we share a lot of how we do things to help them also operate better and be more productive.

Louw [13:18]

And one quick hack for that is we do all calls with video on. In corporate, that’s not a norm. In corporate calls, nobody does video on, and that’s bad for a lot of reasons. So, something as small as that – just having our video on – naturally encourages people to join us with their videos on as well. Another one, which we find interesting, is our clients are quite complex organisations, so we would work with a team of say ten people on the other side. For example, a project manager, a team leader, a finance person, and a compliance person all of them that are now separated. And normally they’re all in the same office, which makes it easy. Now they split so we can’t just broadcast and hope all of them get the message. We need to make sure everybody is on the same page from our point of view. So, that takes a lot more effort than normal.

Candice [14:10]

Like over-communication

Louw [14:11]

Over-communication, yes but also being very direct. There’s not just over, over-communicating but it’s almost checking in with people, specifically individually as well.

Candice [14:24]

The mental health aspect that you mentioned, you get burnt out. You know that that’s the situation – you can respond quite well and assist when you need to.

Candice [14:35]

Okay, cool. On the flip side to the challenges, I’ve also heard a lot of people talking about the fact that there’s a lot of opportunities at a time like this, specifically for anyone in the tech industry because a lot of us are still able to keep working. You say you and your team are still able to function, almost like normal. Are there any opportunities that you’re thinking you just really can’t miss out on taking right now?

Louw [15:03]

I think there’s a lot. I kind of see it as this big, thick tectonic sonic shift that happened, or is happening – everything is changing around us, every single thing. And you kind of need to keep on looking for what those changes are and what it means for you, for your industry, and on a personal level for your family as well. So, in our industry, quite a lot of stuff changed, where a lot of our existing sales funnel was just wiped out instantly when lockdown happened. That was quite a big shock but likewise, on the other side, a lot of inbound interest started happening.

Louw [15:42]

We just started getting inbound calls and stuff. There’s always someone who’s in a good position, and they want to do something. In our world, those are people who want to enter the game or who still have enough capital for resources available to launch new channels or whatnot. We can help them focus on that and do that. It’s also quite nice because there’s a bit of a forcing function in the industry. I know that the macro is probably extremely bad, but a lot of things have changed for the better as well. I’m quite excited in general, there’s a lot of good things coming from this.

Candice [16:26]

I suppose it’s good to focus on what you can control and how you can help. And I’m curious – as the last question from my side – how are you equipping yourself and your team to make the best out of these opportunities? How do you think about them in a way that helps you make the right decision?

Louw [16:52]

I think one side is making sure that you’re healthy and sane. And that is an obvious one but pretty serious, but I think it matters quite a lot. So, we had this little plan of making sure everybody’s safe. Make sure the company is financially resilient during this storm, getting those things in place so that people can stop worrying about the existential threat that’s upon them, so they can then focus on what big opportunities are out there. So, that’s quite a big drive we had for a few weeks which, I think was very positive and added a lot of value. We helped make sure everybody in the company was comfortable for survival in some way or another, and that they could focus on the big impact that they can make.

Louw [17:46]

That’s kind of one thing. And the other one – I think primarily there is a lot of noise, so it’s filtering through a lot of noise, constantly. In the beginning, we were quite aggressive on trying to stay up to date with what’s happening, where everything will go. And then after a while, we realised that – cool, the macro trends seem to be consistent in that it might not be in a positive direction but, it’s consistently moving in that direction, so we kind of adapted to that and just made peace with it, treated it as an axiom or as a constant and kind of just dealt with it and operated on top of that.

Louw [18:27]

Another thing that’s also helping us is shifting our focus quite a lot to customer development mode. So, before this we were quite aggressive about sales – you sell the thing you have – but now we went into understanding how the world works again from first principles. We have to review everything. And so that also helps a lot. Clients could not afford to buy anymore but what you thought they wouldn’t have bought before, they might buy those things now, a lot of those things now seem true.

Candice [18:48]

I love that approach, especially in a time when you don’t know what’s real and what’s new, what’s happening is okay. What are the first principles? Let’s break it down. I absolutely love that thought. I think I would now like to open up the floor to all the attendees who have come just to talk to you. So the first question I have here. Sorry, your name on your tag says H Naidoo. Would you like to ask your first question?

H Naidoo [19:18]

Yeah, so what involvement does Root still have in a programmable banking platform?

Louw [19:26]

Very good question. So, on the Investec side, we don’t have much anymore. We put quite a lot of effort in at the beginning to help set the Investec team up with the technology and everything, how it works, get it up and running and then from there, I think the team that are on this call as well, they’ve done a great job of taking it forward from there. So, we ultimately kind of started pulling back from that to help make sure that the Investec team has full control over the tech that they’re building. I think it is not a lot more.

Candice [20:07]

Cool. Dave, you also had a question. Would you like to ask your question?

Dave [20:23]

How did you end up where you are today? What’s your story?

Louw [20:24]

I started building tech when I was in high school somewhere in Grade10. I think that Grade 10 was the first time you could do IT. At school, we did Java, which was quite fun – you could build lan building games and stuff like that. I always tried to solve real problems with what I do. So I quickly became very bored of the school programs, because they didn’t solve academic problems or problems on some tests or something, so I started playing. Funny enough, I wanted to solve a specific mapping problem that didn’t exist in South Africa for airlines, or aviation, for pilots. There’s no map like Google Maps that tracks you when you’re driving your car, so how do you solve that problem? So I tried to solve that problem. And I couldn’t get past the mapping problem. I bought a disk of African map regions for R12 from the mapping department of South Africa or whatever their name is. And that’s how I got into programming.

Louw [21:36]

I’ve been hacking and bought my first MacBook in Grade 10 for scraps – it cost me R3000 for a second-hand MacBook that had a whole lot of the keys broken, got into programming, published a few apps in the App Store, made a bit more money, bought a proper MacBook with all the keys working, at least in the beginning, and then it kind of scaled up from there and then I did many many many projects, most just never worked for various reasons.

Louw [21:59]

And then at university, I studied electronic engineering at Stellenbosch, and I started playing because my one friend started the company JourneyApps. I was quite familiar with their products and the tool that helps you build apps quite easily and quickly. And I started a company that builds apps on their platform. And that kind of went crazy from there. We scaled up. We got some interesting partnership thing with a company in New York. They’re ranked as the number one – I’m not sure what is going on these days – but back in the day, they were ranked as the number one app development agency in the world. According to Apple rankings and whatnot and SEO. If you google ‘app development’, just those few words, they would be number one.

Louw [22:53]

So we partnered with them. All the clients that they reject, or everybody that comes to them as leads that they rejected were passed to us, and they took a small commission for that, which was ridiculous. We got an opportunity of a lifetime. We got 30 to 40 qualified leads a week for two people and that scaled very quickly, and we scaled that up to 9 people or something. It was quite a lot of fun. I learned a lot but then realised that this was not what we wanted to do. We don’t want to be in the business of building apps for other people who want to solve their problems or where we had no vested interest or even an interest in the problem itself. And that’s not great. That all played out in the US. I spent some time there, between New York and Silicon Valley, mostly. Then I came back from the States to start a drone company Aerobotics, you all know Aerobotics. My initial pitch deck looked exactly the same as the initial one, which is quite funny, but it very quickly never started. We bought a cool drone, also loved building stuff, electronic drones, and stuff. And then we bought a huge drone that was this big. The hexacopter with blades, about this long, and we flew that thing over Somerset West. It broke all the droning laws and stuff. And then, never really started the company. I had spoken to many farmers, learnt about all the things because I thought my connection to South African farmers might give me a head start but then when I met Malan, who now is the CEO OfferZen, to get insights or advice on how to start a drone company, that’s when we started chatting about banking, and all those things and I kind of, I think it was a week in and I never touched the drone thing since then. And that’s pretty much the story.

Louw [24:49]

I did banking for a year. It went viral on HackerNews, which was exciting. We were number one on HackerNews, and Product Hunt and all those cool things. Literally, like in a movie we had a big screen on the wall with a huge number that just counted the signups that were rolling in, which was quite crazy. And then we pivoted from that into a venture and here we are today. So, hope that answers your question, Dave.

Candice [25:09]

Cristo. You had a similar question, but you also had a different question. Do you want to ask that question now?

Cristo [25:20]

So, the first one is what are the big things you’re seeing missing in the FinTech space?

Louw [25:32]

Cool. Hey Cristo. I think the biggest thing that I find missing in the FinTech space, but also very strongly in the insurance space, is that there are no guide rails for people to operate and innovate in. And what I mean by that is, it’s kind of an open canvas. What happens when you have an open canvas is everybody does something, and they all do it in a different way than everybody else. So, you are sitting in a completely heterogeneous industry. Everything is complex and different because nothing is the same as the other. So, it’s very hard to find a common denominator or some sort of common ground with stuff wherein our world you can put an API on it.

Louw [26:22]

Everybody views something they have with a different view in insurance – it’s a madhouse. People have different meanings to the same words. For example, it’s really hard to have a common understanding of other people, and that to me is the biggest thing lacking. There’s no guidance on how to do things. In the development space, stuff is pretty standardised these days, people have RESTful API, so whether you are using Python or JavaScript, or you build your APIs in the same spec or in the same way. But when you’re building an insurance product, nothing. No rules. That’s the biggest missing part or piece.

Cristo [26:58]

So, the second one that I want to ask is phasing. Obviously when you moved to Root and got into banking, which is a different paradigm, it obviously ties in a bit with what you said now. There isn’t this whole lot of knowledge like Google on how to become a payment provider, you won’t find information on that? How do you get that information? Where do you go to get it? How do you get into that?

Louw [27:35]

I am laughing as I don’t think there is a way. Our original thought was, we were just naïve and just did what we wanted to do. We kind of took the first principles approach of what the problem is, what we want to solve, and then we just went at it. You’d learn stuff that you didn’t know about what was super critically important three years later. You learn that you had broken a law or something weird three years ago that you’ve never heard about or known about. And you just go okay, whatever.

Louw [28:15]

I think the problem perhaps is also that people, and people in this space with a lot of domain knowledge – I’m not talking about devs in this space – I am thinking banks, the bankers, insurance actuaries – their world is influenced by whatever they’re on, so they have a different view of compliance, with a different view of risk, a different view of everything than what a developer would have.

Louw [28:38]

So, our approach is first principles, trying to understand a problem. And then you learn as you go. I mean, how to register payments as a payments provider or become a PSP or a website end-to-end, you probably won’t figure it out. They will tell you to speak to the CEO of some other PSP who just tells you to phone this person or that person. I don’t know. There’s just no guide, you probably won’t know these things.

Louw [28:54]

So, we were just naïve, but it got us far enough to launch cards into the market, which was fun.

Ben [29:04]

Louw, I want to just bounce off that question – sorry for jumping in and interrupting. Just being naïve is super helpful to a point because sometimes it gets you killed. So what would you say are some pro tips for being naïve?

Louw [29:09]

You have to be real as well, so you can’t be too ignorant about how the world works. There’s a bit of a balance.

Cristo [29:38]

I would like to offer an answer as well. So, my way of doing it, for example, with that project SnapScan. We would look at the lack of security, no 3D secure, you can just steal credit cards and pay yourself. No problem. But we just had R1 000 000 in our bank account, so worst-case scenario, we’re gonna lose R1 000 000, and then you’re okay, cool. Well, that’s not too bad it’s just if we don’t move fast, we’re not gonna have a business anyway, so that’s what we did.

Louw [30:14]

You want to solve that POC, you want to solve the version of the real thing very fast and do what you can to get there and show everything. Don’t use PowerPoint to show your content but show a real app or card doing something or whatnot. If it does that, then you can start solving and patching it and going from there. I have a real working MVP. I just have to add to that. Something we did – and maybe the bankers shouldn’t be listening to this – but in the beginning, we had our cards running, and we couldn’t figure out the pin authentication. And they did some weird hMac, for the life of us we couldn’t encrypt the pin, so in the end we just disabled it completely on all our local transactions. It was such a fun time when we could just swipe any Root card at any merchant and they would just approve it, regardless of how much money you had.

Louw [31:18]

We just had to do that to figure out how the whole card system works. And after two days of playing around like that, we were like, okay cool now we need to make the thing super solid. And then we went back and cleaned it up and things. But if you’re in a bank environment, there’s no way you’ll get away with just blanket approving card transactions, for example. That’s where the naïvety comes in – you have to just go with it, understand your risk and play with it, go with it. Go for it.

Candice [31:36]

Okay, Grace you had a question. Would you like to unmute and ask it?

Grace [31:43]

Sorry, I was on mute. Now my question was just around the tech stack that you guys used to launch Root and the current culture that your company has or follows, your DevOps and things like that. So, tech stack and culture.

Louw [32:15]

So, tech stack is NodeJS, Typescript, React and that’s pretty much what we do. NodeJS is super performant for web APIs for our type of thing and it’s very simple. Typescript just adds a bit of sanity. JavaScript didn’t scale past three people and we started making too many mistakes. So that’s on a high-level our tech stack.

Louw [32:42]

I think the dev culture is partly also why we use these tools. We very strongly believe in simplicity and not reinventing the wheel. Until recently, we’ve been using Heroku for hosting our platform. When we had to start getting compliant, we started with plugging into the Heroku enterprise environment because we’d rather use robust libraries off the shelf that solve complex problems. We’re here to solve a specific domain problem. It used to be banking, now it is insurance. We’re not here to solve deployment problems or hosting problems or DevOps problems. There is a big enough open-source community out there to do that. Our view is to focus on the actual problem you’re trying to solve using off the shelf software.

Grace [33:28]

Makes sense.

Louw [33:29]

Which speaks to our product, which is the same for our clients: Don’t go rebuild an insurance system. Just use an API that solves all of that. The full vertical is that in our culture.

Candice [33:43]

Cool. Grant, your question is coming up next. Do you want to unmute yourself and ask?

Grant [33:49]

Yeah, thanks, Candice. Howzit, Louw. So, I wanted to ask, when you started out with this idea of programmable banking what was your vision for it? Did you have a big vision that you were trying to solve? How did it begin?

Louw [33:56]

I was trying to find my feet because I was running around in this big Standard Bank building not knowing what I was doing. So, I didn’t have too much of a plan, but originally, we were trying to build a programmable, not a programmable, but a CLI tool for your bank account. That was actually what we set out to do originally – we kind of went, stereotypically devs hate speaking to people, so they hate speaking to incompetent bankers, and therefore they want to use a CLI tool. That was kind of the thing. And then we kind of went back cool, but first for a CLI tool, you will need APIs because what does a CLI tool speak to? But for APIs you need a banking system with APIs, so we’re gonna just progress on this train of thought and then ended up building a core banking system instead.

Louw [34:52]

And then we got cards, and we said, cool cards were just normal cards you can use to make a transaction payment. And then we went, we should make it a bit more – we should be able to customise it to be a bit more sophisticated. So first we were thinking of a rules engine of sorts or some JSON schema that you can configure and build rules in it. Then we kind of got to the point of given this whole serverless movement of lambda and Cloudflare web workers and stuff. Why don’t we just copy that and give the developer the whole payload and then they decide what they want to do? And that’s kind of how it progressed. It didn’t start out as what you see today, what we’re playing with.

Candice [35:38]

Cool. So, we’ve got about five more minutes left, but if you guys are keen to stay and listen to the rest of the questions please do. Jacques, do you want to ask your questions before we run out of time.

Jacques [35:47]

Thanks. Thanks for your time. So yeah, I was just wondering, you touched on a lot of my question in Cristo’s question. What is your structure with the underwriter companies? Does Root have any requirements to comply with the insurance side?

Louw [36:14]

Basically, what we spend quite a lot of time on with MMH – that’s Metropolitan Momentum, that stable of insurance companies and try to deep dive in to understand what the first principles view is, what does insurance mean, how does it work? What does it mean to partner with them, what processes and due diligence processes do their clients and partners go through? It has kind of been a lot of learning that way and then kind of structured and built the product – the Root platform – so the product itself around it and what we learnt there.That is very tied in with what the regulatory requirements are. And then we kind of went through quite a few due diligence sign offs with them.

Louw [36:55]

So, we launched a fake product, where we took them through the process to kind of get them to review and approve and tune-up on what was wrong. And then we started helping clients go through that process and that way we kind of learnt through actually doing the real thing – what matters and what doesn’t. With that, we are a tech platform, so we don’t technically fall within compliance. I mean other than stay compliant with POPIA and those other things. We don’t fall within insurance regulations at least.

Louw [37:31]

That being said we are regulated. We are a registered FSB when we do premium collections for clients. We do money movement and all those things in the back-end, so for that we are regulated. But that operates in a silo. I think for most regulations insurance is very specific to the implementation of the interpretation by insurers themselves. So, the regulator would have their “treat your customers fairly” rules or “policyholder protection” rules, which they might reward. Customers also need to have visibility, so they need to be easily contactable for an insurance claim. And there’s not very specific rules or guidance on how to implement that. So every insurer has their own interpretation of what is acceptable to them. And you know they stick to that.

Louw [38:22]

Root itself is agnostic to underwriters, so we do write products on multiple insurers.

Candice [38:29]

Okay, Adele, I might be pronouncing your name wrong. If you’re still here, do you want to unmute and ask your questions?

Candice [38:44]

No.

Candice [38:46]

Okay, cool. Agshen – I might also be pronouncing your name wrong, but I know you also had two more questions. Would you like to ask them?

Agshen [38:56]

Oh yeah, so you kind of touched on the topic of the sales funnel. How have your clients reacted to continuing engagement or new engagement with your engagement team and the product and sort of new world now that we have COVID-19? And the second question was, can you share one of your most interesting clients or projects that you have implemented?

Louw [39:30]

So, to answer your first question, a bit broad, but I think what we’re experiencing is there’s quite a large set of different types of companies out there. Some of them are large enterprise corporations and we typically deal with a lot of them, as well as retailers of banks in the country, and their internal operations are all behaving differently. Some of them are struggling very hard to cope with it, to survive under the circumstances. Some of them are not. We’ve got quite a few clients who are keen to do things, and they know they need to solve it by launching a website that they can issue their policies through or whatnot, but then they don’t have the operational capability under this pressure to do that, so they would call a team to action but then their teams are all bogged down with basically survival operational pains that they have. That we find generally quite hard.

Louw [40:34]

Startups that we deal with, they seem to just operate as normal. I think they’re used to being in small teams that work from home and whatnot, so there’s not much happening there. So, I think in general, other than the needs and stuff of clients, changing it hasn’t changed that much in terms of how we operate with them. Still the same stuff we need to go through, still the same approval processes and all of that.

Louw [40:55]

Sorry, what was the second question you had?

Agshen [41:01]

The second question was, can you share an interesting project.

Louw [41:00]

I will share one that’s maybe useful for the engineers in the room. We migrated our client’s data, specifically enterprise clients will typically have insurance books that they run, and these would be millions of policies. Tens of thousands of claims that they process. It is quite a big insurance business, and these are retailers or banks. They’re not like Metropolitan, Momentum or Old Mutual. These are Mr Price or HomeChoice companies. One of our most fun stories last year was when we migrated one of the enterprise’s insurance books onto our platform. It was quite fun, but a scale challenge, where I think it was two or three months of constant fires for the engineering team. It was a few million and we went from a few thousand to a few million overnight. Everything breaks, your database breaks, your UI breaks in the most random places, none of your queries are optimised for that – even your indexes break going into that.

Malan [42:15]

I just remember for a long time, you didn’t have dashboarding because literally even the dashboards broke.

Louw [42:20]

Yes, we plugged out all the Raspberry Pis on the walls because the query of the dashboard that counts all policies on a platform physically took the database down, so we just killed it. And we had no visibility because there was just too much happening at the same time, we didn’t have time to solve all the things. That was a big lesson in scale, which was fun, but now it’s all solved. This goes with suppliers or a client like Mr Price or whatnot, of that scale.

Candice [42:53]

Cool. So, it looks like we have no more questions. I want to thank Louw for all the time you’ve given us tonight and answering the bazillion questions that were just thrown at you. You handled them like a pro. I also want to say thank you to everyone for being our guinea pigs and for sharing all your questions and your learnings. I think it’s been cool. Just to note that we’ve popped the feedback link to a feedback form in the chat, and there will also be one in the Slack channel. So, if you guys don’t mind, please share any feedback you have. That would be very useful. Otherwise, I hope you guys have a very awesome evening and thank you so much.


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