NABEEL TANVEER: Thanks for making the time.
Paul Prendergast: Yeah, absolutely. So I suppose the big question is, what does this partnership mean to WTW, and kind of markets are you guys interested in in the vertical SaaS space?
NABEEL TANVEER: Yeah, the insurance brokerage community is always looking to capture upstream and downstream, and I think Willis has done an amazing job of really going upstream. And so when we became aware of Kayna's technology capability, we were very excited because with Kayna's technology, we can then go into these vertical SaaS and pull the appropriate underwriting data and populate via API engines into-- underwriting engines so that they can get their policy with a couple of clicks of a button. And I think that's really going to streamline the process. It's going to add value to the SaaS. The more customers that buy more products increase their retention.
Paul Prendergast: Fantastic. And any particular vertical areas of interest for WTW?
NABEEL TANVEER: Since we've launched this initiative, it's been fascinating how we've come across everything from a SaaS that caters to tattoo artists, which is extremely large, shockingly large here in the United States, to photographers to florists. And one of the ones we're actually launching very, very soon, very excited, is focusing on vendor risk management.
Paul Prendergast: The whole vertical SaaS space is exploding for small businesses. And people say, is it going to arrive soon? And we always say, it's here. About 70% of small businesses in certain verticals that are using these vertical SaaS platforms, so very exciting.
NABEEL TANVEER: Paul, why did you pick WTW?
Paul Prendergast: So we've been spending the last couple of years talking to a lot of vertical SaaS platform owners and operators, and a couple of things they really want. So they want the safety of a very large insurance organization. That's number one.
Insurance is very different than a lot of embedded fintech that they do today where if you take payments work, so it doesn't work right now. Insurance, you want to be comfortable that this organization will look after your customers in two, three, four years down the line. So that's number one.
And also, they want to have the comfort of dealing with people who've successfully paid out claims over decades, understands the regulatory environment, the underwriting, have all the carrier relationships. So we do think that the incumbent large brokers are going to win in this space, 100%. WTW and ourselves, although we're very different in size, are very much focused on the future and innovation and technology.
And I suppose when we started formulating our business we felt that vertical SaaS is so incredibly wide, as you mentioned. There's so many different vertical sectors. You really need to work with somebody who's got access to the overall insurance market and WTW 100% of that.
NABEEL TANVEER: Since we've been working together for several months now, what are some of the things that you didn't anticipate? And what are you looking forward to on our next stage, our next challenge?
Paul Prendergast: It's really about-- there's three phases of the business for us. One was finding the right insurance partner, and I think we're really fortunate to have WTW as a really close partner now.
I think we've got-- we're on track to have quite a few vertical SaaS platforms live in the next couple of months, and then it's the sell-through to the small business. And that really is the proof of the pudding, if you like, providing better insurance solutions, using the technology and WTWs capability to drive real value to those small businesses and to the vertical SaaS.
So embedded insurance, the take-up rate in the vertical SaaS world is relatively small, so there's lots of opportunities but some challenges. So I think that's going to be the interesting part. I think also, certainly WTW's network as well as the insurance expertise network and knowledge on lots and lots of potential customers is super exciting as well. So it gives us credibility as a very small company, but yeah, the acceleration over the last-- since we announced the partnership has been incredible, over the last couple of months. So that's been really good.
NABEEL TANVEER: It's been extremely exciting for WTW. Your technology allows us to really procure insurance for thousands of companies that we couldn't really effectively and efficiently do before. So it is, I think, game-changing in the way that WTW tackles the SME market.
Paul Prendergast: Great. That's great.
NABEEL TANVEER: Paul, can you give me some specifics about how Kayna's technology can enhance WTW's value proposition?
Paul Prendergast: Nobody really enjoys filling out paper forms once a year. It's just not a good thing.
NABEEL TANVEER: I buy insurance, and I can attest to that.
Paul Prendergast: Yeah. So what we find is usually about 80% of the data required to provide a quote are on these platforms already. So you're talking about dramatically reducing the amount of data input for that harried small business owner. So you're taking data from the operating system of the vertical SaaS, prefilling forms. Our widget then picks up the other data points, and then it's a straight-through digital process from there.
So number one, you're simplifying the application process. That's really useful. The second is about 75% of small businesses in the USA are underinsured, and they're unknowingly underinsured. And the reason right now is it's a rushed process. So traditionally, brokers don't get paid enough money to sit down with that restaurateur in Chicago for four days to really understand their business, whereas the vertical SaaS has huge amounts of insights from a data point of view.
So we're able then-- for example, if you think on January 1 that you're going to turn $1 million and have 10 staff but you turn $2 million and you have 20 staff, we have access to all that data in real time. So then we can prompt and tell the broker who's on this, look, this customer's risk has changed. You need to reach out and start taking mitigating steps.
The third piece of the puzzle-- it won't happen today or tomorrow but down the line is being able to segment products further and build new risk models because the data on the platform-- which ones will be interesting to underwriters we'll tell in time as we go through claim cycles over a couple of years. So it's all about distribution today. It'll be about using data for new risk models and market segmentation in phase two of the project.
But I suppose the last point-- so that's the value to the small business. The value to the software platform is that there's no technology to build. And insurance is very, very complicated. So here's a widget. It's like Stripe for insurance. Here's a widget. Plug it in. The last integration-- it can take a day.
So plug it in. A lot of stuff happens at the back end. So really, really make it simple. And then they have the comfort knowing that WTW then have access to all the correct carriers at the back end. So you get the right insurance options for your customers.
And you never have the fear of, well, if I go and I just partner with one MGA who might be great from a tech point of view, well, what happens if their risk appetite changes in year two? Will I have to find somebody else and integrate with them? Or will they be able to cover 100% of my customers? You don't have that worry with WTW.
NABEEL TANVEER: Yeah, I think that our combined capabilities really bring, especially in 2.0, where we can then use the data, collect the data, and start instituting best practices the way that we do for risk management accounts-- but now we're going to do it on scale. So for the 1,000 florists, maybe some way they're delivering or storage or whatever it is. We will learn from the data that you are helping us collect so we can implement risk management on scale and which would then help the portfolio and the underwriters make more profit.
Paul Prendergast: Absolutely, 100%.
So Nabeel, I'm going to ask you a question. So how will this partnership differ from WTW Affinity's current distribution strategy?
NABEEL TANVEER: So what it does is it allows us to be able to tackle those different market segments in scale. And so the aggregation of the data, the underwriting data that is collected with these SaaS has been developing and emerging and growing over the last three years. I don't see that decelerating at all.
Paul, I really appreciate you taking the time to meet with me and sit down and discuss this new initiative. And for those of you watching, this is something that we're really excited about, and we would love to hear from you if you want some more information.
