Mark Wales, CIO at Galileo Platforms, envisages hundreds of millions of new customers for insurance in Asia over the next few years. He believes the old-style system of distribution via agents and banks won’t scale, and instead, it needs to be digital and mobile.
There’s also a demand for insurance products by the e-tail platforms and telcos as well as a need to execute in real-time.
“So if a client is on a mobile phone working with a distributor, they can get a real-time quotation back across the blockchain while they’re actually sitting on the phone. That’s the sort of environment we wanted to have.” When Wales refers to distributors, it’s less likely to be an agent, rather a website, application or comparison site.
To service this massive growth, Galileo sees a need to replace the traditional policy administration system and instead have a single source of information on a blockchain shared by the distributors, insurers, and reinsurers.
Simplicity and retail
The insurance products they’re working on are simple ones in both life and general insurance. They’re easier to implement at a technical level, and currently, they’re focused on direct retail products.
Wales commented “We’re talking premium levels, which are really quite low. We’ve done one proof of concept at premium levels of 20 USD a year for a particular style of life policy.” He gave another example of an incidental add-on insurance product for USD 2.
“You need a really economic platform to be able to process policies when you’re down at that really low premium. And also, have a platform that can support the auto-payment of claims. Because if you’re down at that premium level, this has to be a total no-touch environment.”
Galileo has done several proofs of concept (POC) under NDA but can only publicly disclose one they did with Sun Life for a distributor in a developing Asian market, and they’re now discussing the next phase.
Going live with the network
The aim is to have the Galileo Platform go live around October 2018.
“So we are creating a network. It is a platform…. What we’ve seen happening is as the number of insurers and distributors builds on the platform, then this opens up the opportunity for it to have a network effect for insurers to be able to access different distributors, etc. To start with, though, it’s more likely to be insurers working with a couple of the distributors they want to work within each particular market. But gradually that should build out.”
The revenue model is primarily transaction based, with fees charged on key events such as a new policy, a claim or a renewal.
To date Galileo has been funded by the three founders but are currently doing a fund-raising, talking with both Venture Capitalists and industry incumbents. They’re unlikely to have trouble raising funds given the attractive addressable market, promising product, and impressive set of founder resumes with deep Asian experience.
The Galileo technology approach is described in a separate article.