Advising Clients in the Age of Technological Disruption with Karan Mishra from EY (Ernst & Young)

James BenhamOn this episode of the InsurTech Geek Podcast, talking about advising clients in the age of technological disruption with Karan Misra from technology that's transforming and disrupting the insurance world. We'll be interviewing guests and doing deep dives into specific tech we see changing the industry. We're taking you on a journey through insurance tech, so enjoy the ride and geek out. We are back again, Rob. Good to see you. Sweaty hot summer already starting in Texas. Talked about that last time on the last show, but it's still still definitely here.

The heat is on. It's on the street. You can put that on loop probably in the next podcast Exactly. For three or four months, It's on the street. The heat is on. I mean, I tell I got a I got a song for anything. With us from a not so hot part of the country where I will I will be soon. I I I've gotta go to the Reuters Insurance Conference coming up in June. It'll be up in Chicago.

Karan MishraHe's in Chicagoland with us from otherwise known as Ernst and Young. His name is Karan Mishra. What's up, Conan? Hey. Good good to see you, James. Excited to be here. And speaking of weather, this is the only time of the year where we get to talk about weather and nobody else does in the country. This is the five months of the year when Chicagoans can talk about the weather. Yeah. Other than that, it's terrible.

James BenhamYeah. I would agree with that. Yep. Cold, windy, nasty. Because it's okay. It's okay. I'm a huge Cubbies fan, so I you know, I'm enjoying baseball season even if the games don't always break the way I want them to. It's still enjoyable to watch the Cubbies, and it's all it's all good, man. I I'm looking forward to my my my my next my next Cubs game. You know? Talk to me. Before we talk about DUI, before we talk about work, let's talk about you. You got a a bachelor's in in computer science.

Yeah. Where where were you born and raised?

Karan MishraI was born and raised in India in a city called Bombay. Now most people know it as Mumbai. For those of us that grew up in Bombay, still call it Bombay. So talk talk about hot. Doesn't get hotter than that. Yeah. It gets super hot and

James Benhamsuper humid. And, it's it's it's kinda like my home state of Louisiana. It's just, very, very hot, sticky, and humid, a lot over there. Right? For sure. For sure. It really is. So growing up a young boy in India, what was your career dream as a kid? Interesting question, right, James? I I think

Karan Mishraso to be perfectly honest, I wanted to be a doctor. Growing up in India, you really I think a lot of it is just the focus on academics, right? As a country, you don't really have a ton of options. It's either you go for you go to be an engineer or you got to be a doctor. It's one of the two. I always aspired to be a doctor, and my father, who was a pediatrician, said that medicine is going to be governed by technology by the time you're old enough to be practicing medicine.

And, you know, he was quite right. If you think about it, neuroscience technology is dominating almost all fields, right? Whether it's whether it's medicine, whether it's insurance, which I'm sure we'll talk about some too.

James BenhamSo I ended up being an engineer. Okay. So you you didn't have dreams of becoming the, you know, the next Sachin Tyndall car? I mean, like, this wasn't like this that wasn't that wasn't in the in the cards.

Karan MishraYou know, it it it's not that it wasn't in the cards. It was never on the cards as a profession. And to be perfectly honest, I don't think I was good enough to do that. Just between us. Right? I don't think I was good enough to go play cricket. Yeah. If it if it involves a bat, a ball, and aim for me,

James BenhamI'm not really meant to be playing it. I I don't I don't I don't have the aim, man. I don't have it. I I look. Every single sport that involves aiming something at something else, not good. I I like anything involving balance. And when I played the American version of cricket baseball, I always played catcher. When I played soccer, I was the goalie. Goalie? When I played water polo for my college, again, defense. I just wasn't an offense guy and and couldn't couldn't place any. Heck, man.

I can't wad up a piece of paper and throw it in the trash can. Miss every time, so it's just not. It's it's not gonna happen. It's not gonna So James, you're you're the guy I should go play golf with. Oh, yeah. 100%. Oh, no. 100%. There we go. I I'm I am I am the most consistent golfer that you'll ever play with. Consistently, a 105. Okay? So that's you're gonna love playing against me. It's gonna be great. You're gonna have a great day. You're gonna feel good about yourself.

We're gonna we're gonna drink. We're gonna have a good time. So you you, you went to undergrad over in India, but then you came to Carnegie Mellon for your masters of, information systems management. What what brought you to America?

Karan MishraSo I think growing up in India, right, and recognize you're talking about the early 2000s, right? So the opportunities, at least from an and this is interesting, right? So my ultimate goal, I was a computer science major in my in my bachelor's. I didn't wanna lose touch with that degree. And the thing with graduating with a computer science degree in India is you have about 200,000,000 other people that are graduating with the same degree. Right? So there is you have to find a way to differentiate yourself from the rest of the populace.

That was one reason why I thought a master's was important. Then it becomes the question of why The US. Right? And and I think this holds true today. I think this held true even in the early two thousands. It's a land of opportunity, right? I think when you think about places where entrepreneurship is encouraged, where people are allowed the opportunities to be whatever they want to be, The US always comes to the forefront, right? And I think very similar to a lot of other people that had the American dream, so to speak, right?

That was part of the motivation to kind of move to The U. S. Getting an admit into Carnegie Mellon was not the worst possible thing that happened. I'll be perfectly honest. That was a moonshot school. So when I got into it, it was sort of a no brainer, right? It was like, okay, I got to be crazy to walk away from this. So I think it was a combination of a few things, right? The combination of the market in India, the opportunities you could get coming out with with a bachelor's degree in computer science.

And then just on the flip side, the opportunity that you could wield off in The US. Think a combination of those factors prompted me to move. Yeah, I gotcha. And then you actually spent some time briefly as an intern at Allstate, and then you actually jumped into Deloitte, then

James BenhamThen, I mean, you you you've had some array of of different jobs. I I started out at PricewaterhouseCoopers twenty three years ago, did a grand total of six months, and then started this business when I was finishing grad school. It was not my not my forte, but you definitely chased the the consulting advisory track. What was the, you know, after interning an insurance company, what was the the motivation behind chasing down the the career in in in consulting and advisory services? So it's an interesting it's an interesting question.

If if you think about even the Allstate internship,

Karan Mishrajust just to kinda start there, I was contemplating between two opportunities, Allstate or Verizon. And the roles were completely different. The roles at the role at Verizon was, and this was 2004, 2005, was building a location based services app. It would have been the first of its kind because unlike today, we don't have location based services apps at the time. Or it was doing competitive intelligence for Allstate and insurance. For me, the biggest driver for going with Allstate was, know, computer science degree, Indian guy coming out of India, going to Carnegie Mellon, talk about a perfect stereotype, right?

I want to kind of move away from that, right? I wanted to move away from that. I wanted to get into sort of strategy consulting, which is what the big four, you know, the Deloitte, the KPMG, the Ernst and Young VPWCs of the world were into, right? So coming out of Carnegie Mellon, it seemed like the logical move just to leverage my technology acumen, the education I had, and really apply to business problems. The other truth about consulting and why I stuck around for close to twenty years and did everything I did, you're solving different problems every day.

You're not doing the same thing every day. You're not talking to the same people every day. It's it's very unique in that sense as a job, right? Because you're learning every day, not that you don't in other jobs, but I think just the learning curve in consulting is so sharp. It made it very, very interesting to go after that as a field and keep

James Benhama sustained interest in what you do as a day job, if you will. Yeah. Makes sense. Well, let's let's kind of step through to now. Like, what led you to to right now, you're involved as the life insurance technology leader at What was the path was to that

Karan Mishrabriefly? And then we'll talk about what it's like to advise in life insurance. Sure, sure, of course. So we kind of talked about the fact that I graduated from Carnegie Mellon. Deloitte was the firm I started with. They recruited heavily out of campus and this was a funny story on how I continued with insurance. I remember starting with Deloitte and one of the partners asking the question. I was like a staff at the time. And the question was, hey, we want you to get engaged at an insurance client.

How much experience do you have on insurance and can you spell insurance? And that was the question, right? So I could more than spell insurance at the time having spent a few months at Allstate. So I started off there And honestly, my goal at the time, James, was to go back to India, spending five, seven, ten years, whatever that would have been in the insurance sector, and go back to India because it was a burgeoning middle class insurance was going to take off in India five, ten years from when I was there.

And I wanted to be the guy that had spent time in a matured insurance market and take all the learnings back to India as firms from The U. S. And The U. K. Would launch in India, right? Just because of the consumer market that was growing. There were a lot of things that happened along the way over the nine years I was with Deloitte, some personal things that prompted me not to go back. One of them was meeting and marrying my now wonderful wife, who I met while I was at Deloitte.

But I was about nine years in at Deloitte, spent time there, and then I got a call from and I moved over because was looking to really build and focus on their life and benefits practice. So, there was a heavy focus within the firm to actually build the capability there. And I thought it was an interesting opportunity. I was very entrepreneurial. I always wanted to start my own company. This was a perfect opportunity from Ernst and Young's perspective to actually grow and build a business and manage a P and L.

So I did that for a little bit, continued to solve some of the problems we're having in the market and the industry. And then about two years into being at Ernst and Young, I was talking to my wife one evening, and I was telling her that, Hey, you know, we should we were thinking about starting a family. We didn't have kids at the time. And we had about two or three years before we would have started thinking about starting a family. And I thought that was the best time to go out and try something with them.

Right? Once you have a baby, I figured it would get really hard. So from my vantage point, was, hey, it's now and ever. So I went out there, saw a problem on the life side of the market, decided to capitalize on it, started off at InsurTech, was called SPRE, ran it for four years. We saw we were fortunate, we were lucky, and we probably hit the market at the right time. Got acquired by a leading player in the space called Finios. Post acquisition, honestly, James, was trying to figure out what I want to do next.

It was starting another company or getting semi retired. I started talking to some of my friends and colleagues at and I had such a great experience hanging out here the last time I was here. I was like, you know what? There are interesting things still to do in the market. I'm not ready to hang up the boots yet, if you will, with an insurance and insurance tech. So I came back to you. Tell me what to do now, then we'll move on to Rob's questions. What's

James Benhamthe role leading insurance,

Karan Mishralife insurance technology leader at DUI? Sure. So I think of that role in a few different categories, right? So primarily, I would say every day you wake up and you're certain ones, right? So you're serving life insurance clients, you're giving them business advice, you're giving them strategic advice, you're helping them figure out what markets they should go after, you're helping them figure out how to optimize their bottom line. So, there's still a lot of interesting problems to solve in this space, and that's a big chunk of what we do day to day.

Another hat I wear with an is actually helping us drive our strategy for Nexus, which I'm not sure if you've heard about it, James and Rob, but it's our take on incubation and platforms in the market. So one of my charges is to lead that for the life and the benefits group within which is really interesting and exciting, particularly coming off an InsurTech background, right? Because it's a really interesting ecosystem play that we are bringing to the table, which in my mind is very differentiated from what anyone else is doing in the market today.

So, if I had to kind of categorize that, those are sort of the market facing roles. Outside of that, we, of course, have our teams, we have our partners, we have our InsurTechs in the market, and a big focus of mine is sort of stitching all of those things together to see how we can bring them together for our clients while derisking

Rob Galbraithdelivery. Akron, thank you so much for sharing your background. I really want to dive into kind of your view, right, of the marketplace, how it's evolved and where it's going. So you've got almost twenty years of experience advising clients on business and technology strategies, as well as that firsthand experience yourself coming from a startup. So what are some of the more significant changes that you've seen in the industry? And how do you think these changes are impacting the way you work with clients and helping them develop strategies?

That's a great question, right?

Karan MishraIf you think about the industry, Rob, right, particularly the life insurance industry, I don't believe the industry had fundamentally changed and if you talk to clients they'll tell you the same thing right in I don't know seventy, one hundred, one hundred and twenty years I don't think the industry has changed right. We'll talk to clients even today and we'll hear technologies that are called Life 70 because they were built in the 70s, right? So you're still in that era. However, in the last, I would say it really started about a decade and change ago where the life and benefits industry really started thinking about, hey, are getting commoditized, right?

So the life insurance products you buy from one carrier or benefits products you buy from one carrier is very similar to the product you would buy from someone else, right? So the margins were shrinking, the products were getting commoditized. So I think now as an industry, insurers, life insurers in particular, are forced to think about, I think, two different things in particular. One, how do you differentiate yourself in the market from the rest of the competition, which is one part of the equation? And how do you keep thinking of new and unique ways to drive value in the market outside of experience?

If product is not your single biggest differentiator, the way you model products today, right? Because I think there's a whole conversation around you could model products completely differently than the way you do it today. But the way products are modeled today, you don't really have that differentiation, right? So how do you create that value proposition in the market that is effectively saturated with products? Right? So I think that's been the biggest shift I've seen in the market. So if you think about that and translate that to how we advise clients, right?

That has changed completely because if you were advising clients ten years, twelve years ago, a lot of the conversations were about, hey, you know, and I'm not saying some of these conversations have changed, right? Some of these conversations are still very relevant. But most of the conversation was about, hey, think about like this new you're launching a life insurance product, maybe go the term route. Hey, you could launch these three other products to get more wallet share from your consumers. Hey, let's automate these processes at the back end because they are manual, right?

So, it was a lot of sort of basic blocking, tackling, getting efficiencies using technologies like at the time Pega and others to build things. And you know what I mean, right? There wasn't that bleeding edge technology bent. What happened fast forward to 2000, even 2020 now, 2021, 2022, insurers have become a lot smarter, right? Life insurers have figured out they need to do something different in the market, which means we as advisors to our clients have to come with that perspective, right? And that perspective is not just perspective from a life insurance perspective, it's a broader industry perspective, right?

So and people say this often and clients are unique, but you have so many things you can learn from other industries. Yeah. So many different things, right? You can learn from retail. Think about the way we experience things. Uber, Amazon have changed the way we experience what we demand from an experience perspective as consumers. So now when we're advising clients, we have to if clients are not already there, we have to force them to think about the future. We have to get them to, hey, what are the 20 different things you should be thinking about?

Which means we as advisors need to be on the bleeding edge of everything, and not just everything in the context of insurance, but everything else that we can bring in terms of learnings from other industries and experiences into insurance. So I think it's fundamentally changed the way we advise clients, both in the way we advise them and what we advise them.

James BenhamVery good. Let's talk about the cool things. I mean, I'm a technologist, so I like to geek out. You're in like Rob and I are primarily property and casualty, but there's a lot there's a lot of crossover between PNC and life and health. A lot people don't like to to say there is, but the reality is that there's a there's there's a lot that you can learn from both sides that helps you improve and innovate. So what what are you seeing as the the major innovation drivers in life insurance right now?

You're you're neck deep in the space. What's what's really driving

Karan Mishratechnology and process innovation in that sector? So let me answer the question two ways, right? So I think you said PNC and life are alike, and I don't There are a lot of learnings to be had across both industries. Great. Yeah, it's more automated. Yes. Yeah, yeah. More a crossover. And I 100% agree with you. I'll stop there, right? If you think about what PNC insurers have to do very often, at least from what I understand about the space and as a consumer, is you're constantly selling.

Much against the fact that it's an insurance policy you have to buy, it's an annual term. So it's not like life insurance where, hey, I bought policy and twenty years later, my beneficiary is getting the or whatever, hopefully not twenty years, but you know, the beneficiary is getting the benefit of it, right? I think the big shift has been if you think about life insurance, that focus on the engagement and the experience with the consumer that was always a heavy focus on the P and C side because he had claims more often has now become a heavier focus on the life insurance side.

Right? So to answer your question, James, on where is this headed? Think about it. Your products are commoditized. So what are you going to differentiate on? You're going to differentiate on your experience. That's one. Two, to be able to differentiate on your experience, you have to be able to understand and engage with your consumers differently. So today, as a life insurer, you don't have the ability to engage with your customer unless you have a policy sale, you're cross selling something, or at the end of it, you have a claim.

And if it's a non pure life product, so if you're talking critical illness, accident, those type of products, at least the insured is not dead before you have an interaction. So I think what life insurers are trying to figure out is how do I get more involved in Karan's life? So, hey, Karan bought a term life insurance policy when he was married, but we have no idea that Karan now has an 18 old in the house. How do I engage with Karin to know that he has an 18 old so I can tell him, Hey, dude, you need to go buy that next tier of a policy because you're not just by yourself and your wife now.

Have other responsibilities. So I think fundamentally finding unique ways to engage with your consumer is one end of the spectrum. And if I have to think ten years down the line, I think insurers have to fundamentally change the way they underwrite risk. Your risk models, your actuarial models haven't changed significantly for a long, long time. I think there are aspects of behavioral science and there are startups that are focused on that, that they are bringing in. There are aspects of publicly available data that you can triangulate from, that you can bring into the underwriting process.

And none of these are going to be silver bullets, right? They're just going to be one more data point that you use in the underwriting and risk management perspective. Because the next generation of consumers is not going to wait like one month to give you a blood draw and then wait for the results of the blood draw and then maybe or maybe not get a life insurance policy. That's just the instant gratification we have in everything in our lives today just doesn't lend well to the life insurance process we have today.

So, hopefully that answers your question, right? But I think it's along two sides. It's differentiation in terms of the way you're conceptualizing products. And the second is the way in which you're engaging with your

Rob Galbraithpolicyholders or your insurers. I want to pick up on, you kind of mentioned the sales process for life insurance being very different than property and casualty. And I think about the nature of the products and I think about, I think there was some challenge of like, do you go digital, right? And can you go digital direct to consumer? Do you go through agent broker channels? But yet it's not necessarily face to face and obviously the pandemic really put a kind of a spotlight on this. So I'd love to get your thoughts just about kind of distribution for life insurance.

I know particularly younger generations, as I understand it, the penetration isn't nearly as deep as it once was because there's so many different alternatives out there. There's an education piece to this, right? To even understand why would I need life insurance and then what types of products are available to me. Fewer and fewer people are going to a financial advisor, say, or that kind of in person agent. And then the other part I'd love to have your thought on is the blend of life insurance, maybe looking a little bit more like health insurance, having those multiple touch points that you talked about, kind of engaging with me about my lifestyle, encouraging things.

I think of a vitality type model where there's kind of rewards built in, right? And things like that in a way that you would have never had that number of touch points with your life insurance. So just all aspects of interaction with the customer being from digital, from the point of sale, all the way kind of through the life cycle of the customer?

Karan MishraSo there are multiple layers to the question that you asked there, Rob, right? Because when you think about, so traditionally, right? Just to kind of level set, if you think about distribution from an insurer perspective, to your point, it's largely driven by brokers and agents, right? There was an old age, right? Like P and C products are bought, life insurance products are sold, right? Like you have to actively sell them in the market. And I'm kind of old school that way, right? To give my example, I've had the same insurance.

I had one insurance agent that I got when I was buying my first condo and I've basically gone to him for everything since, right? So even as a guy that talks leading edge technology, it came to that decision, I just leaned towards my agent because there is a level of trust there. Right? So I think as much as there has been a lot of conversation about disintermediation and getting rid of the agent and the broker, I think the pragmatic and the practical approach to this is I don't think that's a bad strategy.

I think there's going to be a level of disintermediation and I'll talk about that a little bit. But I think in the near term, it's more enabling your agents and your brokers depending on the model you're going after with the best possible information to give the best possible advice to the policyholder. So I think there is an enablement component there with agents and brokers. And the reason that enablement component is important is it goes back to what you said about education. Most people don't even understand why they need life insurance policies, right?

I'll give you a perfect example. When I was running the InsurTech, my co founder came from Apple, right? No insurance background, nothing. And I had to literally tell him that he needed to get a life insurance policy and a disability policy before he left Apple, just in case something happened while we were running the startup, right? And this is a smart guy. He's well educated, but he just doesn't have that experience, right? So I think that's one element of it. I think the other element of this is from an education perspective, if we think about participation rates, when you're trying to sell a policy, for instance, to an affinity group or through an affinity group, your take rates are 2% or less, right?

That's nothing, right? I mean, there is so much you can do if you can, I mean, I was having this conversation with an insurer the other day? Was like, if you put in the right effort in terms of decision support tools and actually arming people with the right information, if you get even a 2% bump, it sounds like nothing, but that's a 100% increase in your participation rate. So, it's not like you need to do a lot to see that level of lift in the market.

The third point I would make, and this is going to contradict somewhat what I said at the outset, right, about not disintermediating brokers and agents. The flip side of that equation is there are brokers out there that are sitting on books for the last twenty years, and they're taking a 20% commission, and they're just sitting on that money that just kind of flows through the insurance policy, right? Nothing wrong with that. They have the relationships. But I think carriers, if you have an honest conversation with them behind closed doors, will be the first ones to tell you that that's a 25%.

It's a double edged sword, right? They can't get rid of it because they need the book of business, but they would love to find a way without hurting their broker community to keep that 20%, 25% depending on the product. So you can spread the wealth, right? It's not even like they want to add it to their bottom line, right? The insurers are saying, Hey, if we could save even 10 points on that, I would give five points to, for instance, an employer. I would give five points back to the consumer, right?

But I don't have the ability to do that, so I can't price more aggressively, right? So I think there is a space there. I think there is a market there. I just don't think there has been a company that's come out there that has successfully come up with a way to actually disintermediate the broker and the agent today. I think it's going to happen. I think there are a lot of people trying for it. I just don't think we're there yet, right? And outside of all this from a distribution perspective, and I'll just say this, I think there is a whole equity play, right, just in terms of social equity.

I think there is absolutely an under insured populace in the country. And I think there is a distribution play that needs to be figured out to address that. Right. And we did actually a study as we were conducting this study from a life insurance perspective in the market. And we found some really interesting statistics around how the buying behaviors, depending on the demographic you're going after, change very dramatically. And I think that was interesting for me to see because I don't think insurers necessarily market products that way.

Think they're looking for that. They're looking for a way to do that. But I don't think they've found anything that says, Hey, you can cure products to specific populace a very specific way to increase your take rates. So, I know I answered that with a few different things, but there was a multilayered question, so I wanted to make sure I do it some justice.

James BenhamAwesome. Well, let's wrap up with this question. Sure. This is just a general as an adviser, consultant, thought leader in the space, how do you keep up to date with latest trends and developments? It can be so hard to kind of weed through all the noise and understand what's really going on. So how do you keep up to date with the latest trends and developments in life insurance and InsurTech? Like, what resources, podcasts, websites, articles? Like, what are you doing to stay up to date? Because that can be a really big challenge.

Yeah, no, that's a great question. So I

Karan Mishrawould say I spend about two hours a day reading and I call reading like an all encompassing umbrella, right? So you said podcasts, books, everything, right? And here's why. I think the broader you read, the more perspective you can bring to the industry you're operating and have expertise, right? So I'll read things like broadly on the tech side, TechCrunch is probably no surprise, right? TechCrunch is probably my go to source for sort of the broadest technology news, if you will. Right? If you go one level, I mean, I'll read Morning Brew, you guys have heard of that.

It's like an email newsletter. I love that stuff, right? I've been subscribing to that for years now. I'll read that. We actually, as eBay, get a subscription for, I think it's called a life annuity specialist. So, they do a good job sort of curating articles that are very industry specific. So, I'll read that. I will say this, outside of all of this, one of the biggest learnings I have is being active in the market. I can't tell you how many conversations I have in a day.

Like, if I had to take my day and break it out, I would say 50% of my day is spent, if not more, maybe 75% of my day is spent literally in conversations with clients, with platform vendors, with InsurTechs. But anybody that's willing to talk to me that's within or outside the industry that can teach me something. I'll go out there and have the conversation. Right. And I think it's important to have that perspective and then you apply your lens and kind of figure out how to funnel that into a cohesive thought that you can, you can take to the market.

Right. But that's kind of I think that's the Hey, by the way, I do watch TikTok. It can be very educational as you offer Addictive what it's

James Benhamand educational for sure. I would agree with that. Last question, Cubs or White Sox? Ain't nothing like Wrigley in the summertime. I'll I'll be there in a I'll be there in a few weeks. I can't wait. Well, look, it's been a good discussion.

Karan MishraRob Galbraith, as always, thank you for being here, brother. Absolutely. Great conversation, Grant. Great to have you on. Yep. Yeah. Thank you very much, guys. Really appreciate it. It was fun. We'll chat And

James Benhamthanks to all of our listeners for tuning in today to geek out for our interview with Kronomy Shreve from See you next time. The InsurTech Geek podcast powered by Jibby Knowledge, jibbyknowledge.com. It's all about technology that's transforming and disrupting the insurance world. I've been your host, James Benham. That's jamesbenham.com with co host Rob Galbraith at endofinsurance.com. And thank you for joining us today. Look forward to talking with you soon. We're taking you on a journey through insurance tech, so enjoy the ride and geek out.