Yogesh Shetty is on a mission to bring insurance to the
masses and he’s using technology to do it.
Mr. Shetty is the CEO of Avibra, a company with the mission of creating an integrated digital service for the current and future digital generations that goes beyond insurance to fostering personal wellness.
With a background in both investment banking and insurance, Mr. Shetty has the resume to take on the challenge of modernizing what he admits is an antiquated industry, one that doesn’t serve more than half of Americans.
“Life insurance has not penetrated to the masses,” he began.
“Fifty to 60 percent of people are uninsured and 99 percent of sales are
completed through agents, with maybe one percent online.”
Having covered alternative finance for eight years, I remarked to Mr. Shetty that insurance in 2019 is very similar to where SMB lending and personal finance were at the beginning of the decade, just waiting to be disrupted. The technology is clearly there to do it, and there is no reason why a customer should wait 30 or 60 days for a decision when applying for coverage.
Mr. Shetty didn’t disagree.
“Compared to retail banking, insurance is in the early part
of that transition,” Mr. Shetty said.
Avibra could very well give that transition a boost by
meeting Gen Z and Millennials where they are at. Since emerging from stealth
three months ago, Avibra has targeted people between the ages of 18 and 32,
many of whom essentially don’t know what life insurance is. Get into a
financial jam and it’s off to parents or a crowdfunding site.
So far that’s been the best this generation has, because they are not being targeted by the established insurance industry, who makes larger margins fishing further upstream. Much like how SMBs have been shunned by traditional lenders, so have younger generations been ignored by an industry who starts at the upper middle class.
There are additional reasons why the insurance industry has
been slow to react. It’s highly regulated and capital intensive, so change
don’t come easy and it don’t come cheap. With an agency-driven sales model, one
doesn’t want to risk what has so far been a profitable relationship.
“They’re never the first mover,” Mr. Shetty said.
“Incumbents have 100 percent of the distribution and zero percent of the
innovation. Startups have 100 percent of the innovation and zero percent of the
“We have to figure out the distribution before incumbents
figure out the innovation.”
How do you reach a generation who knows little about
insurance? Meet them where they are, Mr. Shetty said. Start with a frictionless
app that educates users about healthy behaviors. That’s what Avibra’s freemium
model is designed to do, by providing rewards for healthy behaviors. Everyone
who downloads the app receives a $10,000 policy that can increase to a maximum
of $50,000 thanks to such activities as paying credit cards on time, going for
a job, and even downloading music from Spotify.
“My definition of life insurance is the legacy of a person’s
well-lived life,” Mr. Shetty said. “Focus on the living and not the death.”
Financial services companies always look for ways to deepen the customer relationship through frequent contact, and insurance struggles with that, as there often is no engagement opportunity until a beneficiary files a claim. By rewarding positive activity, regular contact is established, which positions Avibra to form an ongoing relationship as the client’s financial needs change over time.
But well before any additional premium services are provided in the future Avibra’s focus is on a healthier customer, Mr. Shetty explained. Financial literacy quizzes, meditation techniques, and video testimonials featuring people who have achieved the impossible. Want the best for them and show them how to progress on their own journey.
Avibra’s underlying technology scans financial statements to
reward positive activity and teach how to overcome the negative, Mr. Shetty
said. If your credit card statement shows a few rounds of golf, that gets
rewarded with extra coverage. Spotify downloads? Music decreases stress.
Through connections to FitBits and AppleHealth Avibra knows when you are
exercising and rewards that too.
And if those bank statements show a keg of beer or two and a
carton of smokes? No coverage decrease, just suggestions on adding healthy
activities to your daily regimen.
“We have more than 200 insights built in based on data,” Mr.
Shetty said. “If people are earning through good habits, they won’t die. That’s
The impacts are also not limited to the individual user, Mr.
Shetty said. Avibra has gamified the app by earmarking some of the rewards
people generate for distribution to random strangers, with the challenge being
to help someone in each of the 50 states.
The life insurance industry is on the cusp of dramatic
changes, Mr. Shetty predicted. With developments like Crispr, gene editing
could produce treatments for many currently incurable diseases, treatments
covered by insurance policies which pay out should those treatments not work.
Avibra is an early pioneer of that philosophy, Mr. Shetty said.
“Remove the friction and make it seamless. Integrate it with
the daily lifestyle so it doesn’t look like insurance at all,” Mr. Shetty said.
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