Ep313 Mikir Shah CEO Africa Specialty Risks: Creating new Markets

0:02I'm Mark Geoghegan and you're listening to the Voice of Insurance podcast, produced in association with Advantage Go, now part of Sapiens, enabling enterprise-scale underwriting through a single pane of glass. This podcast was a really satisfying one to make, because it is unrelentingly positive in its outlook and highlights how insurance can underwrite its own sustainable growth by being in the right place at the right time. The promise of Africa is alluring. 54 countries, a vast landmass with huge untapped resources, a young population, growing trade that is now freeing up, and massive potential economic development.

0:41But it's not at all easy in practice to enable and harness that growth. Many have tried, got it wrong, and ultimately withdrawn. So when I meet someone who's brought together the best of Lloyd's and other specialty markets to bring sophisticated insurance products to these and other developing markets, I really want to find out how they've gone about it. Mikir Shah is the charismatic CEO of Africa Specialty Risks, ASR, a fast-growing business which has just secured support from growth investor Vitruvian Partners. Mikir is a Kenyan who combines actuarial training with long experience in investment banking, and so comes to the insurance industry with a unique perspective.

1:20In this relaxed interview, we run through ASR's strategy to bring corporate specialty insurance to developing markets through the combination of localised underwriting and advanced technology. Mikheer is irrepressibly positive, very smart and very friendly, and shares his insights and hard-won knowledge extremely freely. By the end of the next half hour, I guarantee you'll be feeling as positive about the prospects for African and other emerging markets as he is. Enjoy the podcast. Mikheer, welcome to The Voice of Insurance Thank you Mark and thanks for having me We were just having a quick conversation before I hit record on this that we have had encounters over the time over the last probably more than 11 or 12 years but I don't think we've ever met personally but we're just remedying that so that's good But thanks for coming to our offices as well Oh it's great, well I mean you're in the right place I mean if it was outside of EC3 I might get lost but if it's on Leadnall Street, yes it's fine I know where that is Thank you Yeah.

2:18Directly opposite Lloyd's. It's the right place for us to be. It's absolutely the right place to be. So, Mikir, for anyone out there who's listening, who doesn't know you, why don't you just do what we all do in insurance? Give us a quick run through of your potted history of your CV and your resume to date, and tell us how you got into insurance in the first place. Where's a good place to start? Well, I'll try not to bore you, but I'm a Kenyan. I studied in the UK. I trained as an actuary, but then I went to investment banking. I did many years investment banking. What possessed you? Well, I think they pay better.

2:47I think it suits my personality better. So I think it was more me. And I focused on developing markets as well as developed markets in investment banking. The last role was head of UK insurance, head Barclays, as well as head of Fig across Africa for them when Absa was part of the group. I came out and actually thought I would go back to Kenya and create a new business with the rest of my family. However, I got a call to come back and help Old Mutual in their expansion across Africa, which I did. And actually, that's been the genesis. It's a South African company, isn't it? That's right, yes, yes, yes.

3:17Julian Roberts was the CEO at the time, who I've known for many years, and he just wanted some help to get a transaction across the line in Africa as they're expanding their African footprint. So, bringing us up to date, how did you get to Africa specialty risks and how did that all come about? Well, the story continues because it was actually Julian who asked, what is the big gap in Africa? And I actually explained to him the biggest gap in Africa was the provision of corporate and specialty insurance for businesses across the continent. there was a dearth of it. So you couldn't really put up a new sugar plant, for example, in Kenya and expect the insurances to be available within a week, which they would be in the West.

3:53But in Africa, you'd have to wait six to eight weeks for even a quote to come back. And then the global reinsurers would only cover some of the risks that they should be covering, and they'd be charging a very high price for it. And that meant by its nature, business people had to really keep much more risk onto their balance sheet. And that also translates into investment into Africa. What's clear is that anybody or any corporate or bank investing in Africa, i.e. lending into any businesses in Africa, always required political risk insurance. But there was a dearth of that. Or contract frustration insurance.

4:24There was a dearth of that. And that actually restricted the amount of investment coming into the continent. And therefore, it really hindered the development of the continent. Because you knew that very well from having been on that side. Absolutely, yes. So having been involved in businesses in Africa and understanding banking as well allows me to do both. Obviously, understanding insurance from my training was always important as well. So coming back into insurance to solve the problem was great. So when did you start Africa Specialty Risk? So Africa Specialty Risk, actually, we signed the agreements with Helios Investment Partners in August 2020.

4:59We got our reinsurer in Mauritius licensed on the 31st of December 2020. We then wrote our first policy on the 16th of February 2021. Now, we're a co-insurance business. So we have our own reinsurer in Mauritius. We have our own reinsurer in Bermuda. And we have a Lloyd syndicate. But we also write on behalf of other capacity providers, our partners who provide us capacity. And that includes a number of global reinsurers. And even at Lloyd's, we have a consortium. So it's a sharing model. A lot of alongside rather than just reinsuring you, for example. Paul, there's your balance sheet, which obviously presumably also has reinsurance behind it, and you've got side-by-side co-insurance.

5:38Exactly. And therefore, for any risk, we actually take 25 % of every risk that we see on our own balance sheet. Right. And that's your skin in the game. Everyone knows that all your interests are fully aligned. Absolutely. What we've done is actually try and meet this corporate specialty gap. So 80 % of our business, as a minimum, is faculty risk-by-risk underwriting. We have teams of highly skilled underwriters, many of whom have worked across African developing markets or are from African developing markets, trained in the UK, trained in international insurance and reinsurance, putting the technical skills to work with the local understanding that we bring and really de-risking individual investments in a different way and businesses.

6:19And just to fill in any gap there, you've been doing corporate specialty insurance in Africa for a bit longer than just 2020. You spent some time before with another business. That's right. So the actual plan for this comes from the old mutual day. So it actually continues from the story we were discussing earlier. Put the plan together at old mutual. Unfortunately, old mutual was going through its managed separation at the time. Yeah. So I came out and then actually launched a business with AXA. Yeah, that's what I remember. Yes. And that went well. AXA acquired Excel Catlin. So they were merging everything together.

6:50As a team, we came out and we started again. And this time we started with our model, which is a co-insurance model, rather than using just the one balance sheet. Those kind of mergers on that kind of scale are so often the catalyst for just, you know, little bits sort of rattling out and spinning out. It's just very likely to happen. I just wanted to sort of cross all the T's and dot all the I's on that. Oh, thank you, yes. Excellent. Just because it was whirring away in my mind. I thought anyone listening is probably thinking the same. Yeah, I've been involved in the sector for a long time. So you've been growing pretty fast since 2020.

7:18What sort of scale have you got up to? We've doubled in premium volume every year. This year, we're on target to reach around$500 million of GWP. So it's pretty substantial. Yes, yes. And even in terms of headcount, when we started, there were eight of us. Today, we're touching on 200. Wow. Do you think you can keep growing at that sort of rate? Well, the opportunity is there. We continue to see substantial volume requests. And we're creating new markets as well in terms of new products, new availability of products that weren't available previously. in addition to Africa and the Middle East, which is where we're operating, we have since last year expanded into other developing markets as well.

7:56And that's our focus is developing markets. Remember, everything we've talked about until now has been enabling development. So that's the core thesis of ASR. It's enabling development. So whichever markets need that skill set, our skill set, be it in construction, be it in energy, be it in political risk, trade credit, simply political violence, terrorism, parametric liability, a very broad range of covers, which are designed by their nature to help developing markets, is where we're after and where we're looking to do. And even in Africa, we didn't just go and say, oh, look, we're open for business.

8:31We work with our partners on the ground. We're collaborative with everybody on the ground. We provide training to local direct writers on how to think of risk, how to price risk, how to even assess claims, because that's also very important as part of what we're doing. And so we provide education training. The regulators like us, we engage actively with all regulators because we want to bring something back. And locally, presumably, you're accessing those markets via facultative reinsurance. I presume that you're not likely to have a licence in all 54 countries of Africa at the moment. No, I mean, we are accessing as cross-border reinsurance for most.

9:05However, Lloyd's does have some direct licences and other licences as well. So we are accessing those in the right way that you'd expect us to. And we have people on the ground. So we have an office in Mauritius. We have an office in South Africa, in Morocco, in Dubai. We're building out in Kenya. We will be in West Africa, both Francophone and Anglophone in due course. So the network is building out because being local is important. And so that network, we should expect to see it get bigger. Yeah, absolutely. We've already applied to Gift City, as you'd expect us to do for India. but we're already writing in Central Asian states and the Indian subcontinent and we started just now to write in developing Southeast Asia.

9:48GiveCity seems to be a big thing about this will have to be in the side because I should probably end up doing a whole podcast on GiveCity because I think there's so much going on there but that seems a very interesting way of accessing the Indian market. I must do something about it. Well, I think there's a number of reinsurers who've now licensed in GiveCity and again, our methodology in India is which lines of business do they not understand locally properly? Where can we add capacity? Where can we add actually our skill set? We already have our partners in India and we are working with them actively.

10:15In terms of how you perceive them the rest of the market, do people perceive you sometimes, do they perceive you as a way of getting distribution into these difficult to access places or do they actually perceive you as you've got the expertise as well? Okay, so if you think about our partners, and these are our long-term partners that we've had for a while, we provide access to Africa and other developing markets with understanding. and knowledge. So it's not just distribution, it's actually understanding and knowledge. So it allows us to write risks that perhaps others wouldn't write, but also to decline risks that others would write.

10:48Plenty of risks that look good on paper that aren't good. Absolutely. And therefore, our partners rely on us to do that. We work very closely with our partners on how we expand. So that's really quite important in the way we operate. And we talk to them all the time. We have a very open relationship. Many of them actually come to Africa with us. So what are your core lines? We have the full range of lines that you'd expect us to have. Political risk, contract frustration, trade credit surety, political violence, war, energy, and all forms of energy we're talking about are relevant for the markets that we're operating in.

11:21We're very big on renewable energy, as you'd expect. And we put in some technology around that, actually, which is very different. Construction, liability, parametric, treaty, which is important for us because it's important to provide support there as well. In fact, every line of business is really important for us, and we're launching cyber shortly. Wow. So it's kind of everything you can imagine that most of the people around here in this part of London underwrite and pretty much every line. And then if not, you're thinking of adding it. Yeah, we added marine and aviation recently as well. So marine cargo and aviation.

11:52So we're in all the lines you'd expect us to be in for developing markets. And that's the way we want to be as well. And we want to facilitate trade between regions. And there is a huge amount of trade between regions. If you look at the investment flow from the Middle East into Africa, it's fast. Even the flow from India into Africa is vast. And we want to make sure that we provide liquidity in that flow. Within Africa, we've got the Africa Free Trade Agreement, which 51 states have signed up to. And the vast majority have already ratified it. But in order for us to provide liquidity within the continent, you need trade credit insurance.

12:26So we're a big provider of that. In fact, we're launching an automated underwriting platform specifically around this. We will launch one already called ASR 24-7. It already has a DNO on it, renewable energy property, both quota share and excess of loss. Shortly, we're launching Cyber on there. Actually, in the next two months, we'll be launching Trade Credit, fully automated, underwriting, AI-driven. What about in terms of opening lots of branches? Often, I'd hate to say the word sort of red flag, but sometimes it's a red flag to some people to say, well, God, are you going to be a bit top heavy?

12:57I mean, how much do you have to grow in order to make that platform viable when you're not sort of planting flags in different places? How do you go about starting the office? I presume you do it when you know the demand's there. Well, if you think about the Middle East, where we have an office which is growing and we're just moving to bigger office space as we speak, we started writing in the Middle East in 2022. We opened our office in 2024. And that office has grown very rapidly. But the way we're structured is we'll have a regional office really to show the region that we understand the region.

13:28And we have people locally who are locals in these offices. Are they more like marketing offices? No, no, there's underwriters. There's underwriters across all our offices. Yeah. But we really are focused by line of product. Yeah, we launched in COVID, which had its disadvantages, so we couldn't travel and meet our clients, but it also had some other advantages in the fact that everything we had to do was in the cloud. It was already the next date. It's one of the good things about starting at that time. Yeah, you're not going to have some server sitting in the basement anymore, are you? Exactly.

13:59And therefore, it allowed us to build our own technology in many areas. So if you look at our exposure management tools, they are state of the art and live. Even the platform I'm talking about, the ASR 24-7, that's a fully AI-driven platform, which actually goes from quote and a formalized quote, and it can bind as well. But actually, for us, we collect all the data around everything we quote on. It does our exposure management. It feeds our policy admin. It goes all the way through to credit control. And shortly, will have a first notice of loss on there as well. And that is real technology at the forefront of it.

14:29And of course, you know, you can really bring that minimum premium down, can't you? And that's what happens. So in developing markets, the risks are smaller. Of course, that's why it never worked, because there's no point paying someone to fly this risk all over to London when they say, well, hang on a minute, that's not my minimum premium. Exactly. And underwriters wouldn't spend enough time on this because it's not worth their while. Whereas this makes it affordable from a cost perspective for us to really underwrite properly and for these risks to have real cover that matters. Now you're in Lloyd's, is it temptation again to sort of clean up the platform to say, well, is this the only platform I really need?

15:01Well, actually, we're really happy with our platform, both Lloyd's and a company market platform. Yeah. That will continue because not everybody's at Lloyd's. Lloyd's has a number of syndicates at Lloyd's. We have a couple of them in our consortium, our Baobab consortium. We will be expanding that in due course and bringing more syndicates on the journey with us. And on the company markets, there are a lot of global reinsurers that are not Alloyeds who are in the company markets, who also have the same desire to be in Africa and other developing markets and help enable development. So we want to bring everybody on the journey with us.

15:34Do you want to be known specifically for the Eastlands business? Or over time, would you want to be known as your general specialty? We want to be the reinsurer of choice for developing markets. That's our plan. That's our goal. That makes a lot more sense. And that's our focus. and you'll be in whatever lines you need to be in to do that. And whatever these markets require to enable that development, we want to provide. So it sounds like because, of course, you've managed to get something off the ground, then, of course, the growth can partly look after itself because there can be naturally high growth.

16:05Some of these clients that, you know, you help build the factory, then you can be the insurer of that factory for the next few years and then build the next factory as it expands. Some of the things that we do are pre-GDP growth. They help and enable GDP growth. Some of the critical infrastructure, that kind of stuff. Exactly. So 500 million people in Africa still don't have access to electricity. We know that for an economy to really grow, you need ample electricity for businesses to use. So we are helping close that gap with the insurances that we're providing specifically. We also have a product which guarantees a minimum price of electricity for new investors in renewable energy, because that's what the market needs.

16:43we need to get more investment in so that actually more power can be generated. So these are the sort of things that we're looking at, which is slightly different. And you're talking about products of a level of sophistication that is way more sophisticated than the average person even around here knows how to do. Yeah, and parametric for us is really important as well. Africa is a vast continent. It's tough to send in lots of just as they literally know how to parachute themselves in. Yeah, no, absolutely. And let me give you an example of the scale of the continent. you can fit all of the US, all of China, all of India, all of Eastern Europe, all of Western Europe, Japan and the UK into Africa.

17:18And that gives you an idea of the scale that we're dealing with. Europe fits into Algeria, Europe fits into DRC, those two countries in Africa. It's mind boggling, yes. One of the mistakes any Westerner would make is, oh, Africa, for one, what do you mean by Africa? Do you mean sub-Saharan Africa or North Africa? And within North Africa, You're talking about an enormous area, as you said, that Algeria is big enough to fit Western Europe in. You know, it's crazy, isn't it? Where do you even begin? So with 54 different jurisdictions, how do you set about differentiating us from each one of those?

17:50So obviously, the wrong way, one would presume, is to come with a one-size-fits-all. Absolutely. And I think that's where some global reinsurers have made the mistake of going into thinking Africa is one, and let's adapt something to one. It's not. there's 54 different countries. All of them have their own nuances. It's navigating their nuances. But if you're providing a solution, everybody wants to work with you. And we are providing a solution. So that's the most important part. That's why we have lots of partners across the continent. If you go to the African Insurance Organization Conference, we always have a double stand there.

18:26We had 22 people there this year. That was in Cairo. And the queues of people just waiting to talk to us, the sheer activity around our stand is the most of anybody. and that's because people want to work with us because we are providing that solution that naturally isn't readily available across Africa. I've probably put words in your mouth by saying, you know, one size fits all, I suppose, with the obvious thing not to do. But what are the most common mistakes when your classic international insurance group says, right, what's our African strategy? What's the first thing they get wrong? I think it's thinking of it as one.

18:56Even just saying Africa is wrong. I think it's really how are we going to help and how are we going to make a difference? That's the best way to think about it. And then when you go, then stay. A lot of people have come in Africa and left. When we enter markets, we don't leave. We'll stay and we'll work with the market. That doesn't mean that there won't be difficult times. There will be difficult times. But it's about how you navigate that. I had a memorable interview once with the CEO of Matfri. And you're talking about South America. And someone who's been in South America since the 50s. Well, one of the main things you need to do is make sure you stay.

19:29Absolutely, yeah. Because when it comes good, everyone remember that you stayed there. You didn't just run away. and if you're Mapfre then why would you run away from Argentina just because there's difficult times and might be a time when you're not going to be doing much business. Well I remember Mapfre in the 90s when they're going through a volatile period in their operations in South America and Latin America but they resolved them and now they're very strong. Yes exactly yeah this becomes a real virtue yes I'd say stamina is one of the least appreciated attributes of a successful business it's one that probably most businesses talk about less and they probably should talk about it more.

20:03Yeah, so I would say there's a large market across developing markets. There's a lot needs to be done in developing markets. That's why they're still developing. And so in terms of that opportunity that you see, I mean, how big is it? We think it's vast. I can put some numbers out there. I could say 60 billion. Yeah, because you never really buy 20, 50. But even today, I can say 60 billion easily. But what does that mean? Is that the current market? Or is that what we know about? There's a lot of things that we don't know about that haven't been de-risk and therefore they don't happen. Or that they happen without insurance.

20:35Or they happen without insurance. I mean, a classic example is the East Africa Tea Association. You may or may not know Kenya is the largest exporter of tea in the world, but a lot of that went largely uninsured for the crop and the trade of it and the storage, in fact. So we put a whole package together for the East Africa Tea Association. It's crazy not to insure tea that's already in a warehouse. That doesn't make any sense to me. Yeah, that would be normal sort of warehouse, but it's not joined up together so that actually that tea growers have the full end-to-end coverages. And that's what we've been providing.

21:04But you've already said that you're already in other emerging markets, mainly because it makes an enormous amount of sense. All these developing markets that I've talked about that are outside of Africa and the Middle East, they have the same needs. They have populations that have needs. A lot of that has been met by imports. There's no reason why local manufacturing can't take place. They have resources. There's no reason why they can't make the most of those resources. and rather than shipping ore around the world, why not refine it locally? If you look at the Central Asian countries. If you can do the added value part there.

21:35That's right, yeah. Whereas you keep exporting it somewhere else and they're making all the profit and you've just got the commodity. Exactly. Yes, I get that. Of course, that's where you can really assist unlocking the economic value and you can be part of that chain. And of course, those premiums are going to be higher, aren't they? Absolutely. And we're actually helping development accelerate. It's good to hear about the virtuous circle of insurance. It's one of the really good things that we don't talk about enough, necessary insurance, but insurance allows that economic development to happen that wouldn't happen otherwise.

22:02I don't think actually we make enough of the fact that we provide liquidity for that development. We enable it. When you're looking across the globe then, where are you happiest in terms of, where's sort of red hot at the moment in terms of where you're getting the best growth, most traction? Obviously, it's a virtuous circle. So it's like a snowball, isn't it? Some of these places where they're really getting to a critical mass where it's done to really, really take off. If I'm being honest with you, we're seeing growth across everywhere. But anywhere particularly, you're most happy with, you think, well, this is really great.

22:34Gold star for these people. Everywhere we're going, we like it. Our topic is hiring. We can't hire enough people. Okay, well, anyone listening? You know where to come. Absolutely. If you have any connection to any one of those 54 countries or any other developing markets or any affinity, or you've always wanted to go, then it sounds like you should talk to me here. And we visit these countries, is that the underwriters spent 1 ,400 days travelling around Africa last year. What about the market itself? The global specialty market is quite soft at the moment. It was hard when you started. It was about to get very hard just after you started, in fact.

23:09The tide was turning probably in 2020, but then it really turned to 2022, 2023. Now the tide's turned back the other way. Is that affecting the way that you operate in any way? That's a really interesting question, because clearly everyone's thinking what's going on now. In terms of the softening of the market, which is very prevalent in the West, we see it in the risks that make their way to the West. Yeah, presumably your market, it's not to say that we'll let everyone in on this amazing trade secret, but it can't possibly be as competitive where you are if most other people aren't there. Well, look, being careful about what I'm saying here, is we do see the softening in certain areas.

23:46As I said, the larger risks that make their way to the London market and globally, you do see that. However, it's how you navigate it. I remember back in the AXA days, we went through a point in time where, let's say 2016, 2017 was probably the weakest point in the global markets in terms of pricing. If something was 100 then, even for some of the larger risks that we're seeing that are seeing competition, they may have gone from a 250 to 200 today. So it's not the end of the world. It's not the end of the world. But we are careful about that. And you have to understand. And so sometimes if somebody thinks, oh, we've written a risk and therefore they need to take it off us by buying the business, by being heavily discounted, there's a reason why we have a price.

24:27There's a reason why our terms and conditions are where they are, because we understand the markets that we operate in. You're happy to walk away. Well, I mean, there's nothing happy about losing an account, but you're ready to lose it if you need to. Look, we like to lead. When you lead, you tend to stay on. And then you help navigate what's happening. And actually, the client also knows, if you are a Glaxo insuring their factory in South Africa, they want to ensure that whoever the reinsurer is, is properly rated, is properly thought of as well. So again, because you've got the ratings, you've got that Lloyd's paper, it's as good as anybody's.

25:03Exactly. And even our Bermuda paper, it's BAA1, positive outlook on Moody's, triple E plus, positive outlook on Fitch. And hopefully we'll get something better in the near future. A shout out to all our favourite racing agencies. You mentioned before about AI. What have you found that most useful for in your business? I told you about our 24-7 platform. Yeah, that's very interesting. Which I think is game-changing. Because you could partly code it yourselves these days. Partly that, but also we had a lot of risks, which were perhaps smaller risks, that were flooding the inboxes across all lines of business.

25:34So we actually started thinking this is going to improve our efficiency. Yeah. And it's obviously morphed into something far more important and far bigger than that. So it doesn't just take away the volume risks. Actually, it's becoming a lot more sophisticated in what it's doing now. So that's one aspect of it. But we're using AI in all sorts of areas now. We're exploring really innovative areas of where to use it. Because, as I said, we launched in COVID. So we've stored so much data. We've been going five years. We have close to six terabytes of data. We have more data on Africa than anybody else does.

26:06And it's how we now utilize that. And we already have started utilizing all of that data in our underwriting processes. And presumably, of course, if you're in territories that are not well known to the insurance industry, of course, they haven't necessarily all been modelled, have they? Because if they weren't producing enough income to make it a vendor model, it probably wasn't worth doing. Well, if you bear in mind the sort of countries that fit into Africa, the US, China, India, Eastern Europe, Western Europe, Japan, the UK, those markets as a whole will have, let's say, 20 net count events a year.

26:37Africa may have one or two for a continent that vast. and therefore the providers of cat models wouldn't necessarily focus on Africa. It's a non-cat market, seen as a non-cat market. However, cats do happen, you know. Partly the reason why we have so many cats is we have all this expensive stuff in the way of things and I'm sure if Africa was as developed as Western Europe is or the Eastern Seaboard of the United States, I'm sure it would have more cats. Well, I think the prevalence of cats or this prevalence of cats, the value of damage depends on what you have or where the cat hits. But the actual prevalence of cats is not so great in Africa, but they still have them.

27:10So we're at the forefront of developing the Mozambique cyclone cover. And I'll tell you a little bit about that because I'm very proud of that. I think ASR as a whole is very proud of that. So we divided Mozambique into 40 ,000 hexagons because they all fit together. Every hexagon had a value. And when the wind blew or the rain fell, we could model that. And therefore you could create a value per hexagon that got hit. What that allowed us to do is create a product which is far more flexible, more affordable, equally a better risk proposition for insurers and reinsurers like us. And when the cyclone, Freddie, hit, which came twice, we were able to pay out in eight days because it's all parametric driven.

27:50And that allowed Mozambique to rebuild its bridges and roads very quickly, and therefore the impact economically was limited. Just back on the state of the market, no one's ever immune from the market, but again, if you're bringing new, new business to the market, to the global market. So again, everyone must be your friend. I presume because you're bringing new, new diversificatory business that's also low NACAP perils, you're not adding to anyone's aggregate. It's not all downtown Miami. You know, it's not just, oh no, not another one. Again, does that make you slightly less prone to the vagaries of the market cycle?

28:26Yes, I think the whole structure of our business makes us a little bit more insulated. But it's not something you can just come and write business in. It is something quite sensitive. you need to understand what you're doing as well. So developing markets have their own way of doing business and it's navigating that, having the networks, having the relationships. Opening up a shop somewhere without that doesn't work. People need to know who they're doing business with. It is very relationship-driven still across Africa and other developing markets. We have people on the ground in the region who are well-connected and that makes a difference into how we do business.

28:58In terms of do we have lots of friends who are on the journey with us? Yes, we do. We have lots of friends who are on the journey with us. We value them. Are there other friends who are joining the journey? Yes, there are. And the more that come, the happier we are, because we are making a difference. This can be more efficient. Again, in terms of cost, is it more expensive to do business in Africa? In terms of expense ratio, just one might assume that it would be. Well, I mean, maybe a little bit more, but not massively more, because you do have to be present. And being present is really important.

29:25And therefore, we don't have an office in every country, but we do have regional offices and we travel a lot. And it's important to spend time as well. But then you get what you pay for. Yes. Ultimately, and if you don't, then you stop doing it. Yes, that's right. Yes, exactly. That higher expense should be repaid in hopefully lower points on the loss ratio and better risk selection. Yeah, both. I should congratulate you because you've had investment from Vitruvian, very much blue chip name in the private equity world. Run us through that and sort of, you're an entrepreneur. I often ask people who are entrepreneurs, people who've set up businesses, what kind of entrepreneur are they?

30:00First one, run us through that Vitruvian Investment. Sounds very interesting. There was an announcement on that the other day. That's right. Well, let's go back to the start. So we launched with Helios Investment Partners. They are the largest fund focused on Africa, fantastic relationships across the continent, and understood what was missing. So they actually enabled us to launch in a nice way, allowed us to grow at the pace that we have grown at, and actually encouraged our growth across the period that they've been here with us. Our plan was always to go to global developing markets in due course.

30:31So we're now at that phase where we are now going to global developing markets. So it was a natural phase two of our business, and it was natural then to see someone like Vitruvian succeed Helios in our capital structure. Well, it's natural at some point in the future. Vitruvian has to be replaced because they've got to take their profit at some point. Well, I mean, if you think about Vitruvian, you know, we're part of their new 10-year plus two fund. So there's quite a long journey ahead. They're a growth investor. So they perfectly fit everything that we are as well, a growth business. They have a number of investments in tech-enabled businesses and tech businesses.

31:06And that's exactly where we're going. So the synergy is very large. We're on the journey together. And we'll see where that journey takes us. But it's a very positive journey. And they're a perfect partner for us. Yes, it sounds good. They've been happy with their tech-enabled insurance businesses so far. That's good. Exactly. That can only be good. What about you yourself? Is this the sort of business that, okay, it's not got your name above the door, but you're the sort of person who, now you've got this, you want to keep growing it until you can't carry on anymore and sort of leave it to your grandchildren type person?

31:36There are other types of entrepreneurs who are much more, you know, I really like solving problems and then I like to move on to another new problem. And I'm happy to leave that one onto the next one. They can take the growth and do the other bits that they need to do with that business. I'm more the visionary. Someone described it as missionary or mercenary. Which one are you? Yeah, I don't think it's that minor, actually. We started this business to meet a need, and the need still needs to be met in Africa, our core market. It also needs to be met in other developing markets. In terms of how I think about this, I want to keep driving the business to the extent I'm adding value.

32:09Let's suppose you're solving problems all the time. And of course, as you grow, you get new problems. And then you go into new territory, you get new problems. Absolutely. But I'm not saying I need to be here forever. That's the key point I'm trying to make. There will be a time when you have to have that transition, whenever that is, and that will become apparent at that time. That's refreshing to hear as well. You're not the sort of person who says, but only I could possibly ever run this business. No one else will ever be able to do it as well as I can. Clearly that's not the case. We all know it's good to have a change after a while.

32:38Hopefully it's not in the next year or so, but anyway. No, no, no, no. You're signed on for a good while yet, haven't you? I have signed on for a good while, yes. And actually the next phase, phase two as we call it internally. Yeah, this is a big one now. Yeah, it's a big phase. Because if you've already proved the concept to the extent that you can get an investor like Vitruvian excited, then yes, now you've got the really big bit. And it's part of a very large fund, so they have the funding capability to assist along the way. Mikio, I've come to the end of all my questions. Do you think there's something we've missed that we should have talked about that suddenly occurred to you while we were talking?

33:07No, actually, I think it's been a really good chat. Hopefully, I've answered everything that you... No, you have. You've been really good. No, you've been absolutely excellent. So, in any of your needs for me, just thank you. Well, it sounds like, again, this is a fast-moving business. We should probably book in the time at least in a year, year and a half, two years tops, to make sure we check in and see what you've got to. Thank you, Mark. Thank you for having me. Well, I hope you enjoyed today's episode. If you did, don't forget to subscribe or leave a like or a review or recommendation on whatever podcast platform you used to access this programme.

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34:16The Voice of Insurance podcast is produced in association with Advantage Go, enabling enterprise-scale underwriting through a single pane of glass.

34:29Voice of Insurance is produced by me, Mark Gagan. Music was written by Anna Gagan and produced by Carlos Gagan. Check out more podcasts and written comment pieces at www.thevoiceofinsurance.com.