Microinsurance and Macro Change: How Democrance Impacts People’s Lives in MENA and Asia

July 12, 2019

Another great startup, and another incredible story of change. Meet Democrance, an insurance technology company with the mission to make insurance accessible for the low-income population in MENA and Asia. We interviewed Michele Grosso, Co-Founder and CEO of Democrance to discover how the business is doing right now, what the company’s ambitions and plans for the future are, and what it takes to disrupt a traditional industry such as insurance.

In the past, you worked for a couple of insurance giants in different countries, and at one moment, you decided to start your own business. What triggered you to start Democrance?

I have always been very interested in and passionate about microinsurance, as I saw how powerful it might be in transforming people’s lives among the low-income population. Before Democrance, I tried to launch microinsurance programs within larger companies in different countries, but when I realized that the traditional insurance sector did not have the infrastructure to be disrupted, I decided to create my own company to fill this gap in the market and enable insurance companies to reach further.

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At the beginning, what was most difficult for you as the founder and CEO?

In the beginning, it was challenging to find the right balance between market needs and product market fit. I didn't even realize that Democrance would become a technology company. But in the process, this is what Democrance became: an InsurTech company helping businesses to extend their reach through our SaaS platform. Our platform automates and digitalizes insurance process on the backend. So, some of the largest insurance companies with different product lines, e.g. Life, Health and Property&Casualty insurance, started to see our platform as an opportunity to digitize their traditional business. They use it to lower the cost of sales and their service in general - regardless of which product they sell. As a result, serving low income populations is an important goal for us, but not the only thing our business partners look to us for.

What are the pros and cons of working in purpose-driven companies like Democrance? How do you attract the brightest talent to work in the company?

Our main office is based in Dubai, which in itself is an attractive location. With a presence in eight markets in the Middle East and one market in Asia, half of our team is distributed around the globe, which, for a start-up, makes us quite unusual. We are 20 people of different nationalities with diverse professional backgrounds: PhD in programming, consultants who worked in insurance, telecom, entrepreneurs and engineers who run their own initiatives. What attracts most of our people to Democrance is the freedom to innovate, experiment and work in a truly purpose driven company. We are quick, agile, and do not have to burden our staff with excessive processes and bureaucracy.

Aside from the excitement of having the freedom to create and build something, the biggest draw for our talent is the opportunity to work at a company that makes a real, tangible difference in society- I like to think of it as Democrance's superpower.

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If you were not allowed to talk about your impact in numbers, how would you describe your company results?

While I am not at liberty to disclose our financials, I am really proud of how our small team managed to expand to nine markets in the Middle East and South Asia (Cambodia). We work with some of the largest insurance companies in the world, and we take care of a large volume of personal insurance products across the region, including microinsurance. We have a solid presence in the UAE, Oman and many more emerging markets such as Egypt and Lebanon.

In March, Democrance expanded to Cambodia, its first country in Southeast Asia. Why Cambodia? What differences in the entrepreneurial ecosystems in Asia and MENA can you see?

One of the strategies we used was a partnership with Cellcard, the largest mobile operator in the country and another health and life insurance company, CamLife. We worked with the mobile operator to provide insurance to their customers. Cambodia has a very high mobile penetration, so people can efficiently utilize their gadgets to purchase, use or claim for insurance.

The CamLife’s proposition fit the target population that we wanted to serve exceptionally well- the micro- and micro life/health insurance segment that costs from 0.5-1.5 USD per month. I think South Asia has more telco-driven insurance solutions while in the Middle East and North Africa,this is still a new model. So, on the one hand, we found the right partners, and on the other, the market was favourable and easy to work in. Now, after we launched the business in Cambodia, we are looking to use this experience as a proof of concept and launch pad into the rest of Asia.

The most prominent VCs invested in your startup along the way, including Seedstars. What makes your business attractive for investors, and why do they trust you?

If you look at all insurance technology players, InsurTech is an industry that was born in the West. It’s still quite new in emerging markets, and when we started, we were the first player in the UAE. Because developing markets grows twice as fast as developed ones, there are many opportunities out here for insurers to tap into, but traditional InsurTech businesses were not tapping into them: if you look at other insurance technology startups, they focus more on improving the customer experience for already existing insurance customers. By contrast, the core of our mission is to make insurance accessible and affordable to insured and uninsured populations alike: we are here to make it possible for insurance companies to access a new segment of the population.

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How do you envision the future of global InsurTech? What trends prevail right now and how does Democrance shape those trends in the region?

As I mentioned above, the industry is growing very fast, but the majority of insurance companies focus only on the top of the pyramid. We do the opposite. Our most significant success is when our insurance client realizes the benefits and starts using our platform to offer microinsurance.

For example, one of our customers, when we started working with them, was not interested in microinsurance at all, but after two years with us, the company added its products to our platform. That’s a success for us, that is what we are very proud of.

You not only provide insurance to low-income people but also take many insurance companies on board and invite them to join you in creating impact!

Yes, exactly. We realized that it is not something that we can do in a very regulated industry like insurance. It would be impossible for a small team of 20 people to change such a traditional industry. What we can do is work with companies and show them how our platform can help their traditional insurance business make it more relevant for a wider range of customers. We prove that they can not only digitize their front- and back-office operations, reduce distribution and policy administration cost, but also help low-income groups and make a change.

When you think about Democrance’s future, what do you see? What are your plans for the future?

I think that startups like Democrance need to focus on values and mission. For us, the purpose remains unchanged, and it is to make insurance accessible and affordable to those who need it the most. We plan to expand and grow in more countries in MENA and South Asia in partnership with new and existing clients.