How do you introduce a notoriously conservative industry, like insurance, to AI? Arjun’s answer: building trust by prioritizing long-term wins over short-term gains.
Arjun Mangla, co-founder and CEO of Fulcrum, joins Joanne and Jaya to talk about building the AI-powered future of commercial insurance. Businesses spend close to $2T on insurance every year, yet the work behind it is still done by hand by a small group of professionals. Fulcrum aims to bring the industry into the modern age.
In co-founding Fulcrum, Arjun was inspired by an idea he learned from his entrepreneurial father: that it’s worth the pain and the effort to create something completely new. He discusses how that ambition shapes what Fulcrum chooses to build, and what it passes on. With AI making so many customer problems easier to solve, he has to resist letting the loudest request dictate the product roadmap. Some automation tools could bring in revenue today but become redundant as AI improves over the next few years.
Arjun also talks candidly about how insurance earned its reputation for being slow to adopt technology due to years of overhyped tools that didn't deliver and left the industry burned. In the future, Arjun imagines insurance systems will be connected directly to a business's core systems, so that adding new vehicles to a fleet or selling a building updates coverage automatically. Brokers will focus on relationships and advice, not on paperwork.
He closes with lessons learned about leading a team. He shares what it means to create a culture of "extreme ownership" while scaling from five people to forty in a few months, and how having fun is a core part of his leadership values.
What we covered:
0:00 – Cold open: Arjun on the hidden rigor of insurance and the pain tolerance behind building a company
0:56 – Introductions
1:08 – What Fulcrum does and why a $2T "commodity" market is still so inefficient
3:01 – Arjun’s journey from McKinsey to building the "Ferrari of insurance"
3:39 – What Arjun learned from his entrepreneurial father
8:09 – How AI changes insurance
10:04 – How Fulcrum grew fast in a traditionally conservative industry
13:47 – Building something that lasts beyond workflow automation
16:49 – The future of insurance: automating placement and ongoing coverage maintenance
22:01 – The founder failure Arjun is most afraid of repeating
26:35 – Arjun’s core values as a leader
27:01 – Fulcrum’s company culture: extreme ownership and having fun while scaling
Read the transcript:
Arjun: What a lot of people do not realize is how analytically rigorous insurance really is. Doing it really well is one of the hardest but most important intellectual pursuits. It's a massive, massive problem. Trillions of dollars spent. In the last 10-15 years, there have been so many false starts on technology that was supposed to be game changing for insurance but never really actually worked out for them. There have been a few things that are so core to insurance that have been extremely wrong but just could not be changed until now. With AI, we actually have the opportunity to make that systemic change. There is excitement and glory in withstanding an immense amount of pain to create some sort of lasting change in the world. The company is a vehicle to basically help us achieve that mission.
Joanne: We're here today with Arjun Mangla, co-founder and CEO of Fulcrum. Arjun, thanks for joining us. I would love to start with an introduction of Fulcrum and yourself. What does Fulcrum do?
Arjun: Fulcrum is building the AI-powered future of the insurance industry. Insurance really allows businesses to do audacious things. So you have all your $500 billion worth of iPhones going across stormy seas from China to the US, and Apple does not have to worry about them capsizing in the North Sea just because there's insurance coverage. Businesses really get to park away this concern of risk and not have their operations be paralyzed by concerns around them because insurance exists.
Now, because it's so widespread and such a rational decision for any business, in a lot of cases even mandated by the government, there's close to $2T of insurance bought by businesses every single year. The interesting thing, though, is that even though there's so much capital flowing through, and there are companies that spend literally over a billion dollars on insurance every single year, and so much focus and volume of capital going in, it still is very, very inherently inefficient.
Even though it is a commodity product, it does not really operate like a commodity product in the market. You would expect the market to be perfectly competitive with very, very rational, low-margin products, but it doesn't really get to exist that way because the market making is still done manually by hand by a small group of professionals who are very, very overwhelmed with the amount of work that they do.
And so, we at Fulcrum are basically working to make this universe of insurance a lot more efficient and a lot more competitive than it is right now, which is inherently inefficient and causing all of these problems with imperfect competition.
Jaya: You know, we obviously met in COVID working at McKinsey. And so how did you go from McKinsey to building the Ferrari of insurance?
Arjun: My co-founder Sambhav and I were just always very bright-eyed about being able to find something that is really impactful, that we can create, that wouldn't have existed had we not existed. We got the privilege of being born in a generation where we can go after this massive systemic change that we can bring about, that we're very excited about.
And so now the company is a vehicle to basically help us achieve that mission
Jaya: You know, besides the fact that at McKinsey, there's a lot of stuff you have to unlearn, including making fundraising slides that look like McKinsey, or any slide deck that looks like McKinsey.
But is there stuff you took away from McKinsey, like, "Hey, I learned..."? And it might not be from McKinsey, but from earlier times in life, places that gave you inspiration to be a founder, and lessons you've taken from past careers or life experiences?
Arjun: At the core of it really is my family. I grew up with the experience of my dad building his company. It's literally… I'm actually the second child. The first child was the company, then me, then my younger brother. So, the company was started basically two years before I was born. So we actually, all three of us grew up together.
And in us growing up together, my brother Ishan and I got to hear a lot about all the meandering ups and downs of building a company, except with one small detail that was different: our dad was always very excited about the challenging things happening. It was like, "Oh my God, I'm going to get to solve this new problem," right? "Let's see what this problem has," right? And sort of taking us on those journeys with him for every subsequent problem.
And I think at the core of it, if I really think about articulating what that instilled, it's very directly what I get the privilege to feel every single day now. Because this is a very, very different kind of business compared to that. And much more high velocity, which is very, very exciting. But I think at the core of it, there's this weird idea that there is excitement and glory in withstanding an immense amount of pain to achieve something amazing in the world and to create some sort of lasting change in the world.
And that is the overall driving factor, the thought in the back of my mind every single day. It informs downstream a lot of different core principles by which we're working to build the company. The first core thing is, if you just assume that you are fine to withstand any kind of pain or go through any kind of extreme amount of work to get to your outcome, you get to decouple two pretty important things.
One, what must happen and what must not happen, and then very separately, as a second step, how exactly we're gonna bring that to life. A lot of times it becomes really tough to untangle those two things. And I think that's where it becomes challenging to even fathom the possibility of achieving things that might seem pretty seismic or impossible at first.
But if you can effectively untangle those, and you can bring about this intellectual honesty on that being the most important thing to do, you can make it happen. And to be honest, once you decide what must happen and what must not happen, it's always, at least at the early stages in my experience as a first-time founder, a couple of logical clicks away from something existential. So if this happens, then we have the ability to create this generational company because we would be making this massive leap. The next question you have to ask is, "Okay, can we make it happen?"
And I think Sambhav and I are so aggressive that we can never say no to that answer. We're always like, "Obviously. If anyone can make it happen, we can." One of the things you learn as a founder is how to not just have that mindset and exercise it day to day, as you go through the ups and downs.
But what we're learning as the company is scaling at a weirdly fast pace is how to have that be understood and instilled in a larger culture when you're not just two, four, five people. But you go in three, four months from 5 people to 40 people.
Jaya: Man, I couldn't stop looking at Joanne during that because that's her favorite topic, pain tolerance. You could see her smiling from like two miles away. But over to you, Joanne.
Joanne: I'm curious why you guys decided to work on problems in insurance, and how solving some of the bottlenecks, some of the problems that you're describing in insurance, is going to change this industry?
Arjun: It really sort of goes back to that same thing of what's something really meaningful and impactful that we could create that wouldn't have existed had we not existed? When we realized that we were so excited about building something really impactful with technology, it really was about finding something that is a massive and hard problem to solve.
We wanted to make sure that it's massive because we wanted it to be worthwhile. We wanted it to be hard because then there's less likelihood that there's an amazing solution that would have existed had we not existed. And the insurance industry actually gives us the opportunity to harness both.
It's a massive, massive problem. Trillions of dollars spent. We can't even fathom what that looks like. And it's also insanely complicated and hard because everything in the world is insured. SpaceX space stations, I don't know, Amazon's fleet of trucks, Tesla's manufacturing plants, they all look so wildly different. And so anything that is codifying the risk for that looks wildly different and varied as well. Because if you really think about it, there's a version of the world that exists, and insurance is trying to model out what can happen with each and every asset that exists in this world.
Basically across all of these probabilities, and then trying to price the risk on it. Because it's so complicated and varied, there really has been nothing in the world that could capture that complexity properly in order to effectively solve this problem. But now with AI, we actually have the opportunity to make that systemic change.
Jaya: When most people think of insurance, they think of an extremely conservative, old-school industry, which, to be fair, it is. You guys have obviously grown super, super quickly. Why is it that you've had that success in a market that is so traditionally conservative?
Arjun: I think that insurance is not very tech-savvy, not because of people in insurance but, controversially, I guess, because of people in technology. In the last 10-15 years, there have been so many false starts on technology that was supposed to be game changing for insurance but never really actually worked out for them, that they developed this inherent skepticism of technology. They didn't really get to exercise the muscle of ingesting new technology. And so just like any muscle that we have, right, it got rusty and went out of practice and got a little bit fossilized. But it's incumbent upon us as technology change makers to then go and correct the wrongs of the past of other technology change makers. And actually show that value.
Because at the end of the day, the same core goal is really this mutually aligned principle of having things be a lot more efficient, doing a lot less manual work. And really going towards the same sort of capitalistic principle of core improvement and winning in the business.
Every single insurance brokerage wants to win. They don't want to not win. The only thing that was different before is that they could not believe that technology could help them win. Now, with the 10X improvements that we're able to bring thanks to this massive technological transformation. People are turning their heads. We've gone through a few phases, in fact, right, in bringing about this change. Phase number one was really this, "Oh, this looks like a great demo. Can it actually solve my problem?" And then we kind of got over that and went to the complete other extreme of, "Okay, shit, this stuff actually works," right? "Is it going to replace me?" To then get to this sort of third phase that we are right now in, which is, "Okay, if I use this really, really well, this can actually make me distinguished in my job.”
And I think that now that this sort of realization is commonplace across the industry, the aggression is there because now it feels like it's obviously the right answer, if that makes sense. They're still very, very, I would say, mindful of things being actually impactful. Because they're having to switch their mindset on what counts as technology cost versus labor cost. What's really transformational is that people are thinking about this in the camp of people budgets, not technology budgets. And so they're still very mindful and still a really, really hard customer to please. But if you are able to do that, they want all of it, if that makes sense.
Joanne: Was there anything surprising about the customers that you think most people don't know about insurance, or you didn't know about coming in?
Arjun: Yeah, I think what a lot of people do not realize is how analytically rigorous insurance really is, and how doing it really well is one of the hardest but most important intellectual pursuits.
Jaya: What does the future state look like for your company? And what does the future state look like for all these application companies? Are you just gonna automate a bunch of workflows and then, you know, the next few models come and we're gonna call it a day? How is Fulcrum uniquely positioned to do something, you know, hopefully greater than automating some workflows?
Arjun: Yeah. So I would say that one of the core principles that we have here at Fulcrum is this idea of intellectual honesty: what is something that can systematically become right that could not be right about the world before as a result of AI, not just stuff that can be an immediate dopamine hit right now? The world is going through aggressive improvement unlike ever seen before in AI.
I think every single week, every single month, there's new releases which push the frontier further away, and then one or two months after that, what was the frontier before all of a sudden becomes a commoditized offering that is being cost-competed down. But if you really think about what that means down the line, if we are just thinking about automating workflows today, off of the current base that you're operating off of, it's going to feel phenomenal.
You might be spending, let's say, $10M, $20M on some process today. And getting that down by, let's say, 5X is gonna feel pretty great. But let's say that three years down the line or five years down the line, there's a new leader, new decision maker that comes in there. For them, that $1M, $2M, $5M cost of AI is the new base. And for them to really prove themselves or have an improvement, they would be thinking about how they can have a 10X improvement in that.
So in the insurance world, I think the luxury that we have is that there have been a few things that are so core to insurance that have been extremely wrong. But just could not be changed till now, that now finally can. And a little bit of this is similar to what I was describing earlier, which is that in insurance, you have $2T of capital flowing. But it's flowing through this very, very frustrating manual pipeline. And as a result of that, unlike other commodities, which are extremely price transparent, low margin, low cost, high quality, with a really, really high bar for performance for all players, you're not really able to have that world for insurance today.
What we believe is that with AI, you can actually change that, where the market making of insurance looks fundamentally different. The one core thing that can change about a commodity that can be impactful, which is the distribution, will permanently change. And that is the problem that we are after solving.
Joanne: So if you fast-forward to this world where you have removed a lot of the bottlenecks, you've eliminated a bunch of the manual labor. And Fulcrum is doing the heavy lifting, what does that look like at that point?
Arjun: I think that in a world where we are able to get a bunch of these bottlenecks out, right, there will be some core changes that will happen in just how insurance is transacted and maintained, and then there will be resulting second-order, third-order unlocks as a result of that. So if you really think about it today, at the core of it, a big part of the quote-unquote distribution problem for insurance can be broken into two parts.
One is the initial placement of insurance. Which is, can I go and find the right coverage for my customer or the right coverage for this business. And then the second is maintenance of coverage. Because if you really think about it, your insurance is living and breathing because the business that it's trying to predict and structure and protect is living and breathing. Those businesses are making all kinds of decisions every single day. They're buying five more trucks, or they're divesting a building, or they're acquiring a new business, or they're shutting down a different business unit. So on and so forth. And it's sort of this keeping-up kind of motion that insurance coverage is trying to do to make sure that the business is protected whenever it's doing any of those things.
You can visualize it as a kid that's trying to balance themselves, and all behind is just trying to predict where it could potentially fall and provide protection. And today, there's a bunch of core challenges which stop this from being able to be done perfectly in real time. And they're all manual work oriented. So for example, in terms of placement of coverage, we spoke about how it's not really able to be as competitive as it could be, and how there's a lot of low-hanging fruit on the manual work there. We can envision a future world where the rails actually become a lot more automated, such that even people, for example, sitting in brokerages are mostly just focused on the relationship and the advisory.
And a lot of that translation of business requirements to insurance coverage, to the marketing happening with carriers, to the results coming back, to the choice of optimal coverage, is happening with a system that this person is monitoring and QC-ing and adding an advisory layer on top of.
In terms of the second piece of it, which is also really manual, which is maintenance of insurance coverage. Today, if you wanna add five more trucks, there's basically a business that's sending a brokerage an email, and they are then crafting a change request in some standard forms, and then going out to an insurance carrier and then following up 50,000 times to really see if they're able to get a response.
But a lot of that maintenance of coverage can also become a lot more automated because a lot of those communication loops can become a lot more automated. If you really think about it, if we're able to have these things happen lightning fast, then in a future world you could have things happen a lot more continuously, and you might in fact question a lot of assumptions that we just think of as permanent today.
For example, most of insurance coverage today for businesses is annual. There's a renewal every 12 months. Why is that? Especially when assets that are being insured are there for decades, like buildings last for decades, or cars last for five to 10 years at least, and so on.
And then there's also other constructs, like, for example, changes to coverage, where if you are getting, let's say, additional couple of assets added to your insurance coverage, it's just assumed that you would go back to the same carrier and get an endorsement. Meaning, get a change request to get that added. A lot of these things are the case because there's so much manual work required, and otherwise they wouldn't be. You can't be renewing insurance coverage a lot more frequently than that, for example. And you can't be going out to market to do a full marketing exercise for each and every vehicle.
And so if we are able to make this efficient, there's a bunch of second-order, third-order implications. For example, you could envision a future world where your insurance systems are connected to all the core systems within a business, and as these changes are happening, your insurance and dollars and cents are getting automatically transacted for a lot of it, for example. Today, that would be a nightmare for brokerages to have to do. But in a future world where you have a lot more automation, that kind of future becomes not just possible, but probably the inherent way that insurance is transacted.
Jaya: I think few people know the academic side of you. Within the few free minutes of the day you get, whether it's in the gym or walking from one meeting to the other, you'll be listening to some podcast about founder stories and all those things. And so I'm curious, whether it's through podcasts or however other ways you consume information in this noisy world, what great founder's failure are you most afraid of repeating?
Arjun: To be honest, a lot of stories that I've heard and that resonated, and a lot of anecdotes that I've been told by other founders that I respect, they all actually just come down to this idea of intellectual honesty and extreme rational thought. Oftentimes there's so many different distracting factors that come in that can confuse you and make you take paths that otherwise are not really optimal. But if you are able to be intellectually honest to an extreme extent, then you can make sure that you avoid some of these common pitfalls.
And this sort of idea of intellectual honesty really comes down to, for example, what are some long-term decisions that you should make, but you might be forsaking because there's some short-term local maxima that you are basically solving for? Or when you have a bunch of people who might be disagreeing with you on some approach. Because it is, let's say, socially not really feeling like the most acceptable or the nicest thing to do. But what ought to be done even in those scenarios is really, really important, that might not help you become someone's favorite person right now, but maybe over time, as the results of that bear fruit, that would end up being true.
And so I think there's this sort of idea that, no matter the perception outside, and no matter the weird adverse incentives, for example, even in business, of short-term wins versus long-term sustained impact, are you able to be intellectually honest in how things should be. And so I think there's a few of these things where you have to make these decisions that might not be popular at times. But are really, really important for the spirit of the company and for the people who are involved. I think that's one big part of it.
Jaya: Yeah, well said. Recently Joanne and I did an analysis for our offsite, and I think the traits you're mentioning were some of the top traits found in all founders.
Arjun: Yeah, I think there's several different examples of this. I think in today's world with AI as well. There's trade-offs that you can make because all of a sudden you can have a 10X improvement across an insane number of problems the way that you could never have before.
And so, every single person that you would speak to is going to talk to you about a problem that you can solve that would be a 10X improvement for them. But of course, you cannot solve every single problem under the sun in one go, and you need to have some inherent prioritization. It's really sort of up to you to make some of those hard trade-offs that really advance your company towards your vision rather than solving for some of these local maxima. And there's a lot of smaller automation problems that you can solve for in today's world that would be amazing for today. But if you start thinking about what things will look like a year from now, two years from now, five years from now, it feels like those solutions would be absolutely redundant.
And so do you go after that short-term burst of revenue, or do you go after building what you feel is a much longer-term payoff, but more sustained impact for how you feel this industry should be structured. These are some of the kinds of trade-offs that I often see founders, sometimes including ourselves, get confused by. But they are really, really important decisions to get right in order to build the kind of company that you want to.
Joanne: As a leader, what are some of the most important values that you have as you guide the company?
Arjun: We have two core jobs on a day-to-day basis. One is to build an exceptional product that gives our customers a 10X improvement over their world today, and the second is to make sure that they have an absolutely exceptional customer experience dealing with us.
Joanne: How about internally?
Arjun: There are two things that we really emphasize and pride ourselves on. One is this idea of absolutely extreme ownership. Sambhav and I are very clear that we're building a company that isn't two founders and the rest of the company. We're building a company where we have a bunch of different people who are owners in their own right, of their own pillar, of their own function, and they're the last line of defense and the tallest pole in the tent for that specific function.
But the second part is we also have to have a lot of fun while doing it, because otherwise, what's the point? You can't wake up every day thinking about one fine day when you would have completely solved the problem and built the company that way. You have to have intrinsic excitement to go to work every day and work with the amazing people on your team and have fun with them.
And so those are two things that we really, really emphasize a lot at Fulcrum and try to embody to the best of our abilities. I will say that some ways of having fun as the company is scaling become a little bit tough. One small example is, okay, everyone every Friday going for a happy hour to a restaurant is now not really possible. So some of these things become tough to scale. But in whatever way, making sure that we have that as an intrinsic part of what we do on a day-to-day basis.
Joanne: We can't wait to come to the next happy hour, Arjun. Thank you so much for joining us today.
Arjun: Awesome.