Richard Hartley, CEO & Co-Founder of Cytora talks all things underwriting productivity post-COVID in this InsureTech Connect Presentation. Learn which interventions you can begin utilising to drive productivity-led growth, how COVID-19 has impacted productivity, and what you can do to turnaround this trend.

Transcript

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[Music]

0:10

hello i’m richard ceo of sartorium

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i’m going to talk about how commercial

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insurers can drive growth

0:18

in a post-covered world by focusing on

0:20

underwriting productivity historically

0:22

commercial insurers have have strived

0:26

yet struggled to break the relationship

0:28

between their premium growth

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and their expense base

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and

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typically we’ve seen commercial insurers

0:37

growing in in situations where their

0:40

their expense grave growth has has

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increased at the same rate as their

0:45

premium

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or at the same time struggling to grow

0:49

in situations where

0:51

their their expenses are remaining the

0:53

same

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and there’s been three main reasons for

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this as we moved on to the second slide

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number one underwriters spend a lot of

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time focusing on on manual

1:05

manual tasks quite low value tasks and

1:08

many of these are manual data lookups

1:11

where per submission android is spending

1:13

a lot of time going to 10

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plus different websites and gathering

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information that relates to the risk

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purely to find out whether that risk is

1:22

in appetite or outside episode

1:24

secondly underwriters um

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receive a lot of submissions from their

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broker partners which are outside of

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appetite and in our experience at cytora

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this can be as many as 30 to 40 percent

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of the total submissions they receive

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every single day

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and lastly

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underwriters aren’t helped by um

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by their prioritization they don’t

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generally have an intelligent way to

1:48

guide their focus and to allow them to

1:50

focus their time on the highest value

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submissions which drive most value to

1:55

the commercial insurance company

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and in aggregate these three areas these

2:00

free

2:01

points of capacity leakage in an

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underwriting team contribute to a

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material loss of premium over time where

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underwriting teams could write much more

2:11

premium

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and quite radically shift the balance

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between their cost base and their

2:16

premium but they don’t bind it because

2:19

of all the impediments they have to

2:20

productivity in the team and and the

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onset of covid19 has has actually

2:26

worsened this and amplified this problem

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which means um it’s becoming

2:31

underwriting productivity it’s becoming

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a renewed and increasing focus for

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mid-market commercial underwriting teams

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and this has been really driven by by

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two main areas on the one hand

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underwriting teams face more uncertainty

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there’s more macroeconomic uncertainty

2:48

in the world which means constraints are

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now in place in terms of the capacity

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teams actually have and even some

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insurance companies have put a hiring

2:57

freeze which means

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underwriters have to do more with less

3:01

and secondly and alongside that brokers

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are sending underwriters now more

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submissions so per day underwriters

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receiving a higher volume of submissions

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and a starker difference in value across

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that array of different submissions

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which means the prioritization problem

3:19

that they’re faced with have become more

3:20

acute and more stark

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underwriters now have to do more

3:25

with the same resources and because of

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the increase in competitive intensity

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they have to respond and turn around

3:32

submissions faster to their broker

3:34

partners in order to convert that

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business i’m now going to move on

3:38

and and talk about free interventions

3:40

insurers can do today to drive

3:43

productivity-led growth

3:44

and the exciting thing about this is

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these free interventions are achievable

3:49

today

3:50

and can have measurable benefits very

3:53

early on post-deployment the first

3:55

intervention that mid-market insurers

3:58

can make is really ensuring underwriters

4:00

don’t waste time on low value activities

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in our experience underwriters can spend

4:07

around 30 minutes per submission

4:10

doing

4:11

10 plus manual lookups of information

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going to 10 different websites and

4:16

gathering information that relates to

4:18

the property to the company

4:20

to the flood the fire the windstorm and

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the subsidence risk also checking all of

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the financial activities of the of the

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company

4:29

and this contributes to a a huge amount

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of time being spent

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on on quite manual and low value

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activities

4:38

today it’s possible to auto augment and

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pre-populate this risk information

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before the underwriter even looks at the

4:46

submission

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and this can materially speed up

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the the capacity of the underwriting

4:51

team

4:53

the second area of value

4:55

is um addressing the problem that

4:57

underwriters face where they have to

4:58

look at many out of appetite submissions

5:01

um which don’t which don’t match the the

5:04

criteria of of the insurance company

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and this can be up to 30 to 40 percent

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of all the submissions

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our underwriters receive on a daily

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basis from their brokers

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it’s now possible to automatically

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filter out the submissions that are

5:20

outside appetite

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allowing the underwriters to purely

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focus their time on appetite-aligned

5:25

submissions that do match your risk

5:28

appetite and do meet the value criteria

5:30

that they’re seeking in combination

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both these activities can free up around

5:35

25 of the capacity of of an underwriting

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team allowing them to drive much more

5:41

value and much more premium per

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underwriter the second major

5:46

intervention uh insurance companies can

5:48

make

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is intelligently guiding underwriters to

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the highest value submissions

5:55

now underwriters receive a multitude of

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submissions every single day

6:00

and there’s a big difference between

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the high value submissions which have

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you know a large amount of premium

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associated with them they’re profitable

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they have a good retention rate all the

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way through to the low value submissions

6:14

which doesn’t really make sense for

6:17

underwriters to spend their time on

6:19

today underwriters generally work on a

6:21

first in first out basis which means

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they address their submissions in

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chronological order

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using machine learning it’s now possible

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to rank the submissions in order of

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value

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allowing underwriters to focus on the

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highest value submissions

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first

6:40

to increase the turnaround time so to

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actually shorten the turnaround time of

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those submissions to brokers

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allowing them to then convert more of

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those submissions and there’s a

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well-established

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very strong correlation between the

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turnaround time

6:58

and the chance of conversion and that’s

7:00

that’s really where where underwriters

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can achieve a lot of value today

7:05

it’s also possible to intelligently

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nudge underwriters to follow up on the

7:09

highest value submissions to drive a

7:12

further increase in conversion so after

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the underwriter has quoted the risk

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nudging the undirected to follow up on

7:19

the risk to the broker to really convert

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the highest value ones

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and in combination

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these two activities of the intelligent

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prioritization

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and and the nudges can drive a 20

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increase in growth written premium per

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underwriter and this is really really

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exciting and and a very concrete

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innovation as possible today to achieve

7:42

in in the mid market underwriting

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process

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so we’ve talked about increasing the

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capacity of an underwriting team by

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augmenting automatically the risk

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information associated with submissions

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and we’ve also talked about the

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intelligent prioritization of

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submissions according to value

8:01

the third major

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intervention underwriters can make

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is really ensuring they’re focused on

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the right submissions to capture the

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market opportunity

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and this is really closing the gap

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between

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the macro

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underwriting objectives

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and the frontline day-to-day

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underwriting execution ensuring the

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objectives are translated

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as purely and rapidly as possible

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through to what underwriters spend their

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time doing

8:32

the two failure modes we see today where

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underwriters struggle and the objectives

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and the execution aren’t synchronized is

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where underwriters spend time on areas

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which don’t truly reflect the business

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plan objectives

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or areas where the business objectives

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are known but they translate very slowly

8:54

and inefficiently through to the

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frontline underwriting activities

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today it’s possible for a chief

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underwriting officer to achieve real cut

9:02

real-time control

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over what risks are bound

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and also to exert and adapt control over

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the appetite within within the the the

9:12

period in which the underwriting has

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happened to make dynamic changes and

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really exert more intelligent control

9:19

over the formation of the portfolio

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through time at cytora we call this

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real-time control over the book

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and it really narrows the distance

9:28

between the portfolio objectives and the

9:31

frontline underwriting execution

9:34

in conclusion

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it’s possible in in mid-market today to

9:39

drive sustained productivity-led growth

9:42

with the free interventions we’ve talked

9:44

about

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and the value of this to the insurance

9:47

company

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is to really break the closely coupled

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relationship between

9:53

premium growth and cost

9:56

allowing the insurance company to drive

9:59

additional premium at the same expense

10:01

base

10:02

with these three interventions

10:05

insurance company can increase the

10:07

capacity

10:09

in the underwriting team

10:10

allowing them to write more more

10:13

submissions and more policies

10:15

at the same at the same resource

10:18

secondly to drive

10:20

a better ratio and improved ratio by 20

10:23

of growth written premium

10:26

to uh individual underwriters allowing

10:28

each underwriter to expand their book of

10:30

business to process more submissions and

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ultimately buy more policies

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and lastly to achieve much more of a

10:39

real-time

10:40

closely synchronized relationship

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between

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the high-level portfolio objectives and

10:46

and the frontline underwriting execution

10:48

allowing them to adapt

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as quickly as possible to emerging

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opportunities to emerging market

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opportunities and capture the best

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opportunities ahead of the market thank

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you very much for listening today i

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think this is a truly exciting time for

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for commercial insurers to take

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advantage of the new world we’re in uh

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please get in touch with with me at

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saitoro to find out more and i look

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forward to

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engaging further on this topic thank you

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very much

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[Music]

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