The insurance industry in India has long been one riddled with piles of files, buried under mistrust from people about insurance products. However, with the advent of insurtech and the growing acceptance of digitization, things are changing.
Insurtech has brought out a different side of insurance, making it an easier or quicker process for people to choose from the variety of products online.
Working on the same is the insurtech startup Coverfox. Recently, the startup secured USD 22 Million in a Series C funding led by IFC, Transamerica and existing investors - SAIF Partners, Accel and NR Narayana Murthy’s private investment arm - Catamaran Ventures. Entrepreneur India spoke to Devendra Rane, co-founder, Coverfox about how they got the World Bank’s IFC interested in their product and how they plan to revolutionize insurance in India.
Fintech a Hot Sector, Insurtech the Current Favourite
With the growing interest and buzz around Fintech, Rane believes that all investors have their eyes on fintech products. Coverfox helps bring transparency, simplicity, and ease to the process of buying and managing insurance in India. Using its proprietary technology and algorithm-based platform, users can compare and choose from a range of plans across top insurance companies, understand key features and buy policies instantly and safely.
But how did they get the World Bank’s attention? “We have taken our technology and packaged it into a mobile platform. World Bank’s IFC saw potential in the product because we are also creating a social impact with the product. They had a dual objective – how much will the product impact people and the team behind,” he said.
They are now looking at reaching out to the Tier II and Tier III cities in India. For long, agents in these cities have not preferred to sell bike insurance (although it sells in these cities), not because they don't want to but because it used to take too long to fill out the forms and the commission is less. "Now, they are looking forward to selling bike insurances too as with digital intervention, the entire process takes just about 4 minutes," said Rane.
Rane explained that they are trying to change the way insurance is disrupted. “Thirty per cent of agents applying to be a part of our platform are women, this way we are giving a boost to women entrepreneurs,” he said.
Challenges They Faced
A few years ago, insurance was not a widely accepted concept mainly because of the lack of awareness around the subject. Rane said that four years ago, when they entered the industry, the existing players didn’t focus on technology and the sector was driven by sales. Insurance needed human intervention and thus, the reach was lower. Even the people who did opt for insurance didn’t know the right questions to ask. “That’s when we realized that we need to make insurance simple and easy for people.We pushed the product to give you the right options and help you choose better,” he said.
Earlier to be an insurance distributor one required a net worth of INR 1 cr and a government licence. This was another hurdle that they had to cross – to get the required capital. “We were rejected by everyone because they didn’t understand insurance. That’s when we started approaching people from the insurance industry. Quite a few veterans backed us up,” said Rane.
With their Series A and B rounds led by marquee investors like SAIF Partners, Accel and NR Narayana Murthy’s private investment arm - Catamaran Ventures, they became a brand.
The Future of Insurtech
Fintech has gone through numerous changes over the years. With the drive to be a cashless economy, people are becoming more and more aware about their financial needs as well as how to secure themselves. Millennials don’t want to interact with people and instead want to get their work done by the tap of a button on their phone and that is what Coverfox is facilitating.
“Banking has become easier and financial awareness even amongst the youth has increased. There’s a lot of interest around insurance. We are already selling 50,000 policies a month and that number is only going to increase,” he said.
However, Rane also added that in most countries that insurance is a major part of their GDP, but for India it only accounts to less than one per cent. “Taken in the right direction, insurance can add a lot more value to our economy,” he said.