We Want To Make Insurance Transparent And Simple For Consumers: Varun Dua
Varun, what led you to move on from Coverfox and establish ACKO? What unique need gap does ACKO aim to fill and in what segment?
I worked for 5 years in financial services - ROI based marketing prior to starting my entrepreneurial journey in 2009. For the next 5 years, I started my own business deploying great technology and operations to the Insurance business. I also co-founded 2 firms - Coverfox and now Acko General Insurance, which have brought in good technology and practices to the Insurance Industry in India.
India has 17% of the world's population, however our life + non-life insurance premium accounts for less than 1.5% of the world's. Multiple issues exist in the current insurance lifecycle for customers including -
1. Largely paper based offline process right from buying to claims
2. Complexity of product with ambiguous terms and conditions
3. Standard pricing (not factoring individual risk profiles)
4. Lack of new products / innovation
These factors have suppressed the potential and growth of GI in India.
The other interesting trend is the pace at which digital transformation is happening in India. The Government of India's increased emphasis on digitization through initiatives like 'Digital India' and demonetization has led to an unprecedented growth of internet users. In addition to that, customer experience is being redefined by technology and ecommerce companies. Customers are no longer willing to wait for 3 days to know the status of a transaction.
The intersection of these two trends led to the idea of developing a platform that would help people buy insurance for themselves with the click of few buttons.
With Acko we want to make insurance transparent and simple for consumers and minimize their dependency on others for advice or filling forms. Customers should be able to access low prices in one click based on their risk profile and be confident that at a press of a button - their claim will get paid in the fastest possible time. We intend to offer products that are contextual to the customer with personalised pricing.
Your website says you can help clients get motor insurance instantly, even for expired policies. How does your process circumvent the standard underwriting function in such cases?
We understand that few customers miss the deadline of renewing their motor insurance policy. For these customers, there is a window of renewal that we offer post policy expiry where the customer can get his policy without a car review. We have a simple process of car review that is done before issuing the policy that is within 2 hours at customer's doorstep. The car review can be scheduled at customer's convenience. It's a completely digital process in which our associate would click the photos of the car which would be approved real time by our assessment team and the customer can make payment.
Are you going to focus mainly on vehicle insurance for now? If yes - do you not find the low margins, commoditization, and price sensitivity to be serious challenges to scalability and (eventual) unit level profitability?
Our first focus area is auto insurance. There are plenty of opportunities to differentiate on pricing and service. The buying journey that's available today leaves a lot to be desired since they have not been designed for digital. We would be improving the purchase journey by making it convenient and seamless. We are offering a 3 day claims promise where we also facilitate pick up and drop of vehicle from customers' doorstep. Claims experience is a moment of truth for the customer as he is emotionally and functionally hassled by the incident and the unavailability of his car for his commute. So it's important for us to serve the customer well at his time of need.
Auto insurance is almost 40-50% of the overall general insurance market. From a scale perspective it's a large opportunity and with the right delivery model and the proposition, we can serve a large customer base better.
What kind of interest levels have you received in the "mobile insurance" segment? How do you control portfolio quality on that product? Which general insurer have you tied up with for that product?
Mobile phone (and smartphone) penetration in particular has increased in the last few years. People are more attached to their phones and find it difficult to manage without one. So, any damage to the phone leaves customers in a lot of hassle. Our mobile insurance product will offer a better service experience where we get the phone repaired at the earliest TAT since we own the end to end process and do not rely on third party insurer for claims processing. Given our customer experience promise, the interest levels have been high and we are working on a launch. Quality of portfolio can be managed by ensuring that the right channels and customers are offered the product. When the product gets sold at the time of purchase, the quality of portfolio is likely to be better since customers buying a new phone also get insurance for the phone which will ensure we cover a new phone without damages.
We are a licensed general insurer. Hence, we can offer the product independently.
Is ACKO going to deal in Health Insurance as well? What are your plans on that front?
Health insurance is underpenetrated in India and is also a growing need as cost of medical expenses is on the rise. So we are definitely thinking about a differentiated health insurance offering. However, we are still in very early stages and are working on defining our product and experience here.
How many policies are you averaging on a monthly basis, and with what sort of premium volume?
We have just started offering auto insurance products on our platform and we are also getting our product approvals in phases from the regulator. So it's early days for us. In the next 2-3 months, we will be stepping up on our marketing efforts to take it to the customers.
Which insurer(s) have you partnered with at the back end, and what has driven your choice in this regard? Have these insurers white labelled their products for ACKO?
We have a general insurance license and hence can independently design and offer products to customers.
What's the "Ola Insurance" product listed on your site? How does that work?
Ola has partnered with Acko General Insurance Ltd and has launched a comprehensive in-trip insurance program for its customers across India. The optional in-trip insurance program can be purchased through the Ola app. Commuters can opt for an in-trip insurance cover at a premium of Re 1 per ride for intra-city travel and the facility would be available to all users, including cabs, auto, kaali-peeli and e-rickshaws. This program provides benefits in cases of loss of baggage or laptops, missed flights, accidental medical expense, ambulance transportation cover, and much more. The claims can be made through the Ola app as well as Acko's website, mobile app and, call center. With this, we can improve the experience of customers taking an Ola ride and ensure some of their key pain points are addressed.
