Accel & SAIF-backed Coverfox, an online insurance portal that sells general insurance products, has understood that the only way to fuel the growth in this sector is by making it extremely transparent to understand and easy to transact. With this built into its solution, the company is all set to touch Rs. 1,000 crore in premium billing by 2019.

When Devendra Rane and Varun Dua started their entrepreneurial journey in 2011 with Glitterbug Technologies, they were building middleware technologies for leading insurance companies. Then, Insurance companies worked with legacy technologies trying to cater to new age online customers. “We noticed that in a world where customers were using advanced interfaces such as Gmail and Facebook, insurance online was still a broken experience,” says Dua. He adds, “We decided to take the challenge head-on and became online insurance brokers with Coverfox Insurance Broking.” The company created middleware and web experiences for users to facilitate online transactions. With e-commerce catching up fast and customers willing to buy complicated electronic gadgets online, the founders believed that if presented well, customers would find it easier to buy insurance online too.

India has primarily been a life insurance market, currently at US $60 billion and growing at 12 per cent every year. General insurance on the other hand is currently a US $11.44 billion market and growing at 17 per cent year on year. “Given that this figure is minuscule compared to the world average in terms of customer base and premiums, there is tremendous potential in the sector that can be achieved in the next few years,” opines Dua.

While the team believes that mature growth in this sector will come when general insurance sector starts growing faster, the only way to fuel it is by making the industry extremely transparent for people to understand and transact, whether it is with respect to premiums or claim settlement.

Creating awareness

India’s insurance penetration is not much when compared to developed nations. “People are not aware of the features they should consider while buying Insurance. They find it hard to arrive at a decision about choosing the right plan because the information is not readily available, or available in long documents full of jargon,” says Dua.

The industry has also come to believe that Insurance is a “push product” and hence, sales are largely call-centre based. “This is a problem for the users who end up on the receiving side of those calls,” points out Dua accurately. Many customers end up buying policies which have been pushed to them without an understanding of the intricacies of the product.

Coverfox.com was incorporated keeping these factors in mind. It is not an Insurance broker using technology but a technology company that happens to be an Insurance broker currently focussed only on car, bike, home, health and travel insurance, which need minimal customer support interaction and are easier to research and buy.

People are not aware of the features they should consider while buying Insurance. They find it hard to arrive at a decision about choosing the right plan because the information is not readily available, or available in long documents full of jargon

The company has around 200 employees, who, Dua shares are a combination of experts in e-commerce, social media and marketing, insurance, technology and user interaction. Every policy feature is looked at from multiple perspectives to arrive at its representation for the user in a way he/she understands it best. The company has an internal policy scoring engine, which goes through over five dozen parameters for each insurance product, taking into account user demographics and giving personalized scores to each product for every user.

The one thing that the company is doing very differently from the other insurance aggregators / brokers is helping its customers with claims. It has a claims cell, which handholds a customer through the claims process and makes everything available at their fingertips.

Regulatory roadblocks

“Insurance is a regulated sector and our plan was to create an e-commerce portal for insurance,” says Dua. Hence, the company had challenges that not just e-commerce players faced, but also those compounded with regulatory clearances from IRDA. For example, the regulation requires a minimum net worth for the applicants, so it had to raise investments with zero business, since it couldn’t have sold without a license. The company overcame these challenges from the prior experience the founders had in running an insurance services setup. “Investors and the regulatory body (IRDA) liked our product-focused approach and the business plan, which helped us mount all these challenges,” says Dua.

Finding angel investors who understood insurance and regulatory norms was also a big challenge. However, the company managed to raised two rounds (Series A&B) of funds to the tune of US $14 million from Accel Partners (India & Global) and SAIF Partners.

Making strong progress
Recently, Coverfox partnered with UBER to provide assistance in insurance policy purchases and facilitate car insurance solutions for Uber’s driver partners as part of the latter’s reward-oriented programme, Uber-CLUB. Explaining the rationale behind this move, Dua says, “Uber has a growing, large pool of cars and they needed assistance in ensuring overall safety for their Uber driver partners. They also wanted to simplify insurance and claims for them. We had the right network in place to help them through this task, thus making this a marriage between equals.” Currently, this service is available across 11 cities – Mumbai, Delhi, Bengaluru, Kolkata, Hyderabad, Pune, Ahmedabad, Chennai, Kochi, Guwahati and Coimbatore, and will soon reach all Uber cities across India.

Path ahead

In the past couple of years, India has moved rapidly towards digitization. While on one hand, a generation of people have grown up with the ease of using e-commerce, Facebook and Google, on the other, there is an entire generation being introduced to the possibility that even insurance could be purchased online. “With digitization, we are already looking at trends where more customers are willing to pay premiums online instead of paying cash to offline agents. People are also getting more receptive to ideas like cashless hospitals and cashless garages, which had always been part of insurance claims services, but weren’t taken that seriously,” says Dua. He continues, “Another big opportunity that digitization is bringing to our disposal is that a lot more auxiliary services are coming online. This opens up avenues for insurance to be bundled up with such services.”

Talking about the company’s future plans, Dua says, “We are the second largest online auto insurance player and aim to be the largest in the next few months.”The company sells about 8,000 to 10,000 policies a month, and is witnessing a steady growth of about 20 per cent month-on-month in sales. Its team now comprises 200 employees, working across backend operations, marketing, technology and finance. The company is on course to book approximately Rs. 200 crore worth of premiums in FY17 and aims to touch Rs. 1,000 crore in premium billing by 2019.

Snapshot

Founders: Devendra Rane and Varun Dua

Year: 2012

Concept: It is an online insurance portal that focuses on car, bike, home, health and travel insurance, which need minimal customer support interaction and is easier to research and buy. 

Investors: Raised two rounds (Series A&B) of funds to the tune of US $14 million from Accel Partners (India & Global) and SAIF Partners.