The Evolution of the Indian Digital Broker Market
In recent years, the Indian digital broker market has witnessed the emergence of numerous insurtech startups offering a wide array of products in different permutations and combinations including but not limited to B2B, B2C, and B2B2C. These startups revolve around various themes, each catering to specific market needs and demands:
Marketplace Model
Companies like Policybazaar and Insurancedekho operate under the marketplace model, providing a platform for customers to compare and purchase insurance policies from multiple insurers. This model simplifies the insurance purchasing process for consumers by offering a one-stop shop where they can evaluate different policies, premiums, and benefits before making a decision. The marketplace model leverages technology to aggregate offerings, provide transparency, and enhance customer choice.
Policybazaar, for example, has revolutionized the way Indians purchase insurance by making it easier to understand complex insurance products and by facilitating comparisons among various insurers. This approach has not only increased accessibility but also improved customer trust and satisfaction in the insurance buying process.
Infrastructure Model
Embedded insurance platforms such as Zopper focus on integrating insurance offerings within other services or products, creating a seamless experience for consumers. This model is particularly effective in contexts where insurance can be bundled with other purchases, such as travel bookings or electronics purchases. By embedding insurance into existing customer journeys, these platforms reduce friction and make it more likely that consumers will purchase insurance.
Zopper's strategy involves partnering with companies across various industries to offer insurance as an add-on, thereby expanding its reach and making insurance more accessible to a broader audience. This integration often involves sophisticated technology solutions that ensure the insurance purchase process is quick and straightforward.
Health and Wellness Theme
The health and wellness segment is witnessing significant activity, with players like Plum, Pazcare, and Onsurity offering health and wellness-related insurance solutions. These companies focus on providing comprehensive health insurance and wellness benefits, often targeting corporate clients and their employees. The products in this segment include not just traditional health insurance but also wellness programs, preventive care, and mental health support.
Employee benefits platforms in this segment often gamify the customization of benefits, allowing employees to choose the benefits that best suit their needs while encouraging healthy behaviours through rewards and incentives. This approach not only enhances employee satisfaction but also helps companies manage healthcare costs by promoting preventive care and wellness.
Insurance as a Service
The Insurance as a Service (IaaS) model involves low barriers to entry and encompasses different approaches. Companies in this space are categorized into specific areas, including internal process digitization (solving specific problems like claims or automating customer onboarding), core service digitization (such as risk assessment or underwriting), and full-stack digitization (a few players operating in other markets).
These companies leverage technology to streamline and enhance various aspects of the insurance process. For example, digitizing claims processing can significantly reduce the time and effort required to handle claims, improving customer satisfaction and operational efficiency. Similarly, automated underwriting processes can enhance the accuracy and speed of policy issuance.
Observations from Working with Indian Startups and SMEs
Based on my experience working with Indian startups and SMEs, I have observed the following:
1. Limited Adoption of Property and Casualty Insurance
Most small businesses or SMEs do not purchase property or casualty insurance unless it is bundled with other insurance products. Furthermore, the product options available to them offer very limited customization. This lack of customization means that SMEs often end up with insurance policies that do not fully meet their needs, leaving them either over-insured or under-insured.
2. Need for Customized Solutions
SMEs or startups require customized solutions that cater to their specific business activities and combine various coverages for risks such as Professional Indemnity (PI), Property, Legal Protection, Directors and Officers (D&O), and Cyber. However, these solutions are mainly offered by insurers through a manual process, which is time-consuming and inefficient.
The majority of insurers are not yet equipped with APIs for digital brokers, and their underwriters are not confident in the automatic underwriting of business risks. This results in a fragmented and slow process that does not meet the needs of modern businesses looking for quick and reliable insurance solutions.
3. Challenges in Handling High Volume of Low-Premium Requests
Insurers are struggling to handle a large volume of requests from small businesses seeking low premiums. The traditional methods of underwriting and policy issuance are not scalable to meet the high demand, leading to delays and customer dissatisfaction.
As a result, customers are left with a disjointed journey, a slow and time-consuming onboarding experience, and dissatisfaction with the overall service. This gap between the needs of SMEs and the capabilities of traditional insurers presents a significant opportunity for innovation in the insurtech space.
4. Innovating at Covrzy
At Covrzy, we are reimagining the foundation of business insurance and innovating in the following areas:
a, Increasing Product Customization
We are forging strong partnerships with insurers to develop innovative products that align with both carriers’ risk perspectives and policyholders’ requirements. By working closely with insurers, we can design products that offer the flexibility and customization that SMEs need, ensuring they are adequately covered for their specific risks.
b. Reducing Policy Issuance Time
We are exploring the Bharat stack and how the datasets from these flows can hasten the underwriting process for insurers. By leveraging existing digital infrastructure and datasets, we can streamline the underwriting process, making it faster and more efficient. This not only reduces the time required to issue policies but also enhances the accuracy of risk assessments.
C. Improving Onboarding Efficiency
We are enhancing onboarding efficiency with technology-enabled features such as digital quotes, automated workflows, and self-service and self-care capabilities. These tools make it easier for customers to get quotes, complete the onboarding process, and manage their policies, all through a seamless digital interface.
d. Building a Customer-Centric Claims Experience
We are incorporating predictive analytics within our platform that learns and improves itself with increasing data sets, ultimately reducing turnaround time by minimizing scrutiny during claim payouts. By using advanced analytics, we can predict and identify potential issues before they arise, ensuring a smoother and faster claims process for our customers.
In Conclusion, the Indian digital broker market is evolving rapidly, driven by the emergence of innovative insurtech startups that are redefining how insurance is delivered and experienced. From marketplace models to embedded insurance platforms and health and wellness solutions, these startups are addressing specific market needs and challenges.
Despite the progress, there are still significant gaps in the market, particularly for SMEs and startups that require customized, efficient, and affordable insurance solutions. At Covrzy, we are committed to addressing these gaps through innovation and technology, ensuring that our customers receive the best possible insurance experience.
By focusing on product customization, reducing policy issuance time, improving onboarding efficiency, and building a customer-centric claims experience, we are poised to transform the business insurance landscape in India.
We look forward to continuing our journey of innovation and helping businesses thrive with the right insurance solutions.
Author: Ankit Kamra, Co-founder & CEO, Covrzy.
Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of IIA and IIA does not assume any responsibility or liability for the same.