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Published on: Dec. 8, 2023, 3:12 p.m.
InsuranceDekho looks at high growth
  • Amit and Ankit: ‘We are on a mission to bring insurance to every Indian’

By Ritwik Sinha. Consulting Editor, Business India

As you step out of the lift on the third floor of InsuranceDekho headquarters in Udyog Vihar, Gurugram to meet the top brass, you might find the setting a bit puzzling at first. Right at the main entrance, you’ll see a modest-sized cut-out with a big picture of a hammer and the word ‘Gadar’ written boldly. This seems to be inspired by the poster displays of the recent Bollywood blockbuster starring Sunny Deol. However, as you get closer, you’ll notice a difference. In smaller font, there’s the bold ‘Gadar’ signage followed by two Hindi words, and the complete term reads as – ‘Gadar Macha Do.’ The simple interpretation could be – go for the kill, a clear call from the management to its employees to rev up their efforts. A senior official of the company confirmed that October was being observed as Gadar month (when the company received its Series B funding) and it was a message to further motivate its employees.

The Gadar clarion call also reflects the growing confidence of the company to make a mark in the insuretech space – a domain experiencing significant growth in the post Covid scenario. Reports suggest that the increasing penetration of insurance schemes through technology is a global phenomenon, with particularly brisk growth in densely populated regions such as India, where insurance coverage has traditionally been low.

The company is a promising venture of Jaipur-based serial entrepreneur Amit Jain, also a judge on the popular ‘Shark Tank’ show. He is the man behind the Cardekho group, which has multiple verticals today. “Cardekho Group has built a house of brands where we’ve nurtured and incubated various verticals and entities, each carrying its own potential and opportunities. InsuranceDekho is expanding rapidly and achieving remarkable milestones. It has demonstrated outstanding success, disrupting the Insurtech landscape in India,” says Jain, CEO & co-founder of the group. (Refer to the story published in our February 2022 edition - https://businessindia.co/magazine/cardekho-drives-fast-with-fin-sure).

Independent entity

If the Gadar signage has instilled the expectation of shaking hands with a bunch of aggressive young leaders who are running the show, then their mild demeanour may well surprise. “Two words that come to my mind are gratitude and fulfilment,” says Ankit Agarwal, the CEO and co-founder of InsuranceDekho when he is asked to explain his journey with the firm. Ankit, who hails from a business family in Begusarai, Bihar, holds an MBA from Delhi University and was one of the first employees of Cardekho when he joined in October 2015. Seen as the protégé of Amit Jain, he was later given command of the firm to run as a stand-alone entity. Ask him to explain his equation with Amit Jain, and he does not shy away from plainly stating that it’s more like a guru-shishya relationship.

Incidentally, Ankit, like his mentor Amit, has now also become a judge of ‘Indian Angels’ – a show to support start-ups that is aired on Reliance Jio. Ankit and the other co-founder in the firm, Ish Babbar, who came on the board in 2018, hold equity in single-digit margins in the firm. Ish is a quintessential techie who had earlier worked with companies like Tencent and Yatra.

InsuranceDekho, as officials of the company vouch, was primarily set up to support the CarDekho business. Providing insurance support to the expanding second-hand car business was the main driving force behind having a supplementary unit. “Initially, we were just covering private cars and nothing else. I am talking about 2016-17,” quips Ankit. But the management soon realised that given the expanding insurance ambit in the country, it could be hived off as a separate unit.

Soon, the company was accorded an independent identity status (governed by Girnar Insurance Brokers, a unit of CarDekho Group), which paved the way for the addition of more products in its portfolio. “We have evolved gradually after the management realised that the world is too big for insurance outside of cars. We focused on two-wheelers after cars; commercial vehicle came next; they were followed by health, life, and other segments. We have quite a sizeable portfolio today,” adds Ankit.

  • The Gadar clarion call reflects the growing confidence of the company

    The Gadar clarion call reflects the growing confidence of the company

The company currently claims to have over 480 plans on its platform, comprising Motor (4Ws, 2Ws, CVs, EVs, etc), Health, Life, Investment, Travel, Pet, MSME, Non-motor (fire, shop, D&O, etc). “We see InsuranceDekho’s growth as very promising, aligned with the increasing awareness of insurance and the growing demand for accessible, customised insurance solutions. With a strong presence in over 98 per cent of India’s pin codes and a rapidly expanding network of advisors, we are well-positioned to serve a broad audience. Additionally, we are also actively pursuing strategic partnerships to broaden our reach and make insurance more accessible to a wider audience,” Jain underlines.

“InsuranceDekho.com is the second-largest insurance platform in India behind only PolicyBazaar,” says another official who does not fail to add that in the B2B insuretech segment, Insurance Dekho is the market leader now (in terms of premium collection) while PolicyBazaar continues to dominate the B2C line of businesses, which, of course, is a bigger pie.

 Tapping opportunity

A firm like InsuranceDekho is clearly poised for exponential growth potential in the insurance business, where India continues to be an under-penetrated market by a wide margin. According to a report released by a leading consultancy and research firm earlier this year, overall insurance penetration in the country stood at 4.2 per cent in FY21 (Life at 3.2 per cent and Non-life at 1.0 per cent) against a global average penetration of 7.4 per cent (Non-life dominates with a share of 4.1 per cent).

Despite the low level of insurance penetration, India figures in the list of the top 15 markets globally. As per the report, the insurance market in India stood at Rs9.1 lakh crore (Life and Non-life combined), and there are clear pieces of evidence of commendable high-double-digit growth in the business in the last 2 decades. This growth is primarily believed to have been triggered by the entry of ‘large private bank-backed insurers and significant improvements in distribution and operational capabilities.

And this momentum is expected to continue for a long time, with supporting factors like favourable demographics (55 per cent population in the age group of 20-59), a burgeoning middle class (India is expected to add 140 million middle-income households by 2030), wider adoption of technology, and a supportive regulatory environment.

Among the reasons expected to drive growth in the country’s insurance coverage business in the coming years, the widespread adoption of technology is crucial for ensuring easy access to insurance products for a vast population of potential buyers. This demographic has become increasingly open to the idea of obtaining improved insurance coverage in both Life and Non-life categories. Experts highlight that the recent pandemic has significantly altered perceptions regarding the usefulness of insurance products, including life, health, and others.

“Covid has served as a wake-up call for individuals and families to secure themselves for unforeseen circumstances. There is a noticeable shift towards purchasing life and health insurance products, and this is not solely driven by the previous primary consideration of tax savings,” avers Narendra Ganpule, Partner (Insurance) at KPMG India. This willing group is now swiftly taking action, thanks to the growing popularity of the digital mode (click and buy), which both traditional and technology-specific intermediaries, commonly known as insurtech, fully leverage. According to a recent industry-specific survey, approximately 70 per cent of non-life products are being sold online, and this proportion is expected to further increase in the future.

  • The leadership team

“The traditional method of selling insurance is increasingly being overshadowed. With digital methods, insurance companies and established intermediaries are rapidly reaching out to a massive volume of new customers in Tier-2 and Tier-3 locations,” asserts Kapil Mehta, CEO of SecureNow. The new generation insurtech companies, relying solely on digital methods, typically offer two options: a do-it-yourself tool for end-users (whether B2B or B2C customers) or dedicated apps for distributors nationwide.

These distributor partners, digitally empowered representatives operating in various markets across the country, play a crucial role in attracting customers on a large scale. This emerging ecosystem features key players, starting with PolicyBazaar as the B2C market leader, alongside other well-known names such as Acko, Coverfox, OneAssist, and more.

Positioning & future direction

InsuranceDekho is currently at the forefront of the digital revolution, which is rapidly unfolding. The premium collection figures generated through its system, akin to the gross merchandise value (GMV) that retail firms use to emphasise their size and scale, indicate a significant upward trajectory in recent years. Referring to the premium collection figure, the company has maintained a quantum jump trajectory between FY19 to FY23, witnessing net premium collection growth from just over Rs150 crore to over Rs1,900 crore. Ankit states: “75 per cent of our business comes from motor, with the remaining derived from segments like health, life, fire, marine, etc.”

Regarding premium collection from various sources, 15 per cent of its business originates from Tier 1 locations, while Tier 2 dominates with a 47 per cent share. Tier 3 and beyond contributes 38 per cent to the total premium collection. The company asserts its presence in over 1,400 towns and has served approximately 5.5 million customers.

When seeking an explanation from the top brass about the fundamental structural strength that enables the company to make the most of the emerging exponential insurance opportunities in the marketplace, two key factors emerge from their response: the establishment of a pool of digitally empowered distributors nationwide and the presence of an advanced technology platform. The company primarily operates in a B2B2C mode, offering a dedicated agent channel, similar to LIC, where agent partners utilise the platform to issue policies to customers.

Insurance Dekho currently boasts 1 lakh agent partners on a pan-India basis and aims to double this number in the near future. According to a company statement, partners in non-metro areas are experiencing vibrant business activity and a significant increase in their income since joining forces with InsuranceDekho. Taufiq Ahmad (38), an agent of InsuranceDekho in Gulbarga, Karnataka, shares his experience: “I used to work in call centres and later in a crop insurance firm. In 2019, I became an agent partner with InsuranceDekho. Operating with the assistance of local colleagues, I’ve noticed a significant surge in my income recently. With goods vehicles and health insurance as leading products, our small team is conducting business worth Rs20-25 lakh, and the commission comes to around Rs2 lakh every month.”

Ish Babbar, who is in charge of technology functionalities, states that the company implements an effective training program before onboarding agents to secure the best available talents at the local level to represent it. He explains: “We run a comprehensive training program. Additionally, we have a robust analytics system that allows us to comprehend the selling patterns of newly onboarded agent partners, with a particular focus on identifying any challenges they might be facing. Through the analytical funnel, we can pinpoint these critical issues that are essential to enhancing efficiency in our operations.”

  • The InsuranceDekho team: propelling profit

Following the initially bullish trends of multi-billion-dollar PF funds flowing into Indian start-ups immediately after the pandemic, there has been a reversal in the past year, with a more active examination of profitability propositions. However, insurtech has been an exception, and InsuranceDekho stands out as a prime example.

Earlier this year, the company secured $150 million in Series A funding from notable investors such as Goldman Sachs, TVS Capital, and LeapFrog Investments, marking the largest Insurtech Series A funding in India and South East Asia. Additional funding of $60 million in October, celebrated as Gadar month, followed, with lead participants including Mitsubishi UFJ Financial Group, BNP Paribas Cardif’s insurtech fund managed by Eurazeo, and Beams Fintech Fund.

With ample funds at their disposal, the company is now poised for significant expansion in the near to medium term. Amit Jain states: “We are on track to achieve Rs3,600 crore premium in this financial year, with a substantial 90 per cent coming from Tier II and beyond. We are on a mission to bring insurance to every Indian and be present in six lakh villages in India, and we are excited about the prospects. With the recent funding, we are one step closer to our vision of enhancing insurance penetration across the nation.”

According to Ankit Agarwal, the company will persist in consolidating its current range of offerings for further growth, with no undue emphasis on aligning more with B2C products. This B2C segment constituted a small portion of its premium collection at the end of FY23; approximately Rs50-60 crore out of over Rs1,900 crore.

However, there is an additional operational line in which the company aims to make its debut. Ankit explains: “We are not focused on doing too many things. Right now, what is important for us is to continue to build on our existing base. As an extension, we will get into the reinsurance business. We are in the process of applying for a licence in the coming months.” The mantra for Insurance Dekho in the near to medium term seems to be: make the most of what has been built to ensure the continuation of an unabated high-growth journey.

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