This Startup Is Streamlining Insurance Distribution And Claim Settlement
Riskcovry's co-founders got together to realize their vision of enhancing insurance penetration through the digitalization of insurance distribution
The onset of COVID-19 in India last year has directly impacted the country's $280 billion insurance sector as more and more people have come forward to purchase life and health insurance. While a handful of large corporations dominates the sector, technology companies seek to disrupt the industry by making the insurance buying and settlement process quick and hassle-free.
According to S&P Global Market Intelligence data, India has the second-largest insurtech market in the Asia-Pacific region, next to China. Its market accounts for 35 per cent of the $3.66 billion of venture capital deployed in the region.
Currently, there are around 335 private insurtech firms operating in the Asia-Pacific with 122 of them disclosing $3.66 billion in aggregate capital raised through private placements.
In the twelve months ending on 31 March 2020, insurance premiums in India came to a total of $107 billion following a five-year compounded annual growth rate (CAGR) of 10 per cent starting in the 2015 financial year to the 2020 financial year.
The S&P report also states, "While big techs are vying to become digital intermediaries in the insurance space, established carriers are building proprietary digital channels. Startups that assist both incumbents and big techs in making this transition will likely emerge as winners."
And this turns out to be true as insuretech startup Riskcovry is definitely succeeding in its attempts.
Riskcovry's four co-founders got together to realize their vision of enhancing insurance penetration through the digitalization of insurance distribution. Each of them brought very specific but complementary skills to the enterprise and this, coupled with their passion, has helped to build the category of building infrastructure for insurance distribution.
Riskcovry founder Sorabh Bhandari in a conversation with Entrepreneur India said, "In this journey, we have carefully selected talent whose goals, energies, and passions carefully match ours to build out the company. Right after we achieved product-market-fit, we were lucky to find a few very supportive early customers who shared our vision of embedding insurance in their core product. On the back of this success came some very supportive investors whose collective goal was to help us scale in the best possible way. Our initial funding rounds helped us build and improve on our platform and the Series A round is helping us to add significant scaling capabilities to expand."
Riskcovry's current enterprise customer base spans banks, fintechs, e-commerce, digital, NBFCs, brokers, BCs, HRTech, healthtech and supply-chain companies, including Future Group's FuturePay App (FGNG), IIFL Insurance, Glance, ZestMoney, etc.
"Our assessment of the market prevailing at the time showed us a clear problem statement. There was a lot of chaos because any company wanting to distribute insurance easily, flexibly, and affordably had to deal with a repertoire of over 500 products from more than 30 insurers, 1,000 individual covers, and 20 different ways to integrate these products. For any business, just getting started with distributing insurance would have meant spending months with a dedicated team working ironing out these problems. Given this level of fragmentation in the market, it was a no-brainer to us that the right infrastructure could solve this important problem," he shared.
Riskcovry's platform is powering the digital insurance distribution of more than 50 companies across 11 industries. From BFSI to e-commerce to offline retail to NGOs, the platform is powering it all.
Bhandari believes that during the last 7 years, most companies in the insurance industry have set up exclusive teams to adopt and implement advanced technologies. Their aim is to improve customer experience, provide easier means of distributing insurance, and assisting underwriters to achieve operational excellence. This tech transformation has already enabled real-time quote generation, policy issuance, comparison with multiple insurers, and quick purchases.
Historically, technology has disrupted multiple industries and brought about maximum possible efficiencies during and after the transformation. The insurance industry is no exception. Technology is changing the way insurers think about business and how consumers think about insurance companies.
Insurtech companies are fortifying business models enabled by various technologies. Data sciences, automation, connected devices, artificial intelligence, and machine learning are helping insurers build holistic policies for consumers. This is true for relatively simple products like motor insurance and also complex products like health insurance.
Many Internet-first insurance platforms are receiving positive customer feedback because of their quick service and mobile-first user-flows. In an age where customer loyalty is no longer a given, companies are scrambling to raise the bar on their products and services to stay relevant to customers.
While insurtech companies are certainly playing a pivotal role in this transformation, customers are the truly disruptive force for the insurance industry. Growing customer awareness and sophistication, and demand for extremely good service, are shaping how insurtech companies are thinking about selling, distributing, and servicing insurance products.
The distribution function in the insurance value chain was the first to be disrupted. While great strides are being taken by insurtech companies in improving distribution, Riskcovry is taking the lead with easy-to-implement APIs that enable multi-channel, multi-carrier, and multi-product distribution capabilities, he stated.
The insurance sector in India is expected to grow to $150 billion by 2023. Customer needs and expectations are evolving rapidly. Each of these changing expectations is an opportunity to combine insurance and technology to create innovative products, services, and delivery channels. The traditional approach of selling protective products will be nowhere near for the insurer of the future. Digital literacy and transformation, coupled with advances in data sciences and an evolving customer, are all contributing to seeing multiple players attempting to ride these emerging opportunities.
Consumers are increasingly getting more conscious of preserving and extending the life of all their assets, their homes, phones, vehicles, and appliances. This 'preservation mindset', along with seamless experiences with insurance companies and their intermediaries, will lead to higher insurance penetration.
"We believe that the next five years will see a significant uptake of full-stack digital insurance models as insurers utilize big data to maximize efficiencies and leverage the Internet to distribute and service insurance cheaply," he further shared.