Insurance penetration in India is ~3.7% compared to a global average of ~7.2%, making India one of the least insurance-penetrated markets globally. The vast majority of India’s population still lacks access to basic insurance coverage, forcing them to rely on borrowings to tide over health emergencies, accidents, property damage, crop failure and other such risks which could be covered through insurance.
One of the main reasons for low insurance penetration in India is that insurance products and customer journeys are complex and impersonal, and traditional insurance distribution channels are high-cost and difficult to scale. ~80% of retail insurance in India is sold by intermediaries such as agents and brokers through traditional push-based channels. Customers often lack awareness of insurance products and find it difficult to assess their insurance needs, while their trust in the insurance providers and intermediaries also remains low.
Embedded Insurance – A Game Changer
Innovative InsurTech companies are finding ways to bring consumer-centric insurance products to mass-market customers in India. ‘Embedded Insurance’ is emerging as a promising distribution innovation, with the likes of Ola, Amazon and MakeMyTrip bundling contextual insurance products within their core purchase journeys. Riskcovry is taking this broader approach to the next level by developing an end-to-end digital insurance infrastructure platform that can enable businesses across sectors – from business correspondents to lenders to agri businesses to content platforms – to easily offer their customers a variety of insurance products, standardized as well as tailored.
Embedded Insurance could play a powerful role in creating new channels for insurance distribution, in partnership with businesses that cater to underserved customer segments, including the Next Half Billion and MSMEs. Every enterprise with a large distribution footprint (offline) or an engaged user base (online) has the potential to embed relevant insurance products based on their knowledge of their customers’ needs. The needs of these users are varied. A few examples/use cases are outlined below:
- An affordable housing finance company could offer protection products for hospitalisation, loss of income or property damage along with a mortgage
- A retailer could bundle equipment protection products along with the sale of electronic equipment
- An agri company could distribute crop protection or cattle insurance along with its core offerings.
- A real estate broker could offer homeowners’ or renters’ insurance products along with its brokerage services.
Offering these contextual solutions would help these businesses build deeper customer engagement and loyalty by solving for real unmet protection needs for their customers while earning an additional revenue stream. This would also make the customer’s purchase journey a whole lot simpler and smoother, by embedding the insurance purchase flow within the flow of their normal interaction with the enterprise’s platform, while enabling low-cost, scalable and efficient distribution of products underwritten by insurers. A total win-win-win for the customer, the enterprise, and the insurer alike!
However, selling insurance is just as complex (or perhaps even more so) as buying insurance. There are 50+ insurers in India and hundreds of products, which means that there are thousands of permutations and combinations possible if one were to evaluate the entire market. Processes and regulations are highly complex and opaque. And not every enterprise has the wherewithal to invest in building technology, teams, processes or licenses required to build insurance distribution which is not core to its business.
With its ‘insurance-in-a-box’ solution, Riskcovry is building the enabling digital rails to make ‘embedded insurance’ a possibility for every enterprise in India. Riskcovry has built a large network of integrations with insurers and offers them as open APIs. An enterprise partner, be it a lender, a fintech, a content platform or an agri-tech company can seamlessly plug into these integrations and offer relevant and regulatorily compliant insurance products to their customers to meet their protection needs. By integrating with existing platforms, Riskcovry is taking a new approach to customer acquisition, which has been the biggest challenge for most insurers.
The company’s “API-first” infrastructure approach enables faster go-to-market for Riskcovry’s distribution partners, enabled by its flexible plug-and-play technology modules. These modules are specifically designed to allow rapid iteration of insurance products, across multiple distribution channels, to ascertain “channel-product fit”. Riskcovry’s partners are able to offer insurance products to their customers within a couple of weeks thanks to their direct integrations with insurers. This is in contrast to a 6-12 month cycle typically, combined with significant investments in technology and team bandwidth if these enterprises choose to integrate directly with insurers. For end consumers, the result is greater access, cheaper premiums through contextual products, tailored customer experience and easy claims filing.
Apart from improving insurance reach by enabling embedded insurance for a whole new set of enterprises, we believe Riskcovry will also help build a more efficient, data-driven, and innovative insurance ecosystem in India by powering digitization across the insurance value chain. Today many Indian insurers continue to work with legacy processes and technology infrastructure. Several function largely via outdated systems and manual processes with high distribution costs, long and complex purchasing cycles, difficult claims processes, and low digital product innovation. As a result, products (and pricing) are largely standardised for top-quartile customers and are rarely suited for underserved customer segments. We believe that opening up digital distribution as an important channel will serve as an impetus for accelerated technology adoption and innovation amongst these insurers. This will enable data-driven underwriting and pricing, customised products to meet the needs of underserved customer segments, and a smoother purchase and claim experience for customers.
We are thrilled to partner with Suvendu, Sorabh, Chiranth, Vidya, Asif, and the entire team as they pursue their bold vision to make insurance as ubiquitous as digital payments in India. We expect Riskcovry to leverage its network of demand and supply-side partners to play a key role in India’s insurance adoption and evolution.