From grocery to e-commerce, global tech giant Amazon has managed to grab a strong market share in every sector. And, this time the e-commerce major has made a big foray into Indian Insurance sector by investing USD 12 million in Indian startup Acko. This is Amazon‘s first investment in the Indian Insurtech market. Founded in 2016 by Coverfox Co-founder Varun Dua, Acko provides innovative products with personalized pricing based on customer behavior and data analytics. The latest infusion takes Acko’s total equity funding to nearly USD 42 Mn, having raised one of the largest seed rounds for a start-up in India.
Ashish Dhawan, Veteran Investor and Founder of leading private equity fund ChrysCapital, also participated in this round along with existing investor, Catamaran Ventures owned by Infosys co-founder NR Narayana Murthy.
In an exclusive chat with Entrepreneur India, Dua gave us an inside look at the company's plans for expanding further in India.
Two Keys to Customer Acquisition:
“We have had a good first two rounds of funding and have a good mix of tech investors and insurance investors backing us. Over the next two years, we aim to acquire more customers driven by two key levers – offering differentiated products like motor and health insurance products to customers where the end to end experience from purchase to claims are designed for delivering a superior digital experience. Second, partnering with internet ecosystem players to offer relevant, contextual products to customers with personalized pricing using data and analytics,” said Dua
Through both these factors, Dua’s intent is to make Acko a brand that people identify with innovation, superior customer experience, and service. “This investment is a validation of Acko’s strategy to innovate ever more for tomorrow's financial needs of users,” he added.
Why Investors Made a Big Bet on Acko?
Finding a right investor is the most difficult task which every entrepreneur faces. However, Acko got lucky to have found investors like Amazon and ChrysCap.
Earlier this year, Amazon had invested INR 144 crore in digital lending company Capital Float. Commenting on the investment, Amit Agarwal, SVP and Country Manager, Amazon India, said “Acko is a young and nimble start-up bringing technology and data-led innovation to the insurance sector to deliver a better insurance experience for customers. We are excited to back companies that are focused on using technology for enhanced customer experience and are led by missionary founders and management teams. And, we look forward to being a part of their growth journey.”
Furthermore, Investor Dhawan also shared his excitement for being a part of Acko family. He believes in Varun and his team's vision for a new age of insurance in India.
“The insurance industry is ripe for innovation as data and technology embed themselves in the ecosystem. Acko has a unique opportunity to not only make traditional insurance products more accessible to Indians but also create new categories and significantly improve the customer experience,” said Dhawan.
Last year, there was too much news buzzing around the insurance industry as multiple public-sector undertakings (PSUs) and private companies, such as HDFC Standard Life Insurance, New India Assurance, ICICI Lombard General Insurance along SBI Life and General Insurance Corporation issued Initial Public Offerings (IPOs) to list themselves at the stock market. The move clearly indicated that the industry means serious business.
The insurance industry, which is presently pegged at USD 60billion, is expected to grow four folds in the next 10 year period. With technology-driven innovation kicking in, sooner or later, this growth will be driven by a major industry disruption and the customer will be the final winner in this game. In a recent report, Deloitte listed five exponential trends that will drive this disruption in the industry:
Conversational Chatbots
Chatbots have been around the block for quite some time and all of us have been witness to its ups and downs. But soon with advances in cognitive technologies, Deloitte says, it will be possible to provide increasingly accurate and relevant automated dialogues.
Take the example of speech recognition software, which has made noted developments in reducing word error rates. Similarly, deep learning techniques have helped in machine translation.
“Improvements in speech and language processing technologies are making chatbots more capable, expanding their potential applications across the enterprise,” the report added.
Wearables
Wearable technology is the new trend in the market and all thanks to the Internet of Things (IoT). In fact, as per IDC Asia, India's wearable market was up by 42% in the second quarter of 2016 — over 567,000 units of wearables were sold.
During a previous interaction with Entrepreneur India, Mohit Rochlani, Director (Operations & and IT) of IndiaFirst Life Insurance said IoT can be used more in the general insurance segment wherein Fitbit or any related device can be used to track the customer’s health and offer better rates.
Similarly, the report shares an example of Bajaj Allianz. The company recently launched DriveSmart device, which allows customers use pay-as-you-drive motor insurance policy and the product supported by telematics technology.
On-demand Insurance
The gap between covering everything every time and precisely the risks faced at a certain moment called for a new product called on-demand insurance, the report shares. The product is driven either by need or an event.
One of the first players in the Indian on-demand insurance space is Fingoole. This insurtech provides travel-related covers such as missed flight, delay of checked-in luggage, bounced hotel booking, credit/debit card and personal accident during the trip.
Sharing Economy
Sharing economy as a concept has disrupted various sectors like transportation (carpool services) and B2B real-estate through co-working spaces. The concept is now all set to create a stir in the insurance industry and the new model is globally known as P2P insurance.
The report notes that the new insurance companies in the fast-growing P2P segment are using crowdsourcing and social networking to create a shared insurance experience, but one needs to wait and watch whether P2P insurance will work for the Indian market.
Internationally, some of the startups working in this space are Germany-based Friendsurance, France-based InsPeer, London, UK-based Guevara and New-York based Lemonade.
Blockchain
Chances are that you must read enough about blockchain and its potential uses. For those of you who are new to technology, blockchain is digital distributed ledger that can help companies detect frauds, save time and manpower, maintain e-records, etc.
Smart contracts powered by a Blockchain could provide customers and insurers with means to manage claims in a transparent, responsive and irrefutable manner, the report added. However, for blockchain to work, the community needs to partner and work together on a platform.
According to a Business Standard report, thirteen Indian insurance companies, which include HDFC Life, India First, IDBI Federal Life Insurance are creating a central repository of policyholder data, so that insurers need not repeat the registration procedure for multiple policies.
Robotic Process Automation
Traditional cost reduction mediums are not enough in today world and that’s when computer-coded, rule based software that are known to automate manual activities rule-based tasks come to the companies rescue
One of the common use case has been around accounting close, which is a rules-based process, conducted across multiple locations often requiring multiple handoffs, Deloitte pointed out.
Gone are the days when the insurance industry struggled to find customers even though the agents were going from door-to-door with bundles of files. Today, Insurtech has insured the progress of the industry with paperless transactions and better reach to Tier II and Tier III cities.
With the increasing influence of technology, insurance industry has seen a surge in the number of start-ups coming up in the segment.
Entrepreneur India caught up with Anuj Mathur, Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited as he spoke about how the insurance industry is poised to grow over the coming years and what are the next big things to watch out for in Insurtech.
Increasing Awareness for Life Insurance
The insurance industry has witnessed a decent growth in recent past and presently, is at a very promising juncture. Mathur explains that with a substantial flow of household savings into the financial savings, a good chunk flows into Insurance products.
According to reports, the industry is estimated to grow 15-20% in the next 3-5 years and Mathur believes that the growth would essentially come from the Tier 2 & 3 cities (apart from the Tier 1 cities) as the awareness towards this critical product line is increasing. “The introduction of Point of Sales products will boost the life insurance penetration. The Industry will have to work jointly in ensuring that the Life Insurance solutions are made available to all segments of the population. Increasing awareness of Life Insurance and customizing solutions for the need is what the Industry will have to work for,” said Mathur.
Leveraging the Agility of Start-ups for Newer Technologies
The rapid pace of technological advancement in each sector is creating newer opportunities. It is important to embrace newer technology which not only brings efficiency but also improves the customer experience manifold believes Mathur. At Canara HSBC Oriental Bank of Commerce Life Insurance, they too are adapting to new emerging technologies. “We are using mobility to handle the geographical challenges and are working towards being available to our customers and distributors through all digital channels. We are looking at creating an automated solution which covers all phases of a customer lifecycle from prospecting to onboarding to Service,” he said.
In the insurance sector, there are many start-ups that are also acting as marketplaces for insurance policies or even roboadvisory firms that are helping users take an informed decision. Talking about working with start-ups, he said, “They bring with them a lot of agility and also willingness to explore newer technologies and concepts. However, the challenge lies in its integration with the larger systems in the ecosystem.”
Big Data and Cloud Computing to be Big in Insurtech
The Industry has already initiated various steps to build and strengthen the digital infrastructure at an enterprise level to capitalize on the opportunity presented. According to Mathur, self-service through digital platforms, engaging customers through the life cycle for enhanced loyalty are areas that will see significant development over the next 2-3 years. “Big data analytics, cloud computing and mobility are other areas which will see big investment and movement in the next few years,” he said.
One Million Customers by 2020
With a strong presence in the Tier - 2 and Tier 3 cities, Mathur said that the product needed in these cities are different than that of metros. The combination of the right products with their vast distribution network will help them penetrate deeper in the country. “We have launched a Point of Sale (POS) product in the regional rural bank of Canara which offers the convenience of over the counter product that not only offers life cover but also returns all premiums paid upon the survival of the term,” he said.
They have the vision to have one million customers by 2020 and with a 9-year experience in the bancassurance space; they believe they can reach out to these customers. “The next wave of our growth will also ride on the Digital platform which addresses needs of a specific segment which prefers to deal in a non-physical manner and has a huge potential,” he said.
Ashish Dhawan, Veteran Investor and Founder of leading private equity fund ChrysCapital, also participated in this round along with existing investor, Catamaran Ventures owned by Infosys co-founder NR Narayana Murthy.
In an exclusive chat with Entrepreneur India, Dua gave us an inside look at the company's plans for expanding further in India.
Two Keys to Customer Acquisition:
“We have had a good first two rounds of funding and have a good mix of tech investors and insurance investors backing us. Over the next two years, we aim to acquire more customers driven by two key levers – offering differentiated products like motor and health insurance products to customers where the end to end experience from purchase to claims are designed for delivering a superior digital experience. Second, partnering with internet ecosystem players to offer relevant, contextual products to customers with personalized pricing using data and analytics,” said Dua
Through both these factors, Dua’s intent is to make Acko a brand that people identify with innovation, superior customer experience, and service. “This investment is a validation of Acko’s strategy to innovate ever more for tomorrow's financial needs of users,” he added.
Why Investors Made a Big Bet on Acko?
Finding a right investor is the most difficult task which every entrepreneur faces. However, Acko got lucky to have found investors like Amazon and ChrysCap.
Earlier this year, Amazon had invested INR 144 crore in digital lending company Capital Float. Commenting on the investment, Amit Agarwal, SVP and Country Manager, Amazon India, said “Acko is a young and nimble start-up bringing technology and data-led innovation to the insurance sector to deliver a better insurance experience for customers. We are excited to back companies that are focused on using technology for enhanced customer experience and are led by missionary founders and management teams. And, we look forward to being a part of their growth journey.”
Furthermore, Investor Dhawan also shared his excitement for being a part of Acko family. He believes in Varun and his team's vision for a new age of insurance in India.
“The insurance industry is ripe for innovation as data and technology embed themselves in the ecosystem. Acko has a unique opportunity to not only make traditional insurance products more accessible to Indians but also create new categories and significantly improve the customer experience,” said Dhawan.
Last year, there was too much news buzzing around the insurance industry as multiple public-sector undertakings (PSUs) and private companies, such as HDFC Standard Life Insurance, New India Assurance, ICICI Lombard General Insurance along SBI Life and General Insurance Corporation issued Initial Public Offerings (IPOs) to list themselves at the stock market. The move clearly indicated that the industry means serious business.
The insurance industry, which is presently pegged at USD 60billion, is expected to grow four folds in the next 10 year period. With technology-driven innovation kicking in, sooner or later, this growth will be driven by a major industry disruption and the customer will be the final winner in this game. In a recent report, Deloitte listed five exponential trends that will drive this disruption in the industry:
Conversational Chatbots
Chatbots have been around the block for quite some time and all of us have been witness to its ups and downs. But soon with advances in cognitive technologies, Deloitte says, it will be possible to provide increasingly accurate and relevant automated dialogues.
Take the example of speech recognition software, which has made noted developments in reducing word error rates. Similarly, deep learning techniques have helped in machine translation.
“Improvements in speech and language processing technologies are making chatbots more capable, expanding their potential applications across the enterprise,” the report added.
Wearables
Wearable technology is the new trend in the market and all thanks to the Internet of Things (IoT). In fact, as per IDC Asia, India's wearable market was up by 42% in the second quarter of 2016 — over 567,000 units of wearables were sold.
During a previous interaction with Entrepreneur India, Mohit Rochlani, Director (Operations & and IT) of IndiaFirst Life Insurance said IoT can be used more in the general insurance segment wherein Fitbit or any related device can be used to track the customer’s health and offer better rates.
Similarly, the report shares an example of Bajaj Allianz. The company recently launched DriveSmart device, which allows customers use pay-as-you-drive motor insurance policy and the product supported by telematics technology.
On-demand Insurance
The gap between covering everything every time and precisely the risks faced at a certain moment called for a new product called on-demand insurance, the report shares. The product is driven either by need or an event.
One of the first players in the Indian on-demand insurance space is Fingoole. This insurtech provides travel-related covers such as missed flight, delay of checked-in luggage, bounced hotel booking, credit/debit card and personal accident during the trip.
Sharing Economy
Sharing economy as a concept has disrupted various sectors like transportation (carpool services) and B2B real-estate through co-working spaces. The concept is now all set to create a stir in the insurance industry and the new model is globally known as P2P insurance.
The report notes that the new insurance companies in the fast-growing P2P segment are using crowdsourcing and social networking to create a shared insurance experience, but one needs to wait and watch whether P2P insurance will work for the Indian market.
Internationally, some of the startups working in this space are Germany-based Friendsurance, France-based InsPeer, London, UK-based Guevara and New-York based Lemonade.
Blockchain
Chances are that you must read enough about blockchain and its potential uses. For those of you who are new to technology, blockchain is digital distributed ledger that can help companies detect frauds, save time and manpower, maintain e-records, etc.
Smart contracts powered by a Blockchain could provide customers and insurers with means to manage claims in a transparent, responsive and irrefutable manner, the report added. However, for blockchain to work, the community needs to partner and work together on a platform.
According to a Business Standard report, thirteen Indian insurance companies, which include HDFC Life, India First, IDBI Federal Life Insurance are creating a central repository of policyholder data, so that insurers need not repeat the registration procedure for multiple policies.
Robotic Process Automation
Traditional cost reduction mediums are not enough in today world and that’s when computer-coded, rule based software that are known to automate manual activities rule-based tasks come to the companies rescue
One of the common use case has been around accounting close, which is a rules-based process, conducted across multiple locations often requiring multiple handoffs, Deloitte pointed out.
Gone are the days when the insurance industry struggled to find customers even though the agents were going from door-to-door with bundles of files. Today, Insurtech has insured the progress of the industry with paperless transactions and better reach to Tier II and Tier III cities.
With the increasing influence of technology, insurance industry has seen a surge in the number of start-ups coming up in the segment.
Entrepreneur India caught up with Anuj Mathur, Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited as he spoke about how the insurance industry is poised to grow over the coming years and what are the next big things to watch out for in Insurtech.
Increasing Awareness for Life Insurance
The insurance industry has witnessed a decent growth in recent past and presently, is at a very promising juncture. Mathur explains that with a substantial flow of household savings into the financial savings, a good chunk flows into Insurance products.
According to reports, the industry is estimated to grow 15-20% in the next 3-5 years and Mathur believes that the growth would essentially come from the Tier 2 & 3 cities (apart from the Tier 1 cities) as the awareness towards this critical product line is increasing. “The introduction of Point of Sales products will boost the life insurance penetration. The Industry will have to work jointly in ensuring that the Life Insurance solutions are made available to all segments of the population. Increasing awareness of Life Insurance and customizing solutions for the need is what the Industry will have to work for,” said Mathur.
Leveraging the Agility of Start-ups for Newer Technologies
The rapid pace of technological advancement in each sector is creating newer opportunities. It is important to embrace newer technology which not only brings efficiency but also improves the customer experience manifold believes Mathur. At Canara HSBC Oriental Bank of Commerce Life Insurance, they too are adapting to new emerging technologies. “We are using mobility to handle the geographical challenges and are working towards being available to our customers and distributors through all digital channels. We are looking at creating an automated solution which covers all phases of a customer lifecycle from prospecting to onboarding to Service,” he said.
In the insurance sector, there are many start-ups that are also acting as marketplaces for insurance policies or even roboadvisory firms that are helping users take an informed decision. Talking about working with start-ups, he said, “They bring with them a lot of agility and also willingness to explore newer technologies and concepts. However, the challenge lies in its integration with the larger systems in the ecosystem.”
Big Data and Cloud Computing to be Big in Insurtech
The Industry has already initiated various steps to build and strengthen the digital infrastructure at an enterprise level to capitalize on the opportunity presented. According to Mathur, self-service through digital platforms, engaging customers through the life cycle for enhanced loyalty are areas that will see significant development over the next 2-3 years. “Big data analytics, cloud computing and mobility are other areas which will see big investment and movement in the next few years,” he said.
One Million Customers by 2020
With a strong presence in the Tier - 2 and Tier 3 cities, Mathur said that the product needed in these cities are different than that of metros. The combination of the right products with their vast distribution network will help them penetrate deeper in the country. “We have launched a Point of Sale (POS) product in the regional rural bank of Canara which offers the convenience of over the counter product that not only offers life cover but also returns all premiums paid upon the survival of the term,” he said.
They have the vision to have one million customers by 2020 and with a 9-year experience in the bancassurance space; they believe they can reach out to these customers. “The next wave of our growth will also ride on the Digital platform which addresses needs of a specific segment which prefers to deal in a non-physical manner and has a huge potential,” he said.
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