Click, Click, to insure against a stolen phone, a cab accident or even a runner’s knee injury. Snap, snap to claim it when things do go wrong.

Digital insurer Acko’s chief executive Varun Dua sold this vision to the investors to raise $30 million in May this year. It mustn’t have been hard for him. Fintech has shown promise, insurtech must not lag behind. Because when insurance and tech come together, two things happen. Simplicity for customers, unlike the pile of pages that only an insurance agent can decode for her; value creation that a millennial can foresee, unlike preparing for death, accident or a major surgery. And that is just the tip of the iceberg. The base of its appeal lies in cheaper products, speed in claim resolution, and collection of data. Or so Dua would have you believe.

That’s revolutionary. But why are CEOs of over two dozen general insurance companies not losing their sleep as Dua’s ‘digital only’ insurtech venture inches toward a Diwali launch in October?

Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life Insurance, in The Changing Face of Indian Insurance report published in March, gave the answer: “One often-asked question is whether digital will make the existing distribution channels redundant? I, for one, believe in the contrary.” Chaudhry argued that an agent, who is supported by a ‘digital virtual assistant’ is likely to be more successful in the Indian market.

And it is Dua’s belief in digital-only approach through the entire chain of insurance—creating products, selling them and resolving claims—which makes the conventional insurer doubt him as a disruptive threat. It is also this belief that makes Dua even more confident now, after his experience in selling policies at Coverfox, an online aggregator of policies.

“They (insurance policies) were not innovative enough. As a broker, I realized that the products were being made for agents and then transferred online,” says Dua. If everything is built for offline and then transferred online, he argues, it can hardly disrupt. “Now I get the freedom to try innovation in pricing and servicing of a product, which I could not earlier.”

Failure may be the stepping stone to success, but Acko’s founder, Dua, carries the baggage from the past. Most people do not seek out a way to prepare for the rainy day. “Insurance agents have earned their place by selling policies and anyway cheap data has blurred the divide between a conventional and digital insurer,” says the CEO of an Indian insurance major, who doesn’t want to be named.

A digital-only insurance business has potential, no doubt about it. The general insurance industry in India underwrote premium of Rs 96,379 crore in 2015-16, showing 13.81% growth from the previous year according to the Insurance Regulatory Development Authority.


Ruhi Kandhari

Ruhi writes on the impact of healthcare policies, trends in the healthcare sector and developments on the implementation of Electronic Health Records in India. She has an M. Sc. in Development Studies from the London School of Economics.

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