In the Indian insurance sector, Kamesh Goyal has the image of a founder who does not sell frills or hype or big promises. By selling over 20,000 policies since the launch of Digit Insurance late last November, he has lived up to this image. Digit is one of only two online-first insurance companies in India that have the licence to sell insurance policies. It is also the first one to enter the previously unchartered territory of selling innovative insurance products in India.
Consider this: Digit partnered with the online travel company Cleartrip a month ago to test the market for its travel insurance policy. A conventional domestic air travel policy covers rare events like flight delays of six hours and requires the traveller to file a claim that is processed in about a month. Digit’s policy offers claims for more than 75-minute-long delays and has a speedy redressal mechanism that ensures swift settlements. The company automatically detects flight delays, sending an SMS prompting affected policyholders to make their claim. After this, a picture of one’s boarding pass is the extent of the paperwork required. Who wouldn’t want this hassle-free insurance experience?
The product met Digit’s two objectives—it brought more value to customers and it solved a core problem for its partner. This is why Cleartrip has decided to end its partnership with ICICI Lombard General Insurance in favour of a partnership with Digit. It may be beginner’s luck, but, perhaps, it is the smell of potential success that is waiting to be realised in Indian insurtech.
The Insurance Regulatory and Development Authority of India (IRDA) assessed domestic travel insurance at a premium of Rs 24.6 crore ($3.8 million) in FY 2016-17. A former CEO of Bajaj Allianz General Insurance, Goyal believes that if a new insurance product creates more value for the customer, not only is the entire travel insurance sector a potential market, but an added value can also grow the market. Digit is testing this philosophy by partnering with the online marketplace Paytm and jewellery brand Tanishq to insure mobile phones and jewellery, respectively. This, against damage and theft. Digit is gearing to launch motor insurance next week and health insurance in April.
Transactions for flight tickets, cell phones, or jewellery do not have much in common, except that each one of these transactions creates a potential market for new kind of insurance policies. Insurtech investors including SAIF Partners, Accel India and Fairfax, who have invested Rs 191 crore ($30million) and Rs 385 crore ($60.2 million) in Digit, respectively, believe that the sky is the limit. Their belief is based on evidence, and has a name—ZhongAn Online Property and Casualty Insurance.
The Indian insurance sector in general (and newcomers like Acko and Digit in particular) is enamoured by its success. Last year, Apollo Munich Health Insurance-backed Toffee Insurance, financial services company Edelweiss, and Paytm Bank joined the bandwagon by securing licences to introduce newfangled insurance policies in India.