InsurTech in India – Marketplaces foray into insurance

Author
Rahul Mathur

Rahul is the Startup lead at Accenture’s FinTech Innovation Lab in London. Prior to joining Accenture, he was an Insurance Product Manager at Laka Insurance, a London headquartered early stage InsurTech start-up which recently won at the British Insurance Awards 2019.  Rahul holds a master’s degree in Statistics from the University of Warwick. He is an Ambassador at the Asia InsurTech podcast.

E-commerce marketplaces Amazon & Flipkart and motor marketplaces CarDekho & Droom and what to expect

Flipkart‘s entry into life insurance, in partnership with Aegon Life, signals that e-commerce (& motor) marketplaces might be the next growth opportunity for InsurTech in India.

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Amazon has already forayed into insurance with its investment into Acko and with AmazonPay which will begin insurance distribution shortly (corporate agency licence).

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Whilst e-commerce attracts attention, motor marketplaces will be focusing on insurance too: CarDekho launched InsuranceDekho (already at break-even) under Ankit‘s leadership; they’re an early mover

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Why are marketplaces looking at insurance?

“Economies of scope” – increasing margin on acquired customers §E.g. CarDekho offering motor insurance could increase CLTV (customer lifetime value) by 5%-10% via initial & renewals insurance commission.

Vertical integration – control over CX (Customer Experience) §E.g. Flipkart offering mobile insurance allows them to handle FNOL for their partner carrier – perhaps, an opportunity to delight the customer for future up-sell?

Ability to exercise better fraud controls – unlike insurance co’s which typically rely on 3rd party data regarding time & condition of sales & repair (some) marketplaces have 1st party access to such data §e.g. Flipkart knows more about the phone & Droom knows more about the used cars than their partner insurance co’s

What to expect next? – NBFC licence spree

(Used) car marketplaces are moving further up the vehicle purchase value chain to capture margin on the same CAC (“economies of scope”)

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Some opportunities for Indian InsurTechs

Opportunity

Increased appetite for insurance product innovation

Example in motor insurance is Carro (used car marketplace in Singapore) & its pay-as-you-drive insurance.[3]

Threat

Asymmetric competition arising from in-house brokerage team pushing insurance products from preferred vendors Examples in motor insurance include Hero and Maruti Insurance brokers who were fined recently [1][2]

Mis-selling of insurance products embedded in purchases

Disclaimer

Views expressed in this article are my own and do not represent those of Accenture, its management, its employees or its affiliates.

This article does not constitute investment or any other form advice. The author bears no responsibility in the event of financial or other loss arising from actions taken by the reader or any related party on the basis of information represented in this article. The author does not have any financial interest in any firm mentioned in the article above; this article is produced for educational purposes.

For any further queries or complaints, kindly email me at rahul.j.mathur@gmail.com or r.d.mathur@accenture.com

Author
Rahul Mathur

Rahul is the Startup lead at Accenture’s FinTech Innovation Lab in London. Prior to joining Accenture, he was an Insurance Product Manager at Laka Insurance, a London headquartered early stage InsurTech start-up which recently won at the British Insurance Awards 2019.  Rahul holds a master’s degree in Statistics from the University of Warwick. He is an Ambassador at the Asia InsurTech podcast.

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