Since 2013, Coverfox has operated as an online insurance marketplace, competing with the likes of PolicyBazaar, EasyPolicy, InsureMile, and others, helping India’s 220 million-plus policy-holders buy and manage insurance better.
In late 2017, the Mumbai-based startup turned its attention towards insurance agents – about 2.6 million are registered under IRDA – and rolled out Coverdrive, a B2B seller platform.
It aimed to help offline agents go digital, grow their business, get instant quotes from insurers, reduce paperwork, increase operational efficiencies, and earn more and fast.
In a little more than a year, Coverdrive claims to have distributed close to a million policies and clocked 300 percent growth in earned premium. Over 50,000 insurance agents, most of whom had never sold a policy before, are using the platform. The Coverdrive app has recorded 80,000+ downloads.
The platform already accounts for a third of Coverfox revenues, and the startup expects that to grow to about 50 percent by 2021.
In motor insurance alone, Coverdrive has generated Rs 500 crore of premium in FY19. Its agents are spread across the country’s top 800 cities and towns. Other verticals like life insurance and health insurance are also catching up.
Premanshu Singh, CEO, Coverfox, tells YourStory,
“The 50,000 registered agents are exclusive to our platform. Some of them have been trained and skilled by us. Most of these agents were inactive, and hadn’t sold a single policy for months. No one had built any technology for them. Since we were a large player in the online space, we thought we could do something.”
That laid the foundation for Coverdrive.
Some months later, in April 2018, Coverfox raised $22 million in Series C round from a clutch of investors to fund the new platform.
Coverdrive has not only increased agent activations, but also created new income streams for hordes of micro-entrepreneurs, shopkeepers, college students, and even housewives.
Agents have grown their monthly income by 2.5X, and the number of policies sold has doubled.
Earlier, in July 2019, the startup raised an additional Rs 40 crore from existing investors, taking its overall funding to about $59 million. The funds would be utilised to expand its presence in non-metro markets.
Core product platform and what it solves
Coverfox prides itself on being a “product-centric” startup as opposed to a “people-centric” one. “That’s what separates us from PolicyBazaar,” Premanshu says, adding, “Most insurance startups in India are people-centric, but we’re solely focused on product and technology.”
When Coverdrive was in its development phase, Coverfox executives interacted with hundreds of insurance agents from all over India to understand their pain points.
“We spoke to agents in multiple cohorts. Most of them weren’t very qualified, and had no bargaining power with insurance companies. They had to deal with a lot of paperwork, and maintenance of customer records that left them with no time to grow the business.”
Coverfox used these learnings to build out a platform that could achieve three things:
a) improve discovery of insurance products for agents, b) increase their revenues and operational efficiency, and c) automate tracking and maintenance of customer records through an analytics dashboard.
The CEO elaborates, “It was almost like a SaaS solution for insurance agents. They could get daily/weekly/monthly reports on customer payments. We automated their CRM and also enabled features like Premium Calculator. Most agents couldn’t calculate premium amounts correctly; they often ended up under-collecting from the customer, and later paying out of their own pockets. That was fixed.”
The Coverdrive platform offers more than 150 policies in motor, life, and health insurance from 20 partners, including HDFC Ergo, Oriental Insurance, New India Assurance, Bharti AXA General Insurance, Bajaj Allianz, Royal Sundaram, and others.
“We have integrated with about 44 insurers on Coverfox. All of them will be extended to Coverdrive over the next six to eight months,” Premanshu shares.
Agents are also looking to diversify their portfolios, and Coverfox is encouraging cross-selling, which means motor insurance agents are starting to sell life insurance plans and vice versa. The platform also enables instant payouts within 24-72 hours.
Challenges and opportunities in insurtech
Coverfox shares that one of the biggest challenges of building an insurtech business in India is that it “cannot be driven by discounts and promotions”.
“That is what most payments companies have done, but in our business, we provide value in the long-term,” the CEO explains. “That can be a bit of a challenge.”
Resources are prohibitive too. Hiring is never easy for high-growth startups like Coverfox. The Coverdrive team has 90-100 people now, and will expand shortly.
But, insurtech is the fastest-growing segment in India’s insurance market that is estimated to reach $280 billion by 2020.
Sure, online accounts for just about 3 percent now, but its biggest opportunity lies in the changing behaviour of India’s policy buyers. Buyers have now learnt to trust online distribution channels.
Or as Premanshu puts it,
“Flipkart taught India to buy online, and the ripple effects are being felt in all industries.”
In a recent study, PwC stated that insurtech startups were “reshaping” the domestic insurance sector, and three in four traditional insurers were “at risk of disruption” if they did not engage with fintech players.
Premanshu concurs. He says, “Even two years ago, most insurance players wouldn’t take online seriously. Now, they are building products for online. Annual insurance has evolved into monthly insurance. Next, it will become weekly insurance. Consumer behaviour is inspiring this change.”
Over the next 12-15 months, Coverdrive intends to triple its business, double its seller base to 1.3-1.5 lakh, and increase app downloads. It also plans to sell life and health insurance policies more aggressively.
With the Reserve Bank of India allowing 100 percent FDI in insurance broking, the company reckons it is “a beautiful time” to be in business.