From banking transactions to loan disbursements, technology is disrupting the financial landscape of the country. With the likes of Policy Bazaar helping users make the choice between the best available bets, online insurance and choosing the right insurance isn’t an easy task. Easy Policy was set up for the same reason: making insurance easy. It is a platform that tells people in a transparent manner which plan suits them the best based on their requirements.
Hailing from a family of traditional insurance brokerage businesses, Neeraj Aggarawala was keen on bringing a connection between the online world and insurance. During a UK stint, he found the insurance distribution via web aggregators to be working wonders.
Changing the policy landscape
Soon after returning to India, Neeraj met his friends Alok Bhatnagar, who had quit Thomas Reuters, and Divyanshu Tripathi, one of the founding members at Policy Bazaar. At this time, in 2010, the Insurance Regulatory and Development Authority (IRDA) regulations were changed, bringing a decline to the agency model. The team realised that an online platform would work as the best replacement, and began working around the idea.
Around the same time, Alok decided to surrender his LIC policies and was shocked to find out that the returns were almost negative after 15 years of paying premiums. The trio then realised the lack of awareness among most customers in the situation.
“When we started, online distribution of insurance was very nascent. People did not know about online plans as the insurance companies had not launched too many of them. There were no awareness exercises done by them either. Insurance was largely sold through agents,” adds 45-year-old Alok.
Since people are still not too aware of online insurance, they put a tele-sales layer that would try to explain feature/price benefits to the people visiting the website. This meant that there were significant people costs along with the marketing costs. The initial set of employees came from competition and the industry. The organisation rapidly grew to 50 people in the first six months and now has more than 250 employees.
Insurance is divided into two types, life insurance and general insurance. Life insurance commissions are front-ended, whereas general insurance commissions are annuity-based. To keep the ship moving, the team decided to focus more on the life insurance segment. “We also very quickly went on to 'spend what you earn' model and did not opt for a heavy cash-burn model for creating businesses. This has helped us in scaling up diligently,” he says.
Insurance in India allows for protected margins and thanks to an active regulator like IRDA, it has not seen price wars and the race for loss leadership. The industry allows for profitable growth model and VC funding is required only for scaling up.
Easy Policy now offers various insurance products in both life and non-life categories like car insurance, health insurance, term insurance, child plans, investment plans and retirement plans.
Once the user chooses the type of insurance they are looking for, they enter their basic details, which then takes them to view live quotes provided by insurers. Here, the users can compare and learn about the features packed into each plan, along with their respective quotes.
“To make it easy for our users to choose the best plan that suits their needs, we call each of our visitors to help them understand the factors to consider while choosing a plan,” adds Alok. Once a user has chosen the plan, the user is taken to the proposal form, after which he makes the payment on the insurer’s website. The team then assists the user through each stage until their policy is issued.
Funding after four years
According to the team, unlike the other portals, the focus for Easy Policy isn’t pure comparison but making the entire insurance buying process easier. This is from the discovery of the right plan, procurement of documents and finally issuing of the insurance policy.
The team has raised a pre-Series A funding from Unilazer Ventures, Gaurav Burman of Dabur Scion and Anil Jain, a Chennai-based industrialist. “We were incubated by the Sumpoorna Group, owned by Neeraj’s family, who put in the initial angel capital,” adds Alok.
The team claims to have grown at almost 600 percent in the last four years. It was bootstrapped till the end of last year.
Easy Policy aims to simplify the process and reduce the need for assistance while purchasing simple insurance products like term and motor insurance.
“Mobile and B2B channel development will play a major role. We also wish to go deep within the country with a focus on multilingual, rural and Tier II cities and beyond, so that insurance penetration improves overall, not only in metros,” adds Alok.
Over the past few months the financial landscape in India has been transforming to accommodate more technology improvements and technology-based startups. Whether it is loan platforms like Finomena or platforms like SwitchMe that help change interest rates, today, various startups are using technology to make providing financial services easier.
For Easy Policy, the immediate and most direct competition is Policybazaar, which has deeper pockets and has already captured a wider audience base. With Paytm entering the fray, with services like gold loan repayment and insurance policy platform, Easy Policy is up for some strong competition.
Importantly, SBI General Insurance would be the first insurer to go live on Paytm. Currently, the Alibaba-funded venture does more than 100 million orders of various digital and physical goods every month. Currently, Bankabazaar and Zibika are among the few others to operate in the insurance and EMIs loan payment space.