Using tech and agents, how insurance startup RenewBuy acquired 1M customers in four years
According to an annual report by insurance regulator IRDAI, insurance penetration in India is one of the lowest at 3.69 percent.
Even after 19 years of privatisation, the industry has not reached its full potential. And despite many companies going digital in India, customers still prefer brokers and agents to buy insurance.
With a vision to solve the under penetration in the insurance sector, Indraneel Chatterjee and Balachander Sekhar started RenewBuy in 2015 in Gurugram.
It is an online insurance aggregator, which is backed by a proprietary technology platform through which an agent can offer insurance products to customers. The founders say it works as a digital agent model, which provides transparency and offers instant insurance for lower prices.
Over the years, the startup has raised three rounds of funding. In 2015-16, it raised an angel round, which was supported by a group of high-net-worth investors (HNIs), who, along with the promoters, invested roughly about $2.2 million in the company. The platform used these funds to rapidly grow in Delhi-NCR and Punjab.
By 2017, RenewBuy became almost the number two player in the digital insurance space with just $2.2 million investment. Later, the startup secured its first funding of $9 million from Amicus Capital. And recently, it closed another funding round of around $20 million.
RenewBuy also has a wide base of clients. At the moment, it is present in 450 cities, and works with over 20 insurers and 25,000 PoS partners across motor, health, life, and travel insurance categories. So far, the platform claims to have insured one million customers in India.
Since 2005, both Indraneel and Balachander were working together on building a different kind of insurance distribution businesses.
“While working at a large retail organisation, we created a simple over-the-counter solution to make two-wheeler insurance available at the checkout point of a grocery store, which became a runaway success. It proved to us that while there is immense demand, the problem is that of the supply,” says Balachander.
After starting up, Indraneel and Balachander personally checked the product, and even approached some agents. However, the challenge was to get these agents on to their tech platform. They went to their family and friends to solicit their car insurance at the time of renewals, and use the app for their policies.
And they got their first policy from an-ex colleague from their previous company, who later become a part of the founding team and is now the CMO. The company has a team size of over 50.
Expecting customers to come online and buy insurance on their own is unheard of in India where they still want the guidance of a trusted agent who is required to go through the lifecycle of the product, especially at the time of claim.
“We used technology to solve this problem. RenewBuy’s app-enabled, end-to-end digital insurance platform has created the most cost-efficient and customer-centric model that has digitised the entire insurance value chain for agents, insurers, and customers alike,” says Balachander.
RenewBuy claims it has been successful in delivering the best of all worlds to the end consumer – from offering greater choice, transparency, ability to compare, lowest price, and instant access to the policy on the platform. According to the company, a RenewBuy certified advisor also offers post sales service. This has enabled their advisors to significantly upgrade the way they work with their customers.
How the product works?
A bulk of insurance business is conducted via a traditional agent-led model, wherein the agent represents an insurance company and sells the company’s products to a customer.
Using its proprietary technology, RenewBuy-certified advisors are enabled to provide quotations across car, bike, life, health, and travel insurance within seconds. It provides customised options for unique customer requirements such as adding or removing specific policy features.
The digital platform also enables the advisor to suggest relevant insurance plans based on customer’s life stage and needs.
“Once the customer and advisor have mutually agreed upon the insurance company and the product, the agent aids the customer in filling the proposal form on the app. Later, the agent can click on the payment link and the customer instantly receives the link on the phone to pay via credit card, debit card, net banking, or digital wallets. Following which, the policy is instantly delivered to the customer,” says Balachander.
The customer is also given the option to retrieve the policy online at any point of time by logging into the account.
The business model and challenges
“As we were significantly disrupting the insurance sector’s processes and entire agency business in India, we faced a lot of initial resistance, and even some disbelief. Therefore, the challenge was to make people around us believe in our vision,” says Balachander.
“What helped us was putting together the best team, whom we call the ‘RenewBuy crusaders’. I believe this is the number one reason for our success. They have converted the dream that we had into a reality,” he adds.
RenewBuy works on a simple business model. They are registered brokers with IRDAI, and they receive commission for policies that are sold for different insurance companies. The money earned is spent to acquire advisors and the balance is their earning.
Currently, RenewBuy has nearly 25,000 agents who are constantly engaging with customers using the platform.
Since its inception, RenewBuy claims to have done annualised business to the tune of Rs 500 crore, and the founders say they are targeting over Rs 1,000 crore in revenues by the end of this year.
“Our intent is to keep growing the agent network within the existing cities and add more cities as we go deep into Tier II and III cities,” says Balachander.
RenewBuy’s competitive advantage of using a cost-efficient and low-cash burn model will enable it to become profitable in the next 18 months, while retaining their growth.
Apart from RenewBuy, some of the other players in the space include Coverfox Insurance, PolicyBazaar, BankBazaar.com, Policy Bachat, and Paisabazaar.com. However, there is room for all because only 60 million Indians are insured in the country at present.
The company is also working to expand its presence to roughly 1,000 towns by bringing on board 200,000 PoS partners and insuring 10 million customers by 2022. According to the founders, they are now on track to profitability in the next 18 months.
(Edited by Megha Reddy)