We live a life full of risks and uncertainties, which have significantly increased in recent times. Whether it be an individual, one’s family, or business, every aspect of our life has been subjected to a myriad of uncertainties. This includes loss of life, impact on business, asset depreciation, etc.
To combat these problems, the financial industry, over the decades, has evolved and developed products that protect customers financially (both businesses and individuals alike) against a variety of risks and the impending losses that may be caused due to such occurrences. In a nutshell, we call this insurance.
Featuring for the Cover Story of The Enterprise World’s issue of ‘The 10 Most Trusted Insurtech Solution Providers To Watch in 2022’ is SafeTree Insurance, an insurtech company that has simplified insurance with their customized solutions and advisory.
SafeTree Insurance, a brand name of A2V Insurance Brokers Private Limited, is an insurtech player that seeks to protect the interest of their clients (both corporate and individuals) against variety of risks. SafeTree Insurance is integrating technology and design into customer-centric solutions, based on industry insights to deliver their brand promise of ‘insurance simplified’.
The main driving force of the startup is to improve their client’s business outlook through meaningful product innovations by introducing new-age insurance propositions in order to enhance their brand proposition in addition to risk coverage.
SafeTree Insurance is the coming together of experienced financial experts and technocrats and is a licensed brokerage company as per IRDAI regulations.
“In the Indian market, we aim to introduce customized products that are tailormade to one’s requirements. In today’s day and age, the one-size-fits-all concept is outdated and organizations have to relook as to how the customers have to be served.”
The Insurance Market & Corona as its Catalyst-
Insurance is needed more than ever today as the ‘protection gap’ – the gap between the amount of insurance that is economically and socially beneficial for individuals, households and firms and the amount of coverage actually bought – is getting wider and wider.
According to the Swiss Re Institute, from 2000 to 2020 the protection gap has doubled and this was driven by global trends in digitisation, urbanisation, climate change and a lack of effective innovation.
In private pensions alone, the gap is over $20 trillion today i.e., people cannot afford to live comfortably into old age according to the Geneva Association, an international think tank. In today’s times, if the main family breadwinner dies, the majority of humanity will not able to maintain their living standards and repay debts. The Covid crisis has exposed and exacerbated this situation.
The insurance penetration in the Indian market is also very low. Data suggests that in the Indian market, the penetration of health and life insurance is around 5%. Apart from this, home insurance is also a branch that people are less aware of, where market penetration remains minuscule at less than 1%.
Due to economic and human suffering caused by the Covid 19 pandemic, there has been a considerable shift in awareness and inquiries from people have increased manifold. This has also resulted in the increase in the number of policies, particularly that of health and life.
“It’s unfortunate that the pandemic has been the catalyst in terms of growth for the insurance sector.”
As our country battled the onslaught of the pandemic, several health insurance companies launched simple corona products such as Corona Kavach. These products became extremely popular within a short period of time.
This has highlighted the fact that if an insurance product is easy with simple terms and conditions, then there is a larger acceptance by the customers. Taking a step ahead of these simple and easy products, SafeTree Insurance has been working on developing customized solutions that are self-explanatory and avoid ambiguity.
Capturing a Broader Market-
With Covid and increased digitalization, there has been a significant increase in the number of policies sold through online platforms.
The Insurance market is seeing a bright future, where there has been strong growth in inquires and demand for insurance products post Covid, but there is a huge market of underpenetrated segment of society. This will keep the insurance companies and intermediates on their toes and will bring something new and innovative to the market that captures people’s attention with ease.
The Challenge of Being Different-
Challenges are at every step of the journey; it is how one chooses to tackle these obstacles, that builds a strong team and a credibility with their customers. Within the insurance sector, one of the biggest challenges is that of awareness.
“At SafeTree Insurance, our USP would be our proprietary tools which we are developing for both retail and SME clients which can support their insurance buying journey and decision-making process.”
Insurance is and will always be a risk mitigation product, but the downside of the industry in India is that people are not educated about the risks associated and how they can be handled. To increase awareness levels, SafeTree Insurance intends to train and empower individuals to be their channel partners via their digital platform through their Saksham Bharat program. The tools will help with a better understanding of products and in turn help customers make informed decisions that suit their requirements.
What makes SafeTree Insurance a trusted brand among people is how they help people identify their insurance requirements. At SafeTree Insurance, a customer is first assessed their risk profile, or the ‘Risk Janampatri’ as they call it at the firm.
To give an easy example of their approach, if you have a high-risk appetite, you would be advised to buy a motor insurance product without any additional covers. However, if you have a low-risk appetite, SafeTree Insurance recommends you to buy additional covers with motor insurance such as zero depreciation, so that in case of an accident during policy period, most of the amount will be paid by the insurance company and this event does not financially and mentally impact you.
“On the basis of customers risk profile from Risk Janampatri, we propose a product that suits the customer needs or works really well for them.”
At SafeTree Insurance, new tools are being developed to simplify the overall customer experience. Their unique tool ‘Health Sum Insured calculator’ is already popular with customers buying health cover. They plan to soon introduce tools to help SME clients to simplify their insurance buying process.
Innovations and New Additions-
Innovation is a crucial factor for the growth of a Company and new product propositions will be the unique factor which distinguish SafeTree Insurance from other players in the market.
“What we are bringing on the table is something never done before. It is the kind of insurance propositions that help businesses to increase their customer satisfaction and improve your NPS score.”
SafeTree Insurance will codevelop embedded and parametric products for corporate customers which enhance their customer loyalty and customer satisfaction score.
Insurance is something that nobody wants but everyone needs.
Embedded insurance is emerging as a new way to distribute insurance services efficiently. It doesn’t solve the protection gap, but it addresses many of the supply and demand issues. It could act and as a catalyst for wider industry business model transformation. It is about getting more affordable, relevant and personalised insurance to people. It is enabled by abstracting insurance functionality into technology so that many more third-party organisations and developers can seamlessly incorporate attractive risk mitigation solutions into their customer journeys.
Embedded insurance offers a potential for lower cost distribution to more individuals and firms. Moreover, it provides access to more data for product innovation and reduces underwriting risks. For third party organisations, Embedded Insurance can enhance value propositions and create new revenue streams.
In Property & Casualty alone, Embedded Insurance could account for over $700 Billion in Gross Written Premiums by 2030 accounting to 25% of the total market worldwide.
SafeTree Insurance plans to use this mechanism to increase the penetration of insurance products within masses.
The challenge with the current insurance industry is uncertainty in the minds of customer at the time of claim event in terms of admissibility and amount i.e., whether they will receive their claims and the amount which will be reimbursed by the insurance company.
“To help with that ambiguity the Company plans to develop parametric insurance with new age insurance companies. So, if an incident takes place, the customer will automatically receive money into their bank accounts. This removes the uncertainty in customers.”
These products offer pre-specified pay-outs based upon a trigger event. Through this, customers will be sure of the amount that they will be receiving. This would help build the trust factor and the reliability of customers towards insurance.
The Growth Quotient-
SafeTree Insurance, commenced operations in August 2020 and has been growing aggressively in excess of 20% on month-on-month basis in the current financial year 2021-22. They have increased their monthly gross premium collections from Rs 6m in April 2021 to INR 41m in December 2021.
SafeTree Insurance aims on bringing new and innovative products to Indian customers through various distribution channels.
Shifts in the Insurance Sector and the Future-
While the insurance sector opened to private players in 2000, the products have generally been the same and there is still a huge potential for innovation in insurance products and distribution.
SafeTree Insurance believes new age insurance products through new distribution channels will fuel the growth and penetration of insurance products in the country. The customers can expect more customized products in the insurance markets in coming times as underwriters are ready to take new risks and new propositions.
“I do believe that the future is extremely interesting and there is a huge room for innovative products through new distribution channels to come into the market.”
Let’s hope that there is a ‘policy in the hand of every Indian!’
Mr. Vikas Anand- Leading the Way (CEO & Co-Founder)
Vikas Anand is a Chartered Accountant with over 22 years of experience in Insurance and financial services and has worked in both India and the United Kingdom. Vikas has held senior leadership roles in EY (Ernst & Young) and HSBC Insurance.
Vikas aims to build an organization that will be a trusted Insurance partner for customers by developing innovative technology-based insurance solutions with a customer-centric approach. He wants to expand the utility of insurance products for corporate clients beyond risk mitigations.