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A young startup is changing the rules of the game in India’s insurance market


By Paloma Ganguly for techinAsia

“Fear” – that’s the F word of insurance in India.

Fear, insecurity, and ignorance is what the insurance industry has thrived on for the longest time. Even after buying a policy, a customer is left feeling uneasy. Could the premium have cost less? Was there some fine print he missed? Will settling a claim be easy?

But here’s what. Buying insurance can be convenient, informative, transparent, and fast. And that makes for an entirely different F word – fun!

That was the exact idea when serial entrepreneurs Varun Dua and Devendra Rane set up insurance portal Coverfox in 2013, hoping to change the archaic ways of the insurance industry in India. You will know what they mean if you catch their humor-laced ads on TV.

The Mumbai-based insurance broking firm allows a user to compare policies from top insurance brands in one go and then buy a policy online.

Coverfox founders Devendra Rane and Varun Dua

Coverfox founders Devendra Rane and Varun Dua

Offering over 100 products and with 25 insurers on board, it is doing brisk business in Delhi, Mumbai, Bangalore, Pune, Lucknow, Chennai, and Hyderabad. The company settles 150 to 200 claims a month and has sold around 120,000 policies to date.

“Coverfox was founded with a clear goal – making insurance simple and convenient,” says Varun, a graduate of the Mudra Institute of Communications, in Ahmedabad. “We are already doing half the business of our competitors.”

The firm has found backing from Accel India, SAIF, and Infosys founder N.R. Narayana Murthy’s Catamaran Ventures.

A car insurance case


Photo credit: Pixabay.

I had just renewed my car insurance last month (after two companies called me on the phone with their quotes), but I decided to compare it with Coverfox anyway.

The site asked me to feed in the car number and the date of expiry of my policy, and automatically identified my vehicle model. Then a list of companies willing to offer insurance flashed on the screen.

Going online would have meant more information, greater choice, instant assistance, and a wiser decision.

Here’s what I discovered. The premium I had paid on the offline deal was around US$52.60 less than what these companies were offering.

But an advisor on the portal’s chat window explained that the insurance premium varies directly with the Insured Declared Value (IDV) – the maximum sum assured by the insurer. So If I had paid a lower premium, I could also expect a lower IDV.

A lower IDV means that if my car got stolen or suffered total loss – which is the whole purpose of insuring a vehicle – I would actually get US$900 less than what a deal through Coverfox would have fetched me.

So going online would have meant more information, greater choice, instant assistance, and a wiser decision.

That’s just what online players like Coverfox, Policybazaar, GIBL, MyInsuranceClub, and PolicyBachat are wooing Indian customers with. By 2020, three in every four insurance policies sold are expected to be impacted by digital channels.

How to win

Work is fun at Coverfox office

Work is fun at Coverfox office

Coverfox considers Policybazaar its biggest competitor, apart from the online portals of insurers themselves.

Its biggest draw is auto insurance, though it also offers health, travel, and term life. “We are already the second largest online auto insurance player and aim to be the largest in the next six months. Sixty percent of the portfolio is auto, and health is a majority chunk of the remaining 40 percent,” says Varun.

Coverfox says its advisory panel handholds customers when they need to cash in claims. And that means minimum paperwork at the customer’s end.

Here’s another reason why Coverfox is growing fast. The startups says it can deliver a finalized car insurance policy to your email inbox in seven minutes flat. To someone in India that sounds super fast. Normally, buying insurance offline entails a ‘cover note’, which serves as a proxy for around two months, till the real policy arrives by post.

The average time the company takes to settle cashless claims is one to two days.

Coverfox is not a web aggregator, and has a broking licence from the Insurance Regulatory and Development Authority of India.

“As Coverfox works on [the basis of a] standard commission from all insurance companies, we are unbiased towards any particular product or company and design customized solutions based on the customer’s profile and needs,” explains Varun.

A paradigm shift to online

The Coverfox team at work

The Coverfox team at work

When Varun and Devendra started the portal, they already had plenty of experience.

There is still a huge untapped market that needs to be cracked.

Varun had built tech solutions for insurance firms like Tata AIG and Franklin Templeton. He had co-founded Enser Communications and Glitterbug Technologies, both linked to the insurance industry.

IIT graduate Devendra co-founded the nanotechnology startup Innovations Unified. He then launched two more firms – one specializing in user experience design and another providing technology services to the financial and insurance domains.

With Coverfox, the two aimed to make insurance buying more decisive for the consumer.

The company aims to evolve into an ‘insurance intelligence engine’ that profiles risks based on customer behavior on the website or their interactions with the firm.

“We are also trying to build a network to enable quicker insurance for the used car market, both individually and via used car dealers,” says Varun. The company doesn’t work with new car sellers yet.

But bringing about a paradigm shift in mindsets is the biggest challenge for Coverfox.

“Though our analysis shows that more and more young professionals prefer to buy insurance online, there is still a huge untapped market that needs to be cracked,” says Varun.

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