From Skepticism to Simplification: What Policybazaar co-founder Tarun Mathur said on demystifying insurance sector

Edited Excerpts:

What was the idea behind starting Policybazaar?

So, most of it came from the model of ebookers, a travel aggregator company. MakeMyTrip and Yatra were already ruling the travel booking business. We wanted to create an aggregator platform but we didn’t want to be the third best in the country, since there were already travel booking platforms in India. Insurance seemed like a hard-to-understand product but mandatory for Indians to buy. In India, it is mandatory for people to buy motor insurance. It was easy to put everything online including the features, brands, services, and price. It was easy to make a decision online and purchase. It was possible to do everything online. Whereas, brands that were selling physical products online struggled initially, including Amazon, Flipkart etc. We chose insurance because it is the most digital product in the world. It is a promise delivered online.

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What were the challenges that you faced to enable the adaptation of Policybazaar?

Policybazaar was founded in June 2008. When we set up the company the market had just crashed, everything was looking downward, funding had dried up too. We were becoming pessimistic towards raising funding for Policbazaar. However, Sanjeev Bikhchandani, founder and executive vice chairman of Info Edge came forward and said that it was the right time to invest in the insurance business.

Additionally, while the Internet was quite prominent, however buying on the Internet was not. But people have started buying travel tickets online. People were ready to risk their money online hoping that it would work.

How did you convince people to buy insurance online?

One thing that worked in our favour was that the insurance market was selling at a discount of 25 per cent to 30 per cent. When we entered the business, we decided to reduce the margin and started selling insurance at 60 per cent discounts. We always had the best products. As soon as people bought one product they didn’t mind buying the second product.

Earlier people would come online check our prices and proceed to buy insurance offline through their agents. So to tackle this we deployed telecallers who would call these users and clear their doubts by providing them assistance and converting those calls into purchases. Telecallers played a major role in establishing the faith of customers in Policybazaar.

How has the insurance sector evolved after the inception of Policybazaar?

When we came aggregators were not a common thing. While we were not the only one in the aggregation business, we were the most resilient one. Earlier it was hard to explain the role of aggregators to regulators. But now the regulatory bodies understand what aggregators are. Digital platforms have become the largest channel of sales for every product.

With technologies like telematics and wearables, how do you see AI changing the insurance sector in India?

Telematics in India is still not a hit yet. A telematics device alone costs around ₹3,000, while an average motor insurance costs around ₹6000 for a year. It is hard to convince people to pay ₹3000 extra for the telematics devices. Additionally, India already has the lowest premiums for car insurance. Our tariffs are at 3 per cent, leaving little to no scope for further discounts to reward good drivers. It has not even worked well around the world

While wearables have shown promising results there are insurance companies that track the steps of a person and if the buyer completes the target their premium for next month gets waived off. Wearables like rings, watches etc are helping customers who are fitter to get better insurance with wider coverage at lower prices compared to a customer who is choosing to be a couch potato.

AI has removed all the receptive tasks. As an example, earlier we had an issue with the pdf document of insurance being delivered to customers after they made the purchase. Now, AI has automated that process by checking if the customer has received the document in their mail and if they have not, it ensures the delivery via WhatsApp or other channels. AI has also helped us flag fraudsters. It has helped us identify risk elements in customers and also the ones who deserve to be rewarded.

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Published: 24 Feb 2024, 05:34 PM IST