Fintech has become a vibrant part of the growing Indian startup ecosystem, and insurance startups are now in the spotlight. These insurtech companies have favourable winds blowing towards them with strong digital infrastructures, investor support, and a conducive regulatory environment.
And with India’s insurance market witnessing massive technology innovations from startups, established global players also want a piece of this pie. Several are investing in this ecosystem to harness the potential of these young firms.
Enter Chubb, a leading publicly traded property and casualty company, which has more than $174 billion in assets and reported $38 billion of gross premiums in 2018.
The global insurance giant recently announced the opening of its technology centres in India and has expressed a desire for a closer engagement with Indian startups.
Sean Ringsted, Chief Digital Officer and Chief Risk Officer of Chubb, tells YourStory, “We are very keen to learn from them and access their thinking. It is about an opportunity on how they can help in our products and services.”
This insurance company is present in over 54 countries and provides a variety of insurance products covering commercial, property, casualty, accident, etc. Sean says, “We have seen the benefit from engaging with these startups globally.”
For example, Chubb is a minority investor in a US insurance startup – Bunker. The two are working together to develop insurance products for freelance workers. Similarly, it has backed another insurance tech startup called Jones.
Even though Chubb has not rolled out any plans of actively engaging with Indian startups, it has already got a flavour of the ecosystem in India. The company announced that it will be working with T-hub, a startup incubator initiated by the Telangana government in partnership with IIIT Hyderabad, ISB, and NALSAR.
“Together, Chubb and T-Hub will work on solving business challenges through rapid innovation and market deployment,” it said in a statement.
Sean, who has been visiting India over the last one decade, says he is impressed by the technical talent in the country. However, he is also clear about his part and the expectations the company has from these startups.
“Entrepreneurs have good ideas but it also important that they have clear business solutions and propositions. They need to have a clear path of how they are going to grow, scale, and succeed,” says Sean.
He adds that these insurance tech startups also need to iterate fast, depending upon the environment. An insurance company like Chubb brings experience, scale, and a distribution network, and is looking for startups that can help it in new products or services.
The Indian startup ecosystem today has several startups focussed on the insurance segment. Many have grown leaps and bounds like Acko Insurance, PolicyBazaar, Digit Insurance, and Coverfox, to name a few.
Regulators have put their best foot forward to expand the reach of these insurance startups. The Insurance Regulatory Development Authority (IRDA) recently announced the setting up of a regulatory sandbox to enable faster growth of insurance tech startups.
A regulatory sandbox is where young companies can test their products or solutions in a controlled environment before making them commercially available. This helps startups save time and money. IRDA, with its sandbox regulations, is aiming at creating a framework, which will deal with the regulatory requirement while also being focused on the protection of the policyholders. It has also laid out certain criteria for this initiative.
According to it, insurance tech startups can test their products up to a period of one year in categories like insurance solicitation or distribution, insurance products, underwriting, and policy and claims servicing.
More in the ring
Besides the initiatives taken by the regulator, other private sector insurance companies also want to have a deeper engagement with these startups. For example, Max Life Insurance announced the launch of its accelerator programme – Max Life Innovation Labs – with a focus on creating futuristic tech-based solutions.
Similarly, HDFC Life Insurance Company announced a partnership with IvyCamp, an arm of IvyCap Ventures Advisors, to launch a programme for startups called HDFC Life Futurance. This aims to work with startups building cutting-edge products to harness business opportunity in the insurance value chain.
These companies are looking for solutions based on new-age technologies such as artificial intelligence (AI), blockchain, Internet of Things (IoT), and big data.
Even as these established insurance companies look toward engagement with startups, Sean is clear that there is a rapid pace of change where customers are interacting digitally and “we have to respond to that”.
“In the long term, we will succeed here and our roots will only deepen,” says Sean.