Fintech Asia reached out to Balachander Sekhar, co-founder and CEO of RenewBuy.com, to learn more about the RenewBuy story – how they started, the growth the company has undergone, a view of the Fintech ecosystem in India and of the world. This feature is part of the ‘Fintech India’ series.
He is an alumnus of IIT Bombay and IIM Calcutta, Bala is a seasoned Insurance and Financial Services professional with 18 years’ experience across leadership roles as CMO at MetLife, CEO of Reliance Retail Insurance, and as the Head of Bancassurance at ABN AMRO
Car and bike insurance is a USD 5 billion category in India, and > 98% is currently distributed through offline process via agents, dealers etc. and is extremely fragmented. By 2020, market expected to grow to 8 Billion.
There is a movement towards web-based platforms which is fuelled by improving Internet infrastructure, smartphone penetration as well as consumers’ expectation of transparency, best prices, ease of buy and high-class service experience.
RenewBuy aims to address some of the issues, with fintech, that the sector is witnessing:
- Massive under penetration for insurance especially in 2-wheelers
- Lack of transparency & information pre-sale, as well as Poor service delivery specially in claim handling experience has led to customer dissonance & mistrust.
RenewBuy was established with a vision to change the way motor insurance is bought, sold and serviced in the country, using technology and becoming an enabler by simplifying and digitising motor insurance category.
Given the nature of the ‘FinTech’ category, our team has experienced professionals from Insurance leadership, Technology, Product Management, Marketing and Sales background from leading e-commerce and insurance companies.
How did you come about setting your focus on this particular category? Please tell us a little more about the company’s beginnings as well.
Technology is playing a vital role in disrupting insurance industry in India and is helping create differentiation in consumer experience & service as well as in geographical expansion of the sector– especially to smaller towns and rural India.
Players using technology can provide consumers transparency and access to multiple insurance companies and find lower prices, instant policy issuance.
The category sees large drop-outs – 80% bikes and 25% of cars uninsured despite it being mandatory – primarily due to lack of reach and distributor interest in pursuing small ticket premiums. With technology across the web and mobile, consumers across tier 2, 3 and 4 cities and rural India will have access to multiple insurers and transparent prices.
RenewBuy’s technology platform provides Lowest quotes from leading insurers, Instant policy issuance, 1-Click Renewal, Insurance Reminder Service and Digital documentation thereby giving consumers a much better experience than before by dramatically improving convenience, transparency and trust. Within 18 months of the launch of its platform, RenewBuy has seen transactions climb to 15,000 per month, and is now a leading player in this category.
What transformations have you undergone as a company since starting up?
India has over 120 million 2-wheelers & 15 million Cars and growing at 10% annually. As per various studies, over 75% 2-Wheelers and 25% 4-Wheelers do not have insurance – a concern voiced by the government and regulator.
Consumer surveys have shown that most consumers are looking for transparency & lowest price which can be provided by an online platform. However, they also want the trust & service delivery provided by a ‘human touch’ i.e. their neighborhood agent. And consumers want the best of both the worlds!
RenewBuy has understood the current need gaps in the market and over past 2 years has moved beyond the cost inefficient direct-to-consumer business by digitizing the ecosystem and making traditional insurance agents as well as other motor category influencers into RenewBuy authorised digital agents. These digital agents, using RenewBuy’s technology platform on their phone or laptop are able to provide choice, best price, instant policy without any paperwork, as well as quality service pre-& post-sale, to their customers at the click of a button.
Moreover, they are now able to address low margin 2-wheeler insurance which was earlier out of bounds.
Thoughts on the present Indian fintech landscape? How does it compare to the rest of the fintech majors in the world like Hong Kong, Singapore, United Kingdom, Sweden, etc. according to you?
In-car devices are now being used to monitor one’s driving behaviour over a period to determine future insurance premium. The model is not proven yet in India but globally such products have helped reduce premium for good drivers.
While currently such products are not available in India, globally ‘usage based insurance’ products like Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Pay-As-You-Go etc. are seeing good traction.
Indian consumer is price sensitive and consumer insights show that good drivers want to pay less rather than get penalised for the way others drive.
Technology based data capture to customise car insurance products will address this product gap more effectively in future.
Which are the sectors in Indian fintech where you think there are untapped opportunities? How does it fit in with your product and growth plans for the immediate future?
Technology platform, such as ours, are adapting local as well as global learnings to chart the way for future disruptions in the category. Rich, reliable and insightful consumer data that is captured on our platform is analyzed to provide valuable insights to our digital agents as well as insurance partners.
This data can also be leveraged in future to customize under-writing for individual customers based on history. This will not only revolutionize the category but also bring in much needed transparency and trust for consumers who can then be responsible for how less or more they end up paying for their own motor insurance policy.
Technology will increasingly be used to lower cost of doing business for insurers and provide a superior consumer experience – reducing mis-selling, a bane of this industry. A classic case in point is that online insurance selling removes cost of policy delivery, use of branch network and delivers transparent information to consumers.
Please tell us a little about your funding journey – the requirements & objectives in mind when you decided to raise a round/s; the fit you found or were looking for with your investors; what would you be looking for in the future as the business grows?
RenewBuy has raised 2.5 million USD till date, and well-funded for our current requirements till next year. We are open to raising funds from investors who understand financial services and insurance sector well. The funds will be used to rapidly grow the business, expand geographies and build innovative service solutions. We will further raise capital as and when required depending on business requirements.
What advice would you give to other fintech entrepreneurs?
Our single biggest advice to any entrepreneur would be to understand that this is a long journey, a marathon and not a sprint. So, they should come prepared. There are challenges big and small on a daily basis and one has to be nimble enough to manage them effectively.
If you have complete clarity of thought and truly believe that your idea can disrupt the market and bring value to the consumer, go for it and don’t get distracted. It’s been working for us!