Working out in the gym can be great, except if you get injured. Who do you turn to then? Your regular insurance provider probably will not cover minor injuries. Gurugram-based Rohan Kumar and Nishant Jain realized that most people in cities lead high-risk lifestyles and to help them handle unpredictable emergencies, they set up Toffee Insurance. The two-year-old startup offers bite-sized insurance products, from fitness insurance (for injuries from running, cycling, gymming), mosquito insurance (for several mosquito-borne diseases, including dengue, chikungunya and malaria) to daily commute insurance (for injuries while commuting in any vehicle).
Co-founder and chief executive officer Rohan Kumar, 40, says: “We decided to make insurance younger and consumer-friendly, give it an uplift where people don’t think of it as a heavy financial decision. Can we make it low-premium and low-risk?"
Both Kumar and Jain, co-founder and chief product officer, started their professional journey as product designers. Kumar had joined Jain’s design consultancy firm, Design for Use, in 2013. However, as product designers working on client briefs, the duo was itching to design a product of their own. While they were working with clients like Apollo Munich, they realized the quantum of the problem. There was doubt when it came to buying insurance online, and more than anything else, insurance was looked at as a complicated product. “Our initial idea was to build it and sell it, but we realized soon that we were on to something quite big here," admits Jain.
Jain, 47, did have his worries though. Having started a business from scratch he knew how much effort and patience it took. But they were committed. They decided to build a prototype in late 2016, but it was only in July 2017 when investors came in that they realized they actually can bank on their startup. Kumar and Jain spent the initial year and a half trying to understand the market and looking at parallel economies in South-East Asian countries, doing a lot of prototyping and getting feedback. “Keeping the insurance products only online does not make sense because no one is actually searching for these online. It’s not that they don’t need it, but they don’t know if they want it or not, unless they see it," Kumar explains.
Designing the product was tricky. While Toffee Insurance tied up with major insurance providers to create policies that are simple and affordable, the product had to be right—the merchant needed to be able to understand the insurance which would only happen if it has to do with his primary product. For example, a bicycle dealer will not be able to sell health insurance. Secondly, the process has to be easy and prompt—it should not be a major paper filling exercise. Finally, the incentive has to be good enough for him. “The price point had to be perfect. It couldn’t be so high that it is difficult for him to sell. It also cannot be so low that he loses interest," adds Kumar. The cost of products on Toffee Insurance starts from ₹25 for six months, to ₹682 for a year. Insurance, however, is more than just finding the right price. It is a product which is based on trust. “We could either go about the traditional way—have a huge workforce of 2,000 members on ground, talking to people. Or we keep a lean staff, and leverage the existing infrastructure. We chose to do the latter," says Jain.
The challenge came in the operation level. While the top guys were interested, the internal ecosystem of insurance companies was sometimes so old that getting a product actually executed took forever. “Challenge was not getting the buy in, but after the buy-in the internal processes that they had would take so long. Now, when we look at an insurance partner, we look at not just level of progressiveness at the top, but also how progressive is their tech, can they actually deliver on time, how flexible are they on giving you control," explains Kumar.
The pressure to grow is much more when you have just started something. “But we have been there before. So we knew what to expect and plan more realistically," adds Jain.
The Disruptors series follows startups who are bringing change in an already established market.