How are you different from other digital insurers in the market?
We do not see ourselves as a digital insurer alone. Yes, we are a technology solution-oriented company but technology for us is only a means to an end and not the end in itself.
We were always confident about our mission, but we did not fathom that it would be so impactful for the consumer. To see the sweet spot between technologically advanced solutions and simple, intuitive solutions that people are comfortable with has been quite interesting. We have developed, succeeded, failed and improved our offerings. And given that all this happened in just one year is heartening. I am conscious that this is just the start and we have a long way to go.
The insurance landscape is evolving with insurers coming up with unique products. Where do you see Digit in this space?
From the relevance point of view, customizing products and giving modular offerings is the way to go. For example, our “screen damage only" insurance is one way of giving customers a modular mobile insurance product, which is also cost-effective.
From a cost point of view, short-term products are cost-effective. For example, our home protection is priced at ₹199 for a cover of ₹2 lakh for a week, which is affordable.
We also work with distribution partners who are primarily app-based. For example, we have over 200,000 customers through Cleartrip since October 2017 when we began our relationship.
The biggest difference we provide is using technology to simplify claims processes. There are no hard copies required and most of our claims processes are smartphone-enabled. This shortens the time for claim processing.
Digit’s travel insurance also covers certain high-risk activities such as adventure sports, which insurers either stay away from or offer at higher premiums. What made you explore this segment? Does this come at a higher cost?
Our philosophy is to make products we would like to buy for ourselves and our families. As soon as you start thinking this way, some exclusions become questionable. Adventure sports was one such area. We are competitive in terms of our costing, it is not sold as an add-on, it is just an inclusion.
Your holiday home protection policy is a short-term cover for the time when you’re away on a vacation. How will such a niche product work, given that people don’t typically buy home insurance?
Home protection is an under-penetrated category in India as we have an optimism bias that nothing wrong can happen to us. The only thing we worry about is home contents when we are travelling. This is for people who travel frequently and are worried about leaving their home unprotected. We have soft-launched this product on our website and the pick-up has been slow as it is a pull product and people are not used to the idea, but we feel it’ll pick up with more awareness.
For car and mobile insurance, you offer cash for repairs if a policyholder self-inspects and sends pictures of the damage. Doesn’t this leave gaps for malpractice?
We believe that 95% of people are genuine when it comes to claims and we didn’t want to make the processes for the 5% bad eggs. So, with firm trust in customers, we launched this product. Seven out of 10 people opt for it which means people see value in it.
What are the challenges that come with running digital insurance?
India is at a cusp right now. While there is a digital explosion, processes could be made simpler if we had access to essential customer databases of RTOs (regional transport offices) or FIRs (first information reports) etc. The challenge is in our ability to simplify and find new ways of designing customer journeys.
We are partnering with the right avenues to get this data to develop tech solutions to fill in the gaps and remove system redundancies.
Do you plan to introduce more products in future?
We will be launching health insurance this year which should be a big expansion for us. The principles on which we build our other products and processes will apply to health as well. Also, we will see more institutional partnerships and more strategic partners. Right now, we have 20 institutional partners and about 1,500 strategic partners. We are expanding the number of locations where we are doing business. We will also work on more technology solutions to change the current buying and claim experience.
Will the rise in the number of insurance distributors and aggregators lead to higher penetration, especially in tier II and tier III cities?
There is democratisation of access due to smartphone and internet penetration which goes beyond geographies. This affects many industries, including ours. If someone is buying a mobile phone online, they will also have the inclination to buy insurance right there. Which is why, we feel such products will capture the interest of millennials. And when they come to the point of decision related to other categories, they would know the value of insurance.