We are doing 70% of our insurance business beyond the 30th city: Balachander Sekhar of RenewBuy

RenewBuy, an online insurance distribution platform, aims to simplify and make insurance accessible to all, particularly in Tier-2, -3, and beyond. Notably, RenewBuy generates 70% of its business from beyond the 30th city and 35% from beyond the 100th city. In an interview with Teena Jain Kaushal of Business today, Balachander Sekhar, the CEO of RenewBuy, delves into how his agents can sell policies from multiple insurers, its growth strategy, and the impact of technology and customised products on the market.   

BT: What is your business model? 

BS: Let me take you through the business model, by first sharing a brief history of the Indian insurance sector’s challenges. In the last two decades, insurers have had little or no presence beyond the top 30 cities. Most insurance companies continue to focus on the top tier cities and are unable to expand due to high fixed costs. India’s insurance penetration was at 2.71% in 2001, which steadily increased to 4.2%, but still remains below the global average of around 7.23%. Even today, insurance is highly under-penetrated, especially in the smaller cities and towns, due to complex product structures and a physical, branch-led distribution model. Around 700 million people, in our estimation, can buy insurance but don’t have access. 

RenewBuy was thus established in 2015, with the vision of making insurance simplified and accessible to all. The idea was to build an insurtech company that disrupts the traditional insurance ecosystem. We focused on building a tech-driven branchless model, which gets further channelled by our national network of insurance advisors. Our insurance advisors reach out to their consumers across the country, armed with the RenewBuy Mobile App, which recreates fully what an insurance company branch can do—and not just for one but 30 plus insurance companies. We have enabled our advisors to solve consumer needs on the spot—instant policy as well as servicing of policy, including claim assistance—all contactless. In the last eight years, this model has proven to have the most potential, and can successfully work in Tier 2, 3 cities and beyond.   

BT: How are you different from other digital players like Policybazaar?   

BS: As mentioned above, our digital model is enabled by a huge network of insurance advisors, across the country, who are best geared to provide end-to-end insurance solutions to their consumers. Our model works both ways, where a consumer can reach out to us through the website and our representative will touch base with them. On the other hand, our insurance advisors directly reach out to consumers, using the RenewBuy mobile app and this is where we have concentrated more focus. Digital is the medium through which our insurance advisors are tapping consumers in the smallest of the cities, towns and districts. In fact, we generate maximum business from beyond the top 30 cities; 70% of our business comes from beyond the 30th city and 35% of our business now comes beyond the 100th city. We are present across 800 cities, towns and districts of India and deep into the Tier 3/4/5 markets, and that’s where we want to further increase our outreach.   

We are working with more than 30 insurers and have reached out to more than 5 million consumers and growing. With time, we want to create a consumer base in every village of the country and take insurance to the ones who really need it.   

BT: How RenewBuy’s individual agent is able to sell policies from multiple insurers? What are the Irdai rules relating to it?   

BS: We have a broking licence by Irdai, under which we can appoint POSP (Point of Sales Person) agents to offer insurance products across the country. Our POSP agents are more focused on consumer outreach in the smaller markets, as per our business model; the agents offer insurance products to consumers, from multiple insurers, adhering to Irdai guidelines. In order to become a POSP agent, an individual has to undergo training and pass certification program, as mandated by Irdai. Once the individual is done with the training, he/she takes the exam and gets certified, and becomes a POSP agent and starts with his/her insurance advisor journey. They can offer different insurance policies of multiple insurance companies, as opposed to the tied insurance agents. The certificate received by a POSP advisor is valid for 3 years, after which they have to renew the certification.   

BT: How many agents do you have currently? Do you plan to increase the agency force? 

BS: A large part of the uninsured population resides in Tier 2, 3 markets and beyond, which, in our estimate counts to almost 700 million people. Thus, we are reaching out to those uninsured people, with our current base of 120,000 plus digitally active insurance advisors, present across 800 plus, districts, towns and cities. With this network of digital advisors, we are doing 70% of our business beyond the 30th city. We are fast growing our agency force and planning to double the numbers in the next few years. 

BT: Do you assist your customers and agents during claim settlement? How? 

BS: We provide support to our consumers and insurance advisors throughout the claim settlement process. We have developed an integrated platform for our insurance advisors that not only facilitates claim registration but also provides a comprehensive view of reported claims through an intuitive dashboard. RenewBuy also has a dedicated team of technically qualified claim experts who handle disputes and liaise with its onboarded insurers to ensure fair settlements. In addition, our automated query management system efficiently assigns and addresses the queries of our advisors, enhancing the overall experience.   

BT: Where is most of the growth coming from? 

BS: As highlighted earlier, most of our business is coming from the smaller towns and cities. Around 70% of our business comes from Tier 3,4 markets and beyond. In the product category, RenewBuy started with motor, and fast moved into Health, Life and new range of proprietary products specifically designed for middle income groups. Motor continues to be our lead product category with around 75% share and Health & Life has picked up over last two years and contributes to around 25% of the business. 

Using technology, micro consumer behaviour data and insights, we have co-created low-cost/ customised products, targeted at helping consumers in Tier 2 markets and beyond; helping break the price barriers in those markets. We are hopeful that the products will be ground-breaking in the smaller cities, as they will cater to the particular needs and requirements of the people there.   

BT: How do you plan to grow your business? 

BS: In the next few years, we are focused on RenewBuy’s growth, in terms of tech development, product offerings and accelerated consumer outreach. The business is growing, and performance is aligned with the company’s vision. We want to increase our distribution reach across the country and strengthening technology is vital for increasing presence in the smallest markets. We are enhancing our distribution portfolio with more health and life products and doubling down on technology to improve the product & technology functions.   

RenewBuy has brought massive efficiency in the sales process; we want to leverage this to deliver better pricing to consumers. In the product category, we are co-creating customised products in the health and life insurance segments. Use of artificial intelligence, machine learning, automation is transforming every aspect of our insurance value chain; we are working towards improving claim settlements, underwriting processes for which, we had acquired Artivatic (cutting-edge, AI- Artificial Intelligence based InsurTech company). While India is always our primary focus, we are also exploring markets beyond India, where similar pain points exist and are at the right stage for digital disruption.   

Also read: Choking on pollution: Will your health insurance policy protect you when air quality turns severe?

Also read: Gold prices expected to reach Rs 63,000 during Diwali: MOFSL Report

Also read: Investing in a home? Why pollution matters when buying a flat in Delhi NCR

BT: What is the current amount of funding you have, and are you actively seeking to secure additional capital? 

BS: We have raised a total of $120 million, since inception and raised $40 million in Series D round this year. 

BT: How much commission does RenewBuy agents earn compared to working directly with the company? 

BS: RenewBuy has a broking license from IRDAI, and we operate within the regulatory framework, defined by IRDAI both for insurers as well as intermediaries. As part of that, there is a compensation we receive from insurers and part of it is dispersed to the intermediaries. As POSP agents, our insurance advisors are able to offer multiple insurance products compared to the tied agents. Consequently, they can cater to consumer needs and requirements, more specifically and have the liberty to offer products from a huge insurance bucket. Their conversion ratio is around 6-7% higher than the tied agents.   

BT: How can Bima Sugam change the insurance landscape?  

BS: Bima Sugam is a great initiative by IRDAI; a significant step towards simplifying the process of buying insurance for consumers. We anticipate that the platform will help in increasing insurance distribution, as more consumers can access insurance products through the app. India needs more accessibility for consumers in insurance and Bima Sugam can be a one-stop destination, where people can meet all their insurance requirements. The country needs a digital insurance infrastructure to increase the insurance penetration. More and more insurance manufactures, distributors should join the digital bandwagon for increased insurance distribution.