Making it simple for rural population to buy insurance

Making it simple for rural population to buy insurance

Bimaplan is an InsurTech startup helping drive insurance adoption through technology. India has a low insurance penetration, and the low/middle-income population is underserved by legacy insurers and distributors. Bimaplan’s full-stack embedded insurance platform enables businesses to seamlessly distribute relevant insurance products to their customers. They partner with financial services companies, technology startups, e-commerce platforms, and companies in various segments to build customized insurance products for their users. CXOToday has engaged in an exclusive interview with Mr. Vikul Goyal, CEO Bimaplan

 

  1. Can you explain in brief how you started Bimaplan and how has been the journey so far?

The story of Bimaplan’s inception goes back to the days when the nationwide lockdown was announced during the onset of the pandemic. Seeing migrant workers displaced and stranded due to the complete shutdown of the cities shook my thoughts and emotions. They were always working and earning on a day-to-day basis and didn’t have savings/ insurance or any financial tool to bank upon and hence were forced to walk back home. The scenario made me think about this segment and how we can uplift them and avoid this sort of situation by equipping them with insurance, be it health, life or even simple daily hospital cash.

 

  1. What is the problem you’re trying to solve? Why is your solution better than any others present in the market today?

Financial security is crucial in today’s time. The outbreak of the Covid-19 pandemic made us realize that unexpected events such as medical illness, hospitalization, death of an earning member, or unemployment, can lead to financial loss and push the affected household into the poverty trap. Furthermore, the social security of India’s people is questionable. Despite becoming the fifth largest national economy in the world, it continues to have the largest concentration of the world’s poor people,  estimated around 190 million. In such an alarming situation, with inadequate domestic savings and poor public social security, insurance can be an effective tool to provide the necessary risk coverage for vulnerable households.

On the flip side, insurance penetration in India has marginally improved at 4.2% in FY21 from 3.76% in 2019-20. The Indian insurance industry grew at a CAGR of 17% over the last two decades. One of the key reasons why it isn’t expanding is accessibility and high premiums. Private insurance is largely accessible to the affluent and middle class populations. The government schemes cover the bottom of the pyramid population, however, the risk protection is insufficient. There is a large segment of the population referred to as “the missing middle”, comprising 400 million Indians, which is not covered by either government schemes or private insurance. Bimaplan aims to address this problem by providing affordable relevant insurance products to provide financial security for vulnerable households.

 

  1. How is Bimaplan making it easy for people in rural India buy insurance plans? How are you making paying premiums easier?

Currently, life insurance coverage in rural India stands below 10% while less than 20% of the rural populace has any form of health insurance. Introducing micro and bite-sized insurance products tailored to the rural population’s needs can prove to be a game-changer in improving insurance penetration in the country. At Bimaplan, we have shifted our focus to providing effective policies at a low premium with minimum documents. This has smoothened the process of buying an insurance policy that is not heavy in their pockets and provides optimum coverage at an affordable price.

Apart from developing customized insurance products, we understand it is imperative to make them accessible to the rural population. To enable this, the collaboration between pure-play financial institutions and insurtech platforms along with API integrations can make the accessibility of products seamless via their smartphones. We capitalise on the potential of API Integrations that have the potential to offer a greater degree of personalization to the customers with a quick turnaround time. Having said that, the deployment of the right PoSPs or local agents for physical assistance is still necessary to build trust among the rural population. The adoption of a hybrid model to combine physical and digital selling modes is going to boost financial literacy by increasing awareness, and adoption of insurance policies in rural areas.

 

  1. The pandemic has introduced numerous changes in the insurance sector; how do you feel this has impacted the consumer sentiments in your domain?

Indian population is financially unprepared for unexpected events and medical emergencies and the Covid-19 pandemic has further highlighted the lack of public social security in India leading to one of the worst reverse migrations in India. In such a scenario, with inadequate domestic savings and poor public social security, insurance can be an effective tool to provide the necessary risk coverage for vulnerable households.

 

  1. Elaborate on the present market scenario. What kind of business opportunities do you see in this segment?

Currently, the Indian insurance market stands at $131bn as of FY22. As per BFSI, the it is expected to record a commendable growth trajectory to reach $222 bn by 2026. The increase in the FDI in insurance from 49% to 74% announced in UB Feb 21 has further helped in driving increased penetration and coverage by enabling additional avenues for capital support required for the expansion of the insurance business.

India is the 2nd largest InsurTech market in the APAC (Asia-Pacific) region, accounting for 35% of the $3.66 bn capital invested in this region. The online individual insurance market opportunity is estimated to be $1.25 bn by FY25 more than tripling from $365 mn in FY20.

 

  1. Any new trends you see in the Insurtech segment in coming years? How is it going to impact the customers & Insurers?

In recent years, the industry has witnessed accelerated digital adoption. Nearly, 67% of agents felt customers are more willing to use portals/apps post covid. Further pandemic increased the insurance penetration rate and triggered awareness around insurance. Customers are now adopting digital mode for their insurance needs with 73%/62% of customers preferring online more for GI/HI products. Hence, insurtech will play an integral role in bridging the gap for insurance companies and intermediaries by providing an embedded platform that allows the user to provide a bundled insurance product.

Digital issuance and online channels are expected to witness continued growth, the share of web aggregators within digital insurance has been constantly increasing and web aggregators currently originate 30-40% of digital insurance.

 

  1. What sort of reach do you have in terms of the number of users/downloads/sales?

In less than a year of operations, we have acquired over 300k users and onboarded 35+ partners and we have a projection to reach over 10 million users by the end of FY 2025

 

  1. Any other relevant information you would like to add?

Bimaplan is among the winners of the 2022 Inclusive fintech 50 powered by the center for financial inclusion. Here is the link of the cohort – https://www.inclusivefintech50.com/2022-cohort.

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