Please shed light on your company’s products and services.
SecureNow is a B2B-focussed insurance broker. We help businesses buy insurance to protect their assets, loss of profits, employee benefits and legal liabilities. Currently, we serve more than 40,000 businesses across 150 cities in India
The insurance sector is quite vast. Which are the segments that you majorly bring to use/cater to/focus on?
Within the insurance sector, we are focussed on general insurance, as that is the primary need for businesses. In terms of our product lines, we service fire, health, marine and liability insurances.
Why is the insurance uptake extremely low in India amongst MSME entrepreneurs even though they invest their life savings in their businesses?
There are two reasons for this: low awareness and lack of access. While insurance as a category has gained substantial traction over the past five years, awareness on SME insurance has been low. For example, most businesses would not know that they can buy fire insurance for less than Rs 100 for every lakh of sum assured. The complexity of lack of access is an even bigger problem to solve. Most insurer branches focus on personal lines insurance. So, if you walk into a small branch and ask for liability insurance, there is a high likelihood of getting disappointed.
What are the potential consequences of SMEs not having adequate insurance coverage? How does this impact their growth and sustainability?
Insurance is a mainstay for organised businesses. Several large companies insist their vendors buy a few insurances, mandatorily. This includes workmen compensation and commercial general liability. Absence of these insurances can hinder their ability to get these contracts. Similarly, group health insurance has become a core component of employee benefits. Potential employees look for this benefit before considering an offer. So, it has become critical for employers to provide this benefit to attract quality talent to fuel their growth.
The biggest challenge for a small business is limited capital. Such firms rarely have contingency capital. Small mishaps can set them back by years. For example, a consignment getting damaged in transit can lead to a loss of one month’s profits. It can have a cascading effect on erosion of working capital, inability to fulfill orders, and thereby, loss of clientele. Insurance can help recover from such setbacks quickly.
What kind of efforts do you think are required to increase the uptake of insurance among small businesses?
First, substantial investments need to be made to raise awareness levels. This would require mass education and awareness programmes. You may have come across advertisements for life insurance, but rarely for a marine insurance. This needs to change. Second, the distribution-reach needs to grow. This requires making investments in last-mile distribution through technology. Commercial insurance should be available at the click of a button. Third, the supply side has to be digitised. Insurers should be able to complete the entire customer journey digitally. This should include quotation, payment, policy issuance, policy changes, claims and renewal.
What role do insurance providers play in addressing the challenges faced by SMEs? How can they better tailor their products and services to meet the needs of SMEs?
Insurance providers, like us, need to articulate the policyholders’ needs better. This needs to be done through sharper segmentation. For example, the insurance needs for a trader are different from that of a small manufacturer. Even within manufacturing, the needs vary for a chemical factory compared to a textile unit.
For each segment, the right product, price and distribution has to be ascertained. In several cases, different products can be combined to provide a holistic solution. This would require the insurance ecosystem to shift from product-centric to client-centric approach.
How can embedded insurance be leveraged to make insurance more accessible and affordable for SMEs in India?
Digital platforms have the most extensive reach. Apart from direct buying platforms, embedded insurance can be used to leverage the existing e-commerce ecosystems. For example, SecureNow has tied-up with multiple transport aggregators to embed transit insurance, when a transporter is booking trucks. This enables easy decision making for the transporter, as the product is offered in the right context. It also substantially reduces the transporter’s effort to discover the product. Embedded insurance products are negotiated at the group level, so tend to be cheaper than stand-alone products and are typically low-ticket size.
With the rapid use of technology in the insurance sector, how do you see its future going forward in India?
With more pervasive use of technology, it is likely that the delivery of insurance services would be fully digitised, highly personalised and largely on-demand. Currently, the industry works on a one-size-fits-all approach with very little choice for the policyholder. This is largely due to the absence of collection and analysis of data. The digital flywheel has already started moving with higher digital adoption in fulfillment. Further, digitisation would be enabled due to rising policyholder expectations and competition. We would soon see end-to-end digitisation including in claims. Increasingly, information flow between brokers and insurers is moving via APIs rather than excel and email. This would naturally extend to other parts including surveyors, hospitals and TPAs.
A higher tech adoption in delivery would ultimately lead to higher NPS and increase the trust and demand for the category.