Deal focus: Targeting an insurance pain point

Kamesh Goyal, chairman and founder of India’s Digit Insurance, knows the notoriously thick legalese that clogs up his industry is more about fraud prevention than obfuscation. But that doesn’t mean public impressions to the contrary should be dismissed.

Goyal has identified mistrust among end-customers as the biggest problem in the insurance industry and simplification as the cure. Digit recently raised a $200 million round led by Faering Capital to advance this theory with support from Sequoia Capital India and IIFL Alternate Asset Managers.

The company has now raised $442 million to date, including an $18.4 million round in January featuring Faering, A91 Partners, and TVS Capital at a valuation of $1.9 billion. The latest round values the four-year-old start-up at $3.5 billion.

“Fraud management is of course important, but processes should be made keeping genuine customers in mind as they make majority of the customers,” Goyal says. “Trust begets trust. So, if we as insurers start from a point of mistrust, we will be mistrusted as well.”

Digit offers a streamlined digital process for making claims, a smart phone-enabled self-inspection option for motor claims, a home loan calculator tool, a small business consultant took, and an insurance term dictionary.

There is also a focus on transparency, with publication of a twice-yearly report on Digit’s relevant business metrics such as turnaround times for claims. Perhaps most importantly, the company seeks to maintain engagement with customers outside of policy buying and renewal transactions, while providing customized products with a granular approach to pricing.

“Based on multiple parameters, we are able to give unique pricing as per the customers’ risk profile,” Goyal says. “Then when the customer receives the documents, they are written in simple English, again a pleasure point, especially in an industry where mistrust is caused by complicated jargons in documents.”

Digit claims to have processed around 400,000 claims for 20 million customers to date, with motor and health as the core coverage areas. Growth has spiked during the pandemic, gaining 44% in financial 2021. About 4 million employees at 32,000 companies have signed up for the company’s COVID-19 insurance product, which it claims is the first of its kind in India.

“We feel with a digital approach in our DNA, we were perched to handle the pandemic better with our zero touch processes, so that will continue,” Goyal adds. “Non-motor products like health have seen a natural jump, and we feel it is there to stay.”

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• Topics
• South Asia
• Financials
• Expansion
• India
• Faering Capital
• Sequoia Capital
• IIFL Wealth Managment
• insurance
• covid-19