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A masterclass on insuring rural India | Dhyanesh Bhatt @ GramCover
284 Plays1 year ago
Gramcover is the only insure-tech startup focused on expanding its insurance base in rural India. It is making use of some very unique strategies to sell low ticket-size insurance to the bottom of the pyramid. Dhyanesh shares some amazing insights from his two-decade-long journey in the field of insurance.
Read the text version of the episode.
Read more about GramCover:-
1.How a missed opportunity in insuring rural India became the business model for Gramcover
2.Delhi-based agri insurance startup gramcover is de-risking rural india with affordable products
3.How parametric insurance breaks the mould of traditional insurance?
5.Interview: Dhyanesh Bhatt, co-founder and CEO of GramCover
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Transcript
Introduction to Gramcover and Importance of Rural Insurance
00:00:00
Speaker
Hi everybody, I'm Dhyanesh Bhatt, I'm the co-founder and CEO of Gramcover, a rural focused in short-tech platform.
00:00:18
Speaker
Fundamentally, an insurance company is the business of transferring risk. It takes individual risks and transfers it to a group of individuals, thereby reducing the maximum loss of individuals. And in India, there is no section of the population more at risk than farmers. Farmers don't get any sort of fixed income and they're constantly gambling everything they own.
00:00:38
Speaker
and they are at the mercy of so many factors outside their control, like the weather, global economic conditions and state and national level policies. This is what makes a company like Gram Cover so important. It is the only in-shore tech startup that is focused on expanding the insurance space in rural India and it is making use of some very unique strategies to sell low ticket size insurance to the bottom of the pyramid.
00:01:02
Speaker
In this episode of the Founder Thesis Podcast, Dhyanesh Bhatt, the co-founder and CEO of Gram Cover, talks with your host Akshay Dutt and shares some amazing insights from his two-decade-long journey in the field of insurance. Stay tuned and subscribe to the Founder Thesis Podcast and any audio streaming platform to get access to such amazing master classes from the veterans in the field.
Dhyanesh Bhatt's Career Transition to Rural Insurance
00:01:32
Speaker
So I joined ICIC Lumbar from campus in 2005. Actually at that point of time, ICIC Lumbar was just starting their rural and agribusiness division. So they had come to campus to recruit people for the rural and agribusiness division.
00:01:46
Speaker
I started my journey with corporate insurance. I was in Ahmedabad for the first couple of months and I moved to Mumbai in 2006. From then, I think it is the standard journey that you would have as somebody who is working in a large corporate enterprise.
00:02:07
Speaker
Started at the bottom as a relationship manager, working with multiple clients, worked with a larger set of customers, worked with larger clients, worked across different domains, worked across telecoms, worked across oil and gas, worked across aviation, worked across large government institutions also, and other MNCs as well.
00:02:32
Speaker
I did all of that for around 7 years in my last stint at ICIC Mumbai on the corporate side. I was kind of looking at Mumbai, part of Bombay as a territory and also looking at Kula, Goa and Aurangabad as urban locations that I was kind of responsible for.
00:02:48
Speaker
And at that point of time, somebody within the organization from the rural division was kind of moving out. And so, the call from the management was that you have a background in rural and you had somebody to get into or really look at this rural business piece. So it would be an area of interest or not. So I said, I've been doing corporate insurance for a fairly long time.
00:03:12
Speaker
I think rural would also be a steep learning curve because typically government business and rural business is very significantly different from say a corporate business. I thought it would be a good learning opportunity for me. So then I kind of got into rural insurance.
Common Service Center Initiative and Rural Insurance
00:03:24
Speaker
So started by doing working on crop insurance.
00:03:28
Speaker
I also started working on, over a period of time, I started also working on the low cost health insurance flow rate. So did that. Then kind of, you know, looked at other lines of businesses which are not subsidized. So work with livestock insurance, multiple things in partnership with, say, for example, the ICICI's number added a partnership with the ICICI bank. So the rural banking team used to kind of do something on the liftoff print and all.
00:03:51
Speaker
And if you look at other products which are not subsidized, then the last, I would say, milestone kind of a thing was ICHL Lombard's foray into the CSC setup.
00:04:05
Speaker
What is CAC? CAC is the common service center initiative of the Ministry of Electronics and Information Technology. So, you know, through that, there is a VLE or a village level entrepreneur who has access to multiple G2C and B2C services, then they can offer to the rural or to the urban consumer. And insurance is a lot of the services that is brought to that particular setup.
00:04:28
Speaker
No, this is like the ITC at that Echopan or something like that. It's similar to that, but ITC Echopan would have been limited to ITC product and typically more to do with agri inputs and agri trading, all of that. This is over a ministry level initiative, right? So there are multiple services. So for example, you want to do something on your app or you want to do something.
00:04:51
Speaker
So, a lot of G2C services and G2C services provided through the CAC setup. So, ICIC Lombard had evaluated the opportunity at some point of time in the past. But in 2017, we revisited the part of something that we called as the White Spaces Initiative. We are identifying new opportunities.
00:05:10
Speaker
I worked on the whole CSE initiative, looked at how it has grown over the last couple of years, what are the chances of getting into a larger space.
Subsidized vs. Non-Subsidized Insurance Products
00:05:21
Speaker
So we made the case, presented it to the management, got the approval to launch the initiative, then launched the initiative, did the tech integration bit, and then started with around four states in which we wanted to roll this out. So that was another one, one and a half years. And what products did you roll out?
00:05:39
Speaker
So typically, personal accidents are motor insurance. So motor insurance obviously is a large part of what happens even in the CSU network. So motor insurance is the non-subsidized business. Just with the difference between the subsidized and non-subsidized business, what all is subsidized?
00:05:56
Speaker
So, typically, if you look at businesses like CRO, even for that matter, Ayushman Bharat. So, part of the premium is paid by the farmer, but there is also state government subsidy and probably a central government subsidy also involved. So, the farmer or the customer doesn't pay the full premium. Whereas, in a Motor Insurance Policy, for any of the other policies that you look at, whether it is retail health or it is motor or any of the other lines of businesses that are there, the policy is the customer pays the full premium. So, only in certain government programs, there is a subsidy element.
00:06:25
Speaker
Okay. What percentage of ICICI's business was subsidized? I think a small percentage would say maybe around 15 to 20% at any given point of time. So generally, I would say that subsidized businesses for most insurance companies would be in that range. It will never be like 100% of anybody's portfolio.
00:06:48
Speaker
I think this would hold true for some of the other companies as well.
Distribution Channels in Rural India
00:06:51
Speaker
What are the channels of distribution for reaching rural India? In urban India, you have that bank as one channel and you have the agency channel and you have the corporate broker channel. What are the comparable channels for rural India?
00:07:10
Speaker
So, typically again, insurance is one part of it. So, that is there. If I ever look at any asset insurance, if there is any bank giving a home loan or a vehicle loan, typically, you will have some of these types which are there in place even for hook makers.
00:07:25
Speaker
The second is who are MEFC MFI's significant role in the presence, who are giving income generation loans and also products like term life insurance typically gets bundled with the loan, so that's another very significant part of
00:07:42
Speaker
of the rural insurance base. Then companies like LIC, who have a large rural network of agents and also they also are clearly present there in rural areas, where their agents distribute insurance. And I think over a period of time, something that we do at Gram Cover has also been evolving. So there is this whole regulation of point of sale partners. So these regulations came around in 2015-2016 and the whole mandate from the regulatory laws, we want to look at individuals who can distribute insurance after being trained and certified.
00:08:12
Speaker
to really increase the insurance density and insurance penetration. So, if you look at India, currently the insurance penetration of the percentage of GDP is around 4.2%. What does that mean that 4.2% is the premium collected or is it the... No, 4.2% is the percentage of GDP.
00:08:32
Speaker
Right. So if total GDP is so and so, then of that only so and so percent. 4.2% is the overall contribution of the insurance sector. Right. So which include life insurance and general insurance. Life insurance are relatively larger part around 3.2%. General insurance is around 1%. And what is this number for developed countries like this 4.2 standalone?
00:08:55
Speaker
So, for larger Asian economies, I think it would be in the range of around 6%. For the highest would be probably in the range of around 10 to 15% also. So, this is in terms of insurance penetration. The second is insurance density, which is the per-person premium that is paid. So, India's number is around $78 and the global average is around $800.
00:09:17
Speaker
So, there again it is like one tenth. It's also, you would say it's also a reflection or it's also a function of the economic status of the country. So, as more economic prosperity, as you have more assets, typically the scope of insurance kind of goes on increasing.
00:09:39
Speaker
So, the mandate was that, can we also get insurance distributors who are individuals, who could align with insurance, please align with insurance intermediaries like ourselves, and distribute insurance at the last month. So, that's another channel that is now seeing traction over the last couple of years.
Founding of Gramcover and Product Expansion
00:09:56
Speaker
More and more products are now brought into the ambit of that.
00:10:02
Speaker
That common service center would also be a channel, right? Like selling through. Yeah, obviously CSE is a channel. I would rate them very similar to the POSP model, except for the fact that it's a separate channel which comes into the move. What is that POSP? It's called point of sale partner.
00:10:23
Speaker
And the whole idea is to really create a network of people who understand insurance in the first place, who are trained and certified, and then who can also distribute insurance. Tomorrow, if there is a claim or if there is any support required, then the expectation is that the person who would have taken the insurance from point of sale partner would reach out to him and say, hey, I have a claim. They in turn can reach out to us. And then we in turn can help, engage with the insurance companies in the settlement of
00:10:50
Speaker
So, this point of sale pattern is the same as an agent, right? Similar. What is the difference? So, two things. One is the regulation and the kind of products that they can sell. So, typically, there are certain products which are defined as point of sale partner, POSB products which can be distributed by them. These are generally simple, easy to understand, low ticket size. So, these POSBs don't have to clear the IRDA exam.
00:11:17
Speaker
They have to, there is a separate exam that they have to clear. Easier exam. I think there is, with an agent, there is, I think a 50 hour training required with a point of sale partner. Typically it is a 15 hour training that is manually required.
00:11:30
Speaker
And, what happens is, as an agent, typically, there is an IRDA exam that you need to pass. So, when the point of partner guidelines were launched, they had a similar, I think, thought process in place, saying that there will be an IRDA exam that you need to take. But over a period of time, they realized that it's fairly cumbersome, because the number of POSPs has got to be much larger than the number of agents.
00:11:49
Speaker
So now, any intermediary, for example, grant cover, we have the IRD approved register, I mean, course modules on our application. The POSP is supposed to study that. We have also created some videos for their consumption. And over a period of time, we have it right now in English and Hindi, but probably we'll have more word and actual languages going forward. And the thought was that they will undergo that study material, they will go through it, all of that. And they will take a test. Test is administered by grant cover.
00:12:17
Speaker
It's a minimum threshold for passing and once they pass that exam only then they get access to products. And we also report this data to IRDA on a monthly basis of all the people who kind of registered and certified as record certified as our point of sale. So every insurance company as well as intermediaries have that
00:12:39
Speaker
ability to kind of you know administer exams and kind of you know register and inform the IRD saying these are the people who are interested. And this PSSPs are the same commission as an agent or is there a difference?
00:12:52
Speaker
Yeah, almost the same only. As an agent of an insurance company, you typically get to sell one insurance company as a point of sale partner of an intermediary. Typically, depending upon the time that the intermediary has, there is no choice. If the customer says, I want to have a policy of a particular company.
00:13:11
Speaker
If you have choice, then the ability of the point of sale person to make a sale can also become higher. So I think that is another distinction I would draw as compared to an agent of an insurance company vis-a-vis a point of sale partner to an insurance intermediary, I think that is also there.
00:13:26
Speaker
So, POSPs are generally with intermediaries or insurance companies also. I think both the models are there. There are insurance companies also. So, insurance companies also used to have their own agent model, right? So, I think it's an extension of the agent model where they say, apart from an agent model, we would also like to have a POSP. So, it works both ways.
00:13:46
Speaker
Okay, so coming back to your ICICI journey, so you did that new initiative of CSE. Yes, so that was around 2018. You know, that was the last project that I was kind of, you know, also working on. I knew Jatin from my days in ICICI. So Jatin is the co-founder that
00:14:04
Speaker
He also was a pro-founder and managing director of a company called Skymit, which is an agrian weather data company. So when I was doing crop insurance at ICIC Lombard, Skymit was basically a weather data provider to us. So that's how I knew Jatin from those days. And then around that time in 2018, you know, a gram cover had got its license in IAD license as a composite insurance broker in December 2017.
00:14:31
Speaker
Right, which is like the fag end of F5ET. And they were on the lookout for somebody
POSP Model for Rural Insurance Distribution
00:14:38
Speaker
to come and join the organization as a professional, as a CEO. So, while we got in touch, I met Chatin, we had a whole conversation saying this is a start-up, it's not a large organization, you know, there could be a difference of lens of how we look at things.
00:14:54
Speaker
I had a meeting with the investors and all of that. And then I came to keep onboard to Gram Cover in October 2018. Okay. So Jatin had started Gram Cover. He was the... Okay, okay. Tell me a bit about that background. Meanwhile, while you were at ICICI, what was happening there? Why did Jatin start Gram Cover? What was his vision?
00:15:17
Speaker
Right. So Jatin, I've been in the rural space for a fairly long time. He was running Skymit, and in 2011 was the time when the government crop insurance program had these old pilots around weather-based crop insurance. They also got into it as a weather data product in a large way. So Skymit has a network of, even today, as we speak, they have a network around 8,000 weather stations in India.
00:15:41
Speaker
across multiple states and the whole idea is that they collate a lot of weather data that is given to either state governments or to insurance companies. They also now work with banks to do some kind of an alternative scoring of rule because with weather data or with satellite image data, you can actually look at historical range of what the production was and how all of that is there. But at that point of time, they were primarily in a weather data company and they used to
00:16:10
Speaker
provide the weather data to insurance companies. So it kind of formed a basis for us to settle claims because the weather station was there. And while Chaitin was doing that, he also realized that in rural areas, there is this huge gap of actual distribution. So most of the insurance at that point of time was either a government program or it was embedded. There was no network of distribution in rural areas. What do you mean it was embedded? What is that thing?
00:16:38
Speaker
So, which I was mentioning, right, saying MFI, NBFC, they typically are built into the products. You give a loan to automatically get live insurance or term line, which is equivalent to the value of loan that you have taken, right? So, there is some amount of financial protection for the financial institution plus there is some amount of protection for the beneficiary. So, that is where you realize that, okay, there is this
00:17:01
Speaker
space in insurance distribution in rural. Also, Jatin because by the virtue of his being in crop insurance as a data provider, he also understood and he had experience on the agri insurance side also. So how do you, so the whole thesis at Grandpa was and is to kind of, you know, start with crop insurance. So when we started the journey, we were primarily doing crop insurance. So FY 18, couple of months, we started by insuring 1000 farmers in Himachal. This is like unsubsidized or subsidized this crop insurance. Okay.
00:17:31
Speaker
Crop insurance inherently is subsidized. There is no such thing as a subsidized crop insurance.
00:17:36
Speaker
So there is, and I will talk about it, doesn't fall under the purview of the government crop insurance program. Government program on crop insurance is subsidized. And the whole idea was that you do the first level of insurance for the farmers, right? So FY18, FY19, FY20, I think most of our business was crop insurance. So we grew from 1,000 order farmers to 2,000,000 farmers to 12,000,000 farmers, you know, across FY18, 1920. Most of our business was at that point of time, crop insurance.
00:18:04
Speaker
And this was like, as an insurance broker, like there were multiple insurance companies whose products you would sell. Right. So as an insurance broker, we obviously work with multiple insurance partners. So we work with AIC, we work with United India, we work with ICMSA, Lombard, we work with HDFC, Ergo. We are currently working with Reliance, we are currently also working with Reliance General. So there are six or seven old companies that we have worked with. And obviously, as I was mentioning, the process was that the state government would select an insurance company, right, through the tender process.
00:18:34
Speaker
Then the insurance company wouldn't tell them, kind of, you know, Indians with an entity like ours and the mandate is to take this government program to the non-lonely farmers who are not getting access, right? So the bank is doing the insurance of the lonely farmers for the non-lonely farmers who are not of them are small and marginal farmers. The whole idea is to kind of, you know, really, really take insurance to them.
00:18:53
Speaker
So that's where we started and over a period of time, we kind of grew that significantly.
Scaling Operations and Technology Integration
00:18:58
Speaker
And what is the way in which you grow it? Even before joining, how did they grow it? Was it like feed-on-street? Like you built up a sales team?
00:19:08
Speaker
Yeah, so it's like a POS, the POS model that is there. So, you know, there are a lot of people that we know, you know, Jatin has been in, in crop insurance for a very long time. I have been in crop insurance for a very long time. Our chief business officer Praveen, he has been doing rural insurance and crop insurance for close to a decade. So there is a lot of synergy in the team in terms of understanding how crop insurance works. So we have all these geographies, right? So there are certain states in which we are working. So there is West Bengal, there is Assam, there is, there is AP Telangana, you know, we're doing some work in Bihar, we're doing something in Jhana.
00:19:38
Speaker
So, we know these geographies and we know how proper insurance operates, right? So, we were able to work with people in these geographies to really take the insurance restriction and ask me, right? So, once the insurance company gives us a mandate, we engage with the insurance company, we engage with the regional office, we engage with the district officials and the block officials. We then, kind of, you know, do a lot of work around, say, for example, giving radio jingles, or kind of, you know, doing some kind of a marketing activity, all of that, to kind of, you know, doing a lot of farmer meetings and all of that. And then, onboard these farms and with the program.
00:20:06
Speaker
That's how it generally works. So it is like a last mile connect through a network of people that work with us. Okay. And you sell directly to farmers or you sell to the POSPs, like you appoint POSPs who then? Right. So the whole idea is that, you know, POSP is an extension of gram cover, right?
00:20:24
Speaker
by design. So they are registered with us, they are representatives on the field and we are responsible for whatever activity that they do in the field. So to worry if there is an issue with the POSP, then the regulator is not going to go and talk to the POSP. They are going to go and say who's the entity which is responsible for this POSP.
00:20:44
Speaker
So, they are in the next year. So, I don't differentiate this between saying low SL to the POSB or low SL. Ultimately, at the end of the day, we are saying year in intermediary, which has the connect and the tech platform to really create insurance distribution at the last point. And obviously, the end, the customer is the customer.
00:21:02
Speaker
But if you have, let's say, 1000 people selling insurance, what percentage of them are payroll employees? What percentage are POSPs? Because our entire POSP network is all variable. So as we speak, we have a network of around 5000 POSPs who are registered with us. Our core team strength, which is people who are on the payroll of the government, the employee strength is roughly around 72 people.
00:21:27
Speaker
Oh, wow. Okay. So the primary sales analyst through POS, you don't really have like sales people who are going out. So we might have a district level manager or a block level, I mean, or a state level manager and all that is there, but we will not have people at the last minute, the grand bhajayat, who's in it. Right.
00:21:45
Speaker
The basic structure would be to have district level managers who will manage multiple blocks and POSPs within multiple blocks and kind of guide them, train them, certify them, handle any issue that they might face. You are taking power. How is government licensing is needed to sell crop insurance? Like you said, you license with district officials and block officials. What is the purpose for that?
00:22:08
Speaker
So, it is more about creating awareness at the ground level, saying that, for example, if, let us say, there is EIC, which gets a mandate to work in a particular district. So, they will kind of, you know, obviously go and talk to the district officials. They will tell them that, okay, we have got this mandate and all.
00:22:23
Speaker
But when we go for non lonely farmer enrollments, right? So typically, as I was mentioning, there'll be some marketing activity that we'll include. There'll be some amount of farmer camps that we might do and all of that, right? So there'll be kind of coordinate with the block level officials. So we'll tell them that, okay, we are nominated by the insurance company to do non lonely farmer enrollment in this geography. So we'll be engaging with the farmers and all.
00:22:44
Speaker
Once the data gets violated and shared with the insurance companies, in certain cases, the insurance companies also get the data validated through the block level officials. So, there it is more of an operational interaction, but obviously, we do engage with them in terms of attending any of the meetings that might be happening at the block level, keeping them apprised that we are doing this.
00:23:06
Speaker
So, by the time you joined, what scale was graph cover at? And you said they got a license, what was that license form? So, we are a composite insurance broker by regulation.
Understanding the Insurance Industry in India
00:23:20
Speaker
So, if you look at the insurance space, there is an insurance manufacturer or an insurance company. That's one category. So, there are T4 kinds there.
00:23:29
Speaker
So there is a reinsurance company. So the general insurance cooperation of India is the only reinsurance of India, right? Then they have insurance companies, right? So TSL number, for example, is the general insurance company. So the insurance company insures the insurance companies basically like they can pass on some of their risk.
00:23:49
Speaker
Absolutely. Right. Then there are insurance companies. So there could be a general insurance company. For example, ICIC Loma. There could be a life insurance company. For example, LIC or ICIC Roo. There could be a standalone health insurance company. So, you know, Star Health. These are standalone health insurance companies. Right.
00:24:08
Speaker
Then there is something called as, oh, agriculture insurance company of India limited, which is a government of India initiative doing just crop insurance as we speak. It's like an LIC comparables.
00:24:20
Speaker
It's an LIC comparable but just does crop insurance and then use something called as ECGC which is again like a credit guarantee insurance that is there. So that's a separate entity. So these are broadly forefront categories of insurance from these that are there. The next level is insurance distributors or intermediaries. So again there are multiple levels. So I could be an individual agent that is the base level.
00:24:40
Speaker
or I could be a POSB for an insurance company or an intermediary. That's another. Then there are corporate agents. So as an entity, for example, I am an NBFC MFI, I am giving loans to multiple people. I also become a distributor for an insurance company and I'm building an embedded insurance into my distribution mechanism. So then I become a corporate agent. Then there is a broker. So if you look at agent, an agent by
00:25:07
Speaker
description is a representative of the insurance company. So, BOSP is a representative of the RAM cover or of ICIC Nomad, for example, whichever is the insurance company. An agent is a representative of the insurance company. A copy agent is again, as an entity, a representative of the insurance company. They could have multiple partners, but they are still not representative of the insurance company.
00:25:24
Speaker
Then we come to the Broking category. And the Broking category is representative of the client. So, that's the fundamental difference between an agent and a broker where a broker is representative of the client with the mandate to engage with multiple insurance to give them the best possible solution.
00:25:40
Speaker
There are three categories. There is a direct broker who will work with insurance companies and do direct insurance distribution. Then there are three insurance brokers who only have a mandate to do reinsurance business. So they will work primarily with insurance companies and reinsurance. And then the third highest category of license is a composite insurance broker where you have the mandate to do both life insurance and general insurance and reinsurance. So grant cover has a license of a composite insurance broker.
Gramcover's Growth and Market Strategy
00:26:11
Speaker
and getting caught in December 2017. So, when I joined the RAM cover around October 18, at that point of time, we had not completed a full year of operations. The first year, as I mentioned, we had done around 1000 odd farm work, we had done around 50 lakhs of premium. And from that, from there, the journey started.
00:26:30
Speaker
So like policy bazaar is also like a composite insurance broker. I'll give you some examples. Policy bazaar was I think earlier in Egypt. Now they have kind of you know become a broker. Over there is the process of becoming a broker. I think they are somewhere there. I don't recall the exact stage where they are.
00:26:50
Speaker
Okay. And is there any difference in how these two operate like a broker and an agent? Because both sound similar. An insurance agent can have multiple tie-ups and a broker can also work with multiple insurance manufacturers. Generally, an agent will not have the flexibility of working having multiple tie-ups.
00:27:07
Speaker
or a copyright agent. Copyright agent is an institution. So, that typically means work only for embedded insurance products. So, for example, if I am a NVFC, I will say with every loan that I give, I will bundle certain insurance products, which is what works on an off-road. But they will not go on to send, say for example, motor insurance or health insurance to the retail customer.
00:27:28
Speaker
So, generally, agents will have a representative of an insurance company or an entity and restricted to that. Whereas a broker is typically the representative of the client and can engage with multiple insurers. I think that is a fundamental difference. An agent within a network of family could have multiple people working with multiple insurers, but one agent will typically be assigned or aligned to one particular.
00:27:54
Speaker
And like as a corporate broker, you can have like a negotiated pricing for your set of customers and things like that, because you are the customer representative. So you can have like more customized products.
00:28:08
Speaker
So, I think the price negotiation is just one part of it. The value add, you know, for any intermediary and more so for the broking community, I think lies in providing the right solution. So, let me give an example. If I am looking at a health insurance policy, it's a very simple product. Let me talk about the product, right? So, there's a product called as hospital cash. What it basically means is that if you're hospitalized for more than 24 hours, there is a fixed payout that you get. 500 rupees per day, 1000 rupees per day, whatever is the pre-agreed value.
00:28:37
Speaker
Now, if I want to offer these two women customers who are, say, partnering with an NBS, you're getting a loan, if I have a cover which does not cover pregnancy or does not cover maternity, then it is something that is an issue, right? Because there will be a part of the population which will have maternity during the course of the year. Those things will not get paid. So, I think as an insurance intermediary, as an insurance broker, I think the role that we play is to kind of ensure that the policies mature.
00:29:07
Speaker
is aligned to whatever the exposure is. So, that's one part, right? So, as an insurance intermediary or as any partner to an institution, you know, there are two categories of insurance that are there, right? So, one is a retail insurance. So, where you say that there is motor insurance, for example, or there is health insurance. So, these are retail over the contract products, right? So, the product features will be the same, you know, for multiple insurance companies. There might be different add-ons, but
00:29:35
Speaker
more or less they are similar in nature, right? And there is a price that the insurance community decides. And there may be some flexibility in terms of pricing, but it's a limited flexibility. You will say HRTK based on these parameters, there is a pre-agreed discounting that you can do and insurance companies can provide that information to the intermediaries and the insurance intermediaries will distribute the product. There is relatively less flexibility. The second category is group product. So when you work with
00:30:02
Speaker
group policies or something that we call as master policies. What happens is you have the ability to customize the coverage.
00:30:10
Speaker
the first level, right? So you engage with the client, you figure out what is the, what is the coverage required, then you kind of, you know, talk to the insurance company, you kind of, you know, figure out how it would work. Then based on the structure that you created, you engage with multiple insurance companies to figure out the price, also the service capabilities, right? So somebody might be more take care of somebody might be less take care depending upon whatever that is. So you do all of that. And then you identify the one insurance company that will kind of, you know, either be the partnering agency, and then you kind of bring them together and then you kind of, you know, work with them.
00:30:40
Speaker
As I was mentioning, at Gram Cover, a large part of our business is over through retail, whole retail, through POSPs and all of that, where product is kind of reread and all
Innovation and Strategic Alliances in Insurance
00:30:50
Speaker
of that. But we also have a small part where we customize the coverage. There's something that we call strategic alliances, the whole idea being that we partner with rural focus organization. Let me give you a couple of examples that might help. There is a handkerchief startup that we have partnered with where we invent
00:31:09
Speaker
germination failure covers with the seed packets being. Okay. So if say, for example, there is very heavy rainfall because of a germination would fail, but there is very less rainfall because of a germination would fail or there is very high temperature because of its germination would fail. There is a, there is a cover that is provided to the farmer who's buying the product.
00:31:27
Speaker
Be a partner with another agri-pig company to embed person accident insurance with the sale of products worth a particular amount. So, for example, if a farmer is buying goods worth say 3,000 or 4,000 rupees from a customer, he or she will get a person accident cover which is embedded. So, that information goes to the insurance company, the insurance company will issue the policy document. The farmer is covered for the next six months. So, anything happens to him either accident, death or disability, there is coverage.
00:31:56
Speaker
We are partnered with again another AgriTech company which is in the space of warehouse capacity creation to provide them a parametric insurance cover which protects them against the risk of extreme weather leading to crop damage, leading to no good store, creating a scenario where they have created warehouse capacity and they are paying the rent for it but there is no nothing to store.
00:32:25
Speaker
Yeah, yeah. Loss of revenue. So, yeah. So, it's not exactly loss of revenue, it's loss. So, it's increased cost of working, so to say, right. I already made the expense, but I'm not able to do that because I'm not getting revenues, right? So, that's another example. So, there are multiple examples where we customize the coverage and we say, how does it fit into the overall risk transfer scene, our mechanism. And how is it relevant for the customer? So, you do that, then you look at
00:32:54
Speaker
For this product structure, what kind of pricing you can get, what kind of technology you can use, how do you kind of deploy, all of that. I think the role that any intermediary needs to play, because I think in India, if you look at it, there aren't challenges of awareness, right? Apart from the challenges of access, right? Which way does it distribute, right? So you physically directly distribute, that's one part of it. The second, third most important part is also the challenge of serviceability.
00:33:20
Speaker
So, what happens is you have an insurance product, you distribute, and then you disappear. Now, if there's a problem for the customer, what happens is an insurance typically has this challenge, right? So, let us say there are 100 customers, 90 people out of the 100 customers say 10 people have claimed. Out of the 8 people, their claim got settled. Well, okay.
00:33:41
Speaker
So what will happen is those eight people will say, this is my right, I have taken an insurance policy, the policy has responded. So that's good. I appreciate it. But that's it. But the two people don't get insurance claim seamlessly. They could, there is a debate either about the actual fact that the claim is, you know, applicable or non-applicable. The second about could be about the quantum of claim and all of that. So there is, I would say,
00:34:10
Speaker
disagreement over there, right? Then you'll always hear these things and you see these examples even on LinkedIn, for example, right? Where people say, this insurance company, you know, we did not have a good experience, this is not, so what happens? And it's very important to kind of, you know, address this. So if insurance has to kind of, you know, be a sustainable part of the risk transfer ecosystem, right? It's very important to not only create awareness and access, but also to ensure that serviceability is something that you are addressing.
00:34:38
Speaker
Think that if the customer has a pain point, he should be able to reach out to the partner and say, this is my pain point. And then the partner kind of gets into the act and kind of engages with insurance companies and tries to help it out. Even for rural population, I think it's fairly relevant. Because at the end of the day, the insurance policy is a legal contract.
00:34:57
Speaker
And some people might understand it fully, some people might not understand it fully. Also, the ability to engage meaningfully with the insurance company is in certain cases a challenge. And I think all of these places that intermediary has that mandate to really work on that part. Also, as much as spending time on cultivating new business or working on new policy generation.
00:35:20
Speaker
I like the term we use the risk transfer ecosystem essentially insurance is like transferring risk from one to many like instead of okay interesting so when you joined graph cover hadn't raised any funds or was it bootstrapped till then and
00:35:38
Speaker
So there was an initial, so Omnivore is one of our early investors, they were already on board. And when I joined at that point of time, post that, we've kind of, you know, on-boarded a few more investors. So Omidyar came on board, Flourish Ventures is there. We have EMBC, which is an often tech investor, called Emphasis Ventures, that's the full name. And in the series A that we did last year, Sienna and Inflexorg, these are the two other investors who kind of, you know, came on board.
00:36:06
Speaker
So we have a six investors. Okay. Okay. So they've done like a seed round before you joined. Yeah, they had done seed round before I came on. Okay. So tell me about the journey once you joined. What all in what way did you meaningfully change the trajectory? Did you like bring in more technology? Did you?
00:36:26
Speaker
bring in a better go-to-basket strategy or did you do work on better products or like, you know, just help me understand the journey. I think that is, if I were to kind of look back in the last four years, one is obviously the scale at which we operate and change, right? So when I came on board, we were around 20 people, currently we are around 70 odd people. But in that intervening period of 70, you know, this journey from 20 to say 70 odd, which is in the last four years,
00:36:56
Speaker
And premiums have significantly grown, right? So from 15,000,000 worth of premium in FY18, in FY19, around 2.5 crores of premium, in FY20, we did around 50 crores of premium. In FY21, 110 crores of premium. In FY22, we have done 280 crores of premium.
00:37:16
Speaker
So, I think this has been a significant journey for us, in terms of the skill scale at which we operate. So, starting from working with, say, I was mentioning 1000 log farmers to 2 lakh farmers to 12 lakh farmers to 16 lakh farmers. Last year, we worked with close to around 42 lakh farmers. So, it's a significant scale. The second, I would say, has been the journey on the technology. So, we have been working on the technology side since inception. We have our own house technology team.
00:37:44
Speaker
We've been working on multiple products. We started with crop insurance. Today we have motor insurance. We have a bit of health insurance. Some of these group products we are able to distribute through our platform. So there is an ongoing journey. I think the larger vision would be to have a 10 by 10 matrix.
00:38:03
Speaker
So, I have 10-odd products and 10-odd insurance companies who are offering those products so that the point-of-sale partner working with us has enough choice to cater to what the customer is looking for and also provide enough options in terms of risk transfer solutions.
Enhancing Partner Experience through Technology
00:38:16
Speaker
So, I think second is the whole journey on the product side, right? So, as I was mentioning, for the first couple of years, we were primarily a crop insurance company, but last year, almost 35 to 40% of our revenues came from the non-crop side, right? And motor is major drivers for us, obviously there. The third part, obviously, as I was mentioning, you know, we've done like, we've been able to raise some funds during the process. So, last year, as I was mentioning, done a series A.
00:38:41
Speaker
Also, the team has grown fairly significantly, plus the whole group business that we talk about, where you customize the products in conjunction with the client and then engage with insurance company. That's been another area of how we are able to contribute meaningfully. So that's another way of really engaging the rural ecosystem and growing the methodology or the models in which you make insurance a meaningful part of the conversation.
00:39:12
Speaker
I would say these are difficult things that immediately come to mind of the traction that Grab Cover has seen on the last four years. This is phenomenal growth from 50 lakhs premium to 250 crore. What is your customer acquisition cost? With a normal start-up policy, their customer acquisition cost would be very easy to present because they would spend money on Google and Facebook ads and so on and so forth. What is the cost for you for customer acquisition?
00:39:43
Speaker
Is there a linear relationship? More premium means more cost also? What is that?
00:39:51
Speaker
So, for us, I think the whole course that we incur is majorly in terms of the POSB network creation. I was saying that, okay, we have to engage with them, and most of the training or certification that we do, that's all on the application. So, obviously, there is a course that we incur, but it's more in terms of creating the network of POSBs and then obviously engaging with them and taking things forward. We don't have, because we are rural, I don't think we have a lot of people who are trying to target through social media.
00:40:20
Speaker
Obviously, there will be some such people who will be more active on social media, but it's not like the primary go-to market for us. So, it's through our PUSPs that we kind of typically engage. And that's where our expenses or the cost is also along those lines. It's a small network, as of now, here around 5,000 people in a country with 600,000 villages and 250,000 odd grandsons. So, I think it's a long journey.
00:40:45
Speaker
And as we know, these things will evolve even further. But that's where we are at in terms of cost of acquisition is more towards creating the network and activating it rather than major spend in terms of say Google-oriented. And this would not be like a linear relationship. It's not like for every one rupee more, after even we need to spend 10 best hour, whatever 1 best hour on
00:41:10
Speaker
No, I think the whole idea is that as you create a... So there are, I would say, two or three key levers, right? So the first is the number of products that you have on the platform. This basically enables the point-of-sale part, the kind of...
00:41:22
Speaker
So that increases your average revenue per partner or average revenue per buyer. Correct. So that's one. The second is the network itself. So once I start creating the network and we have a larger network, right? So one is the incremental cost. If you're doing a good job, you know, if you're working well in the rural ecosystem, over a period of time, I would say that a lot of my partner growth of my partner network will happen by word of mouth.
00:41:48
Speaker
because a person who's working with us would probably recommend that, okay, there is a gram cover, there are multiple products, they have a good system and all of that. We'll have more partners coming on board. So, creation of the network should become less expensive as over a period of time. Similarly, I think the second most important part is the lever of activation, right? So, activation and engagement. So, I might have a network of 5000 or partners. What percentage of them are? Over a period of time, I would want to move into a territory where a larger percentage of them are active.
00:42:15
Speaker
So that again kind of increase in the revenues that we get from the same network. The third is, as I was mentioning, it's more on the...
00:42:24
Speaker
ability to engage meaningfully with the partner. So today, as I developed the technology platform more and more, a lot of frequently asked questions could be addressed to that. A lot of product information could go through there. So technology as we scale that apart from being a platform where you can do transactions. If it also becomes a platform where you are getting nudges, where you are getting additional information, all of that contributes to making the whole
00:42:49
Speaker
process more cost effective. So, I would say that as the network of you know partner grows, I would say all the associated costs that we have on a per unit basis. So, over on quantum might still go up but the per unit cost that you have typically over a window frame go down. By increasing your average revenue per partner using technology, you have that leverage there.
Challenges and Approaches in Rural Insurance
00:43:11
Speaker
So essentially I'm guessing that your tech stack is focused on the partner. Like he's the primary user for your tech stack and you want him to be more engaged and more active and sell more and increase. So what are some of the things you're doing there to like make him successful?
00:43:30
Speaker
As you already mentioned it, it is completely focused on the partner app. So we are not a direct-to-customer platform, we are an assisted tech platform. There is a grant-governor partner application which is there on Android, which is used by the point-of-sale partner. So the first step for them is to download the application, give their credentials. So basic information is taken from them, their credentials are created. The first thing that we do is we do their training and certification. So till that point of time, they don't get access to the
00:43:57
Speaker
Once that is done, in the meanwhile, we, so once they get certified properly and they kind of, you know, get trained and certified by us in that they have passed the exam and they are now certified, they will get access to products. What we also do is that we have created wallets for each of our partners.
00:44:12
Speaker
So in the rural ecosystem, we realized that there might be certain scenarios for low-ticket side partners, customers who might want to have alternate mechanisms of paying agreements. Everybody in idemode might not be using a credit card or debit card. We have facility net partners with wallets also. So there's like a lot of tech that goes into the payment part of it also. So the way of connecting people. So they can take cash and use their wallet to make the transaction.
00:44:36
Speaker
So they can take cash, they can actually send a link to the customer, where if say, a customer has Google Pay, now we have seen Google Pay phone, they're becoming more common even in rural areas where there is a smartphone. So for a part of the population who don't have a smartphone, obviously none of these options will work, but Japay, where there are smartphones, there you see some people kind of, you know, operating Google Pay phone, even there. So they can do that, they can use typically a credit card, debit card, that is also open, but those options are also there. Now, we've also tried to
00:45:06
Speaker
simplify the journey of onboarding a customer. So, for example, traditionally, if you wanted to even digitally capture information, you will say, show me your icon and I will manually type that information. But, for example, we can just scan the QR code of other and those 8.10 information fields which are captured and all that, they can come. So, we have done some of those things also to ensure that my data entry is being done seamlessly. There's not too much time and effort wasted to do that.
00:45:32
Speaker
Starting from the connection of the client information, to showing multiple insurance companies as options, to collecting premiums and digitally ensuring that the policy copy is sent across to the customer. So, we have done back-to-back API integration with insurance companies on multiple products. So, then what happens as soon as the transaction is complete.
00:45:52
Speaker
The customer will receive an SMS, saying here is a link to your Ponsil document and they will have a PDF that they can download. So typically, for customers who don't have a smartphone, that will not work. But the general expectation or the general train, we have seen is that within the house, there is at least one smartphone. So the son will have it or the daughter will have it. Somebody with the family will have it. So then they can access it there. And obviously, at any given point of time, this particular document is also available with Ponsil.
00:46:17
Speaker
So tomorrow there is a theme, you know, and the person reaches out, he or she can help. And this document is available in one regular language also? No. So most of the policies typically are still in English. Fortunately, unfortunately, there is a man to kind of, you know, more to regular, but I think that is still a journey. And I mean, I don't know what happens is when you look at technical language in English or legal language in English, these are real language in Hindi.
00:46:43
Speaker
The technical language in Hindi, if you're not used to it, is also fairly complicated to understand. So, I'll give you an example. So, I kind of, you know, got into rural insurance after being seven years, going seven years of corporate insurance, right? So, first meeting that I went to was in a large Hindi speaking state. I'll not think the name of the state, but the large Hindi speaking. Where in the meeting they said,
00:47:13
Speaker
But when you look at eagle, so if you look at
00:47:28
Speaker
either government language or legal language or you know, legal language in Hindi, it is not something that will come very naturally to you to understand.
00:47:37
Speaker
I think there is a journey in terms of simplifying the entire policy holdings itself in the first place. And then I think the second journey is to say that, okay, how do you kind of also ensure that it is kind of out and running? And how do you help the partner to drive more retention, like to prevent churn, you know, like people renewing policy? What is the kind of churn you see and what are you doing?
00:48:03
Speaker
We send out renewal information to the client. We send out renewal information to the point of sale partner also, saying that in the next 30 days, in the next 45 days, these are the renewals that are there. It's very basic at this point of time. I think there is a lot more work that we are planning to do on this as we kind of, you know, grow. But there's a significant amount of data that actually comes to us, right? So in terms of being able to kind of, you know, suggest to them, say, okay, this is this customer that you did crop insurance for, he will also already have a two-wheeler waiting to go and have a conversation with them about two-wheeler.
00:48:30
Speaker
Ah, okay, cross-selling. There's a lot of work that will happen in the days to come. Right now, it's getting the basics right, right? There's this policy that in return, coming up for renewal makes for today is letting the customer know that there's a renewal, letting the partner know that there's a renewal, and kind of taking power from there.
00:48:48
Speaker
Also, I would say the most important part is that anything that comes to us on the claims, we are fairly confident about the fact that it's a very important part and we really get into the act and help in that process also. Even in terms of crop insurance, where I don't have a role to play in terms of settlement of claims, at least in terms of passing information by connecting with the insurance company and sharing that with the farmers, that is something that is key to letting them know. Because unless you take care of that, the renewals are going to be excluded.
00:49:15
Speaker
Right? And a customer lost in income is generally lost forever. Because if it is because of the claim, they will always feel that the insurance companies take premiums, but they don't support in the time of claims. And what is the point? And once the trust is lost, then it's very difficult.
Opportunities for Growth in Rural Insurance
00:49:36
Speaker
Right? So I think the most important part is to kind of ensure that the trust does not
00:49:42
Speaker
What renewal rate do you see generally? So generally what we have seen, crop insurance is the one that we have got maximum experience. So there again, depending upon whether a crop is cultivated by that farmer in the season or not, our general experience has been that we see 50 to 60% farmers coming back to us in the subsequent season.
00:50:01
Speaker
And I would say it's a factor of both the things, saying somebody might be working this year, they might not be working in the next season, they might not be working in the next season. Plus, I think our ability to kind of really keep on... I don't think we have completely pushed the marker as I'm mentioning, right? Crop insurance again, maybe another crosstalk delay is what is covered. I think there's significant headroom to kind of more and more farmers ongoing with the programs.
00:50:23
Speaker
What do you think is the hardest part about growing grab cover? What do you really see as the big problems to solve? All the big problems that you already solved, like the hardest things you did. I mean, you could talk of either like past or future, whatever.
00:50:42
Speaker
I think Gram Coverizer has a good base from where to really grow further, right? So, you know, we've done the first few things right, right? So, starting from getting a good set of investors to kind of, you know, getting the business model right, attaining a product market for it, getting the basic tax stack in place. So, all of those things, I think, have been to a certain extent addressed, though it is like a work in progress and you'll keep on evolving a little bit of time.
00:51:04
Speaker
legwork in terms of the first initial 3-4 years, right? That is where you have maximum amount of challenges to, I would say, overcome in terms of getting the basics right. I think that has been done. I think learning from here would be about how do you now, from here, scale it to like a 5x, 10x in the next couple of years, right? That would be the journey.
00:51:23
Speaker
And then I think if I look at rural insurance, per se, as the space, right? So I think there are three challenges for us, as I was mentioning, right? The challenge of awareness, the challenge of access and the challenge of serviceability. So those are the three challenges, broad challenges that we need to address. Obviously, we have a modern in place, you know, partner with POSPs and we can really solve for this. Yeah, that access is solved through POSP.
00:51:47
Speaker
point of sale partners. And then again, I think I would kind of look at and say, creating that network. So we are in around 5,000 or partners right now, we really want to scale that up. The agent thought process would be that there are 250,000 grand panchats can we have a BOSP in each of the grand panchats, right? That would be it. One is creating the scaling in the network. The second is the first activation and the engagement, seeing how do you kind of, you know, get them to become start participating. And the third thing, how do you make
00:52:14
Speaker
they're more efficient, so that it is, internal distribution is becoming a mainstream activity for them. So that they're picking enough to say, okay, this is the thing that I want to pursue as something that I want to really take forward because I am trying to, you know, be, I am able to sustain myself, right? So I think that would be the, that would be the second part of it, saying these are the two or three challenges that we need to address and that we need to get right.
00:52:37
Speaker
Other than that, I think rural is such a vast space, both in terms of the number of people, also in terms of the geographies. So, I think it's about getting those things right in certain geographies and then being able to replicate it.
00:52:50
Speaker
across my job. For example, typically our presence is in, you know, on crop insurance side is in 6 or 7 states. The idea would be to kind of, you know, wanting to go deeper there and do larger numbers there, instead of saying, I want to work in 20 states. But at the same time, if you get journal insurance as a market where you have both insurance, where you have health insurance, where you have other lines of businesses, there I would want to get more and larger geographies. So balancing that in terms of saying, how do you really
00:53:17
Speaker
manage the moving parts of a rural ecosystem. I think that's where it is. Because again, with rural, there are also nuances working on that might be completely different from working in the UP. So for a large ecosystem that is there of rural, I think within that we insurance distribution, I think that is a large part of the industry that we need to get right. And we'll continue to work on. Do you want to expand your product portfolio? I can see on your website right now, you don't offer help. Do you want to get into that also?
00:53:45
Speaker
So, we are currently working on that as well. We do some amount of health. So, for example, we have done benefit health policies, right? So, whether it is a personal accident policy, whether it is a first big cash policy, the whole idea for us has been here purposefully, to my mind, you know, coming from insurance background, I think health insurance is one space where serviceability is of paramount importance.
00:54:08
Speaker
When I look at rural areas, if you are in an urban area, you typically have a hospital network, right? There is cashless available, you go, you present your policy or your thing, and you say, now this is the policy, so the insurance can be used with the hospital and it will be taken care of. In rural areas, you know that cashless, not hospital, hospital network is not really that great. There are some states who do IRR and all there, the network might be there, but do that typically for the government programs, that network is for government programs, right?
00:54:37
Speaker
So, the whole idea is that when you do independent health products, it should be backed by services. So, when I look at, we have done, typically we have done benefit health products, so personal accident over hospice cash, where it is very, very clear that if you are hospitalized, if there is an accidental death or disability, there is a fixed payout that will happen. That is the read value unless, and that kind of, you know, gets paid, right? The serviceability is robust over there. It's robust, right.
00:55:02
Speaker
Second is Hospy Catch, where you can say if you are hospitalized for more than 24 hours, depending upon the number of days, you will get a fixed amount. And it's a very simple process. It's a small ticket size claim. The documentation is fairly simple. The process is fairly simple. And the servicing is fast, right? So I think we have started our journey with benefit health products as of now. And the idea would be to kind of, you know, get into independent products and certain geographies as we evolve. Okay. What about partnerships with AgriTech startups? Like that would be a...
00:55:31
Speaker
Like that might contribute as much as the USB network. Do you think that would happen on the USB? Because each of these AgriTech startups are focusing on a different area. Like there's one which is only on sale. There's another one which is like, you know, their own dishes. And so a way to capture that dish would be to just piggyback on what they are doing.
00:55:54
Speaker
So any, we have multiple partnerships ongoing, including the silicon that you mentioned, there is an ongoing discussion of working on a product for them as well. And the whole idea is that with any of these partnerships, the thought process is always to look at embedded insurance products.
Scaling POSP Network and Product Portfolio
00:56:11
Speaker
They have a business model, they have a product or service proposition that they are making to the farmers. How do you build insurance as an important value proposition that is adding value to them? So, bundling, for example, parametric insurance with the seed of a seed, or bundling a personal accident product with a scene of a particular value.
00:56:31
Speaker
All of these things is something that we are constantly working on. There is a separate team that does, you know, working on these, as I was mentioning, something called Strategic Analysis, where we partner with these AgriTechs. But this can only, I think to a large extent, be used as an embedded insurance mechanism. Only some of these partnerships could evolve into what you would say a distribution mechanism. Right?
00:56:55
Speaker
So, yes, there is obviously scope to kind of make insurance a meaningful part of the ecosystem or the value that the magnetic starters are creating, but typically a large part of that would work meaningfully if it is embedded. And that's where we are working. I think the distribution part of it through the POSPs in terms of
00:57:14
Speaker
ticket sizes in terms of premium sizes, it would always be that the POSP will be a larger part of the network. The number of one is might be able to do very significantly even through the Agnitex startup platform also. In terms of the sheer volume of premium that you do, I think probably the POSP thing will be a large.
00:57:33
Speaker
Right. Got it. So embedded insurance is typically low ticket size because you don't want to have too much cost added on to whatever they are buying. That's right. Got it. Got it. Got it. Okay. Okay. Got it. Cool. So, you know, so you said you have a target of 10X, like, so making that 250 crore to two and a half thousand crore. Help me understand that number with sub context. Like how would that compare to other insurance, either intermediary platforms or insurance companies? Like how big would that be?
00:58:04
Speaker
I would rather, so we are a small part of the overall ecosystem of the channel insurance industry. The channel insurance industry is roughly around 2.2 lakh crores. We are probably around 280 crore crores. So a small part of what we do. For intermediaries, I don't have exact numbers as the ready bit number to give. But
00:58:32
Speaker
Look at it this way, in terms of the headroom that is available. So, as I was mentioning, we talked about crop insurance. So, crop insurance, we are saying 50% of the gross crop reduced did not though. India has one of the largest livestock population in the world. It is the largest population in the world. We are really touching the scratching surface there. So, maybe 5% of the cattle population actually gets injured.
00:58:54
Speaker
Well, so there's 95%. There's a new bedroom there. You look at health insurance, as you were mentioning, right? So most of the health insurance, there is the Ayushman Bharat for a certain set of people. And then you come to urban areas where you have high cost, high ticket size health insurance. But the missing middle is what the government is also trying to solve. There's like a significant part of the population which does not fall in the financially challenged category, but is yet not having health insurance.
00:59:23
Speaker
And you know, you look at any of the statistics that are there on out-of-pocket health expenses. Typically, we say 65% of all the health expenses are still out-of-pocket. And we have a significant ability to dent somebody's movement economically, right? Because we can't handle that expenses. Something will suddenly happen. You kind of, you know, have some resilience, simplicity use, all of that. You kind of, you know, take care of the medical expenses. And then you suddenly realize that, okay, now we're back where we started, where we were a couple of years ago.
00:59:50
Speaker
If you look at asset insurance, home insurance in rural areas, no one exists. Even in rural areas, it is fairly not very common, but in rural areas, we hardly see that. If you look at shop insurance, I mean, there is a large network of shops, but again, hardly any insurance that happens. If you look at motor insurance, for example, one of the examples that I was giving about renewals. So, I think two-wheelers, if you look at it, you'd be around 50-60% of the two-wheelers don't get their renewals.
01:00:16
Speaker
Similarly, you have challenges in commercial vehicle insurance. So one is the challenge of awareness. I think for people who are existing users, it's not a challenge. But for the second challenge is the challenge of access. So if I'm staying in a village, I have a day job or where I kind of get paid on the databases, you tell me how to go to the
01:00:36
Speaker
they see an office of any insurance company and then there you will get your insurance. Probably, chances are that I might not want to spend the time and go, but if somebody is coming to my room and saying, I will do your insurance at your home, you know, we will just spend some half an hour on it, then you might be ready to go, right? So, I think that the room there is tremendous and I think that is where I would want to look at it because frankly speaking, all efforts would be together. In rural insurance, we are just scratching the surface.
01:01:01
Speaker
We are just beginning of it.
Focus Areas: Investor Engagement and Business Development
01:01:04
Speaker
So even if I were to kind of, you know, somebody does this or somebody does that, we are not doing too little. That is how I would look. So my last question to you, sir, you know, what do you spend your time on? Like, if you were to make a pie chart with things that you are doing, I would love to understand that. So I think,
01:01:29
Speaker
Three or four broad areas. So one is, I would say, investor engagement is one part of it, obviously. Then on the group business part, I spend some amount of time with the team saying, okay, what are we doing? How are we doing? Because I can draw upon my experience from the past and say, okay, this is something you can structure this way or that way. Obviously also the connecting the industry. So that's another part of it. The third is also on the other lines of business is engagement with the team to say, okay,
01:01:57
Speaker
what are the numbers looking like, how are we doing, what are we doing, any health required on the other lines of businesses, plus engaging on the technology side. Because for both the group businesses, as well as for the retail businesses, there is some amount of engagement required on the technology side. We are trying to get that out.
01:02:16
Speaker
take business investors and a little bit of regular discussion on the clients and things like that. I think that those are four broad areas where I would kind of invest. Do you also like travel to rural areas, meet farmers and stuff like that? Absolutely. I think a lot of insights are gained by actual fieldwork.
01:02:40
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.