Micro-Insurance for the Millennial Generation

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In this interview, Rohan Kumar, CEO at Toffee Insurance, discusses microinsurance and the in uninsured millennial consumers. Millennials are early adopters to a wide range of services, including new financial products. Simultaneously, they lack the confidence, trust, and awareness of new financial products promising to make their lives easier, safer and secure. Toffee Insurance wants to change the way millennials think and buy insurance.

Keep reading to learn how Toffee’s data-driven technology is provinding microinsurance to uninsured parts of the world. 

What problem did you set out to solve when founding Toffee Insurance?

Before founding Toffee I worked alongside my co-founder, Nishant Jain, as a product designer and strategy consultant for some of the major insurance companies in the industry. Back then, our goals were to help these global leaders with their digital transformations. It was during this period that it became clear to us that this industry was in desperate need of innovation and fresh thinking. From our point of view, there were three fundamental problems within the insurance ecosystem:
– Distribution – Insurance distribution has largely been either offline, through agents, or through online aggregators. As these channels are usually expensive from a customer acquisition point of view it makes sense to sell complex one-size-fits-all products.
– Product – Since the privatisation of the insurance industry, little to no innovation has been seen in product personalisation. Products have not been adapted to modern lifestyles for the under-35. Their needs and risks are very different, so they don’t buy comprehensive products until a certain life stage.
– Context – Policy wordings are complex and need someone to explain them to you. There is a lot of ambiguity, mistrust and complete lack of context, making it extremely difficult to penetrate the growing digital economy. Our focus was to carve strong distribution partnerships that are contextual to the lifestyle and risks of each of these target segments.

Some of the key highlights we focused on while founding Toffee Insurance were:
– Deconstructing insurance to create understanding;
– Leveraging technology to increase reach;
– Transparent user experience.

Toffee focuses on providing microinsurance to a largely uninsured India. What made you choose micro solutions and how are these different from other parts of the insurance industry?

Microinsurance is a mechanism to protect low income people against risk, such as accident, illness, natural disasters, etc. It’s typically created for specific risks on a low-cost premium and distributed based on need. Toffee Insurance is not a true definition of microinsurance, but there are large similarities in
our model. We have co-created bitesize insurance products for specific risks to increase accessibility of insurance in India. Our target demographic is the major differentiator. Rather than targeting only low-income groups, we are reaching out to consumers who might not have thought of insurance products in this manner, making insurance easy and transparent with a clear value add to their lifestyle.

Toffee offers its customers a variety of insurance products that can be obtained in a matter of minutes. How have you been able to expedite the insurance process? And what challenges has it induced?

We started our journey with a customer centric approach i.e. ensuring ease of access for policy issuance as well as servicing and claims. In order to do this, we made sure that when we built our platform it would integrate products directly with multiple insurance partners to seamlessly deliver a world class experience. Since the deconstructed products are simple and don’t require lengthy applications, we were able to remove redundant forms that were
often confusing to the customer. The biggest challenge here was to ensure consistent user experience when integrating products with multiple insurance partners who operate on different technology stacks, especially when it came to claims and servicing.

Your target market is the millennial demographic. Was there a gap in the market when you started? What are your views now?

The millennial consumers are very active online. They are early adopters to a wide range of services, including new financial products. Simultaneously, they lack the confidence, trust, and awareness of new financial products promising to make their lives easier, safer and secure.

Toffee Insurance wants to change the way millennials think and buy insurance.

One focus is to create products that resonate with the need of this growing generation. We want to make products that are contextual and focused to the lifestyle and risks of their target segments. From a demand view, some of these segments are niche but growing at a tremendous rate. With the onset of an on-demand economy, democratizing insurance is the only future we see. Based on our foray into the sector we have come to realise that there are essentially three steps to engage with this new type of consumer:
– Awareness is key: Insurance as a subject carries a lot of mistrust, with broken promises and bad quality service prevailing in people’s thoughts. New start-ups and products need to bring confidence back to the consumers and really understand the pain points of the new age. Flogging an old archaic product to the millenial consumer will never work.
– Create Context: Insurance is best understood when there is a context attached to it. You think of travel insurance only when you have decided to travel. It’s therefore critical to understand purchase/lifestyle behaviour of the consumer and pinpoint risks in these scenarios to truly innovate on a product that appeals to them.
– Service is King: Not just when the policy is being issued but throughout the lifecycle of the customer — the service levels need to reflect the simplicity of the process, the product and create seamless transactions for improving consumer delight.

The millennial consumers are very active online. They are early adopters to a wide range of services, including new financial products. Simultaneously, they lack the confidence, trust, and awareness of new financial products promising to make their lives easier, safer and secure.

Rohan Kumar, CEO at Toffee Insurance

How do you plan to evolve Toffee in the future?

Toffee Insurance is creating a completely new vertical/category of insurance products, which have not previously existed in India. Not only are we capturing fresh data on consumer risk behaviour but also creating deep personas which will ultimately help us iterate on more personalised insurance solutions for this new young consumer base. Ultimately, we want to embed our products through any point of context (offline or online) where there is a micro-influencer to assist or nudge (not push).

At the moment, we have two main goals:
– Wrap the entire selling to claims experience in a brilliant end-to-end product-like
journey, rather than insurance-like.
– Create an expectation benchmark by approving claims instantly through data-led
algorithms.

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Bradley Collins

Bradley Collins