MUMBAI: Technology is enabling insurance companies to emulate the model of mutual funds managed through digital subscriptions, selling sachet products with low premiums that remain profitable for the industry. The increasing penetration of these products might not always be apparent to consumers, as they are often sold as warranties by manufacturers and retailers or as low-value insurance covers by lenders.
New-age insuretech platforms like Zopper play a pivotal role in this distribution, facilitating the issuance of low-value covers and streamlining claims servicing. Zopper – having raised $100 million since its inception – connects companies with insurers, embedding insurance seamlessly into the core systems of distribution partners. Co-founder and chief operating officer Mayank Gupta envisions Zopper achieving an annualised recurring revenue (ARR) growth of 100% to $300 million by March 2024, with a sustained 50- 60% annual growth rate thereafter.
“A lot of insurance business is still offline and that is what prompted us to get into the insuretech space,” said Gupta. Zopper gets 30% of its business by providing extended protection to household items – including smartphones, laptops, air conditioners, televisions, microwaves, smartwatches, electric bikes, and gym equipment. Motor insurance contributes another 40% of the premium through distributors, while the remaining comes from sales of health and life plans. The warranty category spans various aspects of an individual’s life, covering items such as spectacles or extended warranties on smartphones. Most low-value insurance falls within the premium range of Rs 49 to Rs 99.