The startup has galloped at a lightning pace since it started operations in January 2018. But what it is attempting isn't easy
Infographics: Sameer Pawar
What has also done wonders are bite-sized insurance plans. Take, for instance, the phone protection programme that it offers in partnership with Amazon. The plan—for handsets bought from Amazon--provides coverage for incidents such as accidental drops, liquid damage, screen cracks and software-related issues. All a consumer has to pay is Rs 400-500. If the screen gets damaged, a user just needs to share a picture of the damaged part, no questions asked and Rs 5,000 gets deposited in the bank account. Then there is the Ola ride insurance plan, a first-of-its-kind in-trip insurance programme where a user booking a ride just needs to pay Re 1 to be covered for loss of baggage and laptops, missed flights, accidental medical expenses, ambulance transportation, and emergency hotel requirements. For the users of redBus and GoCabs, Acko offers customised travel insurance products covering trip cancellation, bus-type mismatch, and cab delays. “Bite-sized insurance was a complete whitespace and Acko is now a category leader in this segment,” says Tallam. While in traditional businesses like motor and health, Acko repackaged known insurance products in a faster and cheaper form for digital-first customers, in the non-traditional product segment, the startup found whitespaces and created micro-insurance products. “If done well, this can be a very profitable business line,” he says, adding that the offering in health and Covid has also gathered pace. Meanwhile in Bengaluru, Dua points out how quickly his health vertical has scaled up. Launched in March, the segment now contributes 10 percent of revenues. From providing a comprehensive health benefit proposition for employers which covers not only hospitalisation insurance but also provides primary care and fitness benefits, Acko custom-designed health coverages for gig economy workers whose needs are different from regular employees. Apart from products such as Corona Kavach, which are available for retail users to buy, Acko extended Covid covers to groups such as Amazon sellers. “We have seen a great increase in awareness and demand for health insurance products over the last few months,” claims Dua. “I won’t be surprised if it becomes bigger than motor in a year or so,” he adds. Health, he points out, is a much bigger segment than auto and the headroom for growth is immense. For Acko, which saw a 50 percent dip in business from April to July, the rebound has been fairly quick. The business gathered pace, especially with the rollout of the Indian Premier League, where Acko partnered with the Delhi Capitals. “There has been a 30-40 percent month-on-month growth since then,” he says, adding the startup is also advertising during the current India-Australia cricket series. “It’s all about building a brand,” he says. The flip side, though, of aggressive advertising and quick brand-building is obvious: A bleeding bottom line. Losses have spiked from Rs 134.37 crore in FY19 to Rs 187.78 crore in FY20. Dua, for his part, contends he has his eyes firmly fixed on the losses as well. He explains how he is doing a trade-off between investing money to build a brand or to keep paying commissions as the traditional players offer to agents or aggregators. Unlike life insurance, where a customer gets locked for life or decades, consumers have to see value to stick to a motor insurance or health insurance player. “My customer renewal rate is as high as 65-70 percent,” he claims. The backers are not worried about the rising losses. Abhinav Chaturvedi, partner at Accel, one of the investors in Acko, reckons that to create products for a changing world, it is imperative that insurance companies have a strong relationship with their customers. “People just want to pay for what they use, and nothing else,” he says. To create such products, he says, startups need to quickly churn data and feedback into product features. Though a few incumbents recognise the need to innovate, they are held back by the constraints of their underlying business model and infrastructure. Data advantage, strong customer relationships and customer-centricity are long term sustainable competitive advantages that have done well for any business. “It should be no different for Acko,” he adds. Dua asserts he would ‘move the needle’ in terms of business metrics as well. While companies in the insurance sector take at least seven years to break even, he says, Acko would reach that mark much before that. “The focus for the next few years is to ensure Acko moves from a company to an institution.”