Insurance as candy: Start-up uses new tech to ease buying and claims

Buying insurance and then claiming it can be quite complicated and long-drawn. A start-up is now promising to make it as easy as buying a candy - on average, the company claims, it takes 90 seconds to purchase a policy online while a majority of its claims are approved in less than two hours.

The start-up, Toffee Insurance, works with seven large underwriting insurance firms to curate niche insurance products. Like a home renter insurance (insurance against fire and theft), a daily commute insurance (insurance for accidental injuries), a fitness insurance (for injuries due to running, cycling etc). Recently, it came up with two more, an insurance product for cyclists and another for bags.

Business Today spoke to Rohan Kumar, who founded Toffee in 2017 to "de-jargonise and digitise the insurance buying experience for millennials".

The cycle insurance appears exotic but is modeled on auto insurance. The value depreciates 10 per cent in six months and 20 per cent between six and 12 months. In two years, it would depreciate 70 per cent. The logic behind cycle insurance is simple. The prices of cycles are going up all the time and theft is rampant in this category. The insurance covers theft, damage, as well as accident to the cyclist; the pricing of the product is approximately three to five per cent of the cost of the cycle.

Kumar said the company's go-to-market is through cycle dealers. It has on-boarded about 1000 dealers across 120 cities in India. How is the claim on a cycle theft easy? Kumar says that to claim, no FIR is required - a difficult ask in any police station. Just a police intimation report filed online is good enough. An algorithm developed by the start-up then checks on the customer's background to minimise fraud.

The bag insurance product is tailored for adventure product company Wildcraft at the moment. It just ensures a new bag but not the contents of the bag. Unlike the cycle, this asset doesn't depreciate. It is a six month policy, which can be further renewed for a price.

Kumar says that the company's fraud and claims management system will plug in facial recognition software built by an Israeli company, going ahead. A video-recording software would want the customer to narrate the theft or an accident, for instance. The machine learning algorithm can then tell how accurate the version is depending on data from various parameters such as eye movement and pupillary response.

The goal, Toffee Insurance says, is to leverage new age tech capabilities for both distribution and servicing.