Keeping It Small

Toffee Insurance has made it big by selling insurance for things like bicycles, backpacks and even gym injuries

Toffee Insurance Co-Founders: Rohan Kumar (left) and Nishant Jain / Photograph by Shekhar Ghosh Toffee Insurance Co-Founders: Rohan Kumar (left) and Nishant Jain / Photograph by Shekhar Ghosh

Most people avoid buying insurance as they don't want to deal with the complexities. Even if they do buy, it is largely for saving tax. Rohan Kumar and Nishant Jain, the co-founders of Toffee Insurance, observed the scale of the problem while working on online sales with client Apollo Munich. "We realised that insurance products were not only expensive but also irrelevant for a large number of people. Millennials are not that worried about cancer or heart attack. They would prefer insurance for dengue, malaria, typhoid or even food poisoning," says Kumar.

Why the name 'Toffee'? Kumar explains: "Toffee means small; so sachet-like insurance products. Sachet products have always worked in India. Besides, it's a fun, young and happy name that will resonate with even non-English speaking populace."

Kumar and Jain put together insurance products in healthcare and general insurance and launched Toffee Insurance in 2017. The insurance-tech start-up offers bite-sized covers for loss/damage to bicycles, backpacks, gym injuries, accident during daily commute, salary protection and even dengue and chikungunya. It is registered as an insurance intermediary, which means it creates products for insurers and sells to consumers via distributors.

The company has tied up with nine insurers: HDFC Ergo General Insurance, Apollo Munich Health Insurance, Religare Health Insurance, Tata AIG General Insurance, Future Generali Life Insurance, ICICI Pru Life Insurance, Chola MS, IndiaFirst Life Insurance, Bajaj Allianz General Insurance. It has tie-ups with 15-20 channel partners such as Wildcraft, Eko India Financial Services, Hero Cycles, Firefox Cycles and TI Cycles. "We liked how Toffee innovated, keeping customer needs at the centre. We are keen to offer risk solutions for other products as well if that creates value for everyone," says Jayraj Jadhav, Vice-President-Marketing and E-Business, Tata AIG, which provides the cover for bicycles.

Essence of the Business

The co-founders identified three layers of the business: accessibility, affordability and relevance. "For insurance to stay on top of your mind, it has to get attached to a point of sale mechanism," says Kumar. Affordability is key too. One can get cover for bicycle and backpack - two of their most popular products - for as low as 4-5 per cent of the product's cost. For instance, the annual premium for a Rs 10,000 bicycle would be Rs 400-500. Another focus area was speed - buying a policy from them on an average takes 90 seconds, and claims are processed the same day in most cases, say the co-founders. "Toffee can give conditional approval on the claim within a couple of hours after you upload relevant documents," says Kumar. Of the about 70,000 policies sold in 2018/19, the start-up received 600-700 claims, of which 99 per cent have been settled, they say.

Jeevanandam A., a Toffee customer sent in a claim when his bicycle was stolen within just two months of buying the cover. He received the whole amount. "I only had to provide an online copy of the police complaint and the claim approval happened the same day."

The start-up earns commission on each policy sold for insurers. It shares a part of the revenue with distributors. In 2018/19, its revenue was Rs 3 crore, and the projected estimate for 2019/20 is Rs 30 crore. They plan to expand their product offerings from 12 to 20 by next year. Products in the pipeline include credit insurance, customised travel insurance, gadget insurance and even cover for spectacles.

But the going can be tough as on-boarding channel partners is tricky, says Kumar. Also, a number of insure-tech start-ups, such as Acko, Digit Insurance and Symbo, offer similar products. Toffee has overcome some of the difficulties and is now active in 160-plus cities. "Sales are spread equally across Tier I, II and III cities," says Kumar.

The company raised funding in September 2017 through two early investors, Vivek Gujral and Harshal Shah, veterans in the insurance sector. The investors say they liked the synergy between the co-founders and their integrity. "They are not here to mint money and sell the venture thereafter. They're in the game for long-term," says Shah.

Kumar and Jain hope to go far: "If you can think of a risk, then we should have a Toffee Insurance for that."