Imagine knowing that your movie is a hit even before it has hit the theatres. This is exactly what Varun Dua of Acko General Insurance is going through right now. Slated to launch in the last quarter of 2017, the Mumbai-based startup has already raised a whopping $30 million till now, which has caused a great commotion in the Indian startup ecosystem. Everyone wants to know how Dua achieved this unachievable feat and how can they replicate the same success.
Even before officaliy opening its shop, Acko General Insurance has managed to capture the interest of many high-profile investors who have not just shown interest but also shelled out a collective $30 million seed fund into the startup, which according to experts is the highest ever raised by a startup in India in its seed round.
Acko is the first startup in India to build an insurance business solely on a technology platform. It is basically a fintech startup, which when goes live will provide consumers insurance products that are affordable and relevant to them by tapping into its digital potential. The startup will be offering personalised products after measuring customer behaviour using data analytics.
Speaking to Economic Times, Dua decided to share some inside secrets about the world of insurance and what he’s trying to achieve through Acko General Insurance.
First things first, if you envision on becoming the creme de la creme of your sector, you should understand the sector well. For instance, a MICA alumnus, Dua isn’t new to the world of financial services business. He has previously worked with Tata AIG Life Insurance for nearly five years and has also co-founded online insurance brokerage company called Coverfox in 2013.
Dua believes, that as an insurer, one should as a rule know enough about the customer to understand the risk it is underwriting as your profitability is based on it. He firmly opinions that data is the key to getting the pricing right when it comes to the world of insurance.
What has made Acko even more attractive in the eyes of its investors is the fact that its digital-only model gets rid of the retail expenses of opening physical stores and even eliminates the dependence on a distribution network, aspects which are currently dominating rival insurance companies in the country.
Acko will function as an independent general insurance company with entire operations offered online. Dua is currently in the midst of getting all the necessary permissions for the same. It has already received R1 and R2 licence and is currently waiting for the final approval of R3 from the insurance authority.
According to Dua, one of the main reasons that prompted him to start on the Acko journey was the realisation that hit him one day that there was an open opportunity to look at the world wide web to introduce novel ways of pricing insurance products. He says,”It dawned on me that the scope in the area of building tech into the area of insurance is massive. “This ecosystem allowed one to create new product categories and introduce new ways of pricing them,” he adds.
India currently houses a population of more than 1.2 bn people, out of which only 5 per cent are currently insured. Hence, insurance as a sector has a huge potential to grow and Acko aims to capitalise this opportunity as soon as possible and establish a brand name for itself in the industry. Considering the starting it has had, it is almost half way there.