Debit and credit cards have made our lives easier by a magnitude. We no longer have to stand outside banks to withdraw cash, nor do we need to leave the comfort of our homes to buy anything we want, thanks to ‘plastic money’. And over time, cards themselves have become much more than credit instruments and are tied to aspirational needs as well. But yet, most consumers are not even aware of the hidden features of a card product.
Like free insurance cover. Most consumers may not be aware of the fact that cards free medical insurance up to INR 50 lakh when travelling or that it also provides device protection worth INR 1 Lakh or even flight accident cover of INR 3 Cr. For instance, SBI VISA Signature or Mastercard Debit Cards offers INR 10 lakh for personal accident insurance and purchase protection cover up to INR 2 Lakh. Similarly, HDFC’s Platinum Debit Card provides INR 5 lakh for accidental cover as well as other benefits.
BimaPe’s Know Your Card (KYC) tool. The Mumbai-based insurtech startup envisions allowing cardholders to see that they are sitting on a pile of unclaimed benefits, well-hidden in the fine print of terms and conditions. Customers are mostly unaware of these ‘free’ insurance covers or tend to overlook the benefits, founder Rahul Mathur told us.
Even leading insurance agencies or aggregators in the business of selling insurance rarely discuss these hidden benefits. The outcome: Consumers end up buying too many policies without claiming the coverage they already have and for which they do not have to pay any premium.
Enter BimaPe And Know Your Card
Founded by Mathur, an insurance professional-turned-entrepreneur, the startup is looking to penetrate deeper into the insurance space with this unique card-linked model. Most insurance players focus on selling products instead of helping customers make informed decisions or manage their ‘free’ insurance (both life and non-life) provided by card issuers.
“In my opinion, no one is advising them not to buy travel insurance because their cards already cover it,” said Mathur.
BimaPe aims to change this with Know Your Card (KYC) that reveals free insurance offers linked to cards. The user interface is simple enough. One needs to select the bank, type of card (debit/credit) and the variant from a dropdown menu to get the necessary information. Users do not have to log in or enter their card details to use the tool.
Mathur said that the free insurance check tool utilises data collected from banks’ official websites, open-source platforms and, at times, directly from the banks. “We are still working on it and adding more cards to our platform,” he said.
The tool is built on India Stack 2.0 architecture and the DigiLocker platform to ensure robust infrastructure, keeping in mind the critical nature of the data. The company claims it to be compliant and in-line with all upcoming data regulations norms.
Besides Know Your Card, the startup has two more products coming up – a wallet and the policy deconstruction algorithm, or PDA. The wallet, still in beta, will feature the entire list of hidden insurance benefits to which a user is entitled. Based on the votes from early BimaPe users, the company has recently integrated a Family Mode (in alpha testing phase) with its KYC wallet where the insurance data can be shared with a user’s family. This is essential as staying informed will help customers plan and prepare for any emergency. Understandably, the wallet will require a profile validation or KYC verification and a login.
Next comes the PDA which recommends insurance products to users based on their existing plans, suggests alternative policies and quotes prices on the go. “Building the PDA is a painful process. We have already written 20,000 lines of code and integrated close to 1,200 policies. As more policies get added to the system, the model will train itself and deconstruct them for users,” explained Mathur.
Simply put, users will be directed towards most relevant policy information and everything will be described in simple English. “This is one of the many products we are currently working on. We have also developed a few intellectual properties, but these cannot be disclosed at this stage,” the founder added.
BimaPe: Insurance On Autopilot?
“Nothing has really changed in the insurance space in the past two decades. We have moved away from physical brokers only to make endless calls to someone else (for information, decision-making or claim settlement). And quite often, the bulk of the problem lies in how you make the products/services available to users. That is what we are going after.”
Unlike other transactional startups in the insurance space, Mathur is keen on building a seamless user experience that will go a long way to enable customer acquisition and product/service monetisation. “Right now, we are focussing on raising consumer awareness and building a strong trust funnel so that we can put insurance in autopilot mode. Our customers must have easy access end-to-end, be it managing, buying and claiming insurance.”
Traditionally, insurance distributors figure out what works best for users. Instead, BimaPe is trying to optimise the entire experience and automate processes to make things easier. Come policy renewals, and most customers think that the premium is higher than before. “Well, that may not be the case, but we ask them to shop around. Again, they have queries about carrying forward the benefits. Hence, we have come up with the portability concept and regulators also allow it. Now, we are building technology around this concept to provide seamless support to customers.”
BimaPe’s Know Your Card might be an excellent trigger to build traction for insurance players, but it does not solve the biggest pain point – how will the startup monetise its business? Eventually, BimaPe will have to earn its revenue by selling insurance products. But converting curious members looking for ‘free’ insurance into paid customers who will buy policies or renew the same may not be easy.
As per PwC survey, agents remained the dominant channel for purchase, and customers increasingly preferred to purchase policies from insurance websites, which saw a 2% point increase in share from 2019, which stood at 20%. The idea is considered far-fetched as insurance customers often favour the intervention of human agents and largely depend on them for product selection and advice. BimaPe will find it tough to eliminate the human touch and might have to initially rely on a customer support team to help users with their queries.
Mathur, however, thinks the company is on the right track in terms of traction and engagement. BimaPe claims to have onboarded nearly 1,350 users within a week of its launch. On average, each user has 2.5 cards, and the total amount of free insurance discovered stood at INR 5,500 crore. Plus, close to 6,500 unique visitors also tried to check single-card benefits. The company claims to have 25-30 sign-ups every day, with zero efforts on marketing. If the trend continues, the daily count may touch 150 or so by early next year.
“Despite the traction, we are not going to generate any revenue for months or even for years,” admitted Mathur.
But in the coming months, the company may start selling insurance products which fit the requirements of its users and will charge 10-20% commission. It is also looking to develop an invoice insurance product for the services economy while other products are in the pipeline.
BimaPe completed 100 days in September 2020. Given its recent entry and the current market condition, it has not hesitated to paint a realistic picture for investors, saying it would take at least four to five years to turn a profit. The startup will compete with several heavily-funded companies such as Policybazaar, Toffee Insurance, CoverFox, RenewBuy and Acko. Incidentally, PolicyBazaar, which looks to turn profitable this fiscal, saw its revenue jump 3x in FY20 while its market share and valuation doubled during that period. The company expects to log INR 1,100 crore in revenue and post a marginal profit. Similarly, Amazon-backed Acko, which has close to 60 Mn customers, has claimed to have issued more than 650 Mn policies until now.
BimaPe has spent about INR 5.4 lakh, and Mathur said there’s a runway for the next 24 months at least. “We are also in talks with a few investors and hope to announce a deal in December this year.”