How Zopper Is Helping Insurers Sell Products Through ‘Ecosystem Partners’

Of late, startups in embedded insurance sales have been gaining much traction. Rather than the traditional channels encompassing agents and bancassurance, digitisation has enabled real-time bundling and sale of insurance when a consumer purchases a product or service at the point of sale.

This has made insurtech-as-a-service seen as a win-win for all. According to Zopper, an embedded platform for sales, the next phase of distribution in the country will be spearheaded by this model.

An insurtech platform, Zopper has a unique model which makes insurance distribution profitable for all. It distributes insurance products through the ‘ecosystem partners’, and this ecosystem is vast. From ecommerce portals selling a multitude of products to travel sites selling air tickets and tour plans, and MFIs selling small-ticket loans, everyone is a part of the ecosystem for Zopper, founded in 2011 by Surjendu Kuila and Mayank Gupta.

Zopper was started as Zopper Retail, a hyperlocal point of sale (POS) platform for small and medium businesses. Later in 2018, the founders sold the business to Flipkart-owned PhonePe. Its CEO Neeraj Jain and the engineering leadership team joined the team of PhonePe after the acquisition. The founders then pivoted Zopper to an insurtech SaaS-driven business model. 

Earlier this month, this Noida-based startup raised $75 Mn in its Series C funding round led by Creaegis. It has so far raised $96 Mn, adding to the cap table investors such as Tiger Global Management, Nirvana Venture Advisors and Blume Ventures.

“We want to help our client base by stitching together another couple of products for their customer base. With this, we get a better share of wallet from our clients, which means another 10% to 15% increase in their bottom line,” Kuila said. 

Marketplaces And Cross-Selling: Zopper Plays A Matchmaker 

While marketplaces like Amazon and Flipkart have large customer bases acquired over the years, they struggle to monetise them and keep looking for peripheral products to cross-sell to their customers. 

In the financial services space, cross-selling happens in three ways – lending through NBFCs, selling mutual fund products, and selling insurance. The rapid digitisation over the last few years has made cross-selling possible, and most of the ecosystem partners are now looking to cross-sell insurance products.

“What we do is very simple. We sit between insurance companies and ecosystem partners. Ecosystem partners can be anyone and everyone under the sun who has a captive customer base…There is a huge chunk of players who are now trying to cross-sell insurance,” said Kuila.

Zopper thus enables large insurance companies to reach out to ecosystem partners at zero marginal cost using its proprietary embedded insurance API suite. It allows the insurance companies to help assess the risk better, streamline partner and customer interaction, enhance claim settlement as well as make transactions smooth. 

Insurers first need to understand the customer base of the ecosystem partners. In other words, it is underwriting for them. They also need to figure out their products that can be sold through ecosystem partners.

“Our USP is embedding our tentacles into these larger ecosystem partners by integrating with all their systems, core systems. Once you are integrated, they are not going to throw you out because there’s a lot of effort that has gone into those kinds of integrations,” Surjendu said.

Zopper takes care of pre-sales, post-sales, endorsements, claims, reconciliation, and reporting, among other things. 

“It is a win-win for all. For insurance carriers, they don’t have to spend money. For ecosystem partners, they get interesting products to distribute. What we do is stitch these two journeys together,” said Surjendu.

Decoding Zopper’s Revenue Model 

Zopper gets revenue from the ecosystem partners and the insurance carriers. It earns a brokerage fee when it enables an insurer to distribute products to an ecosystem partner.

“Besides, whenever insurance companies or ecosystem partners use my platform, I get a SaaS fee,” Surjendu said. 

An ecosystem partner may offer services of many insurers and Zopper helps it streamline the services. Ecosystem partners can also use the Zopper platform to address various problems related to post-sales, endorsement, and claims, among others. Zopper earns money for every policy that runs through this particular pipe. 

“When we are integrated with the ecosystem partners, we tell them that there are many products which you are not cross-selling today. There are more products. It can be a group personal accident. It can be a term life insurance. It can be a combo of these two. It can be a hospicash product or a cyber insurance product. Insurers pay me a brokerage fee for the extra products distributed,” Surjendu said.

About 50% of Zopper’s revenue comes from the financial ecosystem, while the lifestyle ecosystem gives 30-35%, and the digital ecosystem contributes around 15%.

Addressing The Menace Of Misselling With Tech

Insurers have consistently faced criticism for misselling products. It is reported more in the cases of life insurance. Traditional distribution channels do not have checks and balances to prevent misselling. But Zopper believes that contextual insurance selling can address this issue.  

For instance, when selling ticket cancellation insurance on MakeMyTrip, it can also add insurance for baggage loss. However, a cancer cover or medi-claim will not be added. In the case of a neobank like Jupiter or Niyo, if the underlying customer base is Gen Z, they cannot be offered life insurance products. The partners need to figure out which products fit what kind of customer base.

The insurance products available in the market today are complex and are thrust upon consumers – be it life or general insurance. ULIPs are an example of it where many customers drop out midway because they had not understood the product well. Meanwhile, medical insurance products are among the most complicated ones, and insurance jargons used in policy statements deter customers.

“Insurance products should be built in such a way that there will be mass adoption of the product. And the outcome of that mass production is that you still make profit,” Surjendu said. 

The insurance industry is growing at a scorching pace and insurtech is playing a key role in driving this momentum. However, the challenges before the industry are manifold. Low awareness, complex onboarding processes, and lack of trust in claim processing are some of the legacy issues the sector is facing. 

“Whether these are challenges or opportunities depends upon one’s perspective. At Zopper, we are seeing a sustained increase in demand for new-age insurance products that simplify the overall experience of customers and insurers alike,” Kuila said.

Energised by the fresh fund infusion, Zopper plans to bolster its SaaS platform and data analytics capabilities. Global expansion and acquisition of early-stage tech startups working in the insurance sector in the next few quarters is also on cards for the company.

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