SecureNow is providing commercial insurances to small and medium enterprises which do not have access to quality insurance. Fintech Asia finds out how SecureNow is using technology to do this, as part of the Fintech India series.
Kapil Mehta, CoFounder & Managing Director of SecureNow has over 23 years of professional experience with >13 years in the Insurance sector. In his last assignment, he was the managing director of DLF Pramerica Life Insurance Company. He has previously worked with Max New York Life Insurance, McKinsey & Co., and Hindustan Unilever in strategic positions. He is a Mechanical Engineer from IIT Delhi and a MBA from IIM Ahmedabad.
SecureNow, through SecureNow Insurance Broker an investee company, is bridging a vital gap by distributing pure-risk, commercial insurances to small and medium enterprises. These small companies do not have access to quality insurances on their own. SecureNow is able to distribute commercial insurances in a sustainable manner by effective use of technology. It is a full service firm that provides excellent claims support to small companies in addition to placing quality insurances. The company’s success can be gauged by the fact that it has over 3000 clients.
How did SecureNow come about setting its focus on this particular fintech category?
Insurance under-penetration in India results in disastrous consequences. In 2015, the floods in Chennai, India killed 289 people and washed out large parts of the city. However, insured losses were just US$ 0.7 billion. That very year winter storms in the US killed 30 but had an insured loss of US$ 2 billion. That’s the gap we need to bridge.
We distribute commercial insurances (employee benefit, property, marine and liability) to small and medium enterprises (SMEs). There are over 20 million such SMEs, mostly uninsured. SMEs that want to buy insurance struggle because they are too small to matter to insurers. It takes weeks for SMEs to get quotes, these are expensive with policy conditions unexplained. Post-sale service delivery and claim support is poor. We address this by providing, within minutes, with our own proprietary calculators, reasonably price estimates with detailed conditions. We have developed these calculators based on agreements with several insurers and our deep understanding of pricing. A three-week process is reduced to three minutes. This is the problem we address, and why we have set our focus on this particular category.
Technology is vital to our business and used across the business. It is used to send claims information to clients, deliver insurance contracts, service claims and keep updated records.
Please tell us a little more about the company’s beginnings as well. What transformations have you undergone as a company since starting up?
SecureNow came to being in February 2011, with a small office in Delhi, and 5 employees. From our humble beginnings, we have expanded to several locations across the country and have over 100 employees. The first 6 months were spent getting our license to operate and planning for launch. Once that was in place, the focus shifted to explaining to companies why they should work with us, and establishing a unique value proposition.
Since starting up, over the period of time, we have put systems into place and have a structure to the processes that we follow. New members have joined at an exponential rate. Institutionalization took place over time with many conventions and norms being established.
What differentiates us is our entire business approach of selling commercial insurances to small and medium enterprises. We have created a distinct position in the industry with our differentiated and technology driven approach to serving the large and under-penetrated insurance market in India.
Thoughts on the present Indian fintech landscape? How does it compare to the rest of the fintech majors in the world like Hong Kong, Singapore, United Kingdom, Sweden, etc. according to you?
The amalgamation of technology in the financial segment in India has played a major role in reinventing the traditional way of doing business. In the absence of technology, it would be a constant struggle to stay relevant in the market. Industries have had to revisit their operating model and policies.
If we compare to the global mature markets, the U.K. has a strong funding landscape, and is one of the most desired locations in fintech with maximum digital connectivity, and an indigenous financial services workforce. They have had regulatory support with tax incentives for fintech and a strong focus on collaboration with global fintech ecosystems. Likewise, Hong Kong and Singapore are emerging as a hub for fintech in Asia, and backed by investment support from the government and Venture Capitalists. In addition to the incentives provided by the government, what helps is these countries’ rich histories as banking and finance hubs, and their affluent population.
The Indian cash-driven economy has adapted well to the fintech opportunity, but is not upto scale when compared to its global counterparts. The future looks bright owing to the enormous under-penetration and need. Not just in wallets and lending, but even in Insurance, the services of fintech have redefined the way in which routine transactions are done. In fact without effective use of technology it is almost impossible to distribute financial products in large numbers. That is one of the reasons why many fintech companies are establishing themselves here. Another advantage is the availability of a a large talent pool. India has already proven itself as being pro-technology, which can be seen in the penetration of smartphones. And the internet penetration, which though is just 35%, but reaches almost 500 million individuals because of the vast population. Government policies which have encouraged digitization, like promoting a uniform and widespread identification (Aadhaar Card) has also provided a favourable backdrop for Fintech. Investors are also considering Fintech as an attractive investment option which just helps the cause. If there is one thing that could skyrocket the growth of the Fintech sector, then that would be stronger partnership between the experienced traditional banking sector and the dynamic start-up culture that has come up. Collaborations can help bring the best of both worlds which will in turn offer to the large audience in India, unique products.
So, in summary, whereas there is considerable activity in the fintech sector in India, we still have a long way to go in terms of market penetration and technology sophistication,
Which are the sectors in Indian fintech where you think there are untapped opportunities? How does it fit in with your product and growth plans for the immediate future?
Digital Lending, Payment Services and Savings, Insurance & Wealth Management are some sectors which have advanced with time, but where there are still opportunities that are untapped. Insurance has been slow in adopting technology but new companies are forcing larger incumbents to relook their approaches. Getting this right is key because insurance is a valuable risk mitigation tool for emerging markets.
We have already created a niche for ourselves as a player that is technologically integrated in our functioning. Insurance broking is a sector where a lot has not happened on this particular front. So, we have the head start. Our plan is to be a pioneer in transforming the insurance sector to cater to small companies and make the buying process much simpler for them. Our website, and technology driven application definitely plays a big role in easing the decision making process at the consumer end by providing comprehensive information in one place and simplifying the application experience.
Please tell us a little about your funding journey – the requirements & objectives in mind when you decided to raise a round/s; the fit you found or were looking for with your investors; what would you be looking for in the future as the business grows?
For the first 4 years we were bootstrapped. Last year we rose $3 million (Rs 20 Cr.) institutional funding from Elevar, a highly regarded international investor in micro-finance and low income focused businesses.
The capital allows us to scale rapidly. Already our new business acquisition is 5 times what it was a year ago. There is much more to be done.
What advice would you give to other fintech entrepreneurs?
The fintech opportunity in India is fabulous. It is an under-developed but very large market where digital adoption is high and internet penetration increasing rapidly. However, tapping this opportunity requires patience, ten years of hard work at the very minimum. Entrepreneurs who stay the course will be successful. The key is perseverance.
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