Digitally Dressing the Insurance Segment- Decoding the Success Story of Acko Insurance

• ByTejika Bajaj     |    December 2, 2021

“We focus not just on the product but also the service aspect of the business where the real meaning of customer experience lies. We are therefore building infrastructure to offer insurance related services to improve customer experience/claims servicing. Our focus will be the customer, customer service and simplicity of our offerings,” said Ruchi Deepak, the Co-founder and Director of Acko Insurance.

The past decade has brought forth incidents of uncertainty with the rise of scams, insecurities, natural consequences not to forget the rise of mutant diseases, which have impacted human life. The rise of these uncertain events has thus led to a spike in the importance of procuring the right kind of insurance.  A major hurdle which follows the insurance segment is the cumbersome procedure and lengthy approval time. In an attempt to streamline insurance policy in the most effective and hassle free manner, Acko Insurance was established in 2017.

A private general insurance company, Acko Insurance is an online insurance platform which allows its clients to buy and claim insurance policy at the touch of their fingertips. The platform eliminates the need for lengthy paperwork and offers its clients premium insurance facilities ranging from automobile insurance to general insurance at zero commission charges.

Finding the True Calling

The founders of Acko Insurance, Varun Dua and Ruchi Deepak were colleagues well before they successfully launched the insurtech startup. While Varun Dua was a graduate from University of Mumbai and worked closely in the insurance sector before starting his own venture, Ruchi Deepak was Delhi University alum who possessed years of consulting experience. The duo met during their employment tenure at Coverfox and instantly clicked.

Varun Dua founded Coverfox in 2013 in an attempt to simplify the insurance procedure and make the prototype more consumer oriented. Though the startup was successful, the founder was not satisfied with the end result provided to the consumer. The duo wanted to build a network which would eliminate the associated hassles of procuring insurance and cut down on the middlemen interference in the segment by bringing a digital aspect. In 2017, the duo found their true calling and set out to lay the foundation stone for one of India’s largest insurance-tech platforms-Acko Insurance.

Deciphering the Business Model

Since its inception, Acko has clocked in over 62 million unique customers on its platform. The secret to its high customer ratio lies solely in the business model of the startup. The Bangalore headquartered startup uses a direct to consumer approach and streamlines the distribution of insurance through its online platform. The platform allows clients to choose from favourable risk selection and underwriting to prepare the best fit policy for themselves.

Furthermore, the insurance app also provides bite-size micro-insurance policies to clients and corporate entities such as Zomato, Ola, Oyo, Urban Clap, redbus and many more. The platform channelizes revenue through effective insurance schemes and advertisements.

Talking about the business model of the startup, Varun Dua, Co-founder and CEO of Acko stated, “Our business model is very simple: Sell digitally and get richer data for underwriting, which leads to better pricing for the customers. The cost of acquisition is lower when selling digitally, and cost of sales is also lower as we have not built any branches or engaged with agents. Additionally, we have a lot more data and analytics to work with and to price the risk better. Moreover, we digitally service the claims and make the process more simple and seamless with minimal paperwork. All this leads to two things. One, because of lower cost structure we are able to provide better value to customers with cheaper and better products. Secondly, with an online insurance model, we can carry out better data-backed underwriting and service claims in a much faster way. With ACKO, policyholders can now save 10-30% on premiums.”

Funding and Achievements

Through its promising business outline and revenue streams, Acko has been able to bag an aggregate funding of $458 million over 6 consecutive rounds of funding. The latest round of funding valued at $255 million was led by General Atlantic and Multiples Alternate Asset Management Private Limited and resulted in the startup being valued at a whopping $1.1 billion thereby acclaiming the status of a unicorn.

Since its inception in 2018, the digital insurance app has proclaimed numerous achievements.  In June 2019, the startup bagged the ‘Golden Peacock Innovative Product Award’ for its contextual micro insurance product. Moreover, the company was felicitated with the ‘Most Innovative Insurer Category in Non-Life Segment’ at the FICCI Insurance Industry Awards 2020. The most recent accomplishment of the insurtech startup includes the award of ‘Best Insutech Company’ at the BW Festival of Fintech received in February 2021.

Sustaining the Trajectory of Growth

Ever since the company laid down its foundation stones, it has observed an upward trajectory of growth and revenue. Starting from the year 2019 when the company administered a premium of Rs. 41.56 crores to becoming a unicorn at a valuation of $1.1 billion post a funding round, the company has exhibited its strong presence in the market.

The insurance startup has experienced a 120% growth in sales of insurance policies for automobiles in FY 22 along with a 3.5 time growth in its consumer base since previous year. The website currently observes customer traffic of 4 million which is a 161% increase since the last year. Furthermore, the platform has also collaborated with prominent industry players like Urban Company, Ola, Amazon, Bajaj Finance and more to diversify its portfolio.

While the startup has come a long way since inception, it is yet far away from reaching its mission and objective. Looking ahead, the company intends to scale up its product offerings in the future. Moreover, the company would also consider foraying into the health insurance domain as well as add more employees to its pre-existing team.

With the on-going global pandemic and the trend of digital platforms, Acko Insurance is likely to experience more traffic on its app. However, the startup also needs to impart dynamism and expand its product offerings in a market that is observing an influx in terms of competition. The manner in which the startup tackles various future hurdles would in turn define its growth trajectory for the future. 

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