On May 7, IFFCO-Tokio, a leading general insurer, announced the debut of “Comprehensive Home Protector”, a home insurance product that eliminates any insurance gaps.
The product covers the risk of loss or damage to the insured’s and their family’s tangible assets, interests, and liabilities. The insurance product is designed in accordance with the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI). It includes de-bundled fire coverage, and the insured can select “Basic Fire Cover” in addition to choosing additional coverage for other natural and man-made disasters.
It covers sections, such as earthquakes, storms, cyclones, typhoons, tempests, hurricanes, tornadoes, tsunamis, floods, inundation, lightning, landslides, acts of terrorism, riots, strikes, malicious damage, bush fires, forest fires, damage caused by the actions of civic authorities, etc.
Other Benefits Offered by the Company
Additionally, personal money, critical documents, and cards lost outside of the insured’s house under specific circumstances are covered by this policy. In addition to covering the cost of replacing lost or damaged documents and items, such as share and stock certificates, deposit receipts, insurance policies, title deeds, manuscripts, passports, driver’s licenses, credit cards, and personal records and certificates, the policy also covers the cost of returning lost money.
Coverage for belongings damage when moving residences from one area to another is one of the most important features of IFFCO Tokio’s home insurance policy. Damages from fire, lightning, bridge collapse, carrying vehicle overturning, derailment or accident, robbery, and dacoity are all included in this feature.
Some of the policy’s most notable features include loss of jewellery and other valuables, damage to fine art, fixed glass, and sanitary fittings; breakdown of household appliances, portable electronics, and bicycles; accidental death or disability of the insured; protection from loan payments in the event of death or disability; and personal liability insurance.
Taking Care of Tenant’s Liability
Tenant liability to the homeowner for damage to the structure, the contents provided by the owner or landlord, electrical installations, underground and above-ground tanks, fixed glass/sanitary fittings, and other fixtures, fittings and interior decorations is also covered by the policy.
Those who purchase the policy directly from IFFCO Tokio will receive a flat 10% early bird discount on the policy premium as part of the company’s launch extravaganza.
Niharika Singh, Executive Director, Marketing, IFFCO Tokio General Insurance, commented on the exciting product’s debut, saying that Comprehensive Home Protector’s introduction is a major turning point in IFFCO-Tokio’s history. There are as many risks associated with the brand as one could encounter at home or when moving.
Additionally, the business has built it such that the consumer can select the risks and only pay the premium for those risks that are likely to be revealed. By offering this coverage, the company hopes to ensure that the policyholder purchases peace of mind in addition to the policy.
Cred, a fintech unicorn that formerly focused on lending and payments, has now expanded into the distribution of insurance goods, starting with auto insurance.
According to Akshay Aedula, head of product and growth at Cred, the company is using its vehicle management platform, Cred Garage, to market insurance products to its users. Depending on the users’ credit scores, Cred offers extra discounts to make the product more appealing.
What is Garage?
Cred customers can monitor their car expenses, outstanding traffic “challans,” and the dates of their insurance and pollution renewals on the Garage portal. In the event of a roadside breakdown, they can also receive assistance. Cred hopes to make money from the programme by collecting commissions from insurance companies, even though car management is free.
There are almost 7 million registered cars on the platform, and there are 4.4 million users—some of whom have more than one car registered in their name. Last September, the platform was launched. Approximately 11 million of Cred’s 13 million monthly users engage in active transactions.
According to Aedulia, Cred’s fundamental belief is to reward good conduct, which is why it has collaborated with three insurance providers to develop an insurance product that gives clients with high credit ratings extra savings on their premiums.
Working With Three Insurance Companies
To provide these products to its clients, the company, which holds a corporate agency licence from the Insurance Regulatory and Development Authority (IRDAI), has collaborated with Zurich Kotak General Insurance, Go Digit General Insurance, and ICICI Lombard. A corporate agency is an insurance distributor that has the capacity to collaborate with nine insurance companies. An entity will require the insurance broking licence in order to engage with more.
According to Aedulia, Cred is expanding this cooperation and is collaborating with a few additional insurance providers. As of right now, the IRDAI has approved the company’s product. Cred’s entry into the insurance market rounds out its range of financial services operations, which began with credit card bill payment and progressed to wealth management, credit, and the Unified Payments Interface (UPI). According to a recent statement from the corporation, payments, credit, and insurance account for 90% of its total revenue.
In addition to having an internal, non-banking finance company called Newtap Finance, Cred has a significant distribution role in personal financing. In February 2024, Cred bought Kuvera for its money management service. Through Garage, Cred has now established its own insurance distribution company.
In FY24, the company reported total sales of INR 2,473 crore, a 66% increase over FY15. With its employee stock ownership plans included, its net loss came to INR 1,644 crore, a 22% increase from the previous year. According to Tracxn data, the firm has raised $866 million and was last valued at approximately $6.2 billion in 2022.
You’re living under a rock if you don’t know what software is. We use it every day, day in and day out. Even if you don’t work on software, you know it. A game is a software made for leisure purposes, there is specific work software. The apps on your smartphone are also software. The point to be clear is basically we are drowned in software. Welcome to the 21st century.
There is no lie in the statement that software has invaded the world. It has penetrated the deepest of our lives. As tech becomes more and more accessible, there is a sure chance it will grow manifolds. It has also penetrated the walls of industries, every company now is a software industry first and a product/service company second. SaaS, software as a service is the new trend. It has transcended boundaries and has leapt to the insurance world. This article talks about SaaS and its application in the insurance industry.
Even if you are naive, you will surely know something about this synonym. SaaS or software as a service is a business model that has been intriguing every business mind out there. It is a model in which software is used as a service and a whole business organisation is built around the walls of these services.
The reason for such popularity of software as a service model is simple to think of. They are easy to operate. Software is the best thing that has happened to humans after hardware tech. They are easy to use, have more efficiency, and are more effective for any scale of organisation. For example, Canva is a popular graphic design platform founded by Melanie Perkins, one of the world’s fastest-growing saas companies. It is valued at $40 billion.
Most people are insured but why is the sector even needed? The insurance sector works on a very easy model of work. You love someone/something and you want to make them safe. So, businessmen came up with a cash-making idea. The model of insurance was made.
Insurance companies will assure you of the monetary safety of the things/person you love and in return, they charge a little fee every month. That monthly charge is known to us as an insurance premium. And yes, you can even include yourself in the category of insurance and not just the precious things. The whole business is made on the basis of fear, or we can call it love. Many celebrities also ensure their body parts.
Insurance companies work for a lot of people, thus, they take insurance premiums from a lot of people. Now the hook is that there are fewer chances of ‘disaster or ruin’ happening every day so they just save and invest the premium money. Or the insurance companies can use some of that money to pay claims for some disaster that may have happened to some insured.
Insured things/people do not get ruined/die daily, so insurance companies save the premium and these earnings are invested. Making the whole business profitable.
Now that we have discussed software and the insurance industry, it is safe to walk on the path of the intersection. Software is known to manage digital data and make sense of data of any magnitude. Insurance companies are companies that operate with a lot of people (Insurance clients). The intersection does make a lot of sense.
Software as a service has penetrated all the domains that humans have known, we mean, mostly though. In the industry of insurance, it has even more demand. It has made things simpler, easier and faster. That makes the work of the company, the firm and the client.
This hassle-free functioning was not possible before this new entrant in the domain. The insurance industry now saves a lot of time and money that can be used somewhere else. Which clearly is a benefit in daily operations as well as in the long term.
SaaS uses a licence and a delivery strategy that provides all the listed benefits of the insurance to the clients without even contacting the brick-and-mortar office. They kill the mediatory and increase the overall efficiency without even taking the support of a third-party source. This is cool and most people would love to pay for this software which actually gets the work done. SaaS provides the most up-to-date information to you and works on the new normal of the Internet.
Talking about the cash of the business, most software doesn’t take a cut for themselves while they cater to a company. By most, we meant the on-premises and hosted systems. The fact that this software in the insurance industry has to deal with a lot of data, does not really bother their efficiency.
Is there a Need for SaaS in Insurance Sector?
There are a lot of activities that an insurance company has to do. They have to constantly improve performance, speed up the writing and acquire new and new businesses (Investment) as soon as possible. With all these hassles, the insurers also have to increase efficiency and cut expenses, and the more the better.
With all this hard work, they still have to manage the clients’ risks well. They have to give strong competition and keep the existing customer happy while maintaining a good amount of new client base. All this can be easily overwhelming. This is the point in the picture when appropriate software comes into play.
If chosen suitable and relevant software services for an insurance firm, they can do wonders. Otherwise, it is not to mention that any insurance company is fragile and can come down like a house of cards. A suitable software as a service results in a fast and developed approach and better work management. Let us see how SaaS is shaking things up in the insurance world. Before we prepare a firm to jump into the software train let us read the benefits.
Benefits of SaaS in the Insurance sector
As discussed above, the insurance sector has a lot of work to do and a lot of data to manage. Incorporating suitable software can help address those mentioned challenges. This will enable the company to focus on its core business model and be more profitable. This is the basic thing that technology does. It simplifies things at any scale.
Catering to customer demands, lowering costs and providing security at a much better level are some of the benefits. Insurance companies can even entail cloud computing to use already-made configurations. Let us discuss the benefits in a little clear way.
Forward-thinking
Tell someone that you don’t want to use the software in your business, and watch them laugh. Forward-thinking is the phrase that properly explains the new innovations and the efficiency that they provide.
If an insurance company uses the best software in line, and they have everything automated, it is obvious that it will attract more customers. This is a great method to stay competitive. As this is a really good competitive advantage.
There are plenty of SaaS platforms like the Invoice cloud that companies can choose from and let them do the magic. Efficient software helps the IT department of an insurance company to manage more data with even more efficiency. Changes can be made easier and more rapidly than ever with no additional workloads.
This makes the business a little more flexible and we all know flexible businesses survive the most. There is also personalised software that crosses paths with users. You can customise, and enable-disable workings as per your specific business needs and requirements.
Greater customer retention
Customers or clients are good for any business out there. If you can increase the comfort for them, it will bounce back and they will be more loyal to the business. The insurance business is a big hard business and there are many rivals in the market.
In a market where everyone is trying to create differentiating factors, a great customer experience can go a long way in increasing retention. The software can make everything easy today, they can manage data, manage payments and improve the overall customer experience.
SaaS is easily expandable and is updated from time to time. The software can make things possible like automatic renewals, and automatic payments of premiums from bank accounts and there are a lot more ways. This is an investment in the comfort of clients and will pay in future retention rates.
Customisability and Scalability
Most of the Software that is provided as services is tailor-made to the needs and wants of organisations. They are super customisable and highly scalable in this sense. As the industry of insurance demands more and more rapid growth and scale. It becomes imperative to improve working management. If they are not calling fast and maintaining efficiency, they will not be able to hold customer demands and eventually lose customers. Thus, the software does the work for them, most software is extremely flexible and highly customisable that can take the shape of any organisation.
Data Guard
Data is the most important and precious asset in this digital world. If a company does not know how to keep its data safe then it is bound to not survive. In the insurance sector, they deal with millions of clients who are unique and have their own set of information. If the insurance company is unable to keep the data safe and secure then they will soon vanish from the competition.
SaaS systems are built with keeping in mind the security and guarding data that they will hold and manage in future. They have the capability to handle large sets of data with the same constant and clear security. They make sure that the insurance firm is never vulnerable in terms of data. These platforms are built with the thought of managing the data of each and every client while keeping a guard as they work and make sense of data for the company.
Insurance firms save the two most needed assets in the world today. With good, efficient software they save time as well as money. The Information technology department saves time by focusing on more important things. The finance department saves money to invest more and earn more returns in present as well as the future. Customers are happy too. For example, a firm can include a chatbot for prospectus clients that can improve the experience.
Albeit the fact that insurance software is effective and efficient, it is hard to prepare a company to incorporate software into the system. They have to look after many things before jumping into the storm. Let us see a few checkpoints before adding SaaS to an insurance corporation. For example, they have to plan everything in advance which can help decrease the hindrances in the process. Most software incorporates skill sets to handle all the data of the business architecture but they still have to be made personalised.
Insurance companies also have to look at integrations that they can provide. Once the software is at work, they have to check the value added to the company. If something is not bearing fruit, it is important to cut that part off. Only allow integrations that serve the users in a better way than before.
We discussed that software is the new ‘workers’. Needless to mention that these workers are a million times more efficient than their human counterparts. That is the reason why software is transcending barriers and now is used in almost every domain. They are now even in the risky business of insurance.
Insurance companies can soar high with the help of these little thingies. They can manage data efficiently. They can improve the client experience which will help in more retention rates. They can save time and money with the help of suitable software.
All of these benefits while still managing to be more secure and alert with data security. This is almost heaven for the insurance world. Never before this was possible and it is delightful to see how companies can perform with these technological aids.
FAQs
What is SaaS insurance?
SaaS insurance is a delivery strategy that provides all the listed benefits to the clients without contacting the brick-and-mortar office. They kill the mediatory and increase the overall efficiency without even taking the support of a third-party source.
What are examples of SaaS?
Adobe, Google Workspace, Salesforce, ServiceNow, and Atlassian are examples of SaaS providers.
Who is the largest SaaS provider?
Adobe Inc, which has a Market Cap of $198.9 billion, is the largest SaaS provider.
What is SaaS in business?
SaaS is a software-as-a-service model where an application is delivered over the internet and can be accessed from any device with an internet connection.
Why do companies use SaaS?
SaaS eliminates the cost of purchasing and installing software and maintenance. Also, SaaS applications are easy to install and maintain than hardware installations.
What are the most important aspects of SaaS?
It is easy to use, has enhanced security, saves costs and is scalable.
Covid-19 shook the economies of the whole world. Not just the countries that are developed suffer but also the countries that are developing and are already poor. This shock was instant and the world market crashed as soon as the pandemic hit the world.
Businesses all over the world that did not have stability got dissolved in the storm and the remaining were absorbed by big businesses. From that time to the current time, all efforts have been to revive the market. There was a lack of funds all over the world, which the government and businesses tried to fill.
As the Covid-19 pandemic curve flattened, and the markets got to their normal workings, the world saw a sign of relief. Then, Russia attacked Ukraine and we all witnessed another unstable time.
All of that happened in the past two years and all that was balanced by the efforts of some entrepreneurs all over the world. Money was an important asset in these times. Banks worked overtime to get money into the hands of people. Many banks’ growth staggered due to the implementation of no work in the sector. Since then every bank has been trying to cope with all the unemployment and money problems in the market.
In recent news one of the most popular banks in India decided to merge itself with another entity to gain more power. The bank was none other than HDFC bank, which is among the biggest banks in the economy. This article tries to cover everything about the news on the HDFC merger with another HDFC entity. Let us see in close detail what the news meant in this case.
HDFC bank limited is an Indian private banking company that deals in all sorts of financial services. It is headquartered in Mumbai. HDFC Bank is India’s largest private bank in terms of assets. HDFC bank is also the tenth largest bank in the world in terms of market capitalization as of April 2021.
It is also the fifteenth largest employer in a country as big as India which nearly employs 120,000 employees. It is also the third-largest company by market capitalization ($122.50) billion on the Indian stock exchanges. All and all, HDFC is a big deal in the Indian economy market.
HDFC Merger with HDFC Bank
The HDFC-HDFC merge was announced on 04-Apr-2022.
The news that shook the market for two days in a row now is about HDFC bank. The HDFC bank has announced a merger with the HDFC. This merger of two big organizations will be the biggest in Indian corporate history.
After the amalgamation, the parent company (Housing finance company) will merge with the banking arm of the company, which is HDFC Bank.
The rumors of this merger happening have been recorded for a long time now. The merger has been speculated to happen in the year 2014. Thus, we can see that the deal that turned into the news yesterday has been in working progress for many years.
The agreement on the merger has moreover mentioned that the parent company of HDFC, that is HDFC will sell some proportion of its loans to the bank every quarter. For the HDFC bank, this was previously the only touchpoint to home loans.
The parent company works in the complementary business of the home loan business and the bank arm works as a lending bank for the public. Both entities will now work together to make more sense of the business that they are into.
What Took HDFC So Long to Merge With HDFC Bank?
For the most notable past, national housing banks were regulated by HDFC. HDFC or the housing finance companies were the regulating bodies for all these sorts of banks and they had easier Norms and rules and regulations to follow, which made managing these corporate entities easier to handle and manage.
As time went by and bad loans accumulated and several other events debunked the housing finance sector, things changed. With the collapse of the DHFL and the fall of other lenders and mortgage providers like Reliance housing finance, the Reserve Bank of India came to the rescue. The RBI took over control and started to impose strict guidelines for the whole housing finance sector.
It was easy for a company like HDFC to manage itself but now, as the norms changed, it was becoming heavier to manage such a big organization. Thus, they thought to merge the HDFC limited and the private lending arm. The merger has its benefits like,
Statutory liquidity ratio
The adequate cash reserve ratio
Compliance with priority sector lending norms
The reason for the time that it took to merge both these organizations was the size of their books. HDFC limited and the bank’s book was huge and it was difficult to plan the merger which took time.
There was also some speculation about the person who will guide the merging body. It was long in the works and it finally is seen to have settled a little. There will be many benefits from the merger like the cost of capital is going to be lower due to the synergy with which the company will operate.
Another good aspect is that interest rates will be low they will be the lowest as compared to some past decades. As the companies, HDFC and HDFC bank have a large stock of liquid assets in their inventory, they will provide a good financial backbone to both entities.
Benefits of the HDFC and HDFC Bank Merger
The news was not enough to set up the theme of reason. Here we will be listing the benefits that the bank will be seeing in the future and the reason why they are looking positively for a merger in the home loan and the bank of the same parent organization. Let us see how the merger is going to be beneficial and the normal benefits of a merger first.
Safety and Profitability
A merger can be very beneficial and it can secure the resulting organization to a great extent which ensures safety and profitability. A merger lets the existing shareholders reorganize the shares of the entity and make a better arrangement for the resulting entity.
Stronger Entity
Another reason for a merger can be that the resources of both the companies and entities add on and they become stronger as an entity. Many companies also enter into a merger or amalgamation to enter new markets to diversify their portfolio of products which will enhance the profitability and profit-making capability of the company.
Other ways companies want a merger is to get some assets from other companies which would have taken much time to buy or set up in their organization.
Taxes
Merging with another company also helps many times, saving tax by lowering the tax liability that is generated for every company. A merger can also be used to eliminate competition between two entities that work in the same sector of products and are fierce in their quality controls department.
By the way, companies like these can work towards the same goal of profitability with more strong arms and assets. This merger will also help in better planning and utilization of all the financial resources that both the companies entail.
The HDFC amalgamation has a lot to do with these above-listed benefits. Apart from the benefits listed above, this merger will have more unsaid benefits like,
Benefit to Investors
The amalgamation between the parent organization and the banking division or arm is going to persuade more investors to stay invested in this joint venture. This move of merging will provide synergy to both the individual entities and will help foreign investors give more abundance to invest into.
High EPS
The merger or the amalgamation will also help in increasing the EPS of the bank. EPS here refers to earnings per share and is a financial metric to judge a company. In normal circumstances, a company with a high earning per share is considered more investing worthy than a company with a low earning per share (EPS).
Stock Price
Another small-term benefit for both entities was that the stock of both companies rocked on the stock market. The stock of HDFC bank closed at a 10 percent higher rate, which valued the private commercial bank at a valuation of 9.2 lakh crore. On the other hand, the stock of HDFC which is a housing finance company rose about 9.2 percent and landed the company at a valuation of almost 5 lakh crores.
HDFC Bank and HDFC Limited Share Price
These were some of the most noticeable benefits that Both the merging companies will get if they work in synergy. After the IL&FS crisis, that happened in 2018, the apex bank of India, that is the Reserve Bank of India has been forcing NBFCs or Non-Banking financial institutions to be more of a bank.
According to the rules of the Reserve bank of India, they are mandated to set aside a good chunk of money as reserves to ensure precaution against thefts and frauds. This made managing NBFCs a little harder and more challenging.
HDFC Chairman Deepak Parekh admitted that the bank-like regulations for NBFCs were the final nudge for the merger and it was the core point that triggered this big sort of a merger between the parent organization of HDFC and the private lending arm of HDFC.
HDFC chairman Deepak Parekh said shareholders of HDFC will get 42 shares of HDFC Bank for every 25 shares held. HDFC’s 26% stake in HDFC Bank will be extinguished as per the terms of the merger. HDFC Bank will be 100% owned by public shareholders, with existing shareholders of HDFC Ltd owning 41%.
“Change is inevitable, but is welcome when it is beneficial to all the stakeholders. The merger not only makes the combined entity strong enough to counter competition but makes the mortgage offering more competitive,” said Parekh.
All these reasons enlist the core set of reasons which led HDFC to merge with its private lending arm HDFC bank and is set to become the biggest merger in the history of Indian corporate history.
The current status of HDFC is worth a watch. The private lender department or the HDFC bank’s loan book now stands at about 12 lakh crore. One of the current goals of the banking arm is to naturally jump to 18 lakh crore and this is not an easy task.
The merger will help in adding resources, both financial and synergic. This task will involve some tight arrangements between profitability, asset quality, and the growth of the organization.
This is another benefit that is often unlisted in this famous merger. Roping in the parent organization of HDFC will help the banking arm get some relief from the tight arrangements of its books. It will be an easier and more economical option for the entity.
Another aspect of the merger can be seen in the private loan lender participant in the amalgamation. The bank, whose total value of home loans stands up at about 11 percent, will jump and magnify to 33 percent.
The other effect of the merger will be that it will make HDFC bank the second largest bank in India. It is a great feat for a private lender like HDFC and is further expected to increase the value of the lender. While the space between the HDFC Bank and State Bank of India would be around 6 to 7 lakh crore.
ICICI Bank on the other hand would be a distant third in the order, that too with a gap of over ₹10 lakh crore. Thus, the position of the HDFC Bank is quite sure to get better.
“Change is inevitable but is welcome when it is beneficial to all the stakeholders. The merger not only makes the combined entity strong enough to counter competition but makes the mortgage offering more competitive,” said Deepak Parekh who is the current HDFC Chairman.
Over the years, HDFC Bank has outgrown its parent both in terms of valuation as well as asset size. “The proposed merger will benefit the economy in many ways. A larger balance sheet and a larger capital base will allow a greater flow of credit into the economy,” said Parekh.
If we look at the Definitive data, it will mark the largest banking sector M&A globally since April 2007. S&P Global Ratings said the deal would create an entity twice the size of ICICI Bank.
Impact on HDFC Mutual Funds
Before the merger, HDFC limited and the HDFC bank had about 5.66 percent and 8.43 percent share in the Nifty 50 which was a big anchor for both organizations. Now, after the merger, their combined efforts of merging the organizations into one single entity have resulted in a share of 14 percent in Nifty 50.
However, a rule states that exposure for a single stock cannot exceed the 10 percent cap in a mutual fund scheme portfolio, and this merger as we can see breaks the limit.
As a result, mutual funds may have to remain underweight on the stock and that will lead to its repercussions. One of the repercussions is that the fund managers will not be able to benefit from the outperformance of the merger, which can turn out to be a dealbreaker for many managers.
Unless the weight of the stock lies under the cap of 10 percent, according to the rule, these mutual funds are expected to underperform the market.
Swap Ratio of HDFC
What is the swap ratio? The meaning is hidden in the words given above. Swap means to take part in the exchange for something. More formally, a swap ratio is a ratio, which is the exchange rate of the shares of the company that goes and forms a merger. This ratio is calculated by the valuation of various assets and liabilities of the merging companies.
In the case of the HDFC parent organization and the HDFC Bank, the swap ratio will be somewhat tricky. The merger has a lot of complexity and it was speculated to be in process for about a decade now.
First, the regulatory body will have to give a nod to the HDFC group to set the merger in a running state. After that, the process could take about 14 to 18 months and with this data, the merger process is expected to be complete by the end of the financial year 2021.
The swap ratio will look like this, 1:1.68. That can be interpreted as, for every twenty-five shares held in the HDFC limited (the parent organization), Forty-two shares of the bank will be allotted.
Cost Optimisation of HDFC
One of the major benefits of a merger is cost optimization. In this scene, it is expected that the cost will be optimized, but in the long run. As two big organizations join hands to operate in synergy or harmony, costs are mostly expected to go down.
This is also expected in the HDFC case too. However, as the organizations are big and strong, cost optimizations will happen in the long term. It will take some time for the cost optimization to show and reflect.
Some experts are also speculating that if the merger worked in a short span and got established, it will be a drag on the HDFC bank. It means that if the merger is established and started working together by the end of the financial year 2025, then it will drag the costs of HDFC Bank.
The cost of statutory reserves is increasing and the home loan segment is not too strong in the short period. As both are getting merged, they are expected to generate a net interest margin of four percent. HDFCs bank books might not look good in the initial years of operations, as the merger turns out fresh but it is expected to benefit in the long term.
So what will be the result of the merger? The answer is hard to say, as we should try to look long term but we can see what the results will be in the short term of time. The stakeholders or the investors of HDFC limited will get shares of the HDFC bank.
This is good news for all the investors of HDFC Limited as they will get shares of HDFC bank, and it is a good deal overall. All these are the result of mergers happening in two big entities in India, HDFC limited and the private banking arm of the same organization, HDFC Bank.
This merger is said to be the biggest merger in the history of corporate mergers in India. It will be a benefit to both the participating organizations, HDFC limited and the HDFC bank. In these times of uncertainty, mergers like these can be a big relief to the economy.
FAQs
Which bank is merging with HDFC Bank?
HDFC Ltd is merging with HDFC Bank.
When did the HDFC merger start?
The HDFC merger was started officially on April 04 2022 by the announcement made public by the officials.
Who is the founder of HDFC bank?
HDFC Bank was founded back in 1977 by entrepreneur Hasmukhbhai Parekh.
What happens after the HDFC merger?
There will be many changes noted after the merger of HDFC-HDFC bank. Changes like investors of HDFC Limited will get 41 percent shares in the merged bank. On the other hand, the shareholders of HDFC Bank will get access to the loan department of the company.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Symbo.
India is the second-largest insurance technology market in Asia-Pacific. Through technology, the insurance industry is revolutionized to a great extent. Indian customers are inclined toward tech-enabled services as it makes the process easier and more accessible. With the main insurance sectors being life insurance, health insurance, property insurance, and commercial insurance, insurance companies are innovating their services. Symbo is an insurtech startup that provides insurance covers for different businesses. Their newly launched insurance services are eyewear insurance, footwear insurance, and even fitness insurance.
Read the success story of Symbo, its founders, business model, insurance services, funding, and their marketing strategy.
Symbo is a leading embedded insurtech platform that enables any business to offer customized insurance and protection plans to their customers, right at the point of purchase. Its vision and mission are to be the world’s largest embedded insurance distribution platform providing best-in-class claims, consulting, and buying experiences to its customers and partners.
Insurance has always been a product that has been “sold” and not bought by the customer. However, they strongly believe that if you offer relevant coverage to the user in a contextual setting, the adoption of insurance will increase. They want to be the company that offers these innovative and relevant insurance products, with a very seamless and frictionless buying experience.
The core belief of the team is that insurance penetration can increase in a market like India if customers can experience the benefits of insurance at a smaller ticket size. An embedded distribution model can take this approach to masses.
Symbo – Industry
The global InsurTech market size is valued at $9.4bn as of 2020. India is the second-largest insurance technology market in Asia-Pacific and including Symbo, India has at least 66 insurtech companies accounting for 35% of the $3.66 billion in insurtech-focused venture capital invested in the APAC region.
According to a recent survey of 500+ bank customers in India from SurveyMonkey, 91% of Indian digital bank customers would be highly interested in receiving embedded insurance offers based on their transaction data, as would 95% of traditional bank customers. ‘Convenience’ is the primary driver for their interest, stated by 63%. This stands as a testimony that Indian customers are welcoming embedded insurance and the industry has a major shift toward the tech side of it while making the process of Insurance even easier and more accessible to all. It will not be long before all insurance companies will start going digital and get into the Insurtech space that Symbo is in today. While the space and services will go digital, they will also evolve drastically in their technology capabilities that will be used even 5 years from now. It is safe to say that there might be a time when Insurance of any kind will be available online and the customers will not have to worry about filling out cumbersome paperwork for the same. The next couple of years is going to be very intriguing to look forward to and see how fast this digitally driven world will change the insurance space in the best way possible.
Symbo – Founders and Team
Anik Jain, Mitesh Jain, and Adrit Raha are the founders of Symbo.
Anik Jain
He is the CEO & Co-founder of Symbo. He has 17 + years of experience working in various fields. He also has experience in leading business units at various levels like start-ups, changes management in a mature organization. He also tends to specialize in the areas of strategy, change management, P&L responsibility, insurance, team management, channel management, business development B2B, broking and sales.
Mitesh Jain
He is a CTO & Co-founder and is an Experienced Founder with a demonstrated history of working in Technology Consulting and product management. He is also an Entrepreneur with experience in incubating business initiatives, evangelizing stakeholders, influencing industry thinking, and launching and scaling up products to deliver strong business impact. He also has Strong experience in solving large-scale problems in a complex regulatory environment through deep product thinking and focus on impact.
Adrit Raha
As a Co-Founder & Co-CEO, he has shared responsibility for overseeing all aspects of the business – from the company’s mission, vision and goals to setting strategy, and direction, and, most significantly, managing my super talented troupe. He is of the strong belief that technology, platforms and protection (be it health or insurance) have, is, and will always continue to evolve, and it so happens that tech innovation is the current now. Hence – Symbo
Symbo has 100+ employees giving out their best services
Symbo – The Idea and Startup Story
Symbo was founded in 2017 with a focus on context-based, need-focused insurance that aims to help customers buy insurance covers based on their personalized needs. During the initial years, they tried to solve the problem of insurance distribution via multiple mechanisms because their vision was always to make insurance accessible to the masses. At one point they had an agent network of 1000s of agents who were using Symbo’s technology platform to distribute insurance.
One such mechanism they experimented with was embedded insurance. They worked closely with an initial set of partners to understand what kind of risks and issues their customers are facing and they co-created unique insurance products for them.
Some of the categories they launched were eyewear insurance, footwear insurance, and even fitness insurance. The customer response to these products was extremely encouraging prompting them to double down on the embedded distribution.
As of today, Symbo has over 30+ insurance partners and over 30 insurance products which are being distributed via partners.
Symbo – Services
Symbo works with partners across e-commerce, retail, fintech, and other categories. By integrating Symbo’s powerful Covergateway API, a business can instantly start offering insurance products to their customers, right at the point of purchase.
The API issues policies in real-time and Symbo has deep integrations with leading insurers in India. The entire buying journey for the users is very seamless, they can choose to purchase the coverage for the product they are buying with a simple opt-in. The claims are also handled in a digital-first way. Customers need to just upload their policy details and photographs and within 48 hours, Symbo’s claim specialists review the claims.
Their USP is that they give customized embedded insurance to the customers according to their needs, and providing API to other businesses not only benefits their customers but the online sellers as well. With a simple opt-in in the purchase journey, consumers can insure the product they are buying against common issues like accidental damage, theft, etc which standard warranties might not cover. The insurance coverage is powered by leading insurers in India and some of their largest partners include Lenskart, Bata, and Decathlon, among others.
While Symbo’s core vision was always to make insurance accessible by innovative distribution methods, Symbo pivoted from an agent-first business model (POSP) to an embedded distribution platform in the last year. The Symbo is a part of Symbo Platforms Pte, which also runs an Enterprise SAAS platform for insurance companies to manage their distribution.
Symbo – Business Model and Revenue Model
Being a platform business, Symbo’s business model is to enable distribution along with its partners and monetize by having a share in every transaction.
SAAS Platform
Insurance companies buy their product to enable capabilities for themselves to have a fleet of insurance agents at their fingertips who are accompanied by a dashboard. This product acts as a centralized tool with tons of features to make the insurance journey better for agents, buyers, and companies. As an InsurTech company, all Symbo wants to do is make insurance better by implementing automation in the tool. This entire stack has all the capabilities and features that companies would want for example monthly subscription, data, analytics, reports, super-admin, 5-level user roles, agent onboarding, and state-of-the-art UI. They have crossed $1M in this line of business.
Embedded
This is the heart and soul of Symbo. In this model, they sell $1.5 per policy (which is their average order value) contributing to their overall GWP. Part of this is sent to the Insurer to the onboard partner and they take a certain revenue share out of this as Monthly Recurring Revenue. Currently, they have 10 partners onboarded with them with around 150k policies solder per month.
Symbo – Customer Acquisition
In the early days of Symbo’s embedded business, they used to spend time at the store understanding customers’ buying behaviour. They worked with the brands to learn about the top reasons their customers were unhappy and created coverage plans that were relevant to the brand’s customers.
They spoke to as many customers as possible during their store visit and explained to them the benefits of insurance and started to sell the initial set of policies.
A lot of their learnings during the initial days of their field visit came to use as they started to scale. They spent a lot of time with store managers and staff to train them on how to sell Symbo’s products. Their marketing collaterals are designed to keep the end customer in mind.
Pivots are always challenging. As they moved from a traditional broker to a technology-first insurtech platform, they had to build the product to support the new use cases, at scale. Since they enable sales of insurance within the partner’s point of sale, they had to build the right integrations and user journeys to ensure the purchase journey is seamless for the user.
Their relationships with insurer partners were one key element that helped them execute the pivot smoothly. They had tremendous support from all the insurers for them to become an embedded insurtech platform, right from the product they wanted to enable integrations with their systems.
It is hard to market a product that lacks quality and easy for products that shine bright with quality. They knew that they have the best technology for embedding insurance be it any way possible – standee QR code or website integration. And with that, they needed to market strongly.
The moment they received a few references from their clients they immediately knew they are marketing it right. The joy of achieving successful word-of-mouth in the days of the Internet is as overwhelming as getting ample leads with low costing clicks as they have been doing before. However, they think there is still a long way to go.
Symbo – Marketing Strategy
They invite you to have a look at the Kanban board at their office where they have brainstormed many marketing campaigns and PR ideas. They have sufficient ideas with them (inside the Insurance sector itself) to create an ever-lasting dent within the subconscious of the masses. They have not set out any campaigns right now as they have kept them occupied with digital advertisements on different platforms. They will be capitalizing on our data and coming out “strong and viral” with their campaigns very soon.
Symbo – Growth
The embedded insurance business is focused on India, while the SAAS platform business has customers across Southeast Asia.
Some of their notable insurer partners are:
Reliance General Insurance
TATA AIG Insurance
HDFC ERGO
Max Bupa Health Insurance
BAJAJ Allianz
Religare
The list of distribution partners continues to grow with brands like Lenskart, Red tape, and Decathlon being some of their key relationships. With over 2M policies issued, they are growing over 30% MoM.
The plan for the next 2 years is to be able to provide customized embedded insurance in as many spaces as it is possible for us. Like most high-growth startups they are in talks with a bunch of investors and would bring in the right strategic partner who can help them fuel the business expansion.
Symbo – Funding
Symbo has raised a funding of $9.4 Million in March 2021.
Date
Stage
Amount
Investors
March 2021
Series A
$9.4 Million
Led by CreditEase Fintech Investment Fund and San-Francisco-based investment firm. Think Investments, with participation from existing investors Integra Partners, Insignia Ventures, and AJ Capital
Symbo – Advisors and Mentors
Mr Sanjeev Jha has been their mentor. He has worked, and had experience, across geographies including India, the Middle East, South Asia, South East Asia, Europe and North America. He has been an advisory board member for Symbo for a year now. Apart from Symbo, he is also an advisory board member for many other companies.
They use all the white-label assets and make full use of open source tools and data available and give due credits wherever required.
Symbo – Recognition and Achievements
Symbo has been awarded the “Digital Insurance Innovation” of the year award from ET BFSI at the World BFSI Congress and Awards 2020.
The startup has also wonthe “Digital-Insurance Broker” award at SBR Technology Excellence Awards in the year 2020.
Symbo – Future Plans
At this point, they are focused on growing their partner base and growing the number of policies. Having seen some of their initial categories like eyewear, and footwear scale, they are working with the insurer to make the program and coverage a lot more exciting for the customers as well as introduce newer categories.
FAQs
Who is the founder of Symbo?
Anik Jain, Mitesh Jain, and Adrit Raha are the founders of Symbo.
When was Symbo founded?
Symbo was founded in 2017.
What are the services offered by Symbo?
Symbo provides embedded insurance for different Businesses.
The Indian insurance industry has witnessed significant progress with both life and non-life insurance growing at a CAGR of 17% and 14% respectively in the past five years, according to a BCG report. The total number of lives covered in this period has doubled from 12 crores to 23 crores.
Although the Indian insurance market is underpenetrated as compared to the global leaders such as the United States. There is a lot of scope for growth and with the outbreak of Covid-19, there has been a major change in the perception of Indian consumers regarding the awareness of their health and the requirement of a health insurance policy.
The pandemic paranoia has led to a near 7% increase in the intent to buy insurance globally. Moreover, research by “The World Insurtech Report, 2021” by Capgemini, stated that around 50% of the customers today are willing to consider insurance coverage from a new age player (insurtech startup).
This clearly states that the demand for the insurtech industry is rising globally and India is also witnessing the same trend. Not only from the consumer perspective, but even the investors’ are also betting more in this industry. The insurtech startups in India raised $822 million in 2021 which was 166% higher than the previous year.
Driven by the shift in the mindsets of the people for insurance products after the pandemic, simplified processes by the digital insurance players, low premium insurance offerings and increased investors’ interest, the insurtech industry in India is expected to reach $339 Bn by 2025.
Insurtech industry is in the growing phase post-Covid, with the existence of more than 110 insurtech players in the country. All these players are focused on offering not only the common life insurance offerings but also non-life insurance covering health, education, vehicle and other areas.
The focus on health insurance has risen post-pandemic with the rise in the health awareness of the people. Thus, it has been the major focus of most insurtech’s as well as healthtech startups.
About Even
Startup Name
Even
Founded
2020
Founders
Mayank Banerjee, Matilde Giglio, and Alessandro Davide Lalongo
Funding Raised
$5 million
Key Investors
Khosla Ventures, Founders Fund (led by Peter Thiel), Lachy Groom, Kunal Shah, and Nikesh Arora
Business Model
B2b-B2C
Primary Competition
Kenko
User Base
40+ Users on the Waitlist
Even, a Bengaluru-based healthtech startup, founded in April 2020 by Mayank Banerjee, Matilde Giglio, and Alessandro Davide Lalongo, is a healthcare membership company that partners directly with the top hospitals to provide fully-cashless and quality healthcare accessible to its members.
It is currently operational only in Bengaluru. The company claims that anyone who opts for being its member can avail of unlimited consultations and diagnostics, also a hospitalisation cover of 50 lakhs annually.
It has tied up with major hospital chains such as Fortis and Narayana Health. The company currently has 40K+ applicants on the waitlist and has plans to reach more than 1 lac users in major cities such as Delhi, Mumbai and Bengaluru.
Covid-19 not just accelerated IPD (In-patient department) but also accelerated the demand for OPD (Out-patient department) including regular doctor consultations and check-ups not requiring hospitalisation of the patient. The OPD market is expected to reach $37.5 billion by FY2024, according to research by Praxis Global Alliance.
Most health insurance companies usually don’t cover OPD expenses and the ones which cover it have immense paperwork and tiresome process, that’s where Even wants to position itself. It wants to bridge the gap and make healthcare easily accessible with its partner network.
Although the company claims to be a subscription-based healthcare service provider, it compares itself with the other health insurance providers. Let us actually compare its offering with other insurance providers and see how better it is than theirs. Let’s look at the table below to understand how Even fairs compared to other insurance providers.
Even Vs Other Insurance Providers: Which Is Better?
Parameters
Even
Other Insurance Companies
OPD
Yes
Yes
Price
High
Low
Starts from Day1
Yes
No
Exclusion of Existing Disease
Yes
Yes
Cashless
Yes
Yes
Hospital Network
21+
2k-16k
Initial Waiting Period
0 Days
30 Days
Co-Pay
0
10-30%
Age Limit
0-64 years
5-80 years
Minimum Term
3 months
NA
Cover
50 Lakh a year
5 Lakhs a year
Is Even Really Disrupting The Healthcare Insurance Industry?
It is clearly evident from the comparison table that Even is offering sort of similar or even fewer benefits as compared to health insurance at a higher price. Not only this, it excludes a lot of benefits in its membership which are otherwise included in the other health insurance companies such as Maternity care, Home health care, and AYUSH treatment.
When we reached out to the customer care executive of Even, they themselves were not clear about what is included and excluded in the membership and had to reconfirm with other team members.
The major issue with Even is that it currently has a very small partner hospital network of only 21 hospitals so the benefits of the membership can only be availed in those hospitals and although it claims that it can make possible the out of network emergency care (emergency care for members if they are outside Bengaluru), how much of it is actually possible still remains a question.
Although there is immense potential in the insurtech industry and hence, a lot of players are entering the market since public money and health is involved in it, these players will remain under the regulator’s purview. There are chances that a lot of such players may run into conflict with IRDAI (Insurance Regulatory and Development Authority Of India) rules.
Even has a clinical establishment licence from Karnataka Government, it has partnered with Cholamandalam MS General Insurance to offer a hospitalisation expense coverage ranging from ₹5 Lacs to up to ₹50 Lacs in its premium (Even Plus) plan which comes under the group policy with the insurer.
Thus, we see that Even and other such health subscription startups buy group health plans from the insurer and onboard retail users and add them later as policy members. Thus, the insurer is underwriting the company and later underwrites the retail customer, but if in case the company faces any issue, the customer may not have anyone to go to for claiming its subscription.
Conclusion
Even though the model of health subscription is aimed to ease the process for the customers and seems intriguing, it is yet to be discovered how these subscription-based healthcare startups such as Even will sustain in the long term given the ambiguity in the regulations and highly unorganised nature of OPD market in the country which may lead to the higher risks of frauds for them.
FAQs
What is Even?
Even is a healthcare startup that provides cashless and unlimited OPD insurance health cover.
Who are the founders of Even?
Even was founded by Mayank Banerjee, Matilde Giglio, and Alessandro Davide Ialongo.
Which health insurance has the highest hospital network?
Care Health Insurance Limited has the highest hospital network. It has more than 16,500 network hospitals across India.
It is no surprise that Saas has become an essential tool in shaping and transforming industries. Nowadays, Insurance industry are being transformed into virtual businesses only because of what virtualization has made the service efficient, accurate, and easier to use.
Software as a service has become the trend these days. Are these tools helping people with their complicated problems? How is it contributing to the insurance industry being a software licensing and delivery model? The functions that Saas has provided to the insurance industry have proved to be remarkable because Saas helps developing solutions and also ensures a more connected environment with customers.
SaaS is the abbreviated form of Software as a Service, and is also known as ‘on-demand software’. It is a part of cloud-computing along with a few more of them such as IaaS, PaaS, DaaS, MaaS, MBaaS, DCaaS, iPaaS, and ITMaaS.
It was during the late 1950s when leading companies like IBM and other computer providers referred to SaaS as ‘time-sharing’ or ‘utility computing’. The services were required by the banks at that point in time so that banks could use computing power and database storing services.
SaaS’ Contribution To The Changing Insurance Industry
It is not only the insurance industry but every other industry in the world that will benefit from emerging technologies like AI, machine learning, and other software tools so that there is an improvement in customer experience and business operations.
Industries like the Insurtech industry use tools like SaaS. The Insurtech industry is large especially in the Asian countries it has got a huge market. India stands as the second-largest Insurtech market in the Asia-Pacific region.
However, the numbers are expected to keep growing from 1.7% to 2.3% by the year 2030. SaaS help insurance companies focus on their business by providing an effective solution. As a result, this becomes a strategy to focus on growth rather than focusing on maintenance of the IT department.
The insurance market has always been competitive and will continue to be. This means companies that can come up with standout offers and features will dominate the market. The gap between insurers and the policyholders needs to be filled so that excellent services prevail in the market.
SaaS’ entry into the insurance industry helped companies reduce their cost and employees were able to check the status of insurance. Companies were able to decrease the use of internal resources without making any kind of compromise on security.
In a country like India where there are more than 800 million internet users, people are adapting the digital benefits of insurance companies. The pandemic situation was another major reason for emerge of SaaS services in the insurance industry.
On one side there are the benefits of using SaaS services and on the other, there has to be proper implementation of SaaS insurance solutions. To go both hands in the hand proper planning is required.
There has to be some effort put in from the employees’ side so that there is an improvement both in customer experience and being cost-effective at the same time. Reasons, why companies should adapt to SaaS, are because of the following:
· Enhancing Customer Service
People say it is the customers that run the business and it is true because customers generate money for a business. Customer satisfaction is important not only in the insurance industry but in every other type of industry.
SaaS helps improving customer service by providing easy solutions. SaaS help saves the time for the policyholders by providing information regarding bill payment. This way they do not have to raise queries which will only waste time and the solution might be ineffective.
Once in a while updates are made from the insurance companies so that additional features can be benefitted by the customers. Additional features also help to enhance the customer experience.
· Information Is Secure
A policyholder will always look for a safe and secure methods for their insurance. Well, SaaS is an effective solution for that because of the security that it provides. Updates help the security of the information regarding the policyholder and payment details more advanced.
Insurance companies would be relieved if they did not have to carry the burden of security. SaaS is the perfect model to use especially when a company has a large number of clients.
Conclusion
The current scenario of the world has pushed people to turn towards the services of insurance companies. Insurance companies are providing enough support to their clients so that whenever there is an emergency the insurance would be of great help.
Thanks to technologies like SaaS that monetary transaction has become more secure. Both customers and insurance companies can save time only because SaaS provides a bridge between the gap between customers and insurance companies.
Without having to move an inch from their houses customers can get help support from chatbots. A chatbot can answer the answers that you can question. SaaS services are yet an effective solution for not only the insurance industry but every other type of industry that can benefit from SaaS.
FAQs
Why SaaS is important for an insurance company?
SaaS helps insurance companies secure the data of the policyholders by identifying fraud and assessing risks.
Will the growth of using SaaS for insurance companies increase in the future?
Insurance industry is rapidly increasing and as well as the SaaS industry. Both businesses and customers can benefit from using Artificial intelligence and SaaS. A huge growth of SaaS for insurance companies is expected in future.
How technology is changing the insurance industry?
Technology has made the claims experience more efficient, accurate, and easier to use than ever before.
