'Toffee' Wants to Change the Way You Think About - and Buy - Insurance

Buying insurance can be intimidating, not least because it requires you to imagine the worst case scenario, and then prepare for it. While medical insurance is included as a workplace benefit for many people, if you decide to get insurance yourself, the process is not easy. Online, there are dozens of sites that are selling policies, but the way most of them present results isn't too different than what you'd see when trying to book travel tickets - just lots of offers from different vendors.

That works for the airlines because we all fly or travel in trains often enough to know how the transaction works, how to assess the value we're getting, and most importantly, plan to travel relatively soon. In the case of insurance, after entering in the amount of cover you require, you're suddenly presented with a long list of options showing a dozen different providers, and very little to help tell them apart or understand the pros and cons of what you're trying to get.

These are just some of the problems that a startup called Toffee is trying to address, says Rohan Kumar, one of the founders of the company. Along with his partner Nishant Jain, the two had been working as consultants for insurance companies on the question of why people don't buy insurance online, and Toffee was born out of this work.

"We had been running a product and design consultancy for about 10 years, and for the last two years, we'd been working very closely with Apollo Munich, who mandated us to help improve conversions online," explains Kumar. After spending a lot of time working on this and actually selling policies with agents and listening in at call centres, the two came to the conclusion that most companies are still selling products designed for an offline channel - they're just doing it online.

"These are comprehensive, complicated products that are difficult to understand, where someone needs to sit you down and help you understand the product, and that's an experience that doesn't work online," says Kumar.

"Second is that if you look across the entire insurance ecosystem, no one has done any product innovation," he adds. "You could take a product from Apollo Munich or Max Bupa or anyone else, and basically the product is the same, with blanket coverage and no difference from one person to the other."

To this end, Kumar says that the duo wanted to find ways to simplify the experience, to target the under-30 market. To do this, Toffee works with existing insurance companies, but rather than providing you with a dozen different choices, it has very specialised insurance packs that cover specific scenarios. You just choose one(s) that suit you and Toffee will take set up everything including the provider.

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The entire process is quick and easy - just tap on a button and enter your name, contact details, date of birth, and then address, and name a nominee. That's it - you're done, all you have to do then is make the payment, at which point Toffee redirects you to the insurance provider's website to complete the transaction.

Comprehensive versus cheap and simple
Most traditional insurance products are "comprehensive" in nature. For example, if you buy a medical insurance, it will cover you in most scenarios, subject to a few possible exclusions listed in the policy. The big advantage of a comprehensive policy is that it covers pretty much everything you need, and, well, a lot of things that you may not actually need. There's a strong case to be made for "just in case", which is why they are so popular. However, what if you've got a very specific worry and just want to address it for the short term?

That's the use case Toffee wants to target by unbundling insurance offerings, to give you cheaper, and simpler plans. "By unbundling, you are also able to cut down the cost involved a lot more, instead of, say Rs. 600, you'd spend, say, Rs. 10,000, if you were getting a comprehensive cover," says Kumar. "I am not competing on price, but the hurdle is much lower here."

The way to do this is to get younger people who don't typically think about insurance to "think about the product in a non-insurance kind of way," says Kumar. "It should be simple, appealing to a younger audience, and not appear as a financial product."

That's where the idea of "Toffee" came really - selling small insurance products like toffees in a store.

So if, for example, you're visiting Delhi in August or September, and are worried about becoming another statistic in the dengue figures, you could visit the Toffee website, and choose to pay Rs. 682 as a one time cost, knowing it will cover diagnostic tests, medicines, and other fees up to Rs. 100,000 if you get the disease. If you don't already have health insurance and don't want to pay that much every month, this is a simple way of adding protection for what you may consider to be the biggest risk factor.

"We are all about data. We want to make it as personalised as possible," says Kumar. "So if you log in from Gurgaon, we might tell you about the pollution level, and suggest a lung product - it will be that specific. The moment you give us a little more information, like I am male, and 24, then we can say, biking accidents in your location have been up, so you want a product for that."

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Products and partnerships
The products listed of the Toffee website right now include dengue cover, travel insurance, accidental injuries while backpacking or commuting, injuries due to running, cycling, gymming, and other fitness related activities.

"We're not competing with the big banks and insurance companies - but we are carving niches," says Kumar. "So for example, a Fitbit could come with a bundled Sports Toffee; we could have a partnership with 1mg - can we map our Dengue product in a native experience for anyone who is looking for Odomos on your site? Sheroes is a 3-million strong women's community, so we're trying to do a breast and ovarian cancer product, and a rental Toffee, for women moving to a new city, theft insurance."

"We're trying to sell insurance in any differentiated manner, so it's almost like picking up a juice in the morning," he adds.

Of course, insurance is a highly regulated market, so a new company can't just show up and start offering new plans. That's why Toffee works with insurance companies to innovate on the product side.

"We started working with Apollo Munich and took one of their personal accident products," Kumar tells Gadgets 360. "So there's a huge community of backpackers, and no product that covers them. So we took personal accident, added a few features, and filed it with IRDA. And now we cover you for any evacuation, hospitalisation, but also loss of camera, loss of equipment. This kind of community driven product makes insurance more relevant to a younger audience."

Today, the company offers insurance from Apollo Munich, Future General, and HDFC Ergo, but is also in talks with Religare and ICICI.

"We want to debundle products, package them in a way that appeals to the younger audience, almost make it a commoditised way to sell insurance rather than as a financial product," says Kumar, adding, "This is an audience that is used to Uber and Zomato - booking an Uber takes a minute and that's how long it should take you to issue a policy."