Insurtech company Coverfox turns around, eyes 3x biz in FY23 - Times of India

Insurtech company Coverfox turns around, eyes 3x biz in FY23 – Times of India

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MUMBAI: Online insurance distributor Coverfox, which is now controlled by private equity investors led by Avaana Capital after the exit of its founders, has recouped revenues and slashed its burn rate by 90%. The company has almost halved monthly expenditure and is pursuing a strategy of embedding its insurtech with partners to gain market share.
Coverfox faced an existential crisis two years ago when the founders of the company — CEO Premanshu Singh and its chief technology officer Devendra Rane — quit weeks before the country went into a lockdown in March 2020.
“We started this year with monthly revenues of Rs 1 crore, but we are ending it with Rs 7.5 crore. It took 21 months to get the revenue back to where it was and reduce the burn from Rs 8 crore a month to Rs 70-80 lakh,” said Coverfox CEO Sanjib Jha. In FY22, the company expects to do Rs 40 crore of revenue and aims to triple this to Rs 127 crore in FY23.
In the last week of March 2020, Jha — co-founder of Avaana Capital and one of the investors — was brought in to take charge during the crisis. Coverfox ended FY21 with Rs 23 crore of revenues as funds had dried up and Jha undertook a move to change the business model from being a lead-generation platform to a technology company with the capability to simplify insurance purchase and embed its pipeline to various insurers on different digital platforms.
The company is also channelling its insurance-buying platforms through a mobile app. This is made available to individual agents who are onboarded using the app. In the last two years, the company has cut its workforce from 1,200 to 300 and taken several measures to rationalise operations. It is now generating commission revenues of Rs 7 crore a month, against which it is burning Rs 80 lakh of shareholder funds. “We made the consumer the focal point and pivoted the business from a company which was about to be shut down to a company that is growing at 30-35% month on month,” said Jha. In these two years, existing shareholders have infused another Rs 25 crore in addition to the Rs 450 crore invested since inception. Other key investors include IFC and Elevation Capital. The new promoters are now looking for strategic investors.
According to Jha, the company has managed to solve two of the problems relating to insurance — making buying a simple three-step process, and providing digital access to products of various companies. However, the next two solutions would require regulatory dispensations. First, enabling consent-based access to the proposer’s medical history would enable straight-through processing of life products. The second dispensation is allowing insurance brokers to embed their platform on other existing platforms. This would enable customers of that platform — say, an e-commerce site — to access insurance products of multiple companies.
At present, 60% of Coverfox’s business comes from motor insurance, although it sells health and term insurance as well. The company is also embedding its technology on third-party platforms like ICICIDirect.



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