economy

Will Zerodha-backed Ditto disrupt the insurance market?

Will Zerodha-backed Ditto disrupt the insurance market?

MUMBAI, NEW DELHI : The co-founders of Finshots, Pawan Kumar Rai, Shrehith Karkera, Bhanu Harish Gurram, and Lokesh Gurram founded Ditto, an insurance advisory platform in February 2021. The platform secured initial funding from Zerodha of Rs4 crore and the latter has a majority stake in it. In the insurance market, the founders hope to replicate their success with Finshots, a financial newsletter with a subscription of more than 400,000 readers launched in August 2019. Ditto now has a team of more than 30 of what it calls insurance advisers rather than agents. It leverages the large readership of the Finshots newsletter subscription and word of mouth to grow its customer base. Ditto’s USP is akin to that of Zerodha, customer first rather than insurer first, according to the founder. Customers can schedule spam-free calls with insurance advisers from the Ditto website and get an opinion on their existing policies. Ditto advises on life and health insurance. In the life category, Ditto recommends only term insurance rather than high-cost endowment policies. “We don’t want to follow an aggressive push model. We want to grow by customers recommending us to their friends. Hence, our advisers only do eight calls per day on average compared with the 50-100 calls that salespersons at other brokerages do. In fact we already have a waiting list of six-seven days to schedule a call with us. In the initial days, we (co-founders) would directly take calls, said Bhanu. A thorny question for the Ditto co-founders is that of commissions. Insurance brokers have an incentive to recommend plans with heavy commissions. According to Karkera, the market would discipline Ditto against following this path with negative reviews preventing any drift towards high commission policies. Ditto also faces other growing pains. An online review by a competitor pointed out that multiple advisers were logged into its mystery shopper call causing confusion for the customer in the call. “This was simply because we had a senior adviser with the trainee, to correct and guide him, explained Karkera. Ditto is transitioning from a corporate agent licence under which it can recommend up to three insurance companies in each category (life, general and health) to a full-fledged broking licence where there will be no such limit. This can help address some of the concerns around commission driven recommendations or limited coverage. neil.b@livemint.com Download.

economy 2021-12-08 Livemint