Acko to cut auto premium via direct route

Mumbai: New-age insurer

Acko General Insurance

is cutting auto policy premiums by taking the cheaper direct route. It is also offering customers the assurance of a

three-day claim

settlement.

The company promises to sell auto insurance 15-20% cheaper than the average premium and that it will send in representatives immediately to not only just survey damages but also get the vehicle repaired. Customers will also be given cab vouchers of Rs 500 per day if their car is not back on the road in three days.

Acko founder and CEO Varun Dua told TOI that, until now, new companies have been trying to get marketshare by reducing rates or increasing commission. However, they have continued to retain the traditional physical distribution network — which includes auto dealerships — resulting in high costs. Acko’s plans are to use the direct model, which is already popular in the West.

“We will tie up with only low-cost distributors, provided they accept our model with lower commissions,” said Dua. This could result in the company losing out on the new car market, where distributors call the shots. But Dua is unfazed. “Our focus will be on three- to 10-year-old vehicles. Over 80% of the auto insurance market is in this segment,” he said.

The new auto insurance product will be available in Mumbai, NCR (Delhi, Gurgaon, Noida), Pune, Bengaluru, Hyderabad, Ahmedabad, Chennai, and Kolkata.

Founded in 2016 by Dua who earlier led Coverfox, Acko has raised a total of $42 million till date. The company is backed by Narayan Murthy’s Catamaran Ventures, Accel and SAIF Partners, Infosys co-founder Kris Gopalakrishnan, Hemendra Kothari of

DSP Blackrock

,

Hexaware Technologies

founder & chairman Atul Nishar, veteran investment banker and

Arpwood Capital

founder Rajeev Gupta, Venk Krishnan & Subba Rao of NuVentures, Swiss Re and Transamerica Ventures.