While buying his car insurance, entrepreneur Sanchit Malik realised the lack of digital innovations in the corporate insurance space.
Sanchit says, as a retail buyer, a customer can go to insurance websites and buy any type of insurance in just a few clicks with some basic checks. However, it is not the same when it comes to B2C. “The whole process is very, very broken as of today,” he adds.
To solve this, Sanchit founded Pazcare in 2020 along with Manish Mishra, who was previously the Director of Engineering at MindTickle and Cleartax.
The Bengaluru-headquartered startup is an employee benefits and insurance platform that works like a marketplace. It is a licensed distributor by the Insurance Regulatory and Development Authority (IRDA), under the Ministry of Finance.
The workings
As a company, one has to choose different insurances -- from fire to employee. For employee insurance in particular, there are multiple schemes to cover such as health, term life, and accidents.
“I found out that the whole experience -- from buying insurance and administration to claiming happens over phone calls and emails,” says Sanchit.
Thus, he ventured into employee insurance to solve the phone call and email-driven problem and streamlined the process with the help of technology.
Sanchit met Manish while interning at MindTickle in 2011, and went on to co-found Pazcare with him when an investor introduced them.
Before starting Pazcare, Sanchit co-founded Townscript in 2013, which he sold to ticket booking platform BookMyShow.
“We started out initially with health insurance as a product, because it's a high frequency claim, but low severity product,” says Sanchit.
Over time, the startup has evolved from an employee insurance platform to a full suite employee benefits platform.
What Pazcare does?
Pazcare provides insurance and health benefits to companies, starting with health insurance, personal accident cover, term life as well as doctors on call.
It launched its platform in 2021, where employers can choose from different insurance plans based on their requirements and their budget. The application is available on both iOS and Android, and one can use the website as well.
The digital platform works with insurance providers, helping them penetrate a larger audience. The startup has 15 insurance companies listed as of now.
“They need a digital channel to distribute the products, which actually gives them accessibility to more customers and eventually more revenue,” Sanchit says.
Pazcare’s customers are companies which have 10-1,000 employees. Some of the companies using the platform include cryptocurrency platform WazirX, edtech unicorn Vedantu, hotel chain Treebo, and others. The company has on-boarded 250 companies at present.
For employers, it offers price discovery through a digital channel with all the suites of insurance benefits.
“Now, employers can do it in a plug-and-play manner. They can administer all of that through the platform in a seamless manner,” Sanchit says.
The employees, who had to manage their communication about different policies on emails till now, can access all the benefits on a single platform. They do not need to log in to different websites to avail the necessary information.
Pazcare also gives employees the option to convert the group policy to an individual policy in case a person leaves a company.
The market and revenue model
Sanchit notes that insurance is growing at a larger pace than before. According to S&P Global Market Intelligence data, India is the second-largest insurance technology market in Asia-Pacific, accounting for 35 percent of the $3.66 billion insurtech-focused venture investments made in the country.
“We believe that in terms of insurance, it will be fairly employer driven, because our country does not provide health insurance or life insurance to us as individuals,” says Sanchit.
As of now, the company’s main target customers are in metro cities, mostly new-age companies. Apart from this, it has even on-boarded few schools as clients.
Sanchit says, timing is very important in any market a startup decides to enter into, reflecting on his learning from his previous startup.
“This is a good time to be in the insurtech space,” Sanchit adds. “We all are playing an important role in increasing the insurance penetration in India, making it more seamless for customers and making it better at scale for both insurers and employers.”
The startup acts as a distributor and earns revenue through commissions from insurance providers, which is decided on the basis of premium.
As of now, Pazcare competes directly with conventional brokers and companies like Plum and Noah Employee Benefits and Perks.
The company raised $3.5 million in a seed round in October last year. The round was led by BEENEXT, along with 3one4 Capital.
At the time of investment, Dirk Van Quaquebeke, Managing Partner at BEENEXT, said: “We are glad to collaborate with Sanchit and Manish who are disrupting the fragmented employee benefits space in India in terms of ease of use. We are excited to partner with Pazcare and its global applicability as they demonstrate success with their customers with high NPS.”
Plans ahead
“We want to onboard more than 1,000 companies by the end of this calendar year,” Sanchit says.
Pazcare is looking to expand its core product line to make it seamless for customers and add more value to them, as well as grow its presence in other cities. It is also aiming to cover diagnostic tests and pharmaceuticals.
The startup has a 70 member team at present, and aims to expand the team size to 120 in the next six months.
Edited by Megha Reddy