Healthcare has never been more in focus than it has been the last 18 months, and will continue to be so. COVID19, apart from being a global health concern, has also compelled the government and organisations across the spectrum to rethink employee wellbeing. India has one of the lowest health insurance penetrations, with only 18% of people in urban areas and 14% in rural areas covered under any health insurance scheme. The nation has one of the highest out-of-pocket spending and an enormous unmet need in healthcare, with only 2% of total healthcare expenditure in India currently covered by insurance providers - a big chunk of this is taken up by large-sized corporations and multinationals with thousands of employees and dependents. 

Right now, very few people can buy health insurance. Many depend on their employers to provide health insurance to them and their families. So what about smaller, growing companies like SMEs and startups that don't have as many employees to attract the big insurance providers? This was the sweet spot for insurance solutions provider Plum. 

Cofounder Abhishek Poddar says, "When my cofounder Saurabh Arora and I started meeting organizations for group health insurance, we found that they dropped the idea of setting up insurance because they were either – denied insurance, found it very expensive, or found the process complicated. We also realized that most SMEs and startups require the right health insurance solutions for their employees. It is the only scalable way for India to accelerate the adoption of health insurance."

With Plum, Poddar and Arora set out to bring product innovation in the group health insurance market and make the process far more efficient for modern businesses. In this endeavour, AI and analytics are proving to be masterful tools. The team has forged new underwriting and fraud detection algorithms with leading insurers, to offer competitive pricing to businesses as small as seven employees. "Underwriting a group is fundamentally different from underwriting an individual. Here, along with the morbidity of the group, we need to assess a whole lot of demographic data points that determine the pricing and measures to prevent adverse selection," explains Poddar. Some key demographic points that Plum considers to build group health insurance plans include location, industry type, cost of healthcare in the city/town of residence, size and age of employees in the group, male to female ratio, married to unmarried ratio, member to dependents ratio. These demographic indexes inform the underwriting engine to create plans with fewer restrictions, making them accessible and affordable for small businesses.

Within the last decade, insurtech startups have led innovations focusing on almost all aspects of insurance leading to an exponential growth of the industry. The health insurance industry has become the fastest-growing segment in the non-life insurance sector, registering a compound annual growth rate (CAGR) of 23%, for the past 10 years. Poddar adds that this is just the beginning of what can be called a transformational disruption in the health insurance industry. "This change will definitely impact the accessibility and penetration of insurance in India and make insurance more convenient for a digital audience. We can expect AI/analytics and data personalization to help the insurance industry address niche segments and serve contextual, new-age requirements." 

A Data-Driven Tech Stack: 

A growing data repository will drive sharper underwriting and pricing mechanisms. Processes across customer onboarding, customer servicing, claims, and renewals, will see a massive overhaul in efficiency and user experience. Here are some ways Plum is leveraging data to churn out refined and intuitive customer experiences.

• Data-driven underwriting and fraud checks: Plum has built a risk engine that uses a mix of public and private data to ensure the company has not been set up solely for the purpose of insurance. The underlying infrastructure automates processes related to quoting, binding and billing, and reduces fraud in the purchase.
• Embedded insurance and APIs: Plum offers a set of APIs and an out-of-the-box insurance purchase system that enables small business service providers such as payrolls, HR information systems, or marketplaces to instantly serve up and underwrite policies within their native applications to enhance the user experience and value of those apps.
• Integrations with insurance companies & operational efficiency: One of Plum's core strengths is that they build integrations with insurance partners that create end-to-end workflows. New employees are automatically enrolled in the insurance systems and insurance e-cards are dispersed within 48 hours as compared to 30 days in the traditional systems. 
• Reducing claims processing time to under 5mins: The team re-designed conventional claims flow, considering the processes from the customer perspective and optimized back-office operations to provide a simple, hassle-free claims service. The team has built a deficiency check system where members can easily upload the required documents and the system can automatically flag any deficiencies. 

In addition, the system sends anticipatory notifications over WhatsApp as the claim progresses keeping the customer in the loop all the time. "We make each step in the experience easy and obvious by providing guidance about what to do next, much like a friend helping one through the journey. This allows our users to self-serve themselves in different situations, e.g, In an emergency at the hospital, and while making reimbursements," explains Poddar. 

How The Pandemic Changed The Way Employers Look At Health Insurance:

The pandemic has rapidly accelerated the significance of health and life security across ages. Health insurance has definitely taken the front seat both from the perspective of securing access to quality healthcare, as well as investing in healthcare finances. COVID-19 has permanently changed how organizations approach employee healthcare. While 2020 was all about survival, employee health insurance trends in 2021 are about emerging from what’s left behind. Employers are considering both long-term and short-term gains while deciding their employee healthcare plans. With the private sector seeing the benefits of comprehensive health insurance and regulatory support from the government, industry players expect these changes to continue

Plum has had to abandon traditional insurance selling wisdom and borrow lessons from the SaaS world, explains Poddar. Due to the high demand for insurance and a sharp public focus on health, the founders are winning on good storytelling and showing how they are solving systemic problems, over hard-selling insurance. Plum witnessed a 90% month-on-month growth rate in the last two months alone. In the second wave, many employers witnessed deaths in their teams and their families. Employees have also seen how expensive hospitalization is for COVID19. This made the need for insurance real and created an urgency. So, companies are open to expanding their health benefit plans. For example, Unacademy gave over 4,000 educators on their platform comprehensive COVID19 life cover with our assistance. Plum has insured 70,000 lives since it started in March 2020 and 24,000 people were enrolled on the COVID19 package in just the last two months. 

"Our team has been at war, deploying our arsenal to help over 500 businesses with comprehensive insurance plans, and no waiting period. True to our mission, we are ensuring that even the smallest start-ups are covered and taking care of their employees remotely." Plum works with 500 organizations including Groww, Unacademy, Twilio, CleverTap, SmallCase, and Simpl. The company is building newer insurance products for SMEs who have teams as small as 5-10 employees and cannot afford to pay annual premiums. So far Plum has raised a total of $20.6M in funding. Their latest funding was a Series A round led by Tiger Global, with participation from earlier investors — Sequoia Capital India’s Surge, Tanglin Venture Partners, Incubate Fund, and Gemba Capital.

A healthy workforce is good economics, no matter the size of one's business. Lifestyle diseases like hypertension and diabetes, and infectious diseases like COVID19, need timely medical intervention. With treatments being expensive, health insurance is imperative. While not everyone can afford healthcare premiums, Plum is aiming to enhance the penetration of health insurance to 100% by reimagining the health insurance stack using emerging technologies.