Ditto | The fintech trying to be human

I bought my first life insurance policy at the age of 21. I sold my first income protection policy at 22. I didn’t get why the world says insurance has to be sold. But that was after I suffered through all kinds of hardship because my family didn’t have enough money. So I concluded that maybe people have to go through some hardship before they realise the value of protection. Ironically, though, I don’t have enough insurance now, when I should… but not for want of trying.

Insurance is weird.

Insurance is hard.

It’s hard because people have to figure how much insurance to get, compare various policies from 25-odd insurance companies, fill out paperwork without getting to read, let alone understand, the insurance policy document, undergo medical tests and answer underwriting questions that hinge on single words. And then when they need it the most, run after archaic claims processes. This is why the insurance industry has intermediaries the world over, even for large companies.

That’s where our conversation with the Ditto founders started. They recounted how they wanted to start a stockbroking business straight out of IIM-A, but ended up running an extremely popular financial education newsletter instead. But they always intended to do something with the audience they were cultivating. They settled on insurance distribution after seeing the success and domination of PolicyBazaar. They knew that insurance is a hard — actually wicked problem to solve. And they were up for a challenge.

Insurance in India

There are 25-odd insurance life insurance companies in India that sell more traditional and unit-linked policies than simple term life policies. There are another 25-odd general insurance companies that sell health insurance along with general categories such as auto, travel, property etc. Insurance penetration in India is low — at around 4%. It is distributed through agents and brokers, though there are now platforms as well.

While there is a need for insurance, the general perception is that insurance is a scam. Customers think insurance companies are scams; the insurers think customers are scamming. The lack of trust runs both ways.

The simple solution is to cover larger pools of healthy populations; the harder solution is to build trust.

Human first approach

Ditto had the luxury of patient capital through Rainmatter, so they decided to tackle the harder problem. The name itself denotes that they treat customers the way they like to be treated – ditto!

So they did a few things differently:

• Ditto built a library of educational content on their website for anyone to browse and learn without any pressure – no collection of phone numbers or email addresses that lead to harassing calls or spam.
• They hired insurance-freshers as an ‘advisory’ team on salary, gave them 3 months of training per category and then no sales targets. The incentives do include closing deals but with customer satisfaction. They don’t have any complaints of mis-selling; on the contrary, customers rave about them and give them referrals.
• They built the tech to make the advisory team more productive including calculating and comparing premia for policies across companies in minutes.
• Their marketing funnel is still the much-loved newsletter and some affiliate marketing with finfluencers — similar to Zerodha’s own strategy.
• The founders still have customers who get assured that they will be around to deal with claims if they arise — they embraced personal assurances just like small individual agents rather than becoming a faceless tech platform.

Basically, Ditto is a fintech with a human-first approach.

That comes at a cost.

Scale is the challenge

Ditto is not short of funds – thanks to Rainmatter. But it hasn’t been able to train insurance advisers fast enough. At the time of the conversation, they intended to quadruple (check) their advisory team. That would still make them a very small player — not enough to move the needle for insurance penetration in India. But Ditto has already made an impact with a couple of insurers and a competitor platform copying their ‘No spam’ tagline.

Will that be enough?

Do you have any ideas for how Ditto could scale faster? Let us know in the comments.