Can EaseMyTrip disrupt insurance?

Hey there,

Bootstrapped travel booking leader EaseMyTrip is now entering the insurance space to challenge companies like Acko and Policybazaar. But why? 🤔

As India's second-largest, most profitable, and public travel booking company, EaseMyTrip has made a name for itself by defying industry norms with bold moves.

Known for innovations like scrapping convenience fees and refunding all bookings due to medical emergencies, EaseMyTrip has truly disrupted the sector.

Now, EaseMyTrip is breaking into insurance, a lucrative sector occupied by legacy players like LIC and disruptive startups like Acko, InsuranceDekho, and Policybazaar.com.

But why is EaseMyTrip.com entering this already crowded space?

1. Travel and insurance go hand in hand:

Booking a trip often comes bundled with the option to purchase travel insurance, typically offered by a third party charging 4-10% extra on top of the trip's price.

These insurance policies capitalize on common travel worries like lost luggage or unexpected climate issues. The rarer these problematic events occur, the more profit the insurance companies rake in. It's a business model that's practically fail-safe for insurers.

2. EaseMyTrip's Past Ventures in Partnerships:

In the past, EaseMyTrip has collaborated with companies like SanKash and Toffee Insurance Insurance to provide bundled travel insurance options to its customers booking trips.

Taking key learnings from these previous strategic partnerships, EaseMyTrip now wants to own a bigger piece of the pie and control the whole insurance value chain end-to-end.

3. Strong Growth Projected Post-Pandemic:

After COVID-19, travel volume has increased manyfold globally. When travel bookings increase, anxiety related to travel also increases for many customers. And where there is heightened anxiety, there is increased demand for insurance to provide protection and peace of mind.

So, as travel continues to rebound post-pandemic, the insurance market related to travel is also expected to grow steadily. The total global travel insurance market alone is projected to surpass $100 billion by 2031.

Despite being a niche product, travel insurance represents a huge growth opportunity.

While all of these factors make this seem like a promising move by EaseMyTrip into an adjacent sector, historically in the Indian startup ecosystem, established companies trying to enter entirely new domains have often failed. Just look at Ola's struggles in food delivery after thriving in ride-hailing.

So will EaseMyTrip be able to buck this trend and replicate its hard-earned success in travel within the insurance sector? Only time will tell!

✏️ Jargon of the day

Premium:

A premium is the amount of money that a customer pays for an insurance policy. It is typically paid monthly, quarterly, or annually. The premium cost is based on factors like the type of coverage, the amount of coverage, and the customer's risk profile.

Insurance companies use premiums paid by customers to fund payouts for those who submit approved claims.

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Cheers,
Karthik