'We are willing to disrupt the established insurance norms': Shanai Ghosh, CEO & MD, Zuno General Insurance

Ardent focus on building customer-centric, innovative products and digital transformation has earned Zuno General Insurance — one of India’s youngest insurance firms — the tag of a key player in the evolving insurance space today. Just six years in, 2023 was a successful blend of financial growth, initiatives and forward-looking strategies to address the evolving trends in the sector, especially in the context of emerging risks like electric vehicles (EVs). Autocar Professional spoke with Shanai Ghosh, CEO and Managing Director of Zuno General Insurance, to understand how the business is finding its way in the era of artificial intelligence (AI) and machine learning (ML).

Data drives the automotive industry today. How does it work for an insurance company like Zuno?

I believe insurance is one of the original data industries. Everything here is structured around data. Pricing is data-driven, as is the probability of an accident and what its severity could be. At Zuno, we’re clear that data and tech drives our business. We have our own tech team, unlike a lot of the older insurance companies, where development is largely outsourced. We develop our own stack and even have a data science team. And, of course, every insurer has an actuarial team.

It’s tech that allows us to capture data and create pipelines to make this data available. The actuarial and data science teams consume this data. We have models that tell us at the most granular cohort level details like the kind of pricing we can move forward with and the experience to expect. We triage these models, starting with a statistical model, followed by ML models that we’re building to get a risk score for cars when we underwrite business. All of this data is triangulated to understand the risk involved and quote an appropriate price. This data-driven approach is vital when you’re getting into new risk industries.

How do you arrive at insurance products for electric vehicles (EVs) and cars with internal combustion engines (ICEs)?

EV adoption is certainly on the rise. But unfortunately, we still have to carry out our business with India’s existing guidelines. These need more clarification as cars are getting more sophisticated with added safety features. We’re increasingly looking at EVs as a separate risk category, but the fact remains that we don’t have enough data available. While we’ve launched EV-specific products, we’re learning as we go along from the little data that’s available. For instance, we learnt from experience that EVs come with the risk of a head-on collision because they accelerate quite fast. And, of course, everyone knows the battery alone is half the cost.

What about add-ons like their charging infrastructure?

For EV insurance products, our add-ons cover their private charging stations, including cables, connectors, etc, which usually are part of the accessories provided. We also offer personal accident cover, in addition to coverage for the usual accidents that could result from a fire, blast or short circuit in the charging station.

Does Zuno cover EV batteries?

We provide coverage for loss or damage to vehicles if it’s caused by a self-ignition or short circuit, when the vehicle is stationary, being charged or parked at a charging station. We also offer battery protection in case of consequential loss to the battery or its parts due to water ingression.

However, consequential loss is usually not insured. Here, it means something could have happened to the EV to cause an accident, and as a result of that accident, something else went wrong. These aren’t usually covered. Proximate loss, proximate reason must be covered. But Zuno offers this protection, say, if something happened and caused a short circuit, which in turn caused battery damage. We’ve taken some time to understand the nature of EVs to come up with products that specifically cater to them and the new risks they pose to people, like a potential fire. Such threats are higher in an EV than an ICE.

Are you working or collaborating with any original equipment manufacturers (OEMs) of EVs, to understand the fine points of the products, reliability, risks, etc?

We’ve organised workshops with engineers from OEMs and auto manufacturers to understand what goes into the making of an EV and the various elements of risk. That’s how we understood the things people would want included but aren’t usually covered by a regular car insurance policy.

As we sell more EV policies and pay more claims, we collect more data. This data is being synthesised and used to create more products. This is important not just in terms of pricing but to understand the nature of risk involved.

In short, we’re a digital-first organisation, where data and tech are at our core. This is why since our inception, we invested in our own engineering and data science teams. We’re also developing our own platforms and tech to be able to use these data insights. Zuno actively engages with well-known EV manufacturers because we recognise the importance of collaboration between insurers and automotive companies, in navigating the complexities of EV insurance. Our engagement reflects a strategic approach to co-creating insurance products that address the unique characteristics and risks associated with EVs.

How is the risk assessed, given that we have smaller EV makers and startups, as well as established companies?

We acknowledge that EVs are still in the “discovery phase.” So Zuno exercises caution in its approach, recognising the unique challenges associated with newer technologies and variations in product quality. At the same time, we also take into account the prevalence of two-wheelers among EVs, understanding that the market includes a diverse range of vehicles. So the company underscores the significance of the brand as an indicator of the quality and diligence invested in developing the product. Zuno works closely with OEM partners, proposing pilot programmes to test and validate the concept.

Are all EV brands treated the same?

Zuno is inclusive in its underwriting approach. We recognise that smaller and niche manufacturers could produce high-quality EVs. Manufacturers that may not have widespread recognition but still demonstrate excellence in producing quality products could be considered.

Zuno offers driver-oriented products through dedicated apps…

We built a platform where we monitor driving behaviour based on the data we collect from a person’s smartphone. Mobiles have sensors, an accelerometer, a GPS tracker, gyrometer and the likes. For our digital platform, we’ve tied up with a tech firm that specialises in telematics. This platform can read data related to driving behaviour, synthesise the data and give us details that we can interpret as either good or bad driving.

This platform is compatible with AI and ML, so it can read data from anywhere. While it’s mobile-based at present, it could potentially be a device in the car or a telematics device that’s embedded in cars today. A lot of EVs are connected cars that come with in-built intelligence, including telematics. We could very well read that data. We’ve also pitched such a programme to several OEMs that we create, but progress on that front is slow since we already have other functional systems.

Zuno seems to have disrupted an entire industry. Is it possible to have both individual and customised products?

Our approach to introducing a programme that rewards individuals based on their driving behaviour, or linking it to the kilometres driven, is a significant departure from the traditional model of insurance sales, where policies are sold as bundles and the engagement largely revolves around the claims. Zuno is committed to innovation, evident in our willingness to disrupt the established norms and offer more personalised, engaging products.

The industry is criticised for offering commoditised, one-size-fits-all insurance products without tailoring them to individual drivers. What is Zuno’s approach?

We have challenged the stereotypes associated with location-based risk assessments, such as assuming that all drivers in a particular region are either good or bad. The company aims to move away from these broad assumptions and engage customers with a more personalised approach. We have proposed a shift towards customised products that focus on an individual’s driving behaviour, irrespective of their location. This approach aims to treat each customer uniquely, considering their specific actions on the road as the key factor to determine insurance premiums.

In this price-conscious market, we believe that the cost of insurance should depend on an individual’s driving behaviour rather than being a fixed, standardised amount. Zuno prioritises customer experience, focusing on Net Promoter Score (NPS) across various touchpoints. The claims team actively analyses NPS, ensuring efficient processing and customer satisfaction. In this regard, Zuno embraced innovation by introducing products such as Zuno Driving Quotient and Switch.

How was business in 2023? What were your core achievements in terms of growth?

Over the past three years, Zuno has consistently achieved high growth rates. We stand at roughly Rs 551 crore currently and expect to grow at about 40% to 50% this year. Our growth rate was close to 40% for the first nine months of FY23. Our approach to growth is not solely focused on increasing market share but is also coupled with a commitment to maintaining quality standards. The number of branches we had on day one and today are the same, but our overall figures are quite different.

This interview was first published in Autocar Professional's February 15, 2024 issue.