Expansion of Low-Premium Coverage

The digital insurance sector has undergone a notable shift in customer acquisition strategy, moving away from the traditional emphasis on selling large annual premium policies towards offering small, simple and low-cost products. One of the most prominent examples of this transformation is the emergence of one-rupee trip insurance. Industry analysts note that such micro-insurance products are not merely low-value coverage options, but also function as entry points for acquiring new customers, building trust, and enabling the future sale of higher-value insurance products.

A significant implementation of this model has been demonstrated by the Indian digital insurer Acko in partnership with the ride-hailing platform Ola. Under this arrangement, ultra-low-cost trip insurance was offered to passengers at the point of booking. For intra-city rides, the premium was set at one rupee. Separate covers were also introduced for other services, with premiums of ten rupees for Ola Rentals and fifteen rupees for Ola Outstation journeys. The structure reflects a segmented approach in which insurance products are aligned with different categories of travel, integrating coverage directly into everyday mobility services.

The insurance cover provided was not symbolic. The one-rupee in-trip policy offered coverage of up to five lakh rupees. Benefits included compensation for accident-related medical expenses, loss of baggage or laptops, financial assistance in the event of missed flights, ambulance support, and emergency hotel accommodation. This combination of a minimal premium with multiple real-world protections contributed to its acceptance among users, demonstrating how insurance can be positioned as a practical tool for everyday risk management rather than a complex financial product.

The operational design of the model also played a key role in its adoption. The insurance option was embedded directly within the ride-booking process, allowing users to opt in with a single selection at the time of booking. This eliminated the need for separate documentation or lengthy application procedures. Claims were also digitised, enabling users to submit claims within approximately two minutes through the mobile application. Settlement times were typically between 48 and 72 hours, contributing to user confidence in the system.

Key performance indicators reported for the initial phase of the programme are summarised below:

The distribution model behind this approach is also significant. Traditional insurance sales typically rely on agents, branches or dedicated sales teams, which increases operational costs and limits scale. In contrast, platform-based partnerships allow insurers to reach consumers within existing digital ecosystems. By integrating insurance into high-frequency platforms such as ride-hailing services, coverage is offered as part of a routine transaction rather than a separate purchase decision.

Acko’s partnerships extend beyond Ola and include platforms such as RedBus, Zomato, Goibibo and Dunzo. This reflects a broader trend towards embedded insurance, where coverage is integrated into digital services that consumers already use regularly. In this model, insurance is not marketed as a standalone product but is instead presented at the point of relevance, such as during travel, food ordering or other service-based transactions.

The implications for the insurance sector are considerable. The model demonstrates that market entry does not necessarily depend on high-value products. Instead, small and easily accessible insurance offerings can serve as effective tools for customer acquisition and trust-building. Once users experience successful claim settlement, they may be more inclined to consider additional insurance products, including health, motor or travel policies with higher premiums.

This approach is also relevant for emerging markets in South Asia, including Bangladesh, where insurance penetration remains relatively low and public perception often regards insurance as non-essential expenditure. Integration of micro-insurance into digital platforms such as ride-sharing services, e-commerce applications and mobile financial services could support wider adoption. As digital ecosystems continue to expand, embedded micro-insurance is expected to play a growing role in improving accessibility and affordability of risk protection for consumers.