Cred Enters the Insurance Market Through the Garage Network

Nitin Konde, Varun Bhardwaj

Nov 5, 2024 — 2 min read

Cred Enters the Insurance Market Through the Garage Network

Cred, a fintech unicorn that formerly focused on lending and payments, has now expanded into the distribution of insurance goods, starting with auto insurance.

According to Akshay Aedula, head of product and growth at Cred, the company is using its vehicle management platform, Cred Garage, to market insurance products to its users. Depending on the users' credit scores, Cred offers extra discounts to make the product more appealing.

What is Garage?

Cred customers can monitor their car expenses, outstanding traffic "challans," and the dates of their insurance and pollution renewals on the Garage portal. In the event of a roadside breakdown, they can also receive assistance. Cred hopes to make money from the programme by collecting commissions from insurance companies, even though car management is free.

There are almost 7 million registered cars on the platform, and there are 4.4 million users—some of whom have more than one car registered in their name. Last September, the platform was launched. Approximately 11 million of Cred's 13 million monthly users engage in active transactions.

According to Aedulia, Cred's fundamental belief is to reward good conduct, which is why it has collaborated with three insurance providers to develop an insurance product that gives clients with high credit ratings extra savings on their premiums.

Working With Three Insurance Companies

To provide these products to its clients, the company, which holds a corporate agency licence from the Insurance Regulatory and Development Authority (IRDAI), has collaborated with Zurich Kotak General Insurance, Go Digit General Insurance, and ICICI Lombard. A corporate agency is an insurance distributor that has the capacity to collaborate with nine insurance companies. An entity will require the insurance broking licence in order to engage with more.

According to Aedulia, Cred is expanding this cooperation and is collaborating with a few additional insurance providers. As of right now, the IRDAI has approved the company's product. Cred's entry into the insurance market rounds out its range of financial services operations, which began with credit card bill payment and progressed to wealth management, credit, and the Unified Payments Interface (UPI). According to a recent statement from the corporation, payments, credit, and insurance account for 90% of its total revenue.

In addition to having an internal, non-banking finance company called Newtap Finance, Cred has a significant distribution role in personal financing. In February 2024, Cred bought Kuvera for its money management service. Through Garage, Cred has now established its own insurance distribution company.

In FY24, the company reported total sales of INR 2,473 crore, a 66% increase over FY15. With its employee stock ownership plans included, its net loss came to INR 1,644 crore, a 22% increase from the previous year. According to Tracxn data, the firm has raised $866 million and was last valued at approximately $6.2 billion in 2022.