Report rapid funding in Insurtech has continued across the globe and has also seen strong momentum in India. Global Funding in insurtechs has grown 7 X in the last 5 years from $2.5 billion in 2017 to $14 billion in 2021 with growth continuing even during the pandemic period.
Insurtech funding in India has also doubled in the last 2 years, from $290 million in 2020 to $800 millon in 2021. There has been a steady rise in the number of insurtech unicorns with over 20 unicorns in 2021, 14 in United States, 4 in UK, 2 each in India (Acko & Digit Insurance ) & France , 1 each in Austria , Israel & Mexico.
Key trends defining / shaping / will aid the growth of the Insurance Industry
· SME is emerging as a key customer segment
· Affordable healthcare for employees of small and medium enterprises remains an unaddressed segment.
· Thrust for employer /Group insurance for large number of emerging SMEs by customising offerings focussed at providing affordable solutions
Data and analytics as core capabilities: Leveraging data & analytics to drive operational efficiencies, Enhance pricing proposition.
Digital data and analytics can no longer be viewed as a capability of the future, are becoming table stakes . There are multiple use cases across the value chain to help drive innovation and personalisation
Importance of higher distribution penetration and reach
Insurance penetration for health and life products continues to remain low in India vs global distributors. In order to increase penetration it is crucial to reimagine distribution through traditional and newer channels and approaches
Increasing importance of enhanced customer experience
Customers are expecting seamless experience as offered by tech disruptors for other key offerings. Insurers focussing on customer experience are seeing lasting results
Emphasis on Health insurance through the National Health Stack which has the Opportunity to become a global standard, similar to UPI
Revealing these insights, the India Insurtech Landscape and Trends Report (Report) said Insurtechs in India are well-positioned to cater to the nuanced needs of customers and are at the cusp of exponential growth.
The report draws out the key challenges as seen through the lens of industry stakeholders and highlights the key imperatives for creating a robust and deep insurtech ecosystem in India.
Commenting on the report, Subhajit Mandal, Co-Founder of IIA (India Insurtech Association) said , “We are highly optimistic about the Indian Insurtech landscape in the next few years. The sustained funding levels over last couple of years has helped launch multiple insurtech startups, which is key for innovation. Enablers such as India Stack, Insurance Information bureau and the regulatory sandbox have provided a strong platform for innovation in insurance value chain”.
Commenting on the report Jitesh Shah, MD & Partner BCG Asia Pacific Lead, Operations in Financial Institutions at BCG said, “As the sector experiences unprecedented growth, it is critical to continue collaboration between insurers and insurtechs. It is also important for the industry to keep innovating to address important issues such as deeper insurance penetration, customer health and wellness, etc. To ensure that the sector experiences continued growth, there is a need for key enablers such as the National Health Stack, regulatory sandbox and Insurance Information Bureau.”