The report analyses the current landscape of the Indian Insurtech against the backdrop of the global insurance industry and focuses on identifying key emerging trends and critical success factors.
Highlights
● Health insurance is the 2nd largest and among the fastest-growing segments of the Indian insurance industry. Despite an annual claims settlement of over INR 350 billion, over 850 million people are without any form of health insurance cover indicating very low penetration and immense market opportunity
● Total funding received by InsurTechs between2015-2019 was over $1 billion. The investment activity in the Indian InsurTech segment has grown at a rate of over28% and there have been 14 successful exits so far
● The power in the insurance industry is shifting from underwriting to distribution and data. There is an increased focus on product innovation and personalization along with a need to leverage new-age technologies to disrupt business models across the value chain.
Mumbai, 24th May 2021: BLinC Invest, one of India’s leading venture capital firms released its InsurTech Report 2021 today. The report summarizes the global insurance landscape with a focus on global Insurtech followed by Indian Insurtech. The cornerstone of the report lies in its analysis of key emerging trends and well the fund’s view on what it takes to be successful in InsurTech across different parts of the value chain thereby giving readers a glimpse into what will create sustainable value in InsurTech.
The Indian insurance industry has a market size of $106 billion and Life Insurance accounts for 75% of that after private players entered the industry in 1999 and contributed to its exponential 13x growth.
The report also takes a close look at the impact of IRDAI’s strict ULIP norms on the Indian insurance industry after 2009, which triggered people to opt for term plans as compared to other forms of investment plans. This also pushed insurance providers to diversify the product portfolio of the general insurance segment.
Amit Ratanpal, Founder & Managing Director, BLinC Invest, had this to say on the release, “Our InsurTech Report highlights the significant gaps in the Indian insurance market and discovers a huge market opportunity in the non-insured and the under-insured segments. For instance, only 35% of the Indian population is covered by health insurance compared to about 92% of the population in the US market. Bridging this gap will require providing access to better quality insurance literature, lowering the cost of premiums, and creating a more cost-effective distribution system. Technology will be the key enabler and we will be looking at investing in companies that understand that penetration across all segments is key to scale and that data and product innovation are critical to attracting the right customers”.
The report details all the key emerging trends starting with the power shift from underwriting to distribution and data and also how industry players are exploring various D2C digital channels while leveraging the online footprints of their customers across various functions like pricing, claim prediction, etc. Customization and value addition are driving product design as new products like event insurance, pay-as-you-go insurance, and insurance as a gifting option take off. Finally, the industry is leveraging new-age technologies like blockchain, AI, ML, NLP, etc. to disrupt business models across the value chain by introducing solutions for AI-based underwriting, virtual claim processing, etc. The industry is also supported by IRDAI’s Regulatory Sandbox which is actively pushing for innovation in the sector.
The report predictsInsurTechs are the future of the insurance market. Globally, the industry has been attracting a lot of interest from the investor community. Their funding has grown at a CAGR of 40% over the last 3 years. Indian InsurTechs have raised more than $1 billion.