India’s InsurTech sector achieved 12-fold revenue growth in 5 years
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New Delhi| India’s InsurTech sector has achieved 12-fold revenue growth in the last 5 years. According to a report on Wednesday, the sector’s cumulative funding is more than $2.5 billion and the ecosystem valuation stood at more than $13.6 billion.
According to the report prepared by Boston Consulting Group (BCG) in collaboration with India Insurtech Association (IIA), there are more than 150 Insurtech companies in the country, with 10 unicorns and sunicorns and more than 45 minicorns, whose revenues have increased 12 times over the past five years to reach $750 million.
Pallavi Malani, managing director and partner of Lead-India Insurance Practice at BCG, said, “Most Insurtechs are present in the aggregation and distribution phases of value chains, accounting for more than 80 per cent of funding”. There is ample opportunity for insurance companies to leverage data and technology in underwriting and claims, which can play a vital role in the continued growth of the insurance industry
While India has made significant progress, increasing penetration still remains a priority, especially in health insurance, where 45 per cent of medical expenditures are still made out of pocket. The report notes that the goal is to achieve 100 per cent coverage for all citizens and to reduce out-of-pocket medical expenditures by less than 10 per cent.
India aims to become the world’s third largest insurance market, with more than 10 companies operating in the global top 50 and more than 100 insurance companies at large. “Because India aspires to be a developed economy, there remain opportunities for higher access, increased awareness and trust, increased affordability”, said Vivek Mandhata, managing director and partner at BCG.
As Insurtech continues to evolve, more than 75 percent of Insurtechs are prioritizing creating profitable operating models. In addition, more than two-thirds are promoting strategic partnerships and expanding into new geographical areas. “The evolving Insurtech clearly shows that collaboration is not just an option, but a strategic imperative to achieve the goal of a developed India for 2047”, said Subhajit Mandal, co-founder of the India Insurtech Association.
