The Indian insurtech sector has witnessed a 12-fold revenue growth over the past five years to $750 million in 2023, according to a report released by Boston Consulting Group on Wednesday. Around 85% of this revenue growth was driven by the top nine insurtech startups, noted the report in partnership with India InsurTech Association.
While globally, insurtech funding has continued to slow down, APAC has been relatively resilient with the Indian insurtechs making big strides in the last five years.
India has over 150 insurtech companies, with 10 of them valued at more than $100 million. Among these, Policybazaar and Acko are the only unicorns, while TurtleMint and Insurance Dekho are classified as ‘soonicorns’, with valuations ranging between $0.5 billion and $1 billion. MediBuddy, Renew Buy and Zopper fall under the ‘Century Club’ category, valued between $100 million and $500 million. Over 45 other insurtechs, including Plum and Nova Benefits, are labeled as ‘minicorns’, with valuations under $100 million.
The report notes that global funding for insurtech has been declining, dropping from a peak of $13.8 billion in 2021 to $5 billion in 2023. India also mirrored this trend, with sector funding shrinking to $300 million in 2023, compared to $580 million in 2021. However, the report added that the cumulative funding in the space has surpassed $2.5 billion, with a total sector valuation exceeding $13.6 billion.
“Most of the insurtechs at scale are present in the aggregation and distribution legs of the value chain, with these accounting for over 80% of the funding,” said Pallavi Malani, MD and partner, Lead – India Insurance Practice at BCG, and Co-author of the report.
She added that there is a substantial opportunity for insurtechs to leverage data and technology in underwriting and claims, which can play a critical role in the continued growth of the insurance industry.
The report also reveals that multiline insurtechs attracted the majority of funding in 2023, outpacing those focused on single lines of business such as motor or health insurance.
Looking ahead, the report identifies opportunities in India’s health insurance market, which grew at a 19% CAGR of between FY19 and FY24 to a gross written premium of Rs 1.08 lakh crore. Retail health insurance alone expanded at an annual rate of 22%.
The report highlights the potential for insurtechs to embed insurance into new channels through partnerships with corporates, SMEs, and affinity networks to penetrate smaller towns. It also highlights the scope for expanding beyond inpatient (IPD) coverage to offer comprehensive health and wellness solutions, including outpatient (OPD) services. By utilising customer data, insurtechs can also enhance affordability with personalised, flexible plans and bite-sized products, it added.