Boston Consulting Group (BCG) in partnership with India Insurtech Association (IIA) have launched a new report titled, “India Insurtech Landscape and Trends”. The report identifies the current trends in the industry, based on perspectives gathered from multiple stakeholders including insurers, insurtechs and key distribution players.
The report highlights that India has showcased a strong momentum in Insurtech, with the funding having doubled in the last two years. Funding in 2021 indicates sustained investor interest. It has propelled from US$ 290 million in 2020 to US$ 800-900 million in 2021; with the hope of insurtechs creating real business value. This has been especially true for General Insurance (GI) and B2C focused Insurtechs, that continue to see strong funding. Even globally, Insurtech funding has shown strong momentum. The rapid growth has resulted in the emergence of 22 Insurtech unicorns in 2021 globally.
Some of the key trends that have emerged in the sector are as below:
- Emergence of New customers segments:
- MSMEs to be key growth engine
- Women becoming key decision makers (54 per cent decisions by women)
- Tier 2 and below to contribute to 70 per cent of the consumption by 2030
- Importance of higher distribution penetration and reach:
- Insurance penetration for key products such as health and life insurance continues to remain low in India vs global leaders (Penetration of insurance in India needs improvement; three per cent for life insurance, 35 per cent for health insurance)
- Important to reimagine distribution
- Criticality of enhanced customer experience:
- Customers are expecting a seamless experience as offered by tech disruptors for other key offerings
- Insurers driving focus on customer experience are seeing lasting results
- Data and Analytics as core capabilities:
- Digital, data and analytics can no longer be viewed as a capability of the future; are becoming “table – stakes”
- Multiple use cases across the value chain to drive innovation and personalization
- Further emphasis on health insurance through the National Health Stack
- Insurance Strong thrust from the government
- Opportunity to become a global standard, similar to UPI
Speaking at the launch of the report, Jitesh Shah, Managing Director and Partner, BCG India 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.”
