The 3rd Annual Event of the India InsurTech Association (IIA), held on November 20, 2024, at the Jio World Convention Centre, Mumbai, marked a milestone in shaping the future of inclusive insurance in India. Themed “Pathways to Inclusive Insurance: A Vision for 2047,” the event was a hub of innovation, collaboration, and insightful discussions. The Insurance Times, media partner, covered the event, showcasing its commitment to promoting insurance industry developments.
The day commenced with a networking breakfast and registration, followed by an insightful welcome address by Prerak Sethi, Co-Founder of IIA. The first panel discussion on building a future-ready insurance industry set the stage for a dynamic day, featuring stalwarts like G Srinivasan (Galaxy Health Insurance), Amitabha Ray (Swiss Re India), and others. They discussed how technology and data are critical in transforming the insurance landscape.
A keynote speech by Shri K. Rajaraman, Chairperson of IFSCA, emphasized the role of regulatory frameworks in advancing financial inclusion. The launch of the IIA-BCG report was another highlight, offering a roadmap for leveraging digital innovation in the sector.
Parallel tracks on health insurance and sustainability were held in the afternoon. Discussions ranged from AI’s transformative role in health insurance to leveraging digital public infrastructure.
The spotlight on technology continued with panels addressing AI, cyber insurance, and equity investing for insurance inclusion. The session on generative AI and its applications in risk modeling featured experts from Google, Eurazeo, and ICICI Bank, highlighting its transformative potential.
Workshops on human-centered design and collaborative discussions on the India-Japan insurance story showcased the event’s global outlook. The closing ceremony featured the IIA Awards, recognizing excellence and innovation in the insurance ecosystem.
With over 900 participants from the industry, the event reinforced India’s position as a global leader in InsurTech.
IIA in association with BCG launched a report “India Insurtech Landscape and Trend” – Pathways to inclusive Insurance – A Vision for 2047. Here is a brief summary of the report.
Boston Consulting Group (BCG) in collaboration with the India InsurTech Association (IIA) has released the fourth edition of the India Insurtech report “India Insurtech Landscape and Trends: Pathways to Inclusive Insurance – A Vision for 2047” at the India InsurTech Association Annual Event 2024. The report throws light on the current trends in the industry and lays down the key levers to drive insurance for all to support the Viksit Bharat Mission.
India has 150+ Insurtech companies, with 10 Unicorns and Soonicorns and 45+ Minicorns with a 12x increase in revenue over the past five years to reach $750 million. Cumulative funding has surpassed $2.5 billion, bringing the total ecosystem valuation to over $13.6 billion
Trends in Funding for Insurtechs
While global Insurtech funding has slowed down, APAC’s Insurtech sector has shown resilience. Indian Insurtech funding has followed the global trend of decline, but revenue has grown multifold, driven by the rapid expansion of larger Insurtechs. With a higher concentration of Insurtechs focused on demand generation and distribution within the value chain, there is significant opportunity to drive innovation in underwriting, claims and servicing.
“The Indian Insurance landscape has come of age, with over 150 insurtechs and 10 unicorns and soonicorns. Moreover, insurtech revenue has grown multifold by 12x over the last five years. However, there are still significant opportunities in the insurtech space. 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. 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.” said Pallavi Malani, Managing Director and Partner, Lead – India Insurance Practice at BCG, and Co-author of the report.
Viksit Bharat – A Vision for 2047
As India aims to become a developed economy by 2047, a robust financial sector is essential and insurance can play a key role. Although India has made significant progress, increasing penetration still remains a priority, particularly in health insurance with 45% of medical spend still being out of pocket. Multiple macroeconomic tailwinds are already driving growth in the industry. The goal is to achieve 100% coverage for all citizens and reduce out-of-pocket medical expenses to less than 10%. India envisions becoming the world’s third-largest insurance market, with over 10 companies in the global top 50 and more than 100 insurtechs operating at scale.
“India has a bold ambition for a ‘Viksit Bharat’ by 2047, which requires a stable and resilient financial sector, with insurance as a key pillar. Health insurance is a primary focus area, as it remains under-penetrated at 0.31%. Moreover, out-of-pocket medical expenses account for 45% of India’s health expenditure, and only 39% of the population is covered. This highlights a significant opportunity in the health insurance industry. As India aspires to become a developed economy, there are substantial opportunities across three pathways: higher accessibility, increased awareness and trust, and enhanced affordability. Insurtechs will play a key role in driving innovation across each of these pathways, supported by the broader ecosystem.” said Vivek Mandhata, Managing Director and Partner at BCG, and Co-author of the report.
Health Insurance – A Key Pathway for Insurance Penetration
The health insurance industry in India has seen strong growth, driven by rising awareness and expanding channels through corporates, SMEs, and government initiatives. The retail segment is growing the fastest at 22% annually, yet the industry remains under-penetrated, with 0.31% penetration and 38.5% of lives covered.
This highlights a substantial opportunity for Insurtech, to innovate across three pathways to boost health insurance penetration:
- Driving Higher Accessibility: Embedding Insurance through new channels by partnerships with corporates, SMEs, and affinity networks to reach Tier 2+ cities (e.g., Bima Trinity). Leveraging Gen AI to support field teams with real-time queries and personalized pitches in vernacular languages. Improving efficiency of existing Bancassurance channels to tap into over 1 lakh branches and 150 crore accounts across semi-urban and rural areas.
- Driving Higher Awareness and Trust: Expanding coverage beyond IPD to comprehensive health and wellness offerings, including OPD, which accounts for 35% of healthcare costs. Gen AI solutions provide quick responses to policy inquiries and claims support. Collaboration with regulator aims to shorten claims processing times from days to instant decisions.
- Driving Higher Affordability : Insurtechs are leveraging rich customer data to offer personalized, flexible plans. Bite-sized product designs and innovative payment models further enhance affordability, enabling more individuals to benefit from health insurance coverage.
Profitable Partnerships for Sustainable Growth
As the Insurtech landscape evolves, more than 75% of insurtech are prioritizing to building profitable operating models. Additionally, over two-thirds are fostering strategic partnerships and expanding into new geographies. The lines between incumbents and Insurtechs are blurring, with Insurtechs concentrating on profitable growth and developing insurance capabilities, while incumbents focus on building digital-first capabilities. The ecosystem is expanding beyond traditional partnerships to include healthcare providers, pharmacies, fitness centers, and diagnostic clinics.
The evolving Insurtech landscape clearly demonstrates that collaboration is not just an option, but a strategic imperative in achieving Vikshit Bharat – the vision for 2047. Since inception, as a non profit, IIA has focused on promoting an ecosystem for collaboration amongst all the participants of the insurance industry. Going forward, we will continue to strengthen these bridges between various stakeholders , focus on it as a key pillar of our contribution towards realizing Vikshit Bharat 2047.
The path to inclusive insurance brings forth critical imperatives and implications for each stakeholder:
- Insurtech need to focus on enhancing profitability and sustainability by refining operating models, building expanded ecosystems and developing resilience through robust technology and governance.
- Incumbents should expand offerings, invest in capabilities for a digital-first approach and address core industry challenges through collaborative solutions.
- Other Key Stakeholders such as healthcare providers, pharmacies and fitness centers to invest in new-age capabilities and foster two-way partnerships to strengthen their offerings.
- Regulator should continue two-way communication and collaboration among all stakeholders to promote greater clarity and facilitate the creation of innovation hubs.
