India InsurTech Report 2020 Executive Summary

2 INDIA INSURTECH REPORT 2020
Introduction
Consider these facts about India: With
1.3 billion people and 50% of the
population under the age of 25, over
250 million residential houses, growing
per capita income & expanding middle-
class population, over 250 million
registered motor vehicles on its road,
and 21.55 million new vehicles getting
sold (FY 2020 data)—which attract
insurance renewal every year, and
growing marine and transit insurance
adoption—there is very little room for
doubt that India is indeed a massive
market opportunity for life and non-life
insurance players. India’s share in the
global insurance market is estimated at
1.7% and is expected to grow by 2.3%
by 2030 (Swiss Re). However, India’s
insurance penetration is around 3.7%.
Why? How is India fixing this low level
of insurance penetration?
A good news is that the insurance
industry juggernaut is moving again
and this time it aims to bridge the gap.
In FY 2020, the Indian insurance
industry’s gross written premium
recovered to $94.71 billion from $82.82
billion in 2018.
The Indian insurance sector is working
on new product and business model
development, technology for
distribution, and favorable regulatory
policies that are opening up new forms
of insurance, such as wearables, IoT-
linked products, and drone cover,
thanks to the fast-growing InsurTech
segment.
InsurTech has emerged as a segment
that can help the insurance market and
incumbents improve distribution,
insurance literacy, and affordability,
which ultimately increases insurance
acceptance and penetration.
The presence of aggregators that
disseminate insurance products to
digital-savvy customers, the use of the
Internet of Things, including wearables,
apps, and other devices, and easier and
transparent digital claim settlement, will
significantly improve access to
insurance for Indian customers.
A tremendous InsurTech opportunity is waiting to be realized as India’s insurance sector
is expected to reach a market size of $280 billion by 2020. With a conducive regulatory
environment, the entry of new FinTech and InsurTech players that crystallize innovative
business models, and incumbents embracing technology to develop a unique set of
differentiated offerings, India’s InsurTech sector is on a course of transformation in both
life and non-life insurance space.
Source: IBEF
71.81
84.74
94.48
82.82
94.71
FY 16 FY 17 FY 18 FY 19 FY 20
GROSS PREMIUMS WRITTEN IN INDIA
($, BN)
7.7
0.8 -2.0
-0.1 0.2
14.0
1.9
7.1 6.4
3.0
Life Non-Life Total
TOTAL YoY REAL PREMIUM GROWTH
RATE — 2018 vs. 2017 (in %)
9.3 1.3 2.1 2.1 1.5
Source: IRDAI Annual Report FY 2018-19

Stagnant Insurance Industry Needs
a Digital Push
The Indian insurance industry has
witnessed marginal growth in insurance
penetration over the last four years. In
2015, insurance penetration stood at
3.44%, which increased to 3.49% in
2016, 3.69% in 2017, and 3.7% in
2018.
The level of insurance density was at its
peak at $64.4 in 2010, up from $11.5
in 2001. Even though there was a slight
decline subsequently, it gradually
recovered to $74 in 2018.
In the fiscal year ending March 2020,
India's life insurance companies clocked
11.36% growth in their collective
premium income at $684 billion. The
gross direct premium underwritten by
the non-life insurers grew 11.67% in
this period. While these numbers
indicate a positive trajectory for
insurance growth, there are some
underlying problems in the market—
distribution is one of them.
Rapid digital adoption in India (829
million internet users by 2021) has
created the much-needed infrastructure
for insurance players to reach Indian
customers. However, traditional insurers
are still struggling with simplifying of
policy terms, settlement procedures,
mutual trust deficits of buyers & sellers,
and differentiating products that can
help customers buy without much
confusion. This is where InsurTech
players have identified their
opportunity.
India has over 110 InsurTech players
spread across different sub-segments,
such as aggregators, claims
management, digital-first insurers,
software white label and infrastructure
APIs, and IoT. InsurTechs are solving
the affordability challenge by innovating
small ticket and low-duration insurance
products. Bite-size insurance, also
termed as ‘sachet insurance,’ is growing
fast. It is frequently bought as a feature
with many different products and
services in the market, such as travel
and e-commerce.
INSURTECH
STARTUPS
INDIA’S INSURANCE
GAP
INSURANCE
PENETRATION
VS. 6.3% GLOBAL
AVERAGE
110+
$27 Bn
3.7%
INSURANCE PENETRATION IN INDIA
0
1
2
3
4
5
6
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Life Non-Life Total
The InsurTech landscape in India is in the nascent stage. Distribution challenges
continue to be a major hurdle for insurers. The lack of customer trust remains a
roadblock for the InsurTech segment that industry players find hard to overcome.
However, recent success stories from Indian InsurTech players paint a promising
picture.

Expert Opinion
KAYZAD HIRAMANEK
Chief Operations and Customer
Experience
Bajaj Allianz Life Insurance Co. Ltd.
MEDICI’s report comes at a point in
time when India’s insurance sector is on
the threshold of a digital makeover.
Even as several other sectors are
buckled under the pressure of having to
cope with the new normal, the
insurance industry has been able to
weather these tough times.
As we move from one unlock phase to
the next, it becomes evident that a
massive transformation lies ahead of us.
Even as I write this, the top minds at
various insurance companies are
brainstorming strategies to rethink
business models based on new norms
defining the society—social distancing,
screen-based human interaction, and
contactless transactions.
New trends such as remote working,
virtual experiences, open source
platforms, cloud-based solutions, and
bot-based conversations have started
defining everyday life. Rapidly
accelerated digitization has benefited
both the old and new breed of
stakeholders in the insurance
landscape. The modern consumer is
fluid across generations, comprising
both digital natives, who are young
people born into the digital age, as well
as digital immigrants (older people who
embraced technology at some point
during their adult lives).
It is fascinating to note how in times of
crisis, technology has, time and again,
emerged as a great leveler. With
COVID-19 acting as a catalyst, the next
generation of prospecting, selling, and
customer experience in insurance has
steadily morphed. The spotlight has
already shifted to UI/UX, orchestrated
customer journeys, and integration with
the API ecosystem. Another focus area
has been contactless yet humanized
engagements between customers and
service providers’ representatives, for
whom face-to-face meetings have
become a challenge due to the
pandemic.
Bajaj Allianz Life introduced ‘Smart
Assist,' the first-of-its-kind co-browsing
service in the insurance industry to
overcome some of these challenges.
Considering the pandemic situation,
when customers are not willing to meet
personally, this service enables screen-
to-screen meeting, making interactions
contactless, safe, and yet personalized.
In addition, we have invested in
interactive portals, new bot- and
WhatsApp-based platforms to help
customers stay connected in the
absence of physical service availability.
This, I believe, is a preview of how the
digital revolution is sweeping across the
insurance sector. Keeping up with these
new paradigms is going to be a
challenge; therefore, up-skilling of
people and their empowerment to help
deliver seamless journeys will be the
gold standard for resilient organizations
in the future.
This report, which highlights the key
aspects of InsurTech in the country, will
not only enlighten its readers about the
fast-paced developments in the sector
but will also serve as a benchmark—an
inspiration—for the players in this
industry.

Expert Opinion
Increasing Attractiveness of Indian InsurTech Landscape
A little over two years ago, I chanced
upon IRDAI’s report proposing a
regulatory sandbox. I thought to myself,
‘India’s InsurTech ecosystem may finally
bloom!’ In a short span of two years,
regulation has become an enabler for
innovation within the Indian insurance
industry.
The IRDAI has played a proactive role
via the regulatory sandbox and via
comprehensive guidance on product
standardization. In 2020, courtesy of
IRDAI, Indian customers have
experienced wearable-linked health
insurance and telematics-based motor
insurance. Both these products were but
a mention within IRDAI's report in
2018.
InsurTech in India is finally beginning to
attract large volumes of capital. In
2020, Acko raised $60 million from
Munich Re Ventures and Digit raised
$84 million in a private equity round.
Capital is a key constraint faced by full-
stack ventures within the insurance
industry—commissions tend to be front-
loaded but lifetime values remain very
high.
Insurance has become a key
monetization driver for large platforms
or FinTech companies. Ola and
CarDekho, among others, have
extensively forayed into insurance via
Ola Financial Services and
InsuranceDekho, respectively. Insurance
distribution is turning into a ‘battle
royal,' with insurance arms of large
institutions going up against specialists
such as RenewBuy and Turtlemint.
InsurTech in India has been riding the
‘built in India, built for the world’ wave
in recent times. Enterprise SaaS
companies such as MetaMorphoSys and
Artivatic have begun cracking accounts
in South East Asia—a testament to
Indian engineering and sales talent.
The hottest space in the InsurTech
ecosystem seems to be employee
health & benefits, which has seen
several entrants emerge in 2020: Plum
Health, Loop Health, Even Healthcare,
Kenko Health, Onsurity, Nova Benefits,
and RIA Insurance.
Startups will continue to play a key role
in the Indian insurance industry in the
coming years by partnering with
carriers, innovating on products, and
building for customers.
RAHUL MATHUR
Founder, BimaPe

India InsurTech Market Landscape
Breakdown of InsurTech Companies
[Illustrative]
Software/White Label/APIs: These
companies provide software solutions to
insurance companies and brokerage
firms. They provide solutions such as risk
assessment, underwriting, fraud
detection, regulation, policy
administration, marketing sales, data
aggregators/providers, chatbots, CRM
tools, APIs, and white-labeled tools.
Internet of Things: IoT companies
leverage the connected device
technology, such as sensors and
wearables, to help identify and analyze
the risk to users. It can be used in car
insurance for a usage-based telematics
program, enabling them to monitor the
drivers. It also provides tailored insurance
solutions for home and life insurance.
Online-First Insurance: These insurance
providers sell their own insurance
products, such as life, P&C, and health,
mainly through the digital channel, with
the risks residing on the platform’s books.
Claims: These startups develop platforms
for digitizing the claim process by
developing tech solutions such as video,
mobile, and self-service options. They
leverage technologies, such as machine
learning and robotics, to provide cognitive
learning systems for quicker payouts.
Aggregators/Policy Management: These
companies provide digital tools that allow
users to search, compare, and find
affordable premiums from multiple
carriers. It also includes players that help
users to manage policies, finance
premiums from a single platform.
SUBSEGMENTS AND DEFINITIONS
This compilation covers only pureplay InsurTech companies and not other FinTech players who offer
insurance as a product in partnership with insurance players.
Aggregators/Policy ManagementSoftware/White Label/Infrastructure/Other APIs
Claims
Online-First Insurance
Internet of Things
Note: There is a growing trend of unbundling and companies expanding into multiple segments.
Therefore, this representation is directional in nature, as companies might be present in more than one
subsegment or segment. Reach out to us if you want to change your company's segment classification
or want to discuss the rationale. Some companies shown in the landscape could have scaled-down
operations significantly or shut down during the COVID-19 period from March to Oct. 2020.

Industry Point of View
In terms of the current number of players, insurance aggregation is one of the most
attractive segments in the Indian InsurTech landscape. To capture aggregators’
viewpoints on how they see the market, we reached out to Turtlemint. Here is what
Turtlemint shared with MEDICI Research Team:
India’s insurance aggregator space is concentrated at the top by a few companies. Is
there room for new entrants? What would it take to challenge the current market?
At 3.7% of the gross domestic product (GDP) compared to a world average of 6.31%,
India’s insurance penetration is one of the lowest globally. At the same time, insurance
is an important product that serves the dual role of protection and financial growth.
Clearly, there is a need to drive insurance penetration in India. Given the large and
mostly available opportunity, there is more than enough room for new players to enter
the InsurTech or insurance aggregator space. However, it is equally important that new
entrants enhance the ecosystem with value accretive and innovative solutions. Within
the insurance value chain, stakeholders in the ecosystem face multiple challenges.
Ideally, new entrants should work toward addressing these challenges and making
interactions among all stakeholders more seamless and efficient. This means that
instead of rushing after the same pie, new entrants should identify new opportunities
in the insurance ecosystem and build innovative solutions to cater to the various
demands of insurance stakeholders. Doing so will not only elevate the entire ecosystem
but also contribute to economic growth and make universal health coverage a reality
for India.
The penetration of online/digital insurance is still very low in India. How do you think
this is going to change in the coming years, and what would be the key drivers?
Insurance plays an integral role in economic reconstruction and providing protection to
individuals. However, the insurance sector in India has had to contend with various
challenges ranging from information asymmetries to challenges with access. Digital can
resolve many of these challenges—a fact that is now becoming increasingly evident
with the adoption of online/digital insurance. A host of factors have come together to
give an impetus to digital adoption.
India’s digital leap is powered by a few factors:
• Enhanced Connectivity and Cheaper Data: At INR 6.7 per gigabyte (GB), the
average cost of mobile data in India is the cheapest in the world, according to the
Worldwide Mobile Data Pricing report for 2020 by Cable.co.uk, a UK-based price
comparison firm. According to the report, this is significantly cheaper than the cost
of data in India in 2018, which was around INR 18.5 per GB at the time.
• Access to Cheaper Smartphones: The increasing ubiquity of smartphones in both
developed and emerging markets is constantly driving down the cost of
smartphones. According to a joint report by ICEA and KPMG, the average selling
price of smartphones in India declined by 16% during 2009–2018. Access to
cheaper data and smartphones has enabled digital/online access for a large part of
What Is Driving Growth for Aggregators (1/2)

• Focus on Building a Digital Infrastructure: Further, the government and various
private sector and public bodies have worked towards creating a critical digital
infrastructure to enable seamless connectivity and innovation. Case in point being
UPI that has changed the payments landscape in the country. Similar initiatives in
the insurance sector can play an integral role in driving online/digital insurance
growth.
• Improving Digital and Insurance literacy: The fourth enabler is digital and insurance
literacy. We have been actively participating in this space by leveraging technology
to make insurance easier for both advisors and buyers. We are focusing on creating
compelling and easy content across multiple formats to educate the common
people about insurance. At the same time, we are empowering insurance advisors
with technology and helping them leverage digital tools to deliver customized
advice in a seamless and cost-efficient manner.
From an aggregator’s point of view, which of the insurance products constitute the
highest growth category, and what are the reasons for them performing better than
others? Can you throw some light on the typical distribution of volumes across these
products?
We have observed two trends over the past few months. First, a sharp increase in the
purchase of health insurance policies and, second, growing interest in term insurance.
Since the beginning of this financial year, we have seen an approximately 6X increase
in the number of health insurance policies, with corresponding growth in the number of
online policies. This growth is indicative of the current environment and underscores
the importance of health insurance in an individual’s financial plan. Within the life
insurance category, term insurance continues to witness consistent growth.
Turtlemint has a unique hybrid model (online + offline), with digitally enabled offline
advisors. What are the best practices with this model? What are the implications of the
offline components on the cost of operations?
Indian insurance customers value the advice given by their insurance advisors.
Therefore, we believe that the best way to drive insurance penetration in the country is
to empower advisors with digital tools. Insurance advisors sell over 70% of insurance
policies in India through a largely offline, paper-based process. Our solutions are
geared at enabling insurance advisors to leverage digital tools. Thus, we need to
provide them the tools and also focus on educating them and teaching them how to
optimally leverage these tools to deliver customized solutions to their clients. In a
similar vein, we have launched a multi-language feature in our mobile application,
which can help insurance advisors communicate more effectively with their clients and
foster enduring relationships. This way, insurance advisors can elevate their offline
interactions by leveraging online tools.
What Is Driving Growth for Aggregators (2/2)

InsurTech Funding
99.0 84.2
276.8
7.2 5.1
45.3
38.9 113.0
6.0
191.5
2018 2019 2020
TOTAL FUNDING
328.1
TOTAL FUNDING
336.5
TOTAL FUNDING
202.3
Q1 Q2 Q3 Q4
$544.6 Mn $203.0 Mn $51.3 Mn$224.0 Mn
Quarterly Funding, 2018–Q3 2020 ($, Mn)
Segment-Wise Funding, 2018–Q3 2020
Top Funded InsurTech Startups in India (>$50
Mn)
63.6%
34.7%
1.2%
0.4%
0.1%
Aggregator Policy/
Management
Online-First
Insurance
IoT/Telematics
Claims
Software/White Label/APIs

Active Investors
• Better Captial is one of the top active investors that have made seed investments
in Riskcovry, Inspektlabs, and Kruzr. It is primarily focused on insurance software
solution firms.
• Omidyar Network and Blume Ventures are the second-most active investors.
Omidyar invested in insurance aggregator firms such as Toffee and GramCover.
Blume invested in Turtlemint and BeatO.
• Softbank has participated three times in the Policybazaar funding round Series F.
It invested a total amount of $200 million.
Illustrative only; not an exhaustive list. Not ranked.

Expert Opinion
Investor Point of View (1/2)
All financial companies will be tech
companies.” When someone said this in
the valley, it sounded like an
exaggeration. However, if we look at the
last few years, it is not too far from the
truth. Starting with payments to lending
and now core banking, challenger
digital-first companies have challenged
the incumbents forcing them to move
towards becoming “digital-first” or
perish.
The same holds true for insurance.
While traditionally the most
conservative and the last to move, we
can already feel the tectonic shifts in
the industry. On one side, we see
Google entering insurance with Verily’s
Coefficient Insurance company. On the
other side, we see traditional insurances
taking large strategic stakes in new-age
insurers, e.g., Allianz in BIMA and AXA
in its competitor, MicroEnsure. In
parallel, we can already see the rise of
credible digital-only/digital-first
insurance companies like ZhongAn
(China), Lemonade (US), Pineapple
(South Africa), Singlife (Singapore), and
Digit and Acko close to home in India.
It is not difficult to see why we are in
the middle of a perfect storm that will
fundamentally change the insurance
industry. I will try to address the drivers
with Indian examples and data;
however, this is equally applicable to
the world over and most emerging
markets.
Insurance as a business depends on five
primary activities:
1. Data collection
2. Data processing
3. Distribution
4. Fraud detection
5. Investing
end up being the largest cost element—
accounting for almost 70%–80% of the
operating cost. At the same time,
effectively managing fraud detection
impacts claim ratios and customer
satisfaction. High physical touch
insurance means either the products
become unsustainable or higher price
points lead to lower penetration.
However, new sources of data, new
methods of processing them, digital
distribution channels, and claims
management systems are
fundamentally changing the insurance
landscape and thus making earlier
unsustainable products accessible.
Listed below are a few broad trends that
are embedding tech deep into
insurance:
• New Data Sources: Digital-first world
filled with IoT devices has meant new
data from every aspect of life. Health
records, satellite data, and activity
tracking enable new-age insurances
or new ways of underwriting
insurance. National Health Stack in
India should fundamentally change
the insurance landscape of health
insurance, which I am eagerly
waiting for!
• New Data Processing Methodology: I
recently came across an insurer that
used image analysis of livestock
noses. Apparently, they are unique to
each livestock and work almost like
fingerprints for them. Similarly, Coco
launched insurance enabled by FEDO,
in which video facial analysis will
directly generate quotes for health
insurance without any need for
medical tests. The progress data
scientists are making in AI/ML, image
processing, and big data is
incredible. I cannot visualize any
insurer soon, which can work without
ANAND DUTTA
Vice President, Nexus Venture Partners
Ex-CEO, BIMA — India/Philippines

Expert Opinion
Investor Point of View (2/2)
ANAND DUTTA
Vice President, Nexus Venture Partners
Ex-CEO, BIMA — India/Philippines
• Embedded Finance: A large part of
insurance has traditionally been sold
through Bancassurance, primarily
because they provide reach to a
large pool of customers with an easy
payment/collection mechanism.
Similar to that is the new pools of
customers of digital platforms, say,
for example, Ola, Snapdeal, and
Swiggy. Ola Finance already services
INR 6 crore worth of insurance every
month in its trip policies. Similarly,
Grab has already underwritten more
than 10 million policies.
This trend will be facilitated by
multitudes of insurance API
companies in line with their banking
counterparts like Plaid and Galileo.
For example, Cover Genius is one
such company globally. It underwrote
~250 million worth of premium last
year. Koala from Indonesia is working
with Oyo to enable insurance for its
hotel rooms. In Indonesia, Pasarpolis
just raised another $50 million to
enable insurance players for digital
platforms. We are witnessing a few
such initial plays in India; however, I
expect this trend to gain force soon.
• More Power to Agents: The largest
source of insurance sales will remain
the agent force. However, players like
Turtlemint will enable agents to
become more efficient and sell more
and sell wide. The traditional
bancassurance model will also derive
several efficiencies through
digitization. SaaS solutions adopted
by insurers in India will be exported
abroad, like other B2B software
plays.
• Digitization of Core Stack of Existing
Insurers: Recently, Duck Creek got
listed in the US and was one of the
most successful tech listings in
recent times. It works toward
created for global markets coming
out of India. This will help the
traditional insurers react and react
fast.
• Challenger and Digital-First Insurer:
If the successful IPO of Lemonade is
to go by, we will see an increase in
the digital-first challenger insurance
companies. We already witnessed
that with Acko and Digit. Paytm’s
acquisition of QBE and Navi’s
acquisition of DHFL are clear steps
toward that direction. These new
insurers will challenge the status
quo, forcing the existing insurance
companies to increase the adoption
of technology/digital.
With so many tailwinds, insurance
automatically becomes a very
interesting area for early-stage
investing. Many VCs, including Nexus,
are highly active in the space and
keeping a lookout for the right team
and business model to fund. For
example, of late, SME Health Insurance
has seen a very keen interest from
investors in India, leading to investment
in companies like Onsurity. We can
expect the trend to continue with a
keen interest in spaces such as API
layers for insurance, digitization of
claims management (vehicle, health,
etc.), crop and livestock insurance, and
parametric insurance, among others.
Insurance is synonymous with safety.
As the world becomes more
individualistic and more adventurous,
the need for insurance will further
deepen. As new technologies evolve and
as the insurance industry adopts and
morphs itself into tech-first institutions,
we can hope that the access to
insurance will get democratized. This
will, for the first time, make insurance
accessible to people who never had that

Top Areas That Need To
Be Developed
Key
Benefits
Startups in India
(Illustrative)
AI/ML-based
underwriting/ risk
assessment
Improvement of loss ratio by
better risk assessment based
on more data and analysis
Not many;
shortage of
startups due to
regulation
Claims automation and
fraud prevention
Cost reduction, improved
efficiency, and customer
engagement
IoT-based preventive
insurance (motor, home,
and health)
Cost reduction and customer
engagement
Digital engagement
(distribution and
customer
service); distribution
(push sales)
Better customer service and
significant cost reduction;
reduced protection gap with
contextual push micro-policies and others
Insurance infrastructure
APIs
Easy consumption of insurance-
as-a-service in any app;
‘insurance in a box’ so that
anyone can sell or service
insurance
Health insurance
(employee and consumer
healthcare)
Group health insurance made
easy with modern digital
experience and competitive
price
Key Areas of Focus for InsurTechs
Here are some key areas that need to be developed for better adoption of digital
insurance in India:
• Insurance infrastructure and APIs that serve as an enabler for ‘insurance as a
feature,’ which is also termed ‘embedded insurance.’
• AI/ML-based underwriting assessment that can better assess the risk and improve
the loss ratio. Claims automation and fraud prevention for improving efficiency,
reducing cost, and mitigating risk.
• IoT-based preventive insurance that will result in proactive customer engagement
and premium & claims reductions for both insurers and insureds.
• The scope of IoT in Insurance goes way beyond telematics and customer risk
assessment. The advanced AI/ML and predictive analytics capabilities have the
potential to drive insurance towards a proactive prevention model. Several InsurTech
players are working to harness this power of IoT/AI.

Ecosystem Partnerships &
Collaboration
[Illustrative]
Collaboration history between insurance carriers and InsurTech startups is very nascent.
In the last two to three years, we have witnessed insurance companies setting up
accelerator programs to tap into the InsurTech ecosystem and help them accelerate or
co-develop products under their guidance. Also there have been some unique
partnerships , for example:
• Apollo Munich Health Insurance’s InspireNext was created in partnership with
MEDICI, with a view to support and collaborate with entrepreneurs that are driving
innovation in the FinTech/InsurTech ecosystem and leveraging their expertise for co-
creating solutions that can beneﬁt the company’s consumer base.
• In a first, HDFC Ergo and Tropogo partnered to launch 'Pay as you Fly' insurance for
drone-owners
• ICICI partnered with MobiKwik for a cyber insurance cover for MobiKwik’s mobile
wallet users (microinsurance category with ~ INR 50K sum assured) that can give
some safety net for new payment system users and help in promoting digital financial
inclusion.
Here are some other interesting partnerships that have been formed since 2014:

IRDAI’s Regulatory Sandbox
In 2019, IRDAI notified a regulation
to facilitate the creation of a
regulatory sandbox environment.
The move was aimed at three
aspects:
1. Developing the insurance sector
with innovation as the driving
force
2. Protecting the interests of the
policyholders
3. Fostering the growth of
innovative companies
IRDAI’s regulatory sandbox provides
a conducive environment to test new
insurance products, processes, and
applications that are not permitted
under the existing regulatory
framework. The initiative allows the
selected companies to test their
proposals on real audience under the
supervision of the insurance
regulator.
The regulatory body has already
completed the first three tranches of
applications. In the first cohort, 67
proposals across four areas,
covering health, non-life, distribution
development, and life insurance,
were approved.
The Insurance Regulatory and Development Authority of India
(IRDAI) has completed three tranches of InsurTech
applications for its regulatory sandbox’s first cohort and has
recently launched the application process for the second
cohort.
Health
Note: Illustrative only; detailed analysis in India InsurTech Report 2020.
NON- LIFE

To understand the impact of the regulatory environment on the growth of online-only
insurance players, we reached out to Acko General Insurance. Acko’s responses to our
questions were as follows:
What policy changes and new policies do you expect from IRDAI to fulfill the massive
insurance gap in the country?
Recent changes surrounding regulatory sandbox have been very encouraging. The
focus has been to make insurance more tech-oriented, efficient, and relevant to
consumers. There is a focus on product, distribution, and service simplification via
digital, which will increase the reach. We should see more changes in this direction.
According to the latest data from IRDAI, Acko has underwritten premiums worth INR
110 crore in FY 2021 up to August, which is 10% lower than the same period last year.
It looks like Acko has been less affected compared with other industries (50%–80%
hit) and players (within insurance) that have been impacted tremendously. Do you see
a very strong comeback in the second half of this financial year?
Auto is our core business. Our sales have picked up and are better than pre-COVID
times now because of the surge in digital adoption. Our direct-to-consumer has played
out well. On the claims side, lockdowns reduced vehicles on the roads, which benefited
us. This helps consumers as we are able to pass on the savings in pricing back to
them.
What impact has COVID-19 brought about on the near-term growth strategy of
insurers?
Motor insurance (the largest share of the general insurance market) has not fully
recovered from the COVID-19 impact. It will take some time for new car sales to get
back on track, and then we can expect the insurance sector to recover. COVID-19 led
car/bike sales to minimal during April–May 2020. While the production is getting back
on, it will take time for the demand to come back to normal. Demand for mid-size and
small cars is expected to go up as people may not use cabs for commuting for some
time. Owing to this dip in sales, the insurance industry has registered a hit on the
numbers. In addition, people have procrastinated their renewal of insurance. A large
part of the market is driven by feet-on-the-street, and thus, that segment has also
been impacted badly. Travel may continue to be affected, and that will impact travel
insurance. Health insurance has seen high demand and has been able to compensate
for other segment losses. It is expected that customers may prefer coming online for
insurance needs. Even insurers need to build capabilities to ensure that they are
tapping into the changes that the industry has seen due to COVID-19.
How did you manage to form many partnerships? Is this the main GTM (partners and
lower CAC) as opposed to selling directly?
This is a very interesting and evolving space. These partnerships help in creating very
novel products. As all these are digital platforms; they help us stay true to our DNA.
These products are small ticket-size products relevant for such a consumer base and
contextual to the services they avail on these platforms. Therefore, this does not
Role of Regulation and Impact of COVID-19

Emerging Opportunities
Bite-Size Insurance
With the increasing demand for
personalization services and products, the
insurance industry has doubled down on
the ‘bite-size insurance’ or ‘sachet
insurance’ where insurance companies
provided protection for smaller premiums
and reduced coverage. Bite-sized
insurance products can be majorly
classified into three categories:
• Need-Based Health Coverage: A lower-
priced product that covers a specific
ailment or a short duration would be a
more attractive investment.
• Event-Based Coverage that includes
some customer activity or event such as
travel insurance for flights, long-
weekend travel, or attending an event
with the risk of being canceled.
• Time-Based Coverage: Due to the
changing models of traveling, such as
ridesharing or vehicle sharing models,
the need for short-period insurance
protection is emerging.
Microinsurance
In February 2020, IRDAI invited
consultations on designing and licensing a
specialized category of ‘Standalone
Microfinance’ institutions. The offline
model of selling and servicing
microinsurance has remained a barrier to
its growth over the years. InsurTech has
the potential to solve this vital issue by:
• Reducing the cost of distribution
• Reducing operational cost by
automating management and servicing
• Reducing risk through better risk &
fraud assessment
These benefits can, in turn, be passed on
to customers as discounted premiums
prompting better inclusion. Some of the
examples in microinsurance include:
Group Health Insurance
Group insurance affordability has been a
huge challenge for MSME companies in
India. However, the same group health
insurance has suddenly become a new
arena for insurance players in India. The
group health insurance market in India is
expected to grow to INR 1 trillion by 2025.
Increasing interest towards this growth
pocket is also visible in digital first
InsurTech players Digit’s focus on Group
health insurance, and COVID-19 insurance
products. Digit recorded 11X YoY premium
growth (Aug 2020 data).
InsurTech players like Plum are working on
providing employers & employees flexibility
and transparency in pricing that translates
into group insurance affordability for small
companies as well.
Claims Management
Claims is one of the most critical aspects of
an insurance policy. A process that has
often been riddled with complexities,
ambiguities and dissatisfaction, there are
multiple problem statements with claims
management that are being addressed by
means of technology today. The key drivers
behind these solutions are increased
process efficiencies, better payout values,
faster SLAs and enhanced customer
experience and support.
There are several InsurTech companies
today developing platforms and tech-led
solutions that automate the claims process
by means of video, mobile, and self-service
options. They leverage technologies, such
as machine learning and robotics, to provide
cognitive learning systems for quicker
payouts. Through analysis of claim
histories, insurers can optimize the instant
payout limits and shorten the claims cycle
time, thereby enabling higher customer
satisfaction and reduced labour costs. Also
evolving are intermediary models that help
consumers maximise their payouts and at
the same time make the whole process
hassle free

Opportunities in Insurance Infrastructure APIs (1/2)
A niche business model that focuses on B2B offering of software and infrastructure
APIs to both distributors and insurance manufacturers serves as an enabler. Bengaluru-
based Riskcovry is playing in this specialized field and successfully growing its client
base. Currently, the company serves around 40 distribution partners/customers clients.
This fast-growing startup has already cracked into a super niche untapped market
opportunity in insurance infrastructure APIs. To understand why there are not many
such players in the market and what has ‘clicked’ for the startup, we reached out to
Chiranth, co-founder of Riskcovry.
There are not many Insurance infrastructure API companies in India. Is it one of the
innovation areas that was missed? Why it is an attractive opportunity now?
In terms of timing, even though payment gateways started coming to India only a few
years ago, payment gateways did exist outside the Indian ecosystem. The irony in this
space is that a lot of insurance work is happening simultaneously across the world, but
we do not see too many players undertaking insurance- as- a- service API-led
infrastructure for insurance distribution. Probably there are three or four names
globally–one in Europe, one in Australia, one in Southeast Asia, and one in the
US/LATAM. The whole concept that insurance product can be brought down to an API
call is fairly nuanced and new. People started doing this for one product–health
insurance or motor insurance. We think that this is the 21st century distribution model.
When you replace everything for a distribution partner and become the face of
‘everything insurance’, (we help with everything from product innovation to
commercialization, tech integration, channel product fit, and scaling the products with
other businesses and channels), that becomes a tall order for any company, let alone a
startup. The reason we can do it is that at the centre of everything we do are APIs
(product, data personalization, and product recommendation). When you keep that
infrastructure at the core, with full-stack API-led distribution, it becomes an attractive
new business model. In terms of the opportunity that we are seeing, it is hard to
comment why other people are not doing it. We can just say that we found a sweet
spot and doubled down on it where we have built around 20 products completely based
on APIs. That, in my opinion, is an interesting ‘tech meets business/insurance
distribution’ combination.
What is the potential market size and opportunity for this segment?
The total addressable market (TAM) of this model that we have created is upwards of
$3.5–$4 billion in India and pretty much the same outside India as well, depending on
which markets you look at. The total TAM for us is $7–$10 billion in the next three to
five years. So far, we have aggregated across close to 40 insurance distribution
partners and enterprise customers and they cut across 6–7 different industries, from
financial services to retail, digital, supply chain, financial inclusion, and LegalTech. We
think we can deliver insurance distribution use cases of any industry without much
customization, because we have developed, API’s as the center of everything in our
platform.

Opportunities in Insurance Infrastructure APIs (2/2)
What technical and operational challenges do you face in executing this model? What is
the level of maturity of the ecosystem to execute it easy and well?
The tech is hygiene for us, so the challenges are two-fold: top-down regulation risks
and bottom-up economic/pricing-related challenges.
As insurance is prone to massive mis-selling, it is highly regulated, probably more
regulated than any other financial service. To assist other organizations with insurance
distribution-at-scale, keeping the regulatory part of it completely kosher, requires us to
understand the domain and compliance really well.. While we want to make it as self-
serving as Stripe did for payments, insurance by definition is a push product, you need
to go through processes such as compliance and product commercialization on behalf
of distribution partners. This makes enterprise sales not as simple as payment
gateways but we fundamentally believe by way of our tech + license platform and
distribution partners’ experience with insurance distribution can be made jus as simple.
Thus, we do not see ourselves getting thousands and thousands of customers, we see
getting hundreds of large-scale customers.
The second challenge is bottom-up and pricing-related. The manufacturing side is yet
to see multiple precedencies where companies have delivered Y-o-Y profit by way of
their underwriting business alone for the last five years. There are one or two
manufacturers who are able to do so despite pricing pressures and distribution
limitations and relatively low consumer awareness. What we are trying to do is not
price our products/platform on a partner-to-partner basis but we have developed
pricing playbooks on a partner segment basis that allows us to be nimble like a startup
in terms of partner acquisition. We have partner segments such as banks, retail,
digital, brokers, payment providers and NBFCs etc, among others..
So as far as our growth is concerned, we are well positioned to navigate through these
operating bottlenecks by way of three T’s: our team, our technology, our timing.

Financing of Insurance Premium (1/2)
Insurance premium financing is a niche space in India’s InsurTech landscape, and it fits
somewhere at the intersection of insurance and lending. While this segment has existed for
long in the global market, Indian customers’ comfort with ‘buy now, pay later’ sort of
services is opening new market opportunities. To understand this space in detail, we
connected with Tim Mathews, Co-founder & CEO at Finsall Resources.
Here is what we learned:
Insurance premium financing has been in the market for decades. What are the current
market trends in this space, especially in the Indian context? Based on your decade long
experience, how do you see the current uptake of premium financing services in the
country?
Before we get into the trends, let us set the context of the market in which we operate.
Non-life insurance penetration in India has below the global average, and there are plenty
of datapoints out in the open and from IRDAI that establish this fact. As per the 2018–19
IRDA data, the global non-life insurance penetration is 2.78%, while that of India is 0.97%.
While there is a multitude of reasons for the low penetration, the gap that Finsall is bridging
is affordability.
The significant trend we see in India is the change in the newer generation's attitude
towards insurance, especially health insurance. Alongside that, the related trend in the
market we are seeing is the increasing appetite for ‘pay-as-you-go’ and ‘pay later’ services
from customers in metros as well as non-metros.
Both matured and maturing insurance markets have insurance premium financing around
the globe. We are tracking more than a dozen economies where premium financing is
prevalent. This sector is typically considered a low margin and stable sector. In a few
international markets, premium financing is the primary mode for payment of insurance
premiums, to the extent that governments also often explore this option.
With the new generation and first-time insurance buyers coming in, a better uptake is
definitely noticed.
What is the total addressable market in India?
Insurance Premium Financing has never taken off in the Indian insurance industry due to
various hurdles and regulations. Hence it is not easy to put a scientific number on the
market size. We also do not have any reports from IRDA or other insurance stakeholders in
the industry.
Going by the last annual IRDA 2018-19 report, the total insurance market in India is
approximately $99.8 billion, out of which there are many unserviceable products, customer
segments, and markets. In addition to that, the customer outlook towards Insurance in
India from different parts of the country is also unique because it is always looked upon as
a cost and not an investment. Based on our internal research and discussions with
insurance firms, we believe that the addressable market is roughly $10 billion consisting of
uninsured and underinsured customers. A significant segment of retail and SMEs customers
that don't have access to capital will appreciate this product.

Financing of Insurance Premium (2/2)
You are playing at the intersection of insurance and lending. Can you highlight some of the
key partners and the nature of partnerships between a premium financing company and
insurance or other InsurTech players that are shaping this segment?
Ours is a complex relationship that involves multiple stakeholders starting from government
departments, insurance & lending regulators, insurance firms, lending firms, insurance
intermediaries, InsurTech, and FinTech entities all the way up to the customers. Managing
all of these stakeholders on a constant basis is required for the seamless delivery of our
services.
Since we operate at the intersection of two highly regulated industries, our most critical
aspect is compliance with the rules and regulations laid down by both the regulators. On
that front, we are a part of the IRDAI Sandbox, along with a large insurance player, and we
are closely monitored by the regulator.
There are a few other insurance intermediaries that are addressing the issue of affordability
in a different way. Attempting to give a simplistic overview of the same would do injustice to
each of those approaches. But rest assured, the future of the insurance industry and all its
related growth drivers is definitely positive, and this space will see a lot of activity from
various stakeholders.

Leveraging the power of distribution to take microinsurance to
millions (1/2)
Ola’s bite-sized and microinsurance offerings in partnership at a low premium is the
perfect example of using the power of a large distribution network and product
innovation to enhance accessibility and affordability of insurance cover to millions .
Here is what the Ola Insurance team had to share with MEDICI Research Team
Apart from low premiums, what are the growth drivers for microinsurance (such as the
OlaMoney-Religare Health Insurance)?
We offer three distinct kinds of Insurance plans:
1. Bite-Size Insurance: On-the-go covers for when you are traveling, such as:
• Ride insurance (cover during your ride)
• Missed flight insurance (on airport rides)
• COVID-19 care plan (15-day cover + teleconsultation helpline)
2. Consumer Health Insurance: Covers your family's health with simple, pre-
underwritten products with no medical tests up to age 60, such as:
• Hospicash (with Religare)
• Super Top Up (with ManipalCigna)
3. Driver Insurance: Covers for gig workers, starting with our driver-partners to
protect things that matter the most, such as:
• Accident cover for drivers
• COVID-19 insurance for drivers
• Commercial motor insurance for drivers
• Monthly health insurance plans for drivers (with free teleconsultations)
Apart from low premiums, the key growth drivers for microinsurance are:
• Intuitive products that are easy to understand and have the simplest buying
journeys (five taps without medical tests).
• Short-term covers that can be switched on or off as per customers’ needs
(e.g., customers can switch off the COVID-19 insurance or driver accident
cover; switches off when they park their cards). This allows you to choose
covers on-demand when you need them the most.
• Unique covers that address customer anxieties at the right time. E.g., Offering
missed flight insurance when you book a cab to the airport.
• Personalization of covers to customer needs—offer a simple entry-level product
& then upsell custom covers depending on needs.
• Services such as hand-holding during claims, help in policy management, and
assistance services such as roadside assistance or teleconsultations.

Leveraging the power of distribution to take microinsurance to
millions (2/2)
Microinsurance is seen as one of the best catalysts for inclusion, considering India's
high insurance gap. Can microinsurance become the primary cover for a person/family?
Is it generally perceived to be a secondary cover considering the several limitations?
It may not be the full cover for the family's needs. But given that most customers find
traditional insurance plans too complex to understand, bite-sized plans can help bridge
the gap by introducing the customer to an intuitive product that is easy to understand
and buy. Then, based on a customer's comfort, the customer can be offered curated
add-on covers to suit their needs.
Ola has issued over 250million ride insurances by partnering with Acko. What has been
the impact of COVID-19 on bite-sized insurance products? What is the immediate
outlook?
We have sold over 450 million ride insurance plans, covering 3.5 crore unique
customers since inception. COVID-19 has positively impacted bite-sized health
insurance products, especially given the increased anxiety & awareness around health.
Many of our customers covered by their corporate medical cover have chosen to add
our OlaMoney Super top-up plan. This offers a cover of INR 20 lakh over a 1/2/3/5-
lakh deductible at prices starting INR 499 per annum. On the other hand, COVID-19
has negatively affected the motor insurance portfolio, but our recovery has been steep.
However, we've also seen a massive reduction in motor claims.

What’s Inside India InsurTech
Report 2020
RESEARCH METHODOLOGY
INTRODUCTION
• Introduction
• Stagnant Insurance Industry Needs a Digital Push
• Indian InsurTech Players Can Bridge the Gap
• Expert Opinion – Kayzad Hiramanek, Bajaj Allianz Life Insurance Co.
• Key Areas of Focus for InsurTechs
• Expert Opinion – Rahul Mathur, Founder at BimaPe
INSURTECH LANDSCAPE AND PARTNERSHIPS
• India InsurTech Market Landscape
• Industry Point of View – Turtlemint
• Ecosystem Partnerships & Collaboration
FUNDING AND INVESTOR ACTIVITY
• Quarterly Funding
• Stage-Wise Funding
• Segment-Wise Funding
• Key InsurTech Investors
• Expert Opinion – Anand Datta, VP at Nexus Venture Partners
KEY PLAYERS
• Policybazaar
• Acko
• Digit
• Other Key InsurTech Players
REGULATORY DEVELOPMENTS AND MARKET INFRASTRUCTURE
• Regulatory Landscape
• What Is Inside IRDAI’s Sandbox
• IRDAI Sandbox Applications
• Digital Infrastructure
• Industry Point of View – Acko General Insurance
EMERGING OPPORTUNITIES
• Bite-Size Insurance in India
• Microinsurance in India
• Industry Point of View – Ola Insurance
• Emergence of ‘Insurance-as-a-Feature’
• Industry Point of View – Riskcovry
• Industry Point of View – Finsall
INSURTECH FUTURE OUTLOOK

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About
MEDICI is the world’s leading FinTech Research and Innovation Platform. MEDICI
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on the platform, enabling FinTechs to scale and create global economic impact.
MEDICI is committed to supporting the complex financial services ecosystem and
enabling stakeholders benefit from the industry’s accelerated growth and global
impact.
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