InsurTech: Inclusive Insurance in India
A special segment covering Indian InsurTechs that are focused on inclusive insurance.
With insurance penetration at ~ 3.69% (of GDP) in 2019 [1], India has a long journey ahead to plug a “protection gap” (courtesy of Swiss Re) of 92.2% [2] i.e. the average Indian household only has ₹ 7.8 in savings & insurance to cover each ₹100 in future expenditures were its primary breadwinner to pass away.
In an economy where private insurance companies can grow 22.5% p.a. in life [3] and >10% p.a. in general [4] by focusing on Tier 1 & Tier 2 cities; the need for specialist micro-insurance entities becomes even more pronounced.
First, let’s look at some of the InsurTechs in this segment:
Stage: Pre-Series A (they announced the raise today - 26.05) [5]
Focus area: Insurance for the rural & agrarian population; products include crop, livestock, health, motor and life insurance.
Disclosed metrics: $10M in GWP for FY 20 with 1.3M customers serviced totally (190K customers added in FY 20)
Watch out for: Their yield & weather-based insurance product (backed by appropriate reinsurance cover) [6]
Stage: Seed (they are raising as we speak!)
Focus area: (Micro)-insurance in West Bengal & adjacent states; currently focused on general insurance via a PoS (point-of-sale) model backed by a technology platform called BimaSaathi.
Watch out for: Their geographical expansion & agency platform build.
Stage: Series A ($5.5M) [7]
Focus area: Sachet insurance products for (semi)-urban economically weaker sections of society; their stand-out product is the Kamai Bachao Yojna (income protection programme for informal sector workers) [8] They’ve got a strong PoS-play via bicycle stores (for bicycle insurance) and medicine dispensaries (for vector-borne disease insurance products).
Watch out for: Moving beyond their staple of sachet insurance products into new LoBs (lines of business).
Whilst you’re here - you should check out the fantastic work done by UpLift Mutual - if you’re at all familiar with the “mutual aid” concept (which is dominating the discussion around “disrupting insurance”); UpLift Mutual would be an “OG” in the space alongside DHAN Foundation (who is working with IBISA Network for crop insurance mutuals in India).
Inclusive insurance in India stands out to me because of changes to proposed regulations:
a. The Micro-Insurance commission (summary infographic below)
b. The Arogya Sanjeevani Policy i.e. standardized health insurance product (summary infographic below)
The combined prospects of a standalone micro-insurance licencing framework (like the small ticket insurer in Japan [9]), expansion of the scope of micro-insurance products and (financial) investor interest in PoS/micro-insurance ventures means that the future is bright for inclusive insurance in India.
Hopefully, this short write-up on inclusive insurance provides some context to the opportunity that lies ahead in India. Please do let me know if you’d like to explore the subject in more depth (e.g. operating models, international case studies etc)
Looking forward to your comments, feedback and constructive criticism. Do share this on Twitter or LinkedIn if you found it useful!
If you could cover operating models and case studies, it would be fantastic. As someone who has been following your posts, I look forward to it. Keep up the good work :)