A new report by S&P Global Market Intelligence said Indian insurance technology startups have attracted USD 1.28 billion, or 35% of the total venture capital poured into the insurtech sector in the Asia Pacific region so far.
The report, quoted by local wire service Press Trust of India (PTI), has pegged India as the second-largest insurance technology market after China.
Out of 335 private insurtech firms in the APAC region, 122 companies have disclosed their fundraise, amounting to a total of USD 3.66 billion. Nearly half of them are headquartered in India and China, and have collectively attracted about 78% of the total investment. S&P Global expects the two markets will continue to command the lion’s share of investor interest on the back of their large and fast-growing insurance markets, the report added.
India, which boasts of being the world’s third-largest startup ecosystem, has at least 66 insurtech startups, of which two are unicorns—companies with a valuation of at least USD 1 billion. Earlier this year, Digit Insurance raised USD 84 million at a valuation of USD 1.9 billion. SoftBank- and Tencent-backed PolicyBazaar, India’s first unicorn in this sector, is looking at a public listing this year. According to news reports, Amazon-backed digital insurance company Acko could be the next insurtech unicorn, as it looks to raise USD 200 million.
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Just before the onset of the second wave of novel coronavirus in March, insurtech platform Turtlemint closed a USD 46 million Series D round from Jungle Ventures, while Riskcovry raised USD 5 million in Series A round from Omidyar Network India.
“Insurance technology investors are attracted to India since it is one of the fastest-growing insurance markets in the world,” the report said.
Insurance premiums in India summed up to USD 107 billion for the 12 months ended March 31, 2020, after growing at a compounded annual growth rate (CAGR) of 10% between FY15 and FY20, Sampath Sharma Nariyanuri, a fintech analyst with S&P Global Market Intelligence, told PTI.
S&P Global expects big tech giants like Tencent, Ant Group, Amazon, and Grab to influence the insurtech ecosystem in the APAC region as they play the roles of investors, partners, and competitors.
“While big techs are vying to become digital intermediaries in the insurance space, established carriers are building proprietary digital channels. Startups that assist both incumbents and big techs in making this transition, will likely emerge as winners,” the report said.