India’s Insurtech Sector Achieves 12X Revenue Growth Over Five Years

India's insurtech sector has delivered 12 times revenue growth over the last 5 years, with cumulative funding surpassing $2.5 billion and ecosystem valuation over $13.6 billion, a report showed on Wednesday.

With more than 150 insurtech companies, 10 unicorns, and soonicorns, and more than 45 minicorns, the sector has seen 12 times increase in revenue over the last five years to reach $750 million, according to the report by Boston Consulting Group (BCG) in collaboration with the India InsurTech Association (IIA).

Most of the insurtechs at scale are in the aggregation and distribution legs of the value chain, accounting for over 80 per cent of the funding.

However, the opportunity to write and process the data and use the appropriate technology in underwriting and claims is extremely high, which can play a critical role in the continued growth of the insurance industry," Pallavi Malani, Managing Director and Partner, Lead-India Insurance Practice at BCG, said.

While the nation has made much progress, it still needs to boast increased penetration, especially in health insurance, where 45 per cent of medical spend still is out of pocket.

Multiple macroeconomic tailwinds are already driving growth in the industry. The aim is to achieve 100 per cent coverage for all citizens and reduce out-of-pocket medical expenses to less than 10 percent, the report said.

India would look to be the world's third largest market for insurance with over 10 companies in the global top 50 and more than 100 insurtechs operating at scale.

"With the aspirations of India becoming a developed economy, there are sizeable opportunities across three pathways: higher accessibility, increased awareness and trust, and enhanced affordability," said Vivek Mandhata, Managing Director and Partner at BCG.

As the landscape of insurtech evolves, more than 75 per cent are focusing on developing profitable operating models.

More than two-thirds are encouraging strategic partnership and geographic expansion.

"The continuously changing landscape of insurtech clearly outlines that collaboration is not just an option but a strategic imperative for achieving Viksit Bharat-the vision for 2047," said Subhajit Mandal, Cofounder at India InsurTech Association.