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
India Advanced
Markets
Emerging
Markets
Asia-
Pacific
World
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 the population.
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.
Illustrativeonly; 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
Typically in a traditional insurance product,
data collection and distribution 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 large
data scientists working on alternate data
sources.
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
digitizing the core stack (underwriting,
distribution, and claim management,
among others) of traditional insurers. We
can expect many more such solutions
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 safety
cover. This will also mean that we will have a
financial safety net in areas we never had
before. Overall, this will mean a much better
world. Keeping fingers crossed for some
exciting next few years in insurance!

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 require heavy decision-making. It helps in introducing insurance to
a larger audience base.
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.
In terms of opportunities for startups. This space needs probably 10 of us to help move the insurance
penetration needle. It is an ecosystem problem that needs an ecosystem solution, which means more
of us need to come in and compete to help move that needle.

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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MEDICI is the world’s leading FinTech Research and Innovation Platform. MEDICI is a partner
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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.
Website: www.goMEDICI.com | Twitter: @gomedici
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