India’s Insurtech Industry: Driving Towards Viksit Bharat 2047 with Robust Growth and Innovation

The Indian insurance sector has emerged as a vital force in shaping a developed India under the “Viksit Bharat 2047” vision. Insurtechs are at the forefront, transforming the landscape with a 12x surge in revenues over the past five years, according to a new report by the Boston Consulting Group (BCG) and the India InsurTech Association (IIA).

Titled “India Insurtech Landscape and Trends: Pathways to Inclusive Insurance - A Vision for 2047,” the report highlights significant growth, challenges, and pathways for the Insurtech industry to ensure universal insurance access in India. Released at the India InsurTech Association Annual Event 2024, it sheds light on the critical role Insurtechs play in building a financially inclusive and resilient economy.

Insurtech Sector on the Rise

India now boasts over 150 Insurtech startups, including 10 unicorns and soonicorns, and 45 minicorns. The sector has attracted cumulative funding of $2.5 billion, with a total ecosystem valuation of $13.6 billion. Revenue growth, reaching $750 million, has been driven by the rapid expansion of larger Insurtechs, despite a global slowdown in funding.

“The Indian insurance landscape has matured significantly, with robust growth in Insurtechs. However, major opportunities remain untapped, particularly in underwriting and claims processing, which can further boost growth,” said Pallavi Malani, Managing Director and Partner, Lead - India Insurance Practice at BCG.

Challenges and Opportunities

Despite progress, insurance penetration in India remains low, especially in health insurance, where over 45% of medical expenses are still out of pocket. To address this gap, the report identifies three critical growth pathways:

1. Accessibility: Leveraging technology to expand insurance through partnerships with corporates, SMEs, and new channels in Tier 2 and 3 cities.
2. Awareness and Trust: Enhancing public understanding of insurance, offering broader health and wellness coverage, and improving customer engagement through AI-driven solutions.
3. Affordability: Using data analytics to design flexible, personalized plans and innovative payment models.

Viksit Bharat 2047 Vision

The report emphasizes insurance as a cornerstone for India’s ambition to become a developed economy by 2047. The goal includes 100% insurance coverage, reduced out-of-pocket medical expenses to below 10%, and positioning India as the world’s third-largest insurance market.

“To achieve Viksit Bharat 2047, we must focus on building accessible, affordable, and trustworthy insurance solutions,” said Vivek Mandhata, Managing Director at BCG.

Health Insurance: A Key Driver

Health insurance, the fastest-growing segment, presents a significant opportunity. Currently, only 39% of India’s population is insured, and penetration remains at a modest 0.31%. Insurtechs are poised to expand access through new distribution channels, including partnerships with healthcare providers and leveraging AI tools to simplify processes.

Collaboration: The Future of Insurtech

Over 75% of Insurtechs are now prioritizing profitability and sustainable growth, with strategic partnerships becoming a key focus. The report highlights collaboration between startups, insurers, healthcare providers, and regulators as essential to achieving the vision of inclusive insurance.

“Collaboration is imperative to achieve Viksit Bharat 2047. The India Insurtech Association remains committed to fostering partnerships across the ecosystem to realize this vision,” said Subhajit Mandal, Co-founder of IIA.

About Boston Consulting Group (BCG): BCG partners with global leaders to drive business transformation and societal impact through innovative strategies and technology.

About India Insurtech Association (IIA): A non-profit entity dedicated to promoting technology adoption in India’s insurance industry through collaboration and innovation.