India’s booming online insurance market is drawing more investors, attracted by the subcontinent’s vast population, opening insurance market and widening middle class. The latest sign of the burgeoning market: the $18.9 million funding round for RenewBuy, a digital portal to shop for and compare health and motor insurance.
The second funding round was led by Indian venture capital firm Lok Capital and IIFL Asset Management. Amicus Capital, which led the previous $8.7 million round, also participated.
- India privatized its insurance sector in 2000, and now has the 15th-largest market in the world, according to figures reported in 2017 in a Knowledge@Wharton article. But Indians remain grossly uninsured at 3.9%, most of it life insurance, compared with a global average of 6.3%, the article said.
- That underinsurance, coupled with growing digitization as more Indians go online, presents a growth opportunity for digital companies like RenewBuy that make obtaining insurance a simpler and more efficient process.
- Rivals including Acko and PolicyBazaar have also drawn investor interest. Acko raised $65 million earlier this year, while SoftBank-backed PolicyBazaar raised over $200 million last year in a round led by Vision Fund.
- Karma Takeaway: Platforms like RenewBuy are using digital solutions to disrupt an antiquated and inefficient system, making it possible for India’s rising middle class to access health and motor insurance and shop for competitive rates more easily. With more than 650 million Indians expected to be online by next year, such solutions are poised to take advantage of the increasing digitization of Indian lives.