BCG：India-insurtech-landscape-and-trends-2022_70页_38mb

India InsurTech Landscape and Trends Summary

Core Content

The India InsurTech landscape is experiencing rapid growth, with a significant increase in funding and innovation across the insurance value chain. The industry is evolving to meet the needs of new customer segments, enhance customer experience, and leverage data and analytics for operational efficiency and personalized offerings.

Main Points

Funding Trends

• Global Growth: Insurtech funding globally has grown 7 times in the last 5 years, with continued momentum even during the pandemic.
• India's Momentum: Insurtech funding in India has doubled in the last 2 years, reaching $800–900 million in 2021, and has shown a 2-year CAGR of 121%.
• Unicorns: As of 2021, India has 2 Insurtech unicorns: Acko and Digit Insurance.
• Product Line Funding: General insurance has the highest funding, followed by multi-line, with a significant portion of the funding directed towards B2C models.
• Global Unicorns: 22 Insurtech unicorns emerged globally in 2021, with the United States leading the count.

Industry Perspective

• New Customer Segments: Emerging segments include Tier 2+, women, and SMEs. These segments are showing a shift in preferences, focusing on experiences, healthy living, and personalization.
• Distribution Penetration: Increasing distribution reach is critical to drive further penetration. Insurtechs and insurers are focusing on digital-first and seamless omnichannel experiences.
• Customer Experience (CX): Enhanced CX is a key differentiator. Insurers with better CX are seeing higher customer loyalty, growth, and profitability.
• Data and Analytics: Data is becoming a core capability for the industry, with AI and analytics playing a crucial role in underwriting, claims, and customer service.
• Health Insurance Focus: The National Health Stack is expected to significantly transform the health insurance landscape, enabling a more integrated and efficient ecosystem.

Key Themes Shaping the Industry

1. Emergence of New Customer Segments

   • Tier 2+ cities are becoming more affluent, with over 115 cities expected to have more than 40% affluent and elite households by 2028.
   • Women are becoming key decision-makers, with 54% of purchasing decisions made by them.
   • SMEs are a major growth engine, with a focus on affordable and customized insurance solutions.

2. Enhanced Distribution and Reach

   • Digital-first models and partnerships are key to expanding distribution.
   • Direct-to-customer (D2C) and digital-native models are accelerating the penetration of insurance products.

3. Customer Experience

   • CX is now a critical success factor, with insurers needing to offer seamless, personalized, and frictionless experiences.
   • Tools like AI, automation, and omni-channel orchestration are being used to improve CX.

4. Data and Analytics

   • Analytics are driving operational efficiencies and enhancing pricing models.
   • Use cases such as churn prediction, fraud detection, and personalized offers are showing significant impact on business outcomes.

5. Health Insurance and the National Health Stack

   • The National Health Stack is expected to streamline health insurance operations and provide rich insights for better pricing and offerings.
   • It aims to become a global standard, similar to UPI, by integrating health data and enabling a holistic health and wellness ecosystem.

Key Players and Initiatives

• India InsurTech Association (IIA): A not-for-profit association that fosters collaboration among startups, insurers, and policymakers. It has grown to over 110 members in less than 18 months.
• Partnerships: IIA has formed partnerships with IAI, NIA, GIFT City, and BIMTECH, and is collaborating with global insurtech associations.
• India Insurtech Stack: A planned initiative to identify digital highways for the insurtech value chain in India.
• Digital Ecosystems: Insurtechs and insurers are leveraging digital ecosystems and partnerships to create innovative solutions and expand their reach.

Conclusion

• Collaboration: Continued collaboration between insurers and Insurtechs is critical for the industry's growth.
• Digital Transformation: Digital and data capabilities are now table-stakes, with AI and analytics playing a central role in driving innovation and efficiency.
• Future Outlook: The Indian InsurTech landscape is expected to see more real business value creation, with the National Health Stack leading the way in health insurance transformation.

Appendix: Key Players in India InsurTech

• Insurers: Bajaj Allianz General Insurance, Aditya Birla Health, PNB MetLife, etc.
• Insurtechs: Onsurity, Exegesis, Riskcovry, eBaoTech, Skaleup, OneAssure, Aureus, etc.
• Distribution Players: Marsh, Prudent, ArrowRe, etc.

Impact of Analytics

• Revenue Boost: 20–50% increase in cross-sell and upsell due to personalized next best offers.
• Churn Reduction: 5–10% uplift in customer retention by identifying high-risk customers.
• Underwriting Excellence: 1–3% uplift in topline through indexed pricing and risk prevention.
• Claims Excellence: 25–50 bps reduction in fraud and adjudication costs.

National Health Stack Components

• India Stack: Facilitates digital services using Jan Dhan, Aadhar, and Mobile.
• Coverage and Claims Platform: Supports large health protection schemes.
• Electronic Health Registries: Single source of truth for health data.
• Health Wallet: Enables reward points for health and wellness purchases.
• Value-added Health Services (VAHS): Includes wellness, fitness, diagnostics, and ancillary services.
• Open Health Services Network: Integrates telemedicine, outpatient, and inpatient services.

Future Opportunities

• Embedded Insurance: Offers a solution for low-ticket products, making insurance more accessible.
• Operational Efficiency: Leverage data to drive automation and reduce manual processes.
• Personalization: Meet customer expectations similar to those of tech disruptors like Uber and Amazon.
• Health Ecosystem: The National Health Stack is expected to support a comprehensive health and wellness ecosystem.

Summary of Key Implications for Stakeholders

• Insurers and Insurtechs: Need to innovate across all key themes to stay competitive.
• Investors: Continued interest in Insurtech funding is expected, with a focus on B2C and general insurance.
• Policymakers: Should support the development of the National Health Stack and other enablers to drive growth and innovation.
• Consumers: Are becoming more tech-savvy and expect seamless, personalized, and efficient insurance experiences.