India's insurtech sector financing projected to surpass $1 billion within the upcoming year, as per a report
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The Indian insurance sector is poised for a significant transformation, as revealed in the latest report titled "Reimagining Insurance: India's Leap into the Future of Insurance." This comprehensive study combines deep industry knowledge and insights from senior stakeholders across insurers, insurtech investors, and technology enablers.
According to the report, digital sales represent only 0.67% of new life insurance business in India. However, the digital channels are gaining traction, with over 90% of retail non-life claims expected to move toward real-time processing. The projected funding of around $1 billion in the Indian insurtech industry signals a strong belief in its long-term potential.
One of the key players in this digital revolution is Perfios, a global B2B SaaS firm founded in 2008. Operating in 18 countries, Perfios serves the banking, financial services, and insurance industry. Based primarily in India with expanding operations in Southeast Asia and other emerging markets, Perfios empowers 1000+ financial institutions and delivers 8.2 billion data points to banks and financial institutions every year.
Prasad Krishnamorthy, Head of Insurtech at Perfios, emphasized the need for digital innovation in the Indian insurance sector. He stated that it is projected that 80% of life insurance onboarding will be automated in India. Perfios' Insurance Operating System is enabling insurers to achieve up to 200% improvement in process efficiency and identify fraud, waste, and abuse.
The report identifies five key shifts: Insurer-led tech investments, journey-level digital transformation, public infrastructure and government support, dynamic distribution and data, and regulation. The Government and IRDAI's initiatives like NHCX (National Health Claims Exchange) and the upcoming Bima Sugam platform are laying robust digital rails for insurance innovation.
The Digital Personal Data Protection Act (DPDPA) is expected to reshape how insurers manage customer data and design consent-based experiences. The Indian insurtech industry is expected to surpass $1 billion in private capital investment over the next 12 months, indicating a positive outlook for the sector's growth.
Total insurance premiums in India reached Rs 11.19 trillion in FY24. However, insurance penetration dropped to 3.7%, with life insurance at just 2.7%, well below the global average of ~7%. Despite this, traditional agent-led distribution remains dominant.
The report examines how insurers are leveraging technology to build agile, inclusive, and future-ready business models. Perfios' online platform significantly accelerates access to credit and financial services for its clients' customers, contributing to the digital transformation of the Indian insurance sector.
As the Indian insurance sector embarks on this journey of modernization, it is clear that the future is digital. With the right investments, infrastructure, and regulatory support, India can reimagine its insurance sector and create a more efficient, inclusive, and customer-centric industry.
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