India’s insurtech sector raised US$ 2.5 billion in funding

Over the years, cumulative funding for the Indian insurtech industry has exceeded US$ 2.5 billion, raising the total ecosystem valuation to US$ 13.6 billion. A report by Boston Consulting Group (BCG) and the India InsurTech Association (IIA) predicts that the sector will attract more investment, fueled by significant growth opportunities. India is home to around 150 insurtech companies, including 10 unicorns and over 45 “minicorns.”

According to Boston Consulting Group (BCG) and India InsurTech Association (IIA) report, the Indian insurtech sector has raised US$ 2.5 billion in funding over the years and is anticipated to attract more investment going forward. The country’s Insurtech ecosystem is valued at more than US$ 13.6 billion. 

Indian insurtech funding fell by 40% year-on-year (Y-o-Y) to US$ 300 million in 2023, down from US$ 500 million in 2022, amid a global funding decline, the report noted. On a global scale, insurtech funding dropped by 27% Y-o-Y, falling from US$ 7 billion in 2022 to US$ 5.1 billion in 2023.

The country is home to around 150 insurtech companies, including 10 unicorns and 45 “minicorns.” Despite a global slowdown in insurtech funding, India’s sector has remained resilient, with revenue increasing twelvefold over the last five years to US$ 750 million. The sector’s growth is largely driven by the expansion of larger insurtechs and a focus on demand generation and distribution, which account for more than 80% of the funding.

Although the majority of insurtechs operate in aggregation and distribution, there are significant opportunities for innovation in underwriting, claims, and servicing. The report highlights that the Indian insurance industry is positioned for continued growth, with macroeconomic trends supporting this development.

India is striving to increase insurance penetration, particularly in health insurance, where 45% of medical expenses are still out-of-pocket. The goal is to achieve 100% coverage for all citizens and reduce out-of-pocket medical costs to below 10% by 2047.

India also aims to become the third-largest insurance market globally, with over 10 companies in the top 50 and more than 100 insurtechs operating at scale.