India’s insurance industry is on track for significant growth thanks to an aspiring middle-class population and increased penetration of digital insurance over the next few years, a recent report by Redseer Consulting revealed. .
According to the report, innovations in digital technology have improved customer experience in the Indian insurance industry. That said, digital insurance penetration in India is only 2% compared to China (6%) and the United States (14%), the report notes.
The report mentions that the overall insurance market in India stands at $131 billion as of FY22, and by FY26, it will reach around $222 billion. The report also analyzed the Total Addressable Market (TAM) of different insurance categories in India.
It was found that life insurance accounted for about three-quarters of the market at $66.5 billion. Auto insurance came in second with a total addressable market (TAM) of $10 billion, followed by retail health insurance with $4.7 billion.
“Strict automotive regulations and a policy shift aimed at making India a digital economy have boosted digital car insurance gross premiums in India,” the report said.
New booming B2C model in India’s insurance industry
The report also mentions the rise of the B2C model in the insurance industry in India and the factors responsible for its growth. They are:
Considerable advantage: According to the report, this is an interesting segment, and lately it has seen a huge upside. Indeed, this segment has significantly lower claims risk due to direct customer interaction than is possible in other models. Apart from that, the persistent ratio for this segment is also higher due to better customer knowledge in the B2C insurance model.
“B2C brokers are using online marketing and asset-light models to get better margins. The experiences these new-era InsurTech models deliver to customers aren’t just digital, they’re delightful,” says Mrigank Gutgutia, Partner at Redseer.
Take advantage of technology: Report says some of the B2C models deliver an end-to-end digital experience through technology apps, app-based insurance claims support, proactive conversions using call centers, and visibility on several quotes, among others, that have helped customers. with extensive insurance experience.
Higher margin: In addition, B2C insurance brokers had significantly higher margins on insurance sold than other B2B2C insurance brokers. Indeed, while B2B2C insurance evolved faster due to the strong uberization of its agents, it had a relatively lower unit economics due to high agent payments.