Online insurance space to hit Rs 600 bn premium revenues in 5 years

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The nascent online insurance segment is expected to grow exponentially over the next 5 years and touch almost Rs 600 billion on the back of expanding digital ecosystem.

Currently, the domestic online insurance space is a miniscule 2-3 per cent of the total insurance premium collection of Rs 3 trillion annually.

“Over the next 5 years, the net insurance premium revenue is pegged at Rs 6 trillion, of which the onlne insurance space is expected to comprise 10 per cent or about Rs 600 billion,” online insurance aggregator RenewBuy CEO Balachander Sekhar told Business Standard.

He claimed the growth in the insurance and online insurance spaces would emerge from both big cities and the tier-II and tier-III towns.

Sekhar said insurance penetration in India across different categories, including motor, life and health, was significantly lower than in developed economies, primarily due to lack of awareness and failure of insurance companies and agents to reach out to the people, especially in rural areas.

He said only about 70 million people of the total 1.25 billion population in India had taken any type of insurance. “Even if the bottom of the pyramid population, which has little disposable income for insurance cover, is spared, there is still a potential market of over 500 million people for the insurance industry in India.”

RenewBuy has drawn up a roadmap to onboard 100,000 digital insurance agents (partners) over the next 2-3 years, including 10,000 in Uttar Pradesh, which is a key market for the company.

“Currently, we have a network of about 11,000 partners, including about 800 in UP, which we would ramp up to 100,000 in coming years,” he added.

The company is also targetting to attain total premium collection of Rs 50 billion in the next five years from the current level of Rs 2.50 billion. “We are doing about 30,000 vehicle insurance policies monthly at present. In coming months, we would add other insurance products as well to our portfolio, including life and health for greater traction.”

Besides, the company has 24 offices in India, including 3 in UP at Lucknow, Kanpur and Varanasi, besides the network of digital agents in all key cities and towns.

According to estimates, there are more than 1.8 million cars and 12 million 2-wheelers on UP roads and the market is growing by 20 per cent annually. However, 10 million of these vehicles, roughly 25 per cent and 75 per cent of the cars and 2-wheelers respectively, are not covered with insurance.

“We want to leverage this huge untapped space through our digital agents and proactively reach out to prospective customers, who either due to lack of awareness or cumbersome paperwork shy away from procuring vehicle insurance,” he added.

Launched in 2015, RenewBuy ranks among the top two online insurance aggregators.