“We believe that the Indian insurance market continues to remain massively under-developed and Policybazaar is uniquely positioned to dramatically increase the adoption of insurance products in the country,” the fund house had said.
Not only PolicyBazaar, a host of other companies offering insurance products in digital platforms have raised money from investors in the last one year.
For example, Amazon recently led a funding round that raised $12 million in additional capital for digital insurance startup Acko. Apart from Amazon, ChrysCapital and N R Narayana Murthy-backed Catamaran Ventures also invested in Acko, which provides insurance products specifically for e-commerce, ride-hailing, and online travel sectors.
Similarly, Coverfox is another online insurance marketplace which had raised Rs 1.44 billion as part of series C funding from global funds such as IFC, Transamerica, AIF partners, Accel and Catamaran Ventures. The company, which sells insurance products on its online platform, also provides claims assistance to customers.
Insurance startups like Toffee are all set to disrupt the traditional business model of the insurance industry with their innovative, customised product offerings. The company sells insurances in the form of bite-sized ‘toffees’ which range from a dengue specific plan available at just Rs 682 for a full year to a daily commute insurance which protects against smaller injuries such as fractures or bleeding due to accidents while commuting to work or home.
Toffee recently raised
$1.5 million in seed funding from Kalaari Capital, Omidyar Network and Accion Venture Lab. The company expects to use these funds to expand its team and build its product portfolio which will soon sport a breast cancer insurance as well as a smoker’s insurance specifically to cover against lung and other cancers for those addicted to smoking.
“We invested in Toffee as we see a huge opportunity in the microinsurance space. Also, the product offerings of Toffee are quite unique in a way that they offer a specific healthcare product like a dengue insurance to consumers instead of a traditional comprehensive health policy, which usually comes up at a much higher premium,” said Anuradha Ramachandran, Director (Investments) of Omidyar Network.
She also said that the Toffee’s business model was very much scalable and the fund house would like to participate in company’s growth story in future.
While the sector is expected to see further traction in coming months, there are many other venture firms who are waiting see a couple of success stories in this space before putting their money. “We see a lot of opportunities in the insurance sector and are currently evaluating some projects. However, it’s our belief that anything related to insurance business should have the ability to scale up in the future and there is need to have a change in overall consumer behaviour for making such propositions profitable,” said Sripati Acharya, co-founder of Prime Ventures.