India InsurTech Primer

Race for digital distribution and product innovation in an

underpenetrated market
November 2022
Digital Practice Newsletter
Private and Confidential 1
Contents Note to readers

Hello Readers,

The Insurtech industry in India is seeing strong momentum

06 Industry Overview across all parts of the industry value chain. With insurance
market (gross premium) poised to grow to $520 bn by FY30 from
$100 bn currently, Insurtech offers large opportunities. New
business models are emerging across the value chain, right from
15 Competitive Landscape
product distribution to providing enabler services.

In this newsletter, we provide an overview of the industry size,

18 Key Trends – Disruption across the value chain segments, key trends, competitive landscape. We also cover
global trends and key transactions in the Insurtech space over
the past 18 months.

41 Global Trends Digital Practice Team

Srikanth Kannan Avni Vira

Director Vice President
47 Deal Activity
Pratik Agarwal Deepak Kumar
Vice President Associate

58 o3 Capital
Sanket Mehta Siddharth Tripathi
Associate Associate

Private and Confidential 2

o3 Capital Digital Practice - Strong track record across various digital & new age
businesses (1/2)

z z z z z

Miko acquired Square BSC raised funds from PharmEasy Redcliffe raised $61Mn AgroStar raised
Off Malabar acquired Medlife from LeapFrog fund from Accel,
IDG

AI Robotics ConsumerTech HealthTech HealthTech AgriTech

z z z z z

BillDesk acquired Chillr acquired by Chai Point raised funds Zomato acquired Tea Box raises funds
JetSetPay Truecaller from Eight Roads TongueStun from RB Investments,
Ventures Accel Partners, DBS

PaymentsTech FinTech ConsumerTech FoodTech ConsumerTech

Private and Confidential 3

o3 Capital Digital Practice - Strong track record across various digital & new age
businesses (2/2)

z z z z z

XSEED raised Big Basket acquired PharmEasy MedPlus raised from TPG Growth
Series B funding Delyver acquired Aknamed Warburg Pincus & invested in API
from Verlinvest Premji Invest Holdings

EdTech FoodTech HealthTech HealthTech HealthTech

z z z z

Medwell Ventures Indegene Lifesystems

Chillr raised funds Quikr
raised funds from acquired
from Sequoia Capital acquired Hiree
Mahindra Partners & Encinal
Eight Roads Ventures

HealthTech FinTech HealthTech B2B Tech

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Executive Summary

Insurance in India is underpenetrated and at the cusp of disruption, led by significant untapped opportunities and innovative business
models – poised to see growth in funding and is expected to reach a $520bn market size by 2030

Insurtechs are expanding beyond discoverability, tapping into opportunities across whitespaces in the value chain; Shift
in focus from distribution to availability of data for underwriting innovation and risk-reward sharing

Web-aggregators – one of the earliest segments that dominated the space, are transitioning to brokers

Digital-first insurers are disrupting the traditional legacy insurance players, with innovative underwriting and
better risk assessment

Rise of the hybrid omnichannel model - Point-of-sales Person (PoSP), online selling & offline distribution

Emergence of Healthcare as a Service for Corporates, offering one-stop health benefits platform; rise in bite-sized
insurance catering to a very specific need or context

Emergence of National Health Stack expected to transform health insurance, enabling end-to-end health and wellness
ecosystems

Globally, players are moving away from being pure distributors to full-stack insurance providers; players creating a health ecosystem
to become a one-stop shop for customers

Private and Confidential 5

 Insurance Sector in India

A ~$520bn market opportunity, currently at an inflection point

Insurance market in India remains underpenetrated and underserved, leaving significant
headroom for growth compared to global standards…

Penetration (%) (Life + Non-Life) Density (USD) (Life + Non-Life)

10,900
12%

7,270 ~150x
7%
  
4%
+8% 3% ~100x
74

India US + Canada Global Average India US + Canada Global Average

Life Non-Life Life Non-Life

  3.4% 9% 10,300 10,700

+0.3% 3.1% +0.6% 
2.8%
  ~563x
 5,392
+3%% 4% ~187x
+8% 
1,872
1% 
55 19 ~283x
~34x
India US + Global India US + Global India US + Global India US + Global
Canada Average Canada Average Canada Average Canada Average

Source: IRDAI; Penetration denotes total premium to GDP; Density denotes ratio of premium to total population; Numbers as of FY21

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…poised to grow at a CAGR of ~18% to a market size of ~$520bn

Premium Underwritten (%)

Life Insurance by Insurer

Life

Private LIC
USD bn
Sector 66%
34%
New
Other Renewal Business
520
Motor 55% 45%
27
Health 35
33
Life General & Health Insurance by Insurer

Stand-alone Specialized
~18% Health Insurers Insurers
CAGR 8% 5%
425
Non-Life
101 PSU
Private 39%
48%
76 Others Motor
32% 36%
FY21 FY30P
Travel Health Insurance by Type
0.4% Governement
Personal Business
Accident Health Individual 10%
3% 29% business
39%
Group
Business
51%
Source: IRDAI; PB Fintech DRHP

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Insurance - at the cusp of digital disruption across the entire value chain…

Insurance Value Chain

Underwriting and Marketing, Sales & Servicing & Policy
Product Development Claims Management
Pricing Distribution Administration

✓ Automated Demand ✓ AI/ML predictive ✓ Automated targeted ✓ Internet Aggregation ✓ Digital H2C interface
Analysis & Insights for underwriting Campaigns
✓ Digital Payments ✓ Automated damage
NPD & Use of Big Data
✓ Use of loT, Telematics ✓ Digital Self Service evaluation
✓ RPA and automated
▪ New Product data for dynamic pricing
✓ Automated policy actioning of requests ✓ Data Analytics; Auto
Development
 Manual Underwriting & recommendation Fraud Detection
✓ Customer Support using
▪ Regulator Rating process
▪ Smaller salesforce & CRM chatbots ▪ Claim Settlement &
 Traditional Market  Pre-fixed slab-based tool integration Disbursement
▪ Customer Support with
Research pricing
▪ Large salesforce & CRM large call centers  TPAs
software
 TPAs  Claims Handlers
 Traditional Marketing
 Traditional Payments  Fraud Detectors
 Agents / Brokers
 Manual Policy
Management

✓ InsurTech Innovations Value chain components that will sustain  Value chain components disrupted by innovation
Improvement in TAT & overall customer experience due to innovation in underwriting, servicing and claims management
Source: Navi DRHP

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…with players innovating across all the stages

Product Development Distribution Servicing/Enablers

Web Aggregators

Life
Claims
B2C
Broker

Digital B2B2C
Non Life
Manufacturers PoSP / Hybrid

B2B2C
Group Insurance
Analytics
Life & Non Life

B2B2C
Embedded Insurance

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Digitally sourced premium by the InsurTech players at ~$2.5bn, showing rapid growth and
expected to reach ~$8.8bn and ~$30.0bn by FY25E and FY30E respectively

Overall Insurance Penetration Digital Manufacturers Web Aggregators/Digital Brokers

% $bn $bn
7.5
22.4
6.0%

4.1%  
+33% +26%

2.6%

7.1
 1.8 
 
+43% +36%
+61% +62%
2.1
0.4
0.0 0.5

FY21 FY25E FY30E FY18 FY21 FY25E FY30E FY18 FY21 FY25E FY30E

Source: IRDAI, o3 Estimates; Penetration denotes total premium to GDP; Density denotes ratio of premium to total population; Numbers as of FY21; growth rates are CAGRs

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Players are expanding beyond discoverability and listing, tapping into opportunities
across whitespaces
Insurance underwriters/manufacturers

▪ Digital insurance company,

▪ Offering competitive auto, travel, ▪ Digital first general insurance
providing general insurance
property, and health insurance provider
products

Health-related InsurTechs

▪ Group health insurance solutions ▪ Subscription based health benefit ▪ Subscription-based health-
to SMEs and start-ups plans for individuals & businesses insurance policies

Bite-sized or gig-economy focused insurance

▪ Serves gig and essential services
▪ A micro-insurance company
▪ A gig-economy focused InsurTech workers to smooth uneven cash
supported by multiple traditional
player flows, and access savings and
insurers
insurance

Analytics and API solutions

▪ AI-based self-service chatbot, AI-based workflow automation,

▪ API-driven “Insurance-in-a-Box" allowing any organization to
and intelligent lead management services offered to traditional
offer any insurance product from any insurer
insurers

Claims management

▪ Tech-backed end-to-end management solution for hospitals to

▪ Online health insurance claims management for individuals
process claims

Source: Chiratae Ventures / EY report, 2022. Private and Confidential 12

Shift in focus from distribution towards underwriting innovation and risk-reward sharing
driven by higher data availability (1/2)
Shift in focus

✓ Firms are gradually coming up the curve with a greater focus on other value chain elements – originally more focused on distribution innovation

✓ Insurance players are likely to break the silos of distribution and manufacturing and collaborate for innovative risk reward sharing models, as has been
witnessed in lending

▪ Developing new usage-based pricing models and improving claims processing

efficiency
Pricing

▪ Utilizing AI/ML, wearables (GoQii), telematics, and behavioral economics to offer

personalized insurance policies, speed up enquiry resolution and improve the client
buying experience
IoT

Source: Chiratae Ventures / EY report, 2022.

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Shift in focus from distribution towards underwriting innovation and risk-reward sharing
driven by higher data availability (2/2)
Data fueling underwriting innovation

✓ Using data from third-party data providers and IoT devices to enable innovation across multiple insurance products, focusing on two important factors: optimal
pricing and increased risk prediction

▪ Determining optimal premium pricing based on driving habits, by collecting consumer

data using IoT, AI/ML and telematics
Auto

▪ Leveraging customer data and historical medical records, for accelerated

underwriting, including determining premium rates
Life

▪ Offering premium discounts to customers indulging in more health-appropriate

behavior, adopting a preventive health approach, with data gathering enabled
through IoT devices such as fitness trackers and customer’s health records
Health

▪ Providing accurate insurance pricing based on risk insights, leveraging technologies

such as satellite imagery, IoT and weather-risk modelling
Parametric

Source: Chiratae Ventures / EY report, 2022.

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 Competitive Landscape

Players with specialized offerings spanning across the entire value chain
Players spread across a range of categories, with strong plays across key themes

Total Funding -> >$10 mn (Select Players) <$10 mn (Select Players)

01 Brokers

02 Aggregators

03 Digital Manufacturers

Health Benefits
04
Platforms

05 Sachet Insurance

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…with a range of players leveraging data, to drive operational efficiency and enhance
pricing proposition…
Total Funding -> >$10 mn (Select Players) <$10 mn (Select Players)

01 Analytics

02 Claims

Underwriting & Risk

03
Assessment

04 Sales

05 Policy Administration

06 Product Management

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 Key Trends

Multiple innovations and disruptions at play across the key themes

 1 Web aggregators – the earliest sector that dominated the InsurTech space…

Web aggregators compile and provide information about various insurance policies of companies on a website and gets paid a fixed charge for
listing of insurance products as well as when it converts leads for insurers

Key Players

Aggregator tries to convert lead

Aggregator is paid a
fixed amount per
product; gives lead to
the insurer

Prospective Visits website Web

Insurer
Policy Buyer Aggregator
Compares policies
Web aggregator
gets paid $$

Buys insurance from

web aggregator’s platform

Total 27 players with IRDAI

Policybazaar commanded a dominant 93%1 market share – Gave up its license in 2021 to become a broker
Aggregator license

Note: 1By number of policies sold among all online insurance distributors

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 1 …is now seeing some key themes in play
Web Aggregators
transitioning to Brokers
✓ Policybazaar gave up its
aggregator license to become a
broker in 2021
✓ Broker license gives access to
venture into segments like
claims assistance, offline
services, and establish Points
of Presence network
Large brands moving away
from Web Aggregators
✓ Lot of mis-selling, led to brand
dilution and exit of many large
brands from aggregator
platforms
✓ SBI Life & LIC with 55% of life
insurance market (individual
premium) are currently not
active on web aggregator
platforms
High Take Rates despite
weak business quality
✓ Commission to web aggregators
are increasing, making up 1.5 -
3.0% of their overall
commission outflows in FY21
✓ Quality of business has not
kept pace with the high
commission payouts
Smaller players relying more
on aggregator
✓ Preferred channel for the mid-
tier Insurer which lack eco-
system support without a
banking parent/financial group
backing or a large agent
network
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 2 Emergence of Digital First Insurers – disrupting traditional insurance business…

Digital First Insurers underwrite insurance policies and sell them through their own distribution networks

Own Tech Customer Experience

In-house build tech stack, Micro Entire journey for full customer Key Players
services architecture for scalability, experience control
frequent app version launches

Operations Product Innovations

Inhouse distribution, Customized policies with
collections, customer support, efficient pricing, using
and claim processing customer data and analytics

Lower premium
Direct distribution enables saving on
commissions that are as high as 20-30%
that go to Broker/Agents/Aggregators

Underwriting + Selling + Distribution

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 2 …have shown agile growth, scaling up rapidly in last couple of years

Revenue
16% 21% 3% 29% 20% 13% 17% 4% 73% 5% 11% 63% 21%
CAGR (%)

180

137 137

115
107
95 93
FY22 86
Gross Written
Premium (INR bn)
53 48
42

10
2

General Insurance
Companies

Net Claims Ratio 75% 84% 73% 87% 69% 78% 74% 94% 74% 70% 69% 98% 64%

Net Commission Ratio 5.0% (3.9%) (1.2%) 13.8% 7.0% (4.0%) (3.6%) 6.4% 3.8% 3.4% 1.0% (6.2%) 1%

Combined Ratio 109% 107% 100% 118% 103% 108% 115% 117% 113% 111% 108% 171% 154%

Solvency Ratio 2.5 1.6 3.4 1.7 2.0 1.7 1.9 1.7 2.0 2.0 1.7 1.7 1.9

Retention Ratio 75% 55% 56% 94% 79% 50% 49% 68% 79% 74% 63% 60% 89%

Claims Settlement 78% 99% 99% NA 97% 98% 96% 100% 95% 95% 92% 96% 97%

Policies Issued (mn) 29 9 20 8 NA NA 9 10 8 12 4 NA NA

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2 Best-in-Class metrics, driven by digital underwriting, offering better risk assessment

Combined Ratios of Health Insurance of select private insurers in India

Expense Ratio Commission Ratio Claims Ratio
134%

134%
121% 118% 120%
117% 99%
109%
103% 101%
101%
93%

77% 94%
92% 87%
77% 91% 98%
78% 79% 67%
64%
49% 40%

3%
1% 6% 9% 5%
4% 5% 1% 1% 2% 1%
36% 35%
26% 23% 24% 28% 26% 25% 24% 25% 29%
22%

FY19 FY21 FY19 FY21 FY19 FY21 FY19 FY21 FY19 FY21 FY19 FY21

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 Perfecting offline channels along with technology enabled seamlessness has been the
2
recipe for success
Insurance primarily being a push driven business, offline distribution strategy along with tech has been the recipe for success

1 High share of offline (incl. brokers & agents) in distribution - 75%+

Digit’s FY22 Channel Mix by GWP
Rapid Scale-up

Others
Direct 2%
25%
Agency
9th
Largest GI company in in India by GWP
16%

Brokers
57% 72%
Revenue CAGR

33k Key Distribution Partners, including c.31k POSPs as of FY22

2.3% / 4.5%
Market share for total / motor
Digitally enabling channel partners via API integrations, chat-bot assistance insurance1
2
and integration with messaging tools

3 Cost-efficient way of onboarding and engaging with channel partners

Note: 1 Non-Life and motor insurance market share by GWP as of FY22

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3 Rise of the Hybrid model - Point-of-sales Person (PoSP) & online selling & distribution

PoSP is an individual who has minimum specified qualifications and has undergone training to be able to sell an insurance policy

The concept of PoSP was introduced in 2015 by the IRDA

Policies Sold Responsibility Commission

✓ PoSPs typically sell pre-
underwritten and simple
insurance policies
✓ Policies include motor,
travel and personal
accident insurance
✓ Both insurance and ✓ The commissions are shared
insurance intermediaries between the PoSP and the
may use a PoSP and the entity employing the PoSP
same entity is responsible
for conduct of the PoSP,
according to IRDA

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3 Omnichannel in insurance - a key enabler for future growth

Customers
✓ Omnichannel experience (trust of the
Digital Assist local agent)
✓ Product discovery & selection

Customer Digital broker connects

compares options Omnichannel PoSP & Customer PoSP

Benefits
online Experience ✓ Additional leads
(Search Online, Buy Offline) ✓ Digital experience of relationship & lead
management

InsurTech
✓ Higher lead conversion (thereby
lowering CAC)
Customer/PoSP completes transaction
on digital broker platform ✓ Addressable market increases to offline
customers (search offline, buy offline)

Private and Confidential 26

 PoSP agents have grown >3X over the last three years, compared to flat growth on
3
individual agents
PoSP agents comprise ~25% of the agents servicing the Indian market, and are expected to grow at 16% CAGR

mn
2,40,000 8.3
CAGR 85%

5.4

2,690

80,000
2.4

50,000
30,000

0.0

FY16 FY19 FY20 FY21

Major
Product

Revenue Health Life Motor Motor Motor Life

Contribution 60% 92% 70% 60% 80%

Private and Confidential 27

 3 Brokers vs Aggregators/Corporate

Process Brokers Web Aggregators Corporate Agents Breakup of Premium by Channel (%)
Remuneration for Lead generation and
 ✓  1% 17%
Product display?
Off-line policy distribution purchases
✓  
allowed?
Life - NBP 29%
Offline PoSP network allowed? ✓  ✓ 52%
Allowed for both Allowed only for Allowed for both
Policy renewal commission allowed? 1%
life and non-life non-life life and non-life
Claims management/settlement services
✓  ✓
mandatory? 11%
2%
Online policy distribution purchases allowed? ✓ ✓ ✓
3% 32%
New business underwriting allowed?    Motor
Max 3 each in 41%
Limit on number of insurer tie-ups? No limit No limit Life, Health and 11%
General
Can intermediary offer rebate/discount/
  
commission share? 1% 1%
Online aggregation and comparison of 23%
✓ ✓ ✓ 34%
policies allowed?
Health
Policy renewal allowed? ✓ ✓ ✓ 11%

Can offer any other product other than

1%
  ✓
insurance products on platform? 29%

Brokers Corporate Agents Individual agents

Direct - Online Direct - Offline Web Aggregators
Source: IRDA, Media Reports, JM Financial Others

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 Insurance commissions are capped by IRDAI; effective commission more due to
3
rewards/benefits given to intermediaries
Maximum commission to be given by Insurers to intermediaries is capped…

40%
35%

15% 15%
10%
8%
3%

Life - NBP (Individual Life - NBP (Individual Motor- Health – Life - Renewal Life - Renewal Motor - Standalone
term) non- term >12 yrs) Comprehensive Individual (Individual term) (Individual non-term) TP

…however, the effective commission is higher due to extra rewards/benefits given by insures to agents

30-40% 15-25%

15-25%

Life Insurance Health Motor

Source: IRDAI; Life Insurance – for pure risk, first year premium is 40% and renewal premium is 10%.; for other than pure risk, first year premium is 35% and renewal premium is 7.5%

Private and Confidential 29

 Emergence of Healthcare as a Service for Corporates, offering one-stop health
4
benefits platform
Majority of health insurance comes via the B2B2E route - employer to the employee; employees buying themselves is very small

Employee Insurance – B2B2E

Employer Employee

Employer offers a platform to employees to let Employees get intuitive platform to manage
them buy insurance plans for the employee policy and apply claims when required

Value Added Services

Routine Health
24X7 Doctor Access Fitness Tracking Discounted Medicines
Checkups

Key Players

Private and Confidential 30

 4 Health InsurTechs – a hotbed of innovation currently

✓ Easy-to-purchase plans, with a higher degree of customization rather than offering run off the mill insurance plans, focusing on offering coverage for
additional expenses, including OPD expenses
✓ Providing additional services such as doctor consultations, health check-ups and mental wellness sessions

Packaged subscription-based TPAs in claims processing

Embedded Insurance
plans and payment support

▪ MakeMyTrip partnered with GoDigit

▪ Healthcare plans to SMEs, MSMEs,
and startups, packaged in monthly
health memberships
▪ Subscription-based health benefit
plans for individuals and
Businesses
to offer embedded COVID-19
▪ Digital platform simplifying the insurance
claims process and functioning as a
mediator ▪ Major insurance player, offering
hotels with complementary health
insurance coverage during the stay
▪ Digital healthcare platform with
health services such as doctor
consultations and lab tests

Source: Chiratae Ventures / EY report, 2022.

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 5 Rise in bite-sized insurance catering to a very specific need or context

Bite-sized insurance options where potential buyers can opt for specific insurance need through a digital policy purchase option

Insurance
Point of Sale Platforms Product description
Category
Shorter
Contextual
Sachet sized duration Protection from theft/damage to Mobiles,
and Gadget purchase Property
Laptops, Mobile screens
insurance and event
need based
specific
Flight travel Travel Flight delay, Flight cancellation, baggage loss

Cab ride Travel / Health Accidents, loss of baggage

Life Train journey Travel Accidents, loss of baggage

Mobile recharges are being bundled with Payment platforms/ Protection against vector borne illness like
Health/Life
Lifestyle apps Dengue
small ticket protection products
EMI coverage during hospitalization or critical
Credit disbursals Health/Life
illness

Non-Life Sachet life insurance products bundled with

Mobile recharge Life
telecom recharge

Travel, health and property, are driving Payment

Other Protection against cyber frauds
new products and receiving greater platforms/Others
acceptance from willing customers
Scaling challenges can arise due to platform dependence

Private and Confidential 32

 Sachet products offer higher degree of standardization are more amenable to digital
5
disruption
(% of total premium)

High
Bite sized/Sachet Travel Segments most
products amenable to digitization 20%

Motor

Products with High

Term life
Standardization 10%
Competitive intensity

ULIPs
Retail health
Home/Property

Life – High ticket investments

SME/Small business 9% 3% 1%
products Life – Endowment/traditional
Motor Retail Health Term Life

Level of required assistance in sales

Low Term life, also face headwinds, as risk
High touch/Assisted sales Low touch/Straight considerations are limiting the use of
through processing non-physical onboarding

Policybazaar has 56% of its motor and 99% of two-wheeler sales, unassisted without any advisor support

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 Partnership with platform players have evolved new products and platforms turning
5
them into large distributors of sachet product
…aided by the simultaneous growth of large online consumers as well as gig workers

New age business Tech/e-commerce players Insurance Segment Type of product

Mobility, health, property, travel, Accidental medical expense, hospital daily allowance,
Ride Hailing Apps
personal accident personal accident cover for drivers

Protection from theft/damage to mobiles, laptops, mobile

Ecommerce Property
screens

Trip cancellation, trip delay, baggage loss, emergency

Online Travel Travel and Health
accident, accidental death

Hyperlocal Delivery Personal Accident Personal accident cover for riders

Credit Credit EMI coverage during hospitalisation or critical illness

Consumer-tech Digital broking for

Travel, health, motor, life, cyber frauds
Ecosystem insurance products

Source: Company data, Credit Suisse

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 Analytics solutions providers - significant impact from deploying analytics across the
6
value chain…

✓ Help companies capture new form of data that they weren’t capturing earlier

✓ Companies help incumbent players make sense of that data – use that data to offer new product, increase efficiency or reduce risk

✓ Simplifies insurance policies and claim processes that are not well documented and simple

✓ Help customers understand insurance policy, make right decisions, keep the right pieces of evidence ready, ensuring maximum benefits when it comes to claims

Business issues & use cases of deploying analytics

Revenue Boost Underwriting expertise Claims Suite Customer Service Others

✓ Sales Force Activation
✓ Churn Predictor (Incl. lapse)
✓ Product Optimization
✓ Need Analysis & Targeting
✓ Renewal Prize Optimizer
✓ Pre- approved sum assured
plan
✓ Medical Waivers
✓ Claims Optimization
✓ Fraud Detection
✓ Reserving
✓ Risk Prevention
✓ Maturity reinvestment ✓ Attrition Management
✓ Request Prioritization ✓ Investment Risk Modelling
Categorization
✓ Branch Footprint
✓ Complaints Analytics Optimization

✓ Preferred Prospecting ✓ Underwriting Fraud Prioritisation ✓ Capacity Planning ✓ Training Suggestions

Detection ✓ Data-driven claims ✓ Text/Voice Analysis ✓ Vendor Risk Profiling
✓ Surrogate Income Models assignment

Source: BCG 2022 India InsurTech Landscape & Trends – BCG Experience.

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 6 ….can help analyze risks better and hence price it accordingly

Use Cases Typical impact seen in insurers

Revenue Boost: Sales 20-50% Increase in cross-sell due to personalised next best offer

Revenue Persistence 5-10% Churn reduction from identifying high-risk customers and taking actions

Underwriting Excellence 1-3% Uplift in bottom-line with segment-wise underwriting guideline changes

Consumer Service:
Maturity investment 5-10% increase in re-investment rate during maturity

Claims Excellence 25-50 (bps) Fraud reduction from new uses of structured and unstructured data

Source: BCG 2022 India InsurTech Landscape & Trends – BCG Experience.

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 Growth to be further accelerated by emergence of National Health Stack expected to
7
transform health insurance…
Key components of National Health Stack

India stack Coverage and claims platform

▪ Easy introduction of digital services – built on Jan ▪ Building blocks to support large health protection
Dhan – Aadhar – Mobile trinity schemes

Electronic health registries National health analytics framework

▪ Single source of truth for health data ▪ Rich information to enable sharper
offerings and pricing

Federated Personal Health Records (PHR) Other key components

▪ Framework Access to health data for patients & for ▪ Digital health ID, payment gateways, etc. shared
research across all health programs

Benefits

Increasing health insurance penetration Fraud reduction and lower adjudication

Lower cost of acquisition
in mid, low-income segment cost

Source: BCG 2022 India InsurTech Landscape & Trends.

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 7 …enabling end-to-end health and wellness ecosystems

Health Records Value-added health services (VAHS)

Health ID

Wellness and Monitoring IoT, Ancillary health Reward partners Personal loan Health
fitness, Gym, third- party, app services for wellness for health information &
Health reports repository spa, yoga, integration ambulance, incentives advisory
coaches, nurses, home
nutrition care, therapy,
Opthal, aids
IoT data
Core Services

Health Wallet
OPD IPD (current ins. Pharmacy Diagnostic
Product)

Open Health Services Network (part of NHS)

Increasing health insurance

penetration in mid, low-
income segment
Online doctor Out-patient, Diagnostics In-patient Pharmacy
(telemedicine) clinics (sec./ter.)

Source: BCG 2022 India InsurTech Landscape & Trends.

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7 Bima Sugam: A one-stop platform for all insurance needs

Bima Sugam will be a one-stop platform for all insurance needs, right from buying the policy to claim settlement and much more

Overview of the Plarform

▪ E-BIMA or E-IA account for policyholders in a Demat format
Govt. databases ▪ No requirement for maintaining & safekeeping physical document
(Database / UIDAI /
IIB) ▪ The policyholder and his family’s insurance policies can be kept by
choosing one repository of their choice

Insurance services Provided

▪ Buy insurance policy
Policyholders / ▪ Claim Settlement
Bima Insurance companies
Agents Sugam ▪ Agent Portability
▪ Policy Portability

Stake Holders
Broker Association LIC
5% 30%
Repositories
(CDSL/NSDL)

Online PSBs
General Insurance
35%
Council
30%

Benefits
Pave way for the new entrant start-ups Opportunity to leverage centralized Agent portability will elevate the after-
adopting a Sandbox approach for unique database, common API integration exposures sales services wherever the agent is involved
offerings such as OPD covers, etc. across products from all categories by creating a good customer experience.

Private and Confidential 39

 7 Players creating health ecosystem to become a one-stop shop for customers

Paytm can build a “closed-loop ecosystem” for health insurance

Paytm x Insurance

Paytm to offer health insurance (via

✓ Raheja QBE) + credit (via Paytm First
Product development loop- Pay-as-you-drive card) + wellness (via GOQii)
Brokerage – D2C & Motor insurance & motor insurance
brokerage learnings feed
B2B2C Bancassurance
into carrier’s product FASTag creates a natural engagement
strategy
✓ point for Paytm with drivers to push its
own insurance products via behavioral
nudges

Owning a brokerage platform & own

E-commerce “Premium”
insurance segment insurance insurance carrier creates a self-reinforcing
✓ product loop - discover gaps in the market
and “learn” from other carriers

Goods-in-transit, credit Wearable-linked health

and white-label goods insurance & lifestyle
insurance insurance

Note: Paytm has called off its deal to acquire Raheja QBE in 2022.

Private and Confidential 40

 Global Trends

InsurTech companies have created significant shareholder value globally

Global funding in InsurTechs has grown 7x in the last 5 years; continued momentum even
during COVID-19
Rapid growth of InsurTech funding across the globe

Global Funding ($bn) Funding by Geography (% contribution)

Funding ($bn) Americas Asia Europe CAGR

(2019-21)
10%
15% 16% 17% 19%
26% 50%
12%
17% 13%
18% 19%
12% (6%)

14

78%
68% 65% 64% 68% 19%
8 62%
7
5
3
2

2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021

Source: BCG 2022 India InsurTech Landscape & Trends.

Private and Confidential 42

Globally, players are moving away from being pure distributors, to full-stack insurance
providers

Price comparison & brokers MGA, PurePlay & Process Infrastructure Ecosystem

2010 - 2012 2013 - 2016 2017 - 2018 2019 - Now

Online quotes & lead Online distribution, varied loT integration, Tech stack, White labelling laaS and
generation products and automated processes Policy claim management Embedded-Insurance

Source: Pitchbook, HPE Growth, Drake Star

Private and Confidential 43

Competition in customer acquisition led traditional brokers and marketplaces
towards downstream integration and differentiation

▪ Brokers and distributors started to expand

Only distribution &
customer engagement
MGAs (+product,
pricing, underwriting)
downstream to become MGAs, with rising CAC due
Downstream to high competition
integration
▪ MGAs are then going full stack when they reach
scale to have the flexibility to try and test new
products and avoid sharing profits with insurers
Full stack

▪ Second wave targets more niche segments

Expansion ▪ Once validated the model in a niche, MGAs and
from niche
full-stack insurtechs are expanding in broader
segments

Targeting niche Several insurance

sectors lines

Source: Dealroom and Mundi Ventures Insurtech European report.

Private and Confidential 44

The Wefox journey from B2C broker and technology provider to challenger full-stack
insurtech

Revenue Beginning to add direct 70% commission -

100% commission
sources premium 30% direct premium

Launched Koble platform: an

Repositioning as B2B2C
Positioned as a B2C insurance
technology provider for insurer
broker
advisors
Acquired licensed insurer One.
Incubated as separate brand
Wefox distribution, One and
open platform for digital
Koble reunited in a single
insurance distribution at scale.
brand
Incubated as separate brand

July 2015 2016 Jun 2017 Oct 2020 Mar 2021

Adding subscription revenue from risk Adding revenues from embedded

prevention platform distribution
2030 vision
50% direct premium; 30% 3rd party commission
Transformed Koble platform
10% subscription and 10% platforms (main margin generators)
Launched a risk prevention into an embedded distribution
product “Wefox Prevent” platform connecting insurers
and distribution channels

2022 2024

Source: Dealroom and Mundi Ventures Insurtech European report.

Private and Confidential 45

Insurance is broadening and incumbents are partnering to offer a broader ecosystem of
services

Mobility Connected industry Health services and benefits Financial wellness and retirement

New ownership Supply chain and Employee Insurance

models logistics benefits, gig remittance
economy

Vehicle/car repair Safety Predictive Construction risk

and concierge maintenance management
services Wellness Mental
products health Saving
management and
financial advice
Cyber security Home and property

Rewards and discounts Specific evidence

for healthy behaviours based treatments
Elderly care Companion
Rental industry Repairs Smart for end of
(ex. deposit home life
guarantee)

Source: Dealroom and Mundi Ventures Insurtech European report.

Private and Confidential 46

 Deal Activity

Significant momentum witnessed over the last 18 months

Huge uptick in the deal activity – Signifies investor confidence

India has shown very strong momentum - funding has doubled in the last 2 years

Total Funding ($mn) By Segment ($mn)

Digital First Manufacturer Broker B2B Platform
Funding ($mn) Deals (#)
Micro Insurance Analytics Claims

57
55
40
33
29
26 276
21 22

3 110
866
34
28
344
512 527 171 499 223

376 165 247

314
270
126 159 152
61 23 82 59
31
2016 2017 2018 2019 2020 2021 2022 YTD 2016 2017 2018 2019 2020 2021 2022 YTD

Source: Tracxn.

Private and Confidential 48

Digital Manufactures/Brokers have bagged maximum funding across the space in India

No of startups

8,000 403 97 52 18 5 2 1 1
Early Stage Late Stage

Total Fintech Total InsurTech

Startups Startups Funded Series A Series B Series C Series D Series E Public

Source: Tracxn. As of October 2022

Private and Confidential 49

PE /VC Deals in last 18 months (1/3)

Round of
Date Target Sub-Vertical Key Investors Deal Value ($mn)
Investment

Oct-22 Series A Health Benefits Quona, Nexus Venture Partners Undisclosed

Sep-22 Series C Underwriting & Risk Creagis, ICICI Ventures 75

Sep-22 Seed Claims Norwest 2

Sep-22 Seed Sales 1Digi Investment Management 0.5

Aug-22 Seed B2B Insurance WaterBridge, Arali Ventures 2

Aug-22 Series B Health Benefits Rajeev Dadlani Group, Blume Ventures 6

Aug-22 Seed Analytics Capital 2B, AL Trust 3

Aug-22 Series A Product Management Mayfield, Kae Capital 4

Jul-22 Series C Broker GirnarSoft 100

May-22 Series D Digital Manufacturer Sequoia Capital, India Infoline 55

Apr-22 Series E Broker Amansa Capital, GGV Capital 120

General Catalyst Partners, Elevation, Optum
Apr-22 Series B Health Benefits 25
Ventures
HealthQuad, Sabre Partners, VentureEast,
Mar-22 Series B Health Benefits 15
EightRoads
Emergence Capital, Sequoia Capital, Bertelsmann
Feb-22 Series C Sales 22
India Investments

Private and Confidential 50

PE /VC Deals in last 18 months (2/3)

Round of
Date Target Sub-Vertical Key Investors Deal Value ($mn)
Investment

Feb-22 Series A Health Benefits Sequoia Capital, Beenext, Orios Venture Partners 12

Feb-22 Series D Digital Manufacturer Intact Ventures, Munich Re Ventures 16

Jan-22 Series D Digital Manufacturer Wellington Management 70

Dec-21 Series B Broker Apis Partners 6

Dec-21 Series A Broker BlueOrchard; InsuResilience Investment Fund 7

Siana, Inflexor, EMVC, Omidyar Network India,
Oct-21 Series A Broker 7
Stride Ventures
Sep-21 Series A Health Benefits Elevation, General Catalyst Partners 12

Sep-21 Series C Broker RSCo 10

SAI Global, Bessemer Venture Partners, Multiply Ventures,
Sep-21 Series A Broker 10
Better Capital

Aug-21 Series C Digital Manufacturer TVS Capital Funds 16

Aug-21 Series C Broker Evolvence India 10

Jul-21 Series A Health Benefits Quona, Nexus Venture Partners 16

Faering Capital, India Infoline Asset Management,

Jul-21 Series C Digital Manufacturer 200
Sequoia

Private and Confidential 51

PE /VC Deals in last 18 months (3/3)

Round of
Date Target Sub-Vertical Key Investors Deal Value ($mn)
Investment

Jun-21 Series C Broker Lok Capital, IIFL Wealth; Apis Partners 45

May-21 Series A Health Benefits Tiger Global Management, Surge 16

General Atlantic, Multiples Equity, CPP
Mar-21 Series D Digital Manufacturer 255
Investments,
Mar-21 Series F Broker Alpha Wave Global 75
Jungle Ventures, GGV Capital, Nexus Venture
Mar-21 Series D Broker 46
Partners, Sequoia Capital, SIG Venture Capital
Mar-21 Series A Analytics Omidyar Network India, Pentathlon Ventures 5

Mar-21 Series A Broker Insignia Ventures Partners,AJ Capital Partners 9

Feb-21 Series G Broker Falcon Edge Capital 58

Private and Confidential 52

Annexure
Online InsurTech distribution models have emerged as the key drivers for growth

B2C model, most attractively positioned in terms of features and product categories
B2C B2B2C B2B

B2C Broker PoSP agents and consolidators Embedded Insurance Group Insurance

Platform aggregating and selling

Selling insurance through partner Selling insurance embedded with a Selling group insurance products to
insurance from multiple insurers
PoS agents or agencies purchased good or service business
directly online to customers

Retain customer leads on own

Customer Lead Generation Leads managed by partner agents Leads generated by seller partners Not applicable
platform

High Customer purchase Partial salesforce - push and

Customer pull-driven business Agent-push driven business Moderate customer intent
intent customer intent driven

Policy and Pricing choices for Allows customers to view multiple

Limited quotes shown by agents Limited insurer partnerships Limited insurer partnership
customers quotes

Proactive conversion using call Proactive conversion using

End to End insurance journey Conversion using agents / agencies Conversion through seller partners
centres salesforce

Policy support (servicing & App based claims assistance & Call centres for limited claims
App based claims assistance & VAS App based claims assistance & VAS
claims) VAS, special support teams assistance

Degree of technology End to end digital experience Offline agents + technology

Offline + Online Support Offline + Online Support
implementation through tech support

Key product categories Life, Health & Motor Significant Motor focus Miscellaneous Non-life Group health and life

Source: Redseer.

Private and Confidential 54

…with certain models, better placed than others in terms of unit economics

B2C - Broker B2B2C-PoSP & Consolidators B2B2C - Embedded B2B-Group Insurance

Low commission on group

Revenue Moderate - High commission High Commission Moderate revenues
products

Moderate acquisition & Moderate servicing and claim

Cost High acquisition costs Low marketing costs
Operation cost costs

High agent and consolidator

Agent Cost NA NA NA
payouts

Large call center & Branding Relationship manager and call Salesforce and customer
Operational Cost Service/ repair/ claim costs
costs center costs support

Digital marketing & branding Moderate expenses (mostly Marketing handle by channel Less marketing and more
Marketing Cost
costs word of mouth) partners salesforce driven

Contribution Profit Healthy Low to Negative Moderate Moderate-low

Source: Redseer.

Private and Confidential 55

o3 Capital: Overview
o3 Capital is India’s premier financial services firm

Financial advisory

Private equity Mid-market Global 2007 3 4

investors corporates corporations

Founding year Office locations Complimentary businesses

Capital syndication (Venture capital & private equity)

Mergers & acquisitions (Domestic & cross-border) 184 116 65

Deals closed VC & PE deals executed M&A deals executed

Specialized sector coverage

8.1 100+ 250+

Deal value advised # of employees Years of cumulative senior

Digital Consumer Healthcare (USD bn) management experience

25+ 100+ 1,000+

Family office relationships VC & PE relationships Mid market relationships

Life Sciences Technology Industrial

Private and Confidential 57

o3 Capital — Contacts & Offices

Srikanth Kannan Avni Vira Pratik Agarwal

srikanth.kannan@o3capital.com avni.vira@o3capital.com pratik.agarwal@o3capital.com

+91 98198 45853 +91 98200 37845 +91 93219 81783

Mumbai Bangalore Delhi Kolkata Singapore

603/604, Piramal Tower, o3 House, CoWrks Aerocity, Awfis, 328 North Bridge Road,
Peninsula Corporate Park, No. 5, Crescent Road, Indira Gandhi International Airport, Rajarhat, 6th Floor, #02-20 Raffles Hotel Arcade,
G.K. Marg, Lower Parel High Grounds, WorldMark 1, Tower A, Aerocity, Ecospace Business Park, AA II Singapore - 188719
Mumbai – 400 013 Bangalore - 560 001 New Delhi – 110 037 Kolkata – 700 156 singapore@o3capital.com
Tel: +91 22 6111 5700 Tel: +91 80 4241 0000 Tel: 1860 258 6633
mumbai@o3capital.com bangalore@o3capital.com

Private and Confidential 58