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The insurance regulator wants tech-first companies to have a bigger play in the sector to help it in achieving its goal of insuring every citizen by the 100th anniversary of Independence
With the Insurance Regulatory and Development Authority of India (IRDAI) opening up the health insurance sector to invite more players, new generation tech-based insurance startups such as Bengaluru-based Onsurity and Pune-based Loop Health have approached the regulator for licences, The Economic Times has reported.
The insurance regulator wants tech-first companies to have a bigger play in the sector to help it in achieving its goal of insuring every citizen by the 100th anniversary of Independence.
In October 2023, IFC, Nexus Venture Partners, Quona invested $24 million in equity funding in Onsurity. The objective was to enable it to function as a health insurance company, one of the persons officials told the newspaper.
Onsurity was launched in 2020 by actuary Yogesh Agarwal and Kulin Shah. This company offers a health insurance management platform for Jupiter Money, CleverTap, Zepto, DBS Bank, and Pantaloons, among others.
“Both these startups want to eventually build products in the group health space, a sector where they act as distributors currently,” a senior industry executive told the newspaper.
Both Onsurity and Loop Health help employers offer group health policies to their employees and run a platform to offer employee wellness services too.
Onsurity has expanded its portfolio. It has also moved into other general insurance products too. These include cyber insurance, and commercial general insurance.
While Irdai opened licence applications in 2023, the regulatory front hasn’t changed much. Only three companies – out of quite a few that applied for licences – got the green light. These were Acko Life Insurance, Credit Access Grameen and Digit Life Insurance. In January this year, Narayana Health was issued the health insurance licence.
As many as 19 companies are waiting to get the nod from IRDAI. The names feature, among others, Jio Financial Services and Paytm General Insurance.
“In the startup world, there are multiple issues around foreign shareholding, issues about ultimate beneficiaries in the venture funds that are backing these startups, so it is taking a lot of time to get the licence,” the founder of an insurtech startup told the newspaper.
He also revealed that funding rounds of several startups who are waiting for the licence from the regulator are pending. The funding is contingent on the granting of licence.
“In some cases, investors have committed additional funding only on the condition that the licence comes in, till then it is a waiting game for these startups,” he added.