Insurtech unicorn ACKO is gearing up to disrupt the life insurance sector as it prepares to launch its first product in the segment. The Bengaluru-based startup is expected to introduce the new life insurance offering within the next two months, targeting customers who prefer to purchase insurance products online.
Focus on Term Life Insurance and Direct-to-Consumer Approach
ACKO’s forthcoming life insurance product will be a pure play term life insurance offering. The startup is taking a direct-to-consumer (D2C) approach, similar to its strategy in the general insurance space. ACKO aims to establish a direct relationship with customers, even if it means adopting a slower growth trajectory.
Former Amazon India Executive Joins ACKO for Life Insurance Venture
To bolster its foray into the life insurance sector, ACKO has brought on board Amit Tiwari, a former executive from Amazon India. Tiwari’s expertise and experience in e-commerce and customer-centric approaches are expected to contribute to ACKO’s entry into the life insurance market. However, formal approval from the Insurance Regulatory and Development Authority of India (IRDAI) is still pending.
ACKO’s Growth, Expansion, and Market Competition
ACKO, founded in 2016 by Varun Dua and Ruchi Deepak, achieved unicorn status in 2021 after securing $255 million in a Series D funding round. The company competes with other players in the insurtech market such as Digit Insurance and Policybazaar. The Indian insurtech sector is projected to reach a size of $339 billion by 2025, with a compound annual growth rate (CAGR) of 57% between 2021 and 2025.
In addition to its core insurance offerings, ACKO has recently ventured into EV battery insurance and acquired a digital health platform called Parentlane. The private life insurance industry in India has experienced robust growth, with premiums increasing by 20% in FY23, as per the latest data from the Life Insurance Council. Despite growing revenue, ACKO’s net loss widened in FY22 due to increased expenses, highlighting the challenges and investments associated with scaling an insurtech business.
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