Insurance Tech Startup Riskcovry Raises $5 Mn From Omidyar India

Mumbai-based insurance tech startup Riskcovry has raised $5 Mn in Series A funding in a round led by Omidyar Network India. The round also saw participation from Pune-based venture capital fund Pentathlon Ventures and Delhi-based DMI Sparkle Fund. 

Founded in 2018, Riskcovry offers an ‘insurance-in-a-box’ model, whereby it enables the insurance infrastructure for platforms or vendors looking to sell insurance products. The company’s customers include mainstream distributors like banks, NBFCs and brokers to alternative players who are new to insurance distribution like retail, payment networks, digital, telecom, fintech, tech startups etc. As such, the business-to-business-to-customer (B2B2C) startup helps companies from any industry to provide digital insurance products and services to their end-customers. 

Some of the company’s enterprise clients include InMobi’s Glance, EMI financing platform ZestMoney, and Future Group’s digital wallet FuturePay. In the current financial year, the startup expects to sell 2 lakh insurance products. 

Riskcovry will use the funds to build new insurance products, invest in its data science team and products, and quadruple its partner network in the next 18 months.

Riskcovry’s competitors in India include startups such as Turtlemint, which recently raised $30 Mn in its Series D funding round, and Symbo Platform Holdings, which raised $9.4 Mn, of which it will divert a large portion to its India entity, Symbo India Insurance Broking Limited. 

The insurance penetration in India is abysmal. According to the Indian government’s Economic Survey 2020-21, India’s insurance penetration at just 3.76% of the GDP is “extremely low” against comparable Asian countries such as China, Malaysia and Thailand as well as the global average. However, during this year’s Union Budget announcement, the foreign direct investment (FDI) limit in Indian insurance companies was increased from the previous 49% to 74%, a move the industry feels will drive more investments in the insurance space. 

According to data from the Insurance Regulatory Development Authority of India (IRDAI), LIC has the majority of the insurance market share, over 66%, while private insurers have about 34% share. 

In recent years, several Indian startups such as PolicyBazaar, RenewBuy, Digit and Toffee Insurance have also entered the space with a range of offerings, some of them even advertising themselves as full-stack digital insurers.

According to a report from the Indian Brand Equity Foundation (IBEF), the Indian insurance market was expected to reach a market size of $280 Bn by the end of 2020. The life insurance industry in the country is expected to grow 12%-15% annually over the next three to five years.