According to a report by homegrown consultancy firm Redseer, insurance penetration in India is likely to climb significantly, with the market expected to reach a value of close to US$ 222 billion by FY26, driven by the growing middle class and increasing internet connectivity.
According to the report, life insurance accounted for about three-fourths of the total addressable market (TAM) in FY22, with a TAM of US$ 66.5 billion, followed by motor insurance with a TAM of US$ 10 billion and retail health insurance with a TAM of US$ 4.7 billion.
New online distribution models such as business-to-consumer (B2C), business-to-business (B2B), and business-to-business-to-consumer (B2B2C) are key growth drivers, with B2C, in particular, garnering significant prospects.
Digital insurance in the US stands at 14% of the entire population and 6% in China. In India, digital penetration in insurance stands at 2%, denoting significant headroom for growth in the years to come, according to the report.
Due to direct customer interaction, the claims risk in this model is much lower than in the other two models. The persistence rate too is higher due to better customer awareness. But most importantly, customers enjoy great customer experiences thanks to end-to-end digital experiences through technological applications. In most cases, through the B2C model, the end-to-end customer journey is covered seamlessly.
Some of the B2C models’ offerings include end-to-end digital experience through technological applications, app-based claims assistance, proactive conversions using call centres, visibility to multiple quotes, and more.
