Insurtech funding set to top $1 billion in 12 months
insurance technology
or Insurtech sector is forecast to exceed $1 billion in the next 12 months after past few years of moderation, said a report released at India Insurtech Summit 2025 on Thursday.
The funding for 2024 stood moderated to $239 million from $497 million a year ago.
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After peaking at $820 million in 2021 on the back of aggressive expansion and strong investor enthusiasm, the funding has moderated. This is because the sector transitioned to a quality-focused growth and as global economic factors encouraged more disciplined capital allocation, according to a report jointly prepared by Perfios, a global B2B software-as-a-service company working in the BFSI sector and fintech and advisory firm The Digital Fifth.
'There is currently a clear gap in funding for tech stack companies and claims solutions — areas that are essential for driving efficiency and enhancing customer experience, and which should see significant growth in the coming years,' said the report.
The report also said that India's
insurance penetration
, which had got a boost from the COVID pandemic, declined below 4% mainly because of drop in uptake of life insurance, according to the report.
Insurance penetration fell to 3.7% in FY24, after staying above 4% for preceding three fiscals. The number for the life insurance segment fell to 2.7% in FY24 from 3% a year ago, while it remained 1% for the non-life segment.
This signals an enormous protection gap, especially in health, life, and micro-insurance categories, the report said.
While penetration declined, insurance density improved slightly, with per capita premium rising from Rs7,847 in 2022 to Rs8,103 in 2023, led by the non-life segment, said the report.
The report said that a slew of regulatory initiatives like National Health Claims Exchange (NHCX) and the upcoming Bima Sugam platform are laying robust digital rails for insurance innovation. In addition, the Digital Personal Data Protection Act (DPDPA) is expected to enhance customer data and consent-based experiences.
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