The next chapter for India’s insurtech is about reach, trust, and retention

During calendar year (CY) 2025, Insurtech IPOs and acquisitions hit multi-year highs, even as fresh venture funding into the category grew at a slower rate. Investors are showing more interest in insurance technology but also asking harder questions from companies showing commercial traction.

Insurtech, the sector that uses modern technology to make traditional insurance products and processes faster, cheaper, and more personal, is on a rally. India’s insurtech sector is one of the largest in the world, and its choices will shape the next decade of insurance distribution here.

According to an October 2025 report by BCG and India InsurTech Association (IIA), India’s insurtech ecosystem has over 150 active players, with cumulative valuations crossing $15.8 billion and revenue reaching $0.9 billion in 2024, a tenfold increase since 2019.

The sector has two unicorns, eight players between $100 million and $1 billion and over 45 players with over $1 million.

India’s insurtech sector mirrored the global trends, signalling a shift in investor focus to backing businesses with clear paths to profitability and scale, according to the report.

Health Insurtech ventures in India accounted for four of the five largest deals and more than 70% of the funding, reflecting their role in driving access, efficiency, and innovation.

For much of the past decade, the sector was aiming for scale. This got global capital excited about a market where insurance penetration has been stuck near 3.7% of GDP for years, roughly half the world average.

However, the excitement about India’s large addressable market is also a tale of caution, as many insurance distribution companies have had to raise funds regularly to survive.

Insurance is difficult to scale responsibly, and the reasons have less to do with technology than with the product itself. For instance, a ride-hailing trip or a food-ordering app proves out its unit economics within days. However, an insurance policy plays out over a year, or five years, or sometimes a lifetime. So, insurtech start-ups cannot simply borrow growth playbooks built for other consumer internet businesses.

The sheer cost of distribution in a country where insurance, outside a few urban pockets, is underpenetrated and where regulation is focused more on solvency, claim settlement and disclosure than growth rates, requires an approach that rewards patience over speed.

The question, therefore, is what sustainable insurtech looks like amid the challenges the sector faces.

To be sure, for years, presence across a large share of India's pincodes was the metric most insurance firms were chasing. It mattered far less whether that customer later bought a different product from the same platform. However, the mindset is slowly changing, with renewal rates and cross-selling turning customer acquisition costs into investments.

For instance, an insurance advisor in a small town might spend a Tuesday following up on a claim filed three months earlier, and walking a family through why a certain hospital expense was covered and another was not. That conversation, far more than any app notification or online offers, is what brings the family back when the renewal falls due, and it is often what brings a neighbour or an extended family member to the same advisor looking for a policy of their own.

A second shift is toward hybrid distribution, human advisors backed by digital tools, rather than the app-only acquisition approach. The advisor becomes both the acquisition engine and the retention engine, when trust is built through conversation rather than online.

That same advisor also chases down missing documents, explaining a rejected claim, or simply answering a call when a policyholder does not know who else to ask. It is this servicing layer, built one interaction at a time, that turns a policy sold into a relationship kept, adding service as its own point, next to Trust and Access, the key pillars of the business.

A third, still-emerging shift is that across India's broader insurance sector, from large life insurers to smaller distribution platforms, growth is increasingly being built organically by addressing the expanding population.

However, some companies are also expanding inorganically, especially through mergers, acquisitions and foreign investments in order to scale quickly to meet the growing demand.

In its early 2026 report on the Indian insurance market, Swiss Re Ltd, a Swiss reinsurance company, predicted the country’s mid-term annual premium growth at 6.9% annually between 2026 and 2030, making India the strongest growing major insurance market globally.

Even for the insurtech sector, acquiring an existing agent network or customer base can help in scaling up quickly to tap the market. Perhaps this is the reason why the central government had once considered merging the loss-making state-owned insurers. The centre has since then asked these companies to focus on profitability, with the government monitoring their performance for a possible decision in the future.

To be sure, even policy has started nudging the sector towards consolidation. The opening of 100% foreign direct investment into insurance, the recent rationalisation of GST on individual life and health premiums, and the regulator's own emphasis on capital efficiency and faster claim settlements point towards a sector that wants to be judged on outcomes for policyholders and not headlines about funding raised.

However, none of this means growth stops mattering, as India remains badly under-insured, and closing that gap needs both existing and new players to push harder.

Domestic rating agency, ICRA Ltd., in its April 2026 report on the Indian insurance sector, said it expects the individual New Business Premium (NBP) to rise by 9.4-9.9% to Rs 2.02-2.03 trillion in FY 2027, driven by private insurers.

NBP is the total money collected from newly sold insurance policies industry wide.

The rating agency expects overall NBP to rise by 7.8-8.2% to Rs 4.95-4.97 trillion in FY2027 from Rs 4.60 trillion in FY 2026 and Rs 3.97 trillion in FY 2025. Having spent close to a decade building an insurance distribution business from a handful of towns into a nationwide network, we believe the insurtech companies that matter five years from now will be the ones that create real value for this growing ecosystem, while also treating every funding round as a fuel for growing the business.