It’s hard to tell one from another. Policybazaar and Insurancedekho function primarily as online marketplaces for insurance products. But in February, when the latter raised $150 million at a valuation of $450 million in the largest series A series A Livemint InsuranceDekho raises $150 mn, largest ever series A funding round by Indian insurtech firm Read more round in India’s insurtech sector, led by investment firms Goldman Sachs Asset Management and TVS Capital Funds, it became apparent that there’s something unique about its business model.
The six-year-old company sells almost every new policy through a field agent—mostly in non-metro cities where insurance still means buying an LIC (Life Insurance Corporation of India) policy to save tax. It has gathered an army of 80,000 field agents—a count higher than most insurance companies. For instance, Max Life Insurance, India’s largest non-bank private insurer in terms of assets under management, had close to 69,000 agents as of 31 January.
In this way, the startup itself resembles state-run LIC, India’s largest life insurer, which banks on field agents for more than 95% of its new business premium (NBP)—the premium earned through new policies.
However, this approach also means that the insurtech—based in Gurugram, an industrial city bordering India’s national capital, New Delhi—hardly makes money by selling new policies, as almost the entire commission it gets from the insurer goes to agents bringing in new customers.
Still, this heady online-offline mix with a pan-India reach has investors rooting for Insurancedekho. “The company has a tech-backed field-agent network that is taking insurance to the middle-income category in cities beyond tier-I. There’s a vast market for it,” said a TVS Capital Funds executive who didn’t want to be named because they weren’t authorised to speak with the media.
In fact, ~85% of Insurancedekho’s revenue comes from tier-II cities and beyond. “It is my utmost belief that customers still need agents in flesh and blood for buying big-ticket insurances,” Ankit Agrawal, founder and chief executive of the company, told The Ken.
The company, which started in 2017 as an insurance arm for Cardekho—one of India’s largest online aggregators for new and used four-wheelers—claims to have moved out of its incubator’s shadows. It has ~5 million unique customers—compared to the parent’s 50 million—with revenue surging 2X every year. And its business model reflects everything Agrawal wanted to work with—insurance and people.
But in doing so, he’s taking on incumbents such as market leader Policybazaar Policybazaar The Ken Policybazaar’s turnaround story faces a state-backed insurance-marketplace hurdle Read more , owned by PB Fintech, as well as cash-rich insurtech Turtlemint, backed by Singapore-based fund-management company Amansa Capital and India-US venture fund Nexus Venture Partners.