Digital insurer Acko General Insurance Ltd has forayed into retail health insurance to disrupt the sector, which is primarily dominated by offline players, a top company official said.
Since the insurtech unicorn launched group health insurance policies around two years ago, it has nearly 150 corporate clients. “Health is an important category for us to build and, therefore, we started first with a more aggregated business with group health insurance,” said Sanjeev Srinivasan, chief executive officer of Acko General Insurance, in an interview.
India’s retail health insurance segment is dominated by five standard health insurers (SAHIs), including Religare-led Care Health Insurance, Niva (Max) Bupa Health Insurance, Star Health, Aditya Birla Health Insurance, and Allied Insurance and ManipalCigna Health Insurance
Acko General offers motor and embedded insurance as well as group health covers.
“Motor insurance contributes around 50% of the business, while embedded insurance product accounts for 25-28%. Embedded insurance helps customers engage with Acko for the first time and the category has given us 60-70 million customers in the last five years,” said Srinivasan.
For retail health insurance, it is looking to follow a similar approach to what it has done in the past with motor insurance, offering instant policies and claim settlements through its digital platform. “With our experience in serving corporates with group health products, the company believes it’s the right time to go in a big way to the retail category. In five years, we want health insurance to become as large as the motor category,” he added.
Acko has more than doubled revenue to ₹1,087.5 crore in FY22 from ₹475.3 crore in the previous fiscal year, while its loss widened to ₹382 crore in FY22 from ₹132.5 crore in the year ago. Srinivasan said high marketing expenses is the primary reason for the surging loss and claimed that it is the largest marketing spender in the industry. “While others have made their way through agents and brokers, we have invested on marketing, creating awareness for the industry in the process,” he said.
“In 3-4 years, our losses will come down and we will get to profitability, with the renewals book becoming bigger.”
In addition to the health insurance plans, Acko is offering a top-up with a sum insured starting from Rs 10 lakh for consumers who want additional coverage to their existing group medical or retail health coverage. Srinivasan explained that most corporates provide insurance covers of around up to Rs 5 lakh to employees and the cap, as we have seen through the pandemic, isn’t comprehensive in many cases. “That’s where the top-up plans come into action. One can buy them even if their company provided them with coverage of any other insurer.”
Meanwhile, Acko is also in the works to enter the life insurance segment with its digital-first approach. “We have recently applied for our life insurance license and have got approval for the first stage which is R1. We are closing in the next stages in a few months. We plan to go live by June and July,” weighed Srinivasan.