The firm founded by insurance veteran Kamesh Goyal provides motor, health, and travel insurance, among other products, according to its website. Its partners include Cleartrip, Sterling Holidays and insurance aggregator Policybazaar.
Digit is also backed by Canadian billionaire Prem Watsa’s Fairfax Holdings, which has invested $140 million across rounds.
Before starting Digit, Goyal worked with Germany-based insurer Allianz, heading their strategy, planning and performance management.
Digit, which is expected to earn premium of about $280 million for FY20, is one of the fastest-growing general insurers in the country, the Times of India reported on 10 December 2019.
“From insurance to insurtech, the industry is going through a basic transformation, and Go Digit Insurance is at the cutting edge of this change with their customer-centric approach, prudent underwriting, and use of technology for operational excellence," said Gopal Srinivasan, chairman, TVS Capital Funds.
New age insurers such as Digit and Acko Insurance have seen heavy investor interest as they look to employ different methods of underwriting risk and offer more differentiated products than traditional insurers.
However, Digit still acquires its customers mainly offline, while Acko acquires them online.
Acko has raised more than $100 million in equity so far from investors such as former Flipkart co-founder Binny Bansal, SAIF Partners, Accel Partners and Infosys founder Narayana Murthy’s Catamaran Ventures.
Other insurance startups include Turtlemint, which provides a technology platform for insurance agents to sell products, and is backed by investors such as Sequoia Capital and Nexus Venture Partners.
The insurance industry has also benefited from the government’s decision to permit 49% foreign direct investment, which has made the Indian insurance sector lucrative to foreign investors and enabled insurers to secure capital to work on aggressive plans related to expansion and innovation, according to a June 2019 report from consultancy firm PwC. Insurers who have been in business for at least 10 years are allowed to raise capital through initial public offerings (IPOs).
Digitization can reduce around 20–30% of the cost of non-life insurance products and 15–20% of the cost of life insurance, said the PwC report.
Total life insurance premiums in the country have nearly doubled in the past decade, from ₹2.65 trillion in FY10 to ₹5.08 trillion in FY19, according to data from the Insurance Regulation and Development Authority of India, while health insurance premiums rose nearly 5 times in the past decade from ₹8,305 crore FY10 to ₹44,873 crore in FY19.
However, insurance penetration in India still lags behind other countries. Insurance penetration, which is measured as the ratio of insurance premium paid and the gross domestic product of the country, increased from 2.71% in 2001 to 3.69% in 2017 in India, but still lags behind the penetration levels in the rest of the world (6.13%) and emerging Asian economies (5.62%).
According to the PwC report, “for insurers, digitization of sales processes has always been the top priority. Although there has been significant investment and innovation in this area, re-evaluation of post-sales processes is vital for alignment with the needs of digitally advanced customers."
“Online self-service, easy communication channels, acceptance of digital documents, online processes for claims and other requests and flexibility in accessing account are the basic services expected. Further, elimination of paperwork through strategic digitisation of business processes will provide huge relief to customers," it added. Further, personalisation is expected to be the future of insurance. A connected technological architecture can assist in providing a holistic view of customers to executives for better interaction and consolidation of customer information has the potential to drive deep insights into customer behaviour.