Private funding in India's insurtech sector set to cross $1 billion in the next 12 months: Report

The private capital investment in the Indian insurtech industry Private funding in Indian insurtech industry to cross $1 billion in next 12 months, report saysis expected to surpass $1 billion over the next 12 months, according to a report by The Digital Fifth and Perfios.

The joint report, “Reimagining Insurance: India’s Leap into the Future of Insurance,” presents a vision of a sector on the brink of rapid modernisation. Total insurance premiums in India reached Rs 11.19 trillion in FY24, and while traditional agent-led distribution remains dominant, digital channels are gaining traction, albeit from a low base.

The report examines how insurers leverage technology to build agile, inclusive, and future-ready business models. It also highlights the shift from a traditional agent-led model to a platform-driven, modular, and customer-first ecosystem. 

The report identifies five key shifts: Insurer-led tech investments, journey-level digital transformation, public infrastructure and government support, dynamic distribution and data, and regulation. It combines deep industry knowledge and insights from senior stakeholders across insurers, insurtech investors, and technology enablers.

It maps the present and future of Indian insurance, framing key technology shifts, regulatory developments, and strategic imperatives. 

“India’s insurance sector is on the brink of a transformative shift. With onboarding expected to be 80% automated in life insurance and over 90% of retail non-life claims moving toward real-time processing, we are entering a phase where efficiency and trust go hand in hand,” said Sameer Singh Jaini, Founder & CEO, The Digital Fifth. 

He added, “This evolution is also mirrored in investor sentiment, where projected funding of around $1 billion in the coming year signals strong belief in the sector’s long-term potential. What is most promising is the parallel investment in core system modernisation, smarter underwriting, and digital-first claims journeys. These foundational changes will elevate customer experience and redefine how insurers create, deliver, and sustain value in a dynamic ecosystem.” 

"As this report highlights, India’s Insurtech sector is poised for significant growth, yet digital sales represent only 0.67% of new life insurance business," said Prasad Krishnamorthy, Head of Insurtech at Perfios.

"This gap underscores a tremendous opportunity. Insurance Operating System at Perfios, which already powers 40% of cashless health claims is enabling insurers to achieve up to 200% improvement in process efficiency, while also identifying fraud, wastage, and abuse. This report underscores the critical need for modernisation that encompasses technology, trust, speed, and personalisation, especially as we see a sharp rise in self-onboarding and DIY insurance journeys." He added. 

While India’s insurance sector is evolving rapidly, significant structural challenges continue to hold back its full potential. Insurance penetration dropped to 3.7% in FY24, with life insurance at just 2.7%, well below the global average of ~7% signalling an enormous protection gap, especially in health, life, and micro-insurance categories.

Initiatives like NHCX (National Health Claims Exchange) and the upcoming Bima Sugam platform, the Government and IRDAI are laying robust digital rails for insurance innovation. The Digital Personal Data Protection Act (DPDPA) is expected to reshape how insurers manage customer data and design consent-based experiences.

Founded in 2008, Perfios is a global B2B SaaS firm that serves the banking, financial services and insurance industry in 18 countries, empowering 1000+ financial institutions. Through its online platform, the firm helps financial institutions to take big leaps by shaping their origination, onboarding, decisioning, underwriting and monitoring processes at scale and speed. 

It claims to deliver 8.2 billion data points to banks and financial institutions every year to facilitate faster decisioning and significantly accelerates access to credit and financial services for its clients' customers.