Two online nonlife insurers, Acko and Digit Insurance, have received the final approval from the insurance regulator to carry out operations.
Both companies are relying on their technology platforms to differentiate themselves and plan to replicate the e-commerce service experience that customers are used to, reported Times of India.
Acko is a digital-only non-life company promoted by Varun Dua, founder of online insurance brokerage Coverfox and backed by Narayana Murthy's Catamaran Ventures. Digit Insurance is started by Kamesh Goyal, former head of Bajaj Allianz in India and is backed by Fairfax Group.
Mr Dua said that Acko will adopt a risk-based pricing for retail covers such as motor and health insurance as against the flat pricing strategy followed by incumbents. Acko will mine and analyse data to draw a more accurate risk profile and in future would also use telematics, which involves using a device or mobile app to track driving patterns for vehicle insurance.
Acko is starting with a paidup capital of INR2 billion with 48% invested from foreign investors. The company plans to start selling insurance by December 2017 with 100 employees, most of whom will be on the claim servicing end.
The company will adopt a straight-through process for distribution, underwriting and issuance of policies with minimum manual intervention. Distribution and servicing partners will also be digitally integrated with the company's platform. "We will be starting with auto and travel insurance with health in 2018. Personal accident insurance cover will be integrated with other products," said Mr Dua.
Digit has already raised INR3.5 billion (US$53.6 million) which is one of the largest amount of capital that any insurance company commenced its operations with in the country.
Digit will be introducing its products and services in the next four to six weeks in the Indian market -- initially through strategic partners. Ms Jasleen Kohli, Director and Chief Distribution Officer, said: "Our core purpose is to make insurance, simple. For us, making insurance simple translates into - easy interface for customers and partners to interact and transact with us, simple products, simple and effective claims process."