Indian Unicorns 2022: Acko Helps Indian Masses Get Insured

Non-life insurance market in India is expected to grow 14% in fiscal 2022 from INR 1.98 trillion (~$27 billion) in fiscal 2021 driven by the influx of private insurers in the sector. But despite the market size, currently, only a fraction of the nation’s 1.3 billion people have access to affordable, sizable policies. Acko is a leading non-life insurance player in the country that recently entered the unicorn club.

Acko’s Offerings

Founded in 2016 by Ruchi Deepak and Varun Dua, Bengaluru-based Acko is an online insurance policy provider. Traditional banks and insurance agencies typically sell policies without gathering enough information on customers. Acko wanted to change that by building a solution that could leverage data analytics to know a consumer well and create a more customized insurance offering.

Acko was set up as an insurance provider that provides personalized insurance products based on user consumption behavior. For instance, it considers conditions such as the person’s driving history, auto ownership history, demographics, cab usage history, physical illness, and many more factors to determine the right pricing for the user. It provides smaller-sized insurance products for people working in the healthcare and transportation sector, such as drivers.

The company started as India’s first digital insurer and is now the country’s fastest-growing insurance company. It offers customized pricing, instant policy, and quick claim settlements, to help make insurance more user-friendly. Its digital-only model removes the retail expenses that come with opening a physical store and eliminates the dependence on distribution networks.

Today, Acko provides insurance for cars, bikes, health, and even electronics. Recently, it announced a partnership with Amazon Pay to launch insurance products for both two and four wheelers. Customers will be able to get a quote on Amazon Pay by providing basic details and get the option to choose premium add-ons including zero depreciation and engine protection. Customers will be able to pay insurance premiums using Amazon Pay balance, Unified Payments Interface, or any other saved card.

Acko also announced a partnership with Ola that allows its riders the option to add in-trip insurance while they book their ride. The program provides benefits including lost baggage or laptops, missed flights, accidental medical expenses, and ambulance transportation cover. The claims can be made from Ola’s app, in addition to Acko’s website.

Acko’s Financials

Acko currently covers over 70 million customers in India, of which over a million are part of the gig economy through partnerships with companies including food delivery giants Swiggy and Zomato. It reported an annual revenue run rate of $175 million last year.

The company has raised $458 million in six rounds of funding led by Canada Pension Plan Investment Board, Intact Ventures, Munich Re Ventures, Multiples Alternate Asset Management Private Limited, General Atlantic, Lightspeed Venture Partners, RPS Ventures, Intact Ventures, and Amazon. Its most recent round was held in October 2021 when it raised $225 million at a valuation of $1.1 billion.

India’s insurance space is attracting several private players. Another digital-focused player, Digit Insurance, had recently joined the unicorn club as well. Like Digit, Acko too is counting on building long-lasting relationships with its customer base. It believes, rightly so, that it can help build higher customer lifetime value by offering them access to a portfolio of other ancillary products – from cars to bikes to probably homes. It is helped by the fact that demand in India for suitable insurance products remains unmet. Acko has the opportunity to meet this demand. It will, however, need to be mindful of execution discipline that sometimes goes amiss when lofty valuations abound.

Photo Credit: Arek Socha from Pixabay

This segment is a part in the series : Indian Unicorns 2022