Insurance startup Digit Insurance has secured $44 Mn (INR 302.6 Cr) from existing investor Fairfax Holdings. This is a second funding round for the Bengaluru headquartered startup. FairFax has also invested $1 Mn in Digit’s parent company Digit Infoworks, taking the total fundraising amount to $45 Mn.
Following the latest round, Digit’s total fund raising amount has now touched $94 Mn. Last year, FairFax had pumped undisclosed amount in the startup.
The company plans to use the latest funds for increasing its product portfolio and further expanding its distribution network across India. These steps will help in fulfilling company’s mission to simplify insurance investment for common people.
Kamesh Goyal, founder & chairman of Digit, said that company is aiming to expand its network across regions like Siliguri, Ranchi, Patna, Gauhati in the east, Nagpur in Maharashtra, Coimbatore in Tamil Nadu and Srinagar in Jammu and Kashmir among other places.
Incorporated In 2016, Digit offers insurance products across various verticals like car insurance, travel insurance, mobile insurance, jewelry insurance, health insurance, home insurance etc. The company is backed by a huge team of 525 people to support sales, customer services and other imported operations. Mr. Goyal said that the company plans to scale up its team by another 200 employees by September this year.
The company is trying to distinguish itself from other competitors by settling faster claims. It claims to settle a claim via phone call within 10 to 20 minutes, with the company now aiming to minimize the time span to nearly 7 minutes. On smartphones, it claims to settle nearly 20 claims everyday and now aims to increase by this number by almost 100.
Overview of India’s online insurance sector
The work for most of the online Insurance player is really cut out, considering that today only 3% of insurance products are bought online. Besides, the competition posed by established players like LIC and GIC can obviously prove to be too daunting for any startups. And not to mention that competition posed by eminent financial institutions like HDFC & SBI can equally prove to be immensely challenging.
However, increasing smartphone and internet penetration offers glimmer of hope not only for online insurance but for the entire Fintech sector. Indian government’s decision to increase FDI limit from 26% to 49% in insurance companies has also paved way for attracting investment in digital insurance companies.
According to rough estimate, India’s online insurance market is valued to be around $80 bn.
Currently, two players PolicyBazaar and CoverFox are among two most formidable players in the online insurance space. PolicyBazaar last month earned coveted unicorn status after raising $200 Mn from SoftBank.