During the calendar year 2025, Initial Public Offerings (IPOs) and acquisitions in the insurtech sector reached an all-time high, despite a slowdown in new venture funding attraction. Investors show increased interest in insurance technologies, but they are also asking stricter questions of companies demonstrating commercial success.
Insurtech, an industry that uses modern technologies to make traditional insurance products and processes cheaper, faster, and more personalized, is experiencing a period of growth. The Indian insurtech sector is one of the largest in the world, and its development will determine the distribution of insurance services in the country for the next decade.
According to a BCG and India InsurTech Association (IIA) report from October 2025, the insurtech ecosystem in India comprises over 150 active participants. The total valuation of these companies exceeded $15.8 billion, and revenue in 2024 reached $0.9 billion, ten times higher than in 2019.
The sector includes two unicorns, eight players valued between $100 million and $1 billion, and over 45 companies with annual revenues exceeding $1 million. This sector in India reflects global trends, signaling a shift in investor focus towards supporting enterprises with a clear path to scalability and profitability.
Health insurtech startups in India accounted for four out of the five largest deals and over 70% of all funding, highlighting their role in driving accessibility, efficiency, and innovation.
For most of the last decade, the sector focused on achieving scale. This attracted global capital to a market where insurance penetration had long remained at around 3.7% of GDP, roughly half the global average. Nevertheless, optimism about India's large potential market is tempered by caution, as many insurance distribution companies have had to regularly raise funds to sustain operations.
Scaling insurance responsibly is a complex task, and the reasons are related not so much to technology as to the product itself. For example, a taxi ride or food order demonstrates its unit economics within a few days. However, an insurance policy is valid for a year, five years, or even a person's lifetime. Consequently, insurtech startups cannot simply apply growth models developed for other consumer internet businesses.
High distribution costs in a country where insurance, outside certain urban areas, is underdeveloped, and regulation focuses more on solvency, claims settlement, and disclosure rather than growth rates, require an approach that values patience over speed.
Thus, the question arises as to what sustainable insurtech looks like amid the current challenges in the sector. Previously, the main criterion for most insurance firms was having a presence in a large number of Indian postal codes. Whether a customer would buy another product on the same platform was less significant. However, the mentality is gradually changing: renewal and cross-selling metrics are turning customer acquisition costs into investments.
For instance, an insurance agent in a small town might spend Tuesday reviewing a claim filed three months ago and explaining to a family why some hospital expenses are covered while others are not. It is this conversation, rather than an app notification or online offers, that prompts the family to return upon renewal, and often it is this interaction that leads a neighbor or relative to the same agent seeking their policy.
The second shift is towards a hybrid distribution model combining digital tools with human agents, instead of a purely app-oriented approach to acquisition. The agent becomes both a driver of acquisition and a driver of retention, as trust is built through communication rather than online interfaces.
This same agent handles finding missing documents, clarifying a denied claim, or simply answering a call if the insured does not know whom to contact. It is this level of service, built interaction by interaction, that transforms a sold policy into a retained relationship, adding service as a distinct important aspect alongside Trust and Access—the key pillars of the business.
The third, still emerging shift is that in the broader Indian insurance sector, from large life insurers to small distribution platforms, growth is increasingly being achieved organically due to a growing population. However, some companies are also expanding inorganically, especially through mergers, acquisitions, and foreign investment, to rapidly increase volumes and meet growing demand.
In its report on the Indian insurance market in early 2026, the Swiss reinsurance company Swiss Re Ltd projected an average annual premium growth rate in the country of 6.9% between 2026 and 2030, making India the fastest-growing major insurance market globally.
Even for the insurtech sector, acquiring an existing network of agents or a customer base can help scale quickly and enter the market. Perhaps this is why the central government once considered merging loss-making public insurance companies. Since then, the center has instructed these companies to focus on profitability, while the government monitors their operations for a possible future decision.
It cannot be denied that policy also pushes the sector towards consolidation. The opening up of 100% foreign direct investment in insurance, the recent rationalization of GST on individual life and health premiums, and the regulator's focus on capital efficiency and faster claims settlement indicate a sector that wants to be judged by outcomes for policyholders, not by headlines about raised funds.
Nevertheless, this does not mean that growth ceases to matter, as India remains significantly underinsured, and closing this gap requires efforts from both existing and new players.
The national rating agency ICRA Ltd., in its report on the Indian insurance sector for April 2026, expects the New Business Premium (NBP) to grow by 9.4–9.9% to 2.02–2.03 trillion rupees in the fiscal year 2027, driven by private insurers. NBP represents the total amount collected from newly sold policies across the industry. The agency forecasts that total NBP will grow by 7.8–8.2% to 4.95–4.97 trillion rupees in FY 2027 compared to 4.60 trillion rupees in FY 2026 and 3.97 trillion rupees in FY 2025. With nearly a decade of experience building insurance distribution businesses from several cities to a nationwide network, we believe that the insurtech companies that will be important in five years are those that create real value for this growing ecosystem while viewing every funding round as fuel for business development.