Acko gets in-principle regulatory nod to start general insurance business

Acko General Insurance  - set up Coverfox founder Varun Dua - on Tuesday said that it had received in-principle regulatory clearance to launch a general insurance business in India. This is called the first level of approval, or R1.

Acko will operate as an independent general insurance company with its entire operations offered through the digital platform. It will create products and deliver opportunities in areas where there are gaps, such as personalised insurance products based on user consumption behaviour.

Post the R1 approval, the company has filed for R2 approval with the insurance regulator.

“Insurance world over and especially in India has massive opportunities harnessing technology for lower distribution costs, algorithmic customised pricing and automated claims. The opportunity is even wider if innovative products which are designed to be consumed online within the internet economy can be made to work in a way that customers find it relevant and easy to access”, said Varun Dua, Founder of Acko.

In a press statement, Acko said that it has raised USD 30 million, which in effect makes it one of the largest seed rounds for a startup in India.

The company is backed by Narayan Murthy’s Catamaran Ventures, Venk Krishnan and Subba Rao of NuVentures, Infosys co-founder Kris Gopalakrishnan, Hemendra Kothari of DSP Blackrock, Atul Nishar – Founder & Chairman of Hexaware Technologies, and Rajeev Gupta, veteran investment banker and Founder of Arpwood Capital, Accel and SAIF Partners.

The company said that more investors are slated to back the company, as active interest in the insurtech sector plays out globally.

“Consumers need to be given more innovative product choices, at a price point that is ‘designed’ for them & at an unparalleled convenience and service levels. All of this is only possible within the construct of ‘manufacturing insurance’ and thus we are delighted to support Acko in being the first fully digital insurer of the country,” said Vivek Mathur, Managing Director, SAIF Partners.

US, China and Europe have seen a big fillip to funding as technology disrupts the insurance ecosystem. Oscar Health and Lemonade in the US and Zhong An in China have exploded to billion dollar valuations as the sector sees startups capturing niche markets, disrupting various parts of the value chain and focusing on millennials who need a simpler, customised and more transparent way of dealing with their insurance.