Angel One to go fully digital with life insurance JV; 65% focus on critical illness products, says CSO Amit Majumdar

Edited Excerpts:

Why life insurance at this point in time?

It’s not a sudden decision. As a platform player, we’ve always looked for products and services that can be digitally enabled on our Angel One platform. Our customers are largely from cities beyond metros, they’re digitally savvy and completely native to mobile. Over the last five years, we’ve studied this segment and realised that they’re agnostic to any financial product as long as it’s end-to-end digital from onboarding to transaction to closure. They don’t visit branches or distributors. Around 70 percent of our customers are new to financial services. They might have a bank account but no exposure to equities, SIPs, or mutual funds. So, their financial journey often begins with us. Most insurers depend on physical distributors, leading to high engagement costs and little flexibility in product design.

Our JV partner Livwell brings patented face-scan technology that enables underwriting on the fly. A customer scans their face, gets a health score, and receives a personalised quote instantly. By rescanning every few months, their parameters, and therefore premiums or coverage, can be updated dynamically. This is a digital-first, data-driven approach to protection. Combined with growing awareness post-COVID, where customers increasingly see life insurance as a protection product rather than investment and regulatory reforms from IRDAI that allow more bundling and product flexibility, we felt the timing was right. Insurance is a long-term business, with a typical 8–10-year horizon. We already engage customers for wealth and credit; adding protection completes the ecosystem. It deepens engagement, drives cross-sell, attracts new users, and lets us offer a holistic financial experience.

You mentioned the amendment bill. Since this is a JV between Angel One and Livwell, and Livwell currently holds 74%, how does the proposed increase in the FDI cap to 100% impact you?

The government’s “Insurance for All by 2047" vision can’t be achieved with the limited number of existing insurers. Also, market concentration among a few large players has kept penetration at just around 3 percent. Allowing 100 percent FDI enables more entrants and competition.

However, even with 100 percent FDI, many foreign players will prefer an Indian partner who understands the local consumer and financial services landscape. Past JVs in the insurance space struggled because their partners didn’t understand financial services deeply. IRDAI has become more selective about JV approvals for this reason. So, foreign partners continue to seek local alliances. For us, while we hold 26 percent, the JV helps co-create the right products for our segment. We understand the customer, and Livwell understands the product. If the business performs well, we have flexibility and we can maintain our stake or enhance it later. Currently, we’ve invested Rs 104 crore for a 26 percent stake, with a 3-, 5-, and 8-year plan. Depending on growth, additional capital may be infused either by us or by Livwell, now that 100 percent FDI is permitted.

Are you waiting for the bill to be rolled out before you start selling? Where are you with the business right now?

We’ve already registered the company and secured IRDAI approval for the name. The next step is the R1–R3 application process, three stages of regulatory scrutiny. It’s detailed and includes due diligence on all partners. The IRDAI chairperson was recently appointed and is meeting existing insurers, so we’re timing our filings accordingly. We expect to make our first submission by mid or late October. We’re targeting approvals by the end of this financial year and hope to go live with products in Q1 FY27. While we’re Angel One’s exclusive digital partner, LiveWell will also distribute through bancassurance and limited physical agents. Unlike legacy insurers that rely on agents for 75 percent of business, our mix will be 75 percent digital and 25 percent physical.

You mentioned a three-, five-, and eight-year window. How do you see capital needs evolving?

We’ve modelled the business trajectory for the next decade. Our Rs 104 crore capital is sufficient for now. But if we see strong tailwinds, as fintechs have seen in other financial products beyond metros, we might add capital to accelerate growth.

Do you plan to enter health or general insurance too?

No. Life insurance is the one area that truly needs digital innovation. General and health insurance, especially motor, are already well digitised. We’ll remain a distributor in those categories. We already have open-architecture partnerships with multiple insurers. We follow a “build versus buy” approach, and life is where we decided to build.

Will your life insurance business offer typical products like term, annuities, and ULIPs?

Not exactly. Our focus will be different. About 60–65 percent of our portfolio will be critical illness products with covering diseases like cancer, diabetes, and heart conditions.

Today, critical illness is usually just a rider in term plans. But our customers relate better to targeted protection. They prefer covering specific health risks they understand. Term insurance will still be offered, but critical illness will be our core. We’ll also have savings products, but the mix will be reversed compared to legacy players. Savings might form around 35 percent of our portfolio, while the bulk will be term and critical illness. That structure also makes our solvency ratio requirement lower and capital efficiency higher. Since we’re digitally led with minimal physical distribution, our cost base will also be lower and directly benefiting consumers.

How do you view the GST cut on life and health insurance products? There’s also the question of companies having to absorb the loss due to input tax credit (ITC).

For us, it’s a positive. As a new, digital-first entrant, we’re agile enough to adapt quickly to regulatory changes. The GST cut has been a shot in the arm. We didn’t expect it, but it helps us price our products more competitively from the start — without legacy cost structures weighing us down.