Digit Insurance to raise $84 million

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General insurance player Digit Insurance has received regulatory approval from the Insurance Regulatory and Development Authority (IRDAI) to raise $84 million (approximately Rs 600 crore) from three growth equity investors - A91 Partners, Faering Capital and TVS Capital.

This combined investment would bring Digit’s total funding to $224 million, making it one of the largest funding rounds in the Indian general insurance space.

Moneycontrol reported in October that the non-life insurer was looking to raise Rs 600 crore for solvency needs.

In an interaction with Moneycontrol, Kamesh Goyal, Chairman and Founder - Digit Insurance, said that the funds would purely be used for solvency purposes. He added that this round of funding should suffice for another 15 months.

"IRDAI rules require that solvency or minimum capital be linked to the amount of business written. This $84 milion should be sufficient for at least the next financial year," he added.

The three new equity investors put together will hold slightly less than 10 percent stake in Digit. The insurer is backed by Prem Watsa's Fairfax.

Digit is an insurance start-up, founded with the aim of making insurance simple. Digit has a comprehensive portfolio of products across motor, travel, property and health insurance.

Within two years of operation, Digit now serves more than 5 million customers and has achieved close to $300 million (approximately Rs 2,130 crore) of annualised premium and has a 1.2 percent market share of the overall in the general insurance industry in India.

In addition to the three institutions investing in the company, 72 Digit employees have also invested over $4.34 million along with the investors as a part of this round.

Gopal Srinivasan, Chairman - TVS Capital Funds, said, “From insurance to insurtech – the industry is going through a basic transformation, and Digit Insurance is at the cutting edge of this change. With their approach focussed on customer-centricity, prudent underwriting and technology for operational excellence, we are excited to partner with Kamesh and see the new phase of insurance touch many lives in India, via a simplified user experience.”

For the April to December period, Digit wrote gross premiums of Rs 1,642.27 crore, showing a year-on-year growth of 210.25 percent. Digit is among the fastest-growing general insurers in the country.

Gautam Mago, General Partner - A91 Partners, said that Kamesh and the team at Digit were building a new age insurance company in a thoughtful manner with an admirable mix of simplicity and technology.