Acko is an under-the-radar startup that wants to disrupt India’s insurance industry through a digital-only model. This week it stuck its head above the parapet and announced that it has raised $30 million to get started on its bold plan.
Founded by Varun Dua, the man behind insurance comparison site Coverfox, Acko is designed as a wholly digital take on insurance in India. The company is an independent general insurance provider that is wholly digital. Beyond operating online and without the expense of a brick and mortar footprint, Acko is aiming to unbundle insurance in India to make it both more affordable and relevant to consumers.
“India is a fairly nascent insurance market [with the same] traditional carriers that we’ve seen for decades,” CEO Dua told TechCrunch in an interview. “Acko will be the first internet-only carrier.”
Taking insurance in India online
Inspired by models such as Lemonade and Oscar Health in the U.S. and Direct Line in the UK, Dua sees a huge opportunity to tap into digital to take a shot at the current market — which is estimated to be worth over $10 billion annually — and reach a new segment of consumers who have been left out to date.
“The system of distribution in India does not provide information on the user at all. There’s not enough data to underwrite accurately on a real-time basis,” Dua said. “Sales are mostly offline and flat pricing, usually [insurance firms] don’t know much about a customer before underwriting him.
The Acko CEO believes his firm can offer a 30-40 percent discount on incumbents by pricing its policies more accurately by gathering information and data online. That’s in addition to cost savings by operating without a physical presence.
“We will probably start off taking away existing [insurance rivals’] customers,” he added. “It’s a relatively easier market because people are moving online year on year. That…