IRDAI Grants Life Insurance License to ACKO
- ByStartupStory | April 1, 2023
Recently, the Insurance Regulatory and Development Authority of India (IRDAI) has granted a license to ACKO, an insurtech unicorn based in Bengaluru, to become one of the few life insurers in India. The regulatory authority has also given approval to Credit Access, a microfinance company, to begin its life insurance business. According to an official statement from IRDAI, Acko Life Insurance Ltd. And Credit Access Life Insurance Ltd. Were granted certificates of registration to initiate life insurance operations during the 121st meeting held on 25th March 2023.
The number of life insurers in India has increased to 25 following the recent license granted to ACKO by the Insurance Regulatory and Development Authority of India (IRDAI). Interestingly, the IRDAI has approved a company for life insurance for the first time in 12 years, with the last license issued to Edelweiss in 2011. The regulatory authority stated that this decision was made after granting registration to a general insurer in its 120th meeting held in November 2022. As a result, a total of three new insurers have been added in the financial year 2022-23, and there are currently 20 applications in the pipeline at various stages of registration in the life, general, and reinsurance segments, according to the official statement.
In 2021, ACKO joined the unicorn club after raising $255 million with support from major investors such as Amazon, Accel, General Atlantic, and Canada Pension Plan Investment Board (CPPIB). According to reports, the insurtech unicorn is currently in talks with its existing investors to secure a funding round of up to $150 million. The latest funding round is expected to value the startup at $1.5 billion, as reported by various sources. In addition to General Atlantic and CPPIB, Lightspeed Venture Partners and Multiples Private Equity are also said to be interested in participating in the fundraise, as per ET reports.
ACKO is a digital insurance policy provider, founded in 2016 by Varun Dua and Ruchi Deepak, and is a competitor of Digit and Plum. The company has achieved one of the largest market shares in embedded insurance products such as mobility and gadget insurance across various digital consumer platforms including Amazon, MakeMyTrip, Ola, Urban Company, and Bajaj Finance. ACKO has also partnered with companies like Zomato and Swiggy to provide insurance coverage to nearly one million gig workers in India. Despite a 3X increase in net loss to INR 382.3 Cr in FY22 from INR 132.5 Cr in FY21, the company’s revenue surged 2.29X to INR 1,087.5 Cr during the year from INR 475.3 Cr in FY21.
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