This follows the Insurance Regulatory and Development Authority of India (Irdai) opening the heavily regulated sector to new participants. The sector regulator has sought tech-first firms to play a key role in helping the country achieve the goal of insuring every citizen by 2047.
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Onsurity and Loop Health declined to comment on ET’s queries.
Last October, IFC, Nexus Venture Partners, Quona invested $24 million in equity funding in Onsurity, primarily to fund its aspirations to become a health insurance company, said one of the persons cited above.
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Onsurity was started in 2020 by qualified actuary Yogesh Agarwal and Kulin Shah, who has worked with Acko in the past. It offers a health insurance management platform for Jupiter Money, CleverTap, Zepto, DBS Bank, and Pantaloons, among others.
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Founded in 2018, Loop Health has raised around $40 million till date from Y Combinator, General Catalyst, Elevation Capital, and Khosla Ventures, among others.
ETtech“Both these startups want to eventually build products in the group health space, a sector where they act as distributors currently,” said a senior industry executive in the know.
Both Onsurity and Loop Health help employers offer group health policies to their employees and run a platform to offer employee wellness services too. Onsurity has further expanded into other general insurance products like cyber insurance, and commercial general liability insurance.
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While Irdai opened licence applications last year, not much has moved on the regulatory front. Many companies had applied for insurance licences under multiple categories and only three players got the nod – Acko Life Insurance, Digit Life Insurance and Credit Access Grameen. In January, Narayana Health got the health insurance licence from Irdai.
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There are around 19 companies whose applications are still being evaluated by the regulator. Among the large players, Reliance-backed Jio Financial Services and Paytm General Insurance have applied.
“In the startup world, there are multiple issues around foreign shareholding, issues about ultimate beneficiaries in the venture funds that are backing these startups, so it is taking a lot of time to get the licence,” said a founder of an insurtech startup and one of the applicants for a general insurance licence.
The founder added that the funding rounds of many startups who are awaiting the licence from Irdai are pending.
“In some cases, investors have committed additional funding only on the condition that the licence comes in, till then it is a waiting game for these startups,” the founder said.