Digit Insurance - Insurance Company
Founded in 2016, Digit Insurance is one of the leading general insurance companies in India.
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Founded in 2016, Karnataka-headquartered Digit Insurance is a tech-driven insurance and financial services platform that aims to simplify insurance for common people. It provides motor, health, travel, property and other insurance schemes and is the first insurance company to be fully clouded.
In 2021, Digit Insurance became India’s first unicorn of the year after raising $18M from existing investors like A91 Partners, Faering Capital, and TVS Capital, bringing its total valuation to $1.9B. In the beginning of 2022, the company raised $70M in a venture funding round and is currently valued at $3.5B.
The company is owned by Fairfax and its subsidiary Digit Infoworks. It is also backed by notable investors like TVS Capital Funds, Sequoia Capital India, A91 Partners, Faering Capital, India cricket captain Virat Kohli and the employees of Digit.
Business Overview & Products
Digit Insurance provides the following products and services through its website and app:
Commercial Vehicle Insurance
Auto Rickshaw Insurance
Super top-up insurance
OPD Health Insurance
Arogya Sanjeevni policy
Personal accident insurance
Corporate health insurance
International Travel insurance
Flight Delay insurance
The company operates across 7 states in India – Karnataka, Gujrat, Maharashtra, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, and Bihar.
How It Works
Digit Insurance has an all-digital model that is supported by analytical and other technologies to fasten the insurance process in various ways.
The pre-inspection app reduces turn-around time for claims. As soon as a customer comes to the portal, the app determines whether there is a gap in their insurance or not. An SMS-based link is then generated and sent to the user which gives them instructions to carry out the pre-inspection. The app allows users to take 8-10 pictures which are automatically loaded into the system through the link. Particularly for bikes, AI recognizes basic checks like registration number, color, etc. This fastens the process of pre-inspection cases to below 2 hours.
In-house-built apps help claim settlement faster. For example, travel delay claims are 100% automatic, as soon as a customer’s flight is delayed, they receive an SMS to send their boarding pass and bank details. Once the immediate claim registration and approval are done, money is transferred to the customer’s account.
The self-inspection app is a smartphone-based solution that uses customers’ cameras to complete the process making it a hassle-free experience for users. The app reduced inspection time from days to just 10 minutes and has led to motor claims being approved in 24 hours.
Moreover, there’s also an audio claim feature available for users who do not wish to fill out long applications. In order to file a claim, users can simply call to register one. This call is taped and then used to extract and store important details for processing the claim.
Digit Insurance has an application programming interface (API) integration for all partners including Policy Bazaar, Flipkart, Clear Trip, and Amazon India, to cancel or make amendments to their policies. It also incorporates machine learning which helps with a faster reconciliation, float management, fraud management, and claims settlement. The analytical tools used by Digit Insurance are Python, BI tools such as IBM Cognos, visualization tools such as Power BI, databases such as Postgres, and Data Lakes such as Hortonworks.
Business Model & Pricing
Digit Insurance has a cloud-based business model which has lowered the company’s operational and infrastructure costs. It creates beneficial partnerships with companies that it can integrate with to provide insurance alongside products. It has implemented this strategy with 1500 companies including international e-commerce powerhouses Amazon and Flipkart.
The company earns revenue through its various insurance plans but mostly through premiums. These premiums start at a low cost making it an attractive option for users belonging to all kinds of financial backgrounds. For example, the two-wheeler insurance premium starts from only INR 786 ($10.82)
In 2021, Digit Insurance reported an operational revenue of $252M which showed a 56% growth bringing their consolidated revenue to $304M. In the first half of 2021, sales crossed $292M and premium income grew 44% to $430M. The company also reported a profit of $16M.
In 2021, it became India’s first unicorn of the year after raising $18.5M from existing investors and is now valued at $3.5B. Its valuation has grown almost five times in the past 5 years, it has processed more than 400,000 claims and has a claim settlement ratio of 96%.
The company has served over 20 million customers and its app has been downloaded over 100,000 times.
Kamesh Goyal: Chairman and Co-Founder at Digit Insurance. Kamesh always held a fascination for the finance world. Initially, he started his career by working at The New India Assurance Co.Ltd. Later he worked at KPMG India as their Manager and as Head Of Asset Management and US Life Insurance at Allianz Asset Management.
History & Evolution
In 2016, Kamesh Goyal had been working at Allianz for 16 years. He found himself yearning for a venture of his own where he could put his experience of 33 years in the insurance industry to good use. It was only after he failed to explain the basics of insurance to his teenage son that he decided to take a good look at the jargon-heavy industry and its complex operations. This is what motivated Goyal to start a business that would provide simplified and customized products and ensure fast and easy settlements. Go Digit Infoworks Services, an IT development, and consultancy firm was launched as a joint venture with Oben Ventures and Fairfax Financial Holdings.
In 2016, a subsidiary of Go Digit Infoworks called Go Digit General Insurance was launched. At first, the company was named Oben but was later changed to Digit Insurance.
In 2017, Digit Insurance received its license from IRDA and launched its first product, travel insurance. That same year Fairfax Group bought a 45% stake in the company for $52M making it the highest amount received by a startup in the insurance sector.
In 2018, Digit Insurance acquired ITI Reinsurance, an organization that helps insurers in their efforts to provide stable and affordable risk transfer solutions to their policyholders. That year it also partnered with Flipkart to offer mobile insurance.
In 2019, the company gained a 1% market share in India, insured more than 5 million customers, and settled more than 100,000 claims.
In 2020, the company expanded its business by 30%. Two major products helped the company drive growth, covid health insurance, and fire insurance. The covid-19 product, a fixed benefit cover, was able to reach out to over 2 million Indians through the Digit Group Illness Insurance product. Despite the pandemic, it exhibited a promising growth of 31.9% and earned a premium of $186M.
In 2021, Digit Insurance became India’s first unicorn of the year by raising $18M from existing investors. The company is now valued at $3.5B and was the only Indian insurance company to feature in the CB Insights Fintech 250 list of the year.
In India, the gross direct premium income for insurance in 2021 was $14.62B with an increase of 12.3% in Year on Year growth (YoY) due to 28.8% growth in the health segment and $84.7% growth in the personal accident segment.
The insurance industry in India consists of 57 insurance companies, with the market share of these private sector companies increasing to 48.03% in 2020.
The biggest difference Digit Insurance provides is using technology to simplify claims processes. It is the only company in the insurance industry to be fully clouded. There are no hard copies required and most of the claims processes are smartphone-enabled. This shortens the time for claim processing and makes it user-friendly for its customer base.
Suggested starting points to dive deeper
Never Been A More Exciting Time To Be In General Insurance, Says Digit Insurance's Goyal (Ishan Shah, Money Control, Oct ‘21)
Will Digit Simplify Insurance to Pull in India? (A Junior VC, July ‘21)
Digit Insurance eyes Rs 6,500 cr in premia sales by October 2022 (The Economic Times, Oct ‘21)
Digit Insurance comes up with cover amid deadly coronavirus spreads (Business Standard, March ‘20)