India’s Insurtech ecosystem tops $15.8 billion: How AI is driving insurance growth

India’s Insurtech ecosystem has reached a significant scale, with cumulative valuations exceeding $15.8 billion and revenues growing tenfold since 2019 to $0.9 billion in 2024, according to a new report by the India Insurtech Association (IIA) and Boston Consulting Group (BCG).

The report, “India Insurtech Landscape and Trends: Reimagining Insurance with AI,” shows that AI and Generative AI (GenAI) are emerging as key accelerators of profitability and efficiency, with the potential to unlock a $4 billion profit opportunity — a 60% boost to the sector’s existing $6 billion profit base.

The technologies could generate $25 billion in additional revenue and $3 billion in cost savings across the insurance value chain.

Health Insurtechs lead funding momentum amid global slowdown

Despite a global funding correction — with global Insurtech funding dropping to $4.1 billion in 2024 — India’s Insurtech segment has remained resilient. Health-focused players accounted for 4 of the 5 largest domestic deals and over 70% of total funding, highlighting the growing focus on health access and efficiency.

“The funding reset signals a move toward sustainable, scalable business models,” said Vivek Mandhata, Managing Director and Partner at BCG. “Investors are prioritizing Insurtechs that can deliver long-term value and profitability.”

Insurance ranks among top AI adopters

Globally, the insurance sector is now the second-highest adopter of AI and GenAI, behind only technology. Indian insurers deploying these tools are seeing measurable benefits — including 15–20% productivity gains, 10–20% faster underwriting, and 20–30% lower service costs.

However, the report cautions that while over 90% of insurers have launched AI pilots, only 7% have achieved enterprise-scale adoption. Scaling AI effectively, it says, will require focused investments in data, processes, and workforce capabilities.

AI as a lever for India’s insurance ambitions

To support India’s Viksit Bharat aspirations, the industry must lift premium growth from the current 7% to 13–15% annually over the long term. AI and GenAI are expected to play a pivotal role in achieving that, by driving both productivity and financial inclusion.

“India’s insurance ecosystem is on the verge of large-scale transformation,” said Suhail Bhansali, Partner at BCG. “Strong digital infrastructure and AI capabilities offer a foundation to scale responsibly and make the sector more intelligent and inclusive.”