Acko receives IRDAI nod to commence life insurance business

The last company to have received a licence for life insurance was Edelweiss in 2011.

Acko, which is backed by the likes of General Atlantic and Canada Pension Plan Investment Board (CPPIB), is close to raising a fresh funding round of $150 million led by its existing investors valuing it at $1.5 billion, according to people in the know.

While General Atlantic is leading the new round of financing with CPPIB, Multiples Private Equity and Lightspeed Venture Partners are also participating in the fundraise, said sources close to the talks.

Its other existing backers include Amazon, Accel, Elevation Capital, Ascent Capital, Intact Ventures, Munich Re Ventures and Flipkart cofounder Binny Bansal, among others.

The Bengaluru-based startup had last year also signed a term sheet with PayU, owned by Prosus, but the South African conglomerate decided not to go ahead with the financing, as ET reported in September last year. Acko was looking to raise the funds to enter the life insurance business.

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Currently, Acko provides offerings in auto, health and travel insurance segments where it has partnered with the likes of cab-aggregator Ola and Amazon for bite-sized insurance covers available through their respective apps. Insurtech firms such as Acko, Digit, and Plum raised large sums of funds in the aftermath of the Covid-19 pandemic as they witnessed strong demand from customers on the back of disruptions due to the pandemic, which led to more awareness about insurance.

“In the 121st meeting of Insurance Regulatory and Development Authority of India held on 25th March, 2023, two new entities namely Acko Life Insurance Ltd. and Credit Access Life Insurance Ltd. were granted certificate of registration to commence life insurance business,” an official statement by IRDAI said. “With these two additions, the total number of life insurers operating in India have gone up to 25, which had remained stagnant since 2011, when the certificate of registration was last granted to a life insurer”.

“This comes after the grant of registration to a general insurer in the Authority’s 120th meeting held in November 2022; marking addition of a total three new insurers in the financial year 2022-23. Another 20 applications are in pipeline at various stages of registration in life, general and reinsurance segments,” the statement added.