CHENNAI: Insurtech, a portmanteau of insurance and technology, seems to be the next battleground for e-commerce firms with Amazon and Flipkart diversifying into the insurance space. Even as Amazon nears a deal to invest in online-only insurance start-up, Acko, the Seattle-based e-tailing major, is set to face its real test with Flipkart reportedly readying its own entry into insurance sales online.
Amazon is said to be looking at investing in the insurance sector and is in the final stage of finalising the deal with Acko at an outlay of nearly Rs 100 crore. Amazon is not the only company that has been pursuing investing in the start-up. Acko had previously been in talks with Flipkart for an investment, but the discussions did not yield any result. However, once the deal goes through, it may see the retail giant develop financial products with Acko and act as distributor of those products by selling it on its website.
Acko General Insurance, a subsidiary of Acko Technologies, has been on a fund-raising spree and had raised Rs 200 crore separately in May 2017.
Likewise, in a quiet move, the co-founders of e-commerce giant Flipkart, Sachin Bansal and Binny Bansal set up a new entity, Sabin Advisors, on December 7, 2017, reportedly for new businesses ranging from venture capital funding to insurance. A month ago, the company indicated that it intends to bring in insurance as a category on Flipkart.com and sell plans on behalf of insurers, according to documents filed with the Registrar of Companies.
The Flipkart board had already cleared the insurance service roll-out in September and mentioned that it has sought approval from the regulator, Insurance Regulatory and Development Authority. With e-retailers entering the sphere, consumers will be able to buy policies from third-party websites as well. It, however,
remains to be seen whether e-retailers will help consumers take informed buying decision. Or, for that matter, whether the pecking order of existing players such as Policybazaar and Bankbazaar that currently dominate the insurance space in India, will change.