Insurtech Unicorn Digit Insurance Is Ready To Go Public

digit insurance logo

Three points you will get to know in this article:

  • Digit Insurance, a digital-first insurer, provides coverage for cars, bikes, health, and travel.
  • SEBI approves its IPO, set to launch in May 2024.
  • The company targets to raise INR 1,250 Cr through a fresh issue and INR 5,000 Cr through existing shareholders’ offer for sale.

Insurance stands as one of the oldest and most indispensable industries globally, offering protection and security against a multitude of risks for individuals and businesses alike. Yet, it is also recognized as one of the most intricate and cumbersome sectors, burdened by numerous intermediaries, protracted processes, and often, low levels of customer satisfaction.

In response to these challenges, Digit Insurance, a pioneering digital-first insurance company, is reshaping the landscape of the insurance sector. Established in 2017 by Kamesh Goyal, a former executive at Allianz, Digit Insurance introduces straightforward, transparent, and cost-effective insurance solutions across various domains including automobile, health, and travel. By harnessing technology, data analytics, and a customer-centric approach, the company pioneers initiatives such as smartphone-enabled self-inspection, instantaneous claims settlement, and adaptable coverage options.

Digit Insurance’s IPO

Since its inception, Digit Insurance has experienced exponential growth, serving over 20 million customers and achieving a gross written premium of INR 6,095 Crores in the fiscal year 2023. The company’s success is further underscored by substantial investments, with over $200 million raised from prominent investors including Faering Capital, TVS Capital, A91 Partners, and Fairfax Holdings, the latter being the investment vehicle of Canadian billionaire Prem Watsa. Notably, Digit Insurance attained unicorn status in January 2021, boasting a valuation of $1.9 billion.

Digit Insurance’s Future Plans

Anticipating its next significant milestone, Digit Insurance is poised to embark on a public offering, having secured approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO), slated for May 2024. The IPO is set to encompass a fresh issue of shares valued at INR 1,250 Crores, alongside an offer for sale (OFS) of shares amounting to INR 5,000 Crores by existing stakeholders. The proceeds from the fresh issue will bolster the company’s solvency margin and facilitate future capital requirements.

This move positions Digit Insurance as the second insurtech company in India to go public, following Policybazaar’s listing in November 2023. Expected to be among the largest in the Indian insurance sector, surpassing ICICI Lombard’s INR 5,700 Crore IPO in 2017, the IPO also presents an exit opportunity for early investors such as Fairfax Holdings, holding a 45.12% stake in the company.

Looking ahead, Digit Insurance remains steadfast in its commitment to expansion and innovation. With aspirations to enhance its market share in the insurance sector, the company endeavors to introduce new products and services catering to evolving customer needs, including home insurance, cyber insurance, and microinsurance.

Furthermore, Digit Insurance is poised to capitalize on the opportunities presented by the Drone Rules 2021, introduced by the Indian government to streamline drone regulations. Recognizing the potential for insurance coverage in this domain, Digit Insurance has already forged partnerships with entities like Skye Air Mobility, a drone delivery startup, to offer tailored insurance solutions. The company envisions pioneering innovative insurance products such as pay-as-you-fly and usage-based insurance for the burgeoning drone industry.

SA Team

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