Amazon, the e-commerce major is about concluding an investment deal with online insurance startup firm, Acko, quoting Economic Times, an Inc42.com report said. Apart from being a distributor, Amazon will also co-create financial products with Acko, if the deal gets through, noted the report. Once the deal is through, then Amazon will commence selling a gamut of financial products through its websites, the report said.Mumbai-based fintech startup Acko General Insurance founded by Coverfox co-founder Varun Dua this year had secured $30 Mn in a Seed round in May 2017. The investors included Narayan Murthy’s Catamaran Ventures; Venk Krishnan and Subba Rao of NuVentures; Kris Gopalakrishnan; Hemendra Kothari of DSP Blackrock; Atul Nishar – founder & Chairman of Hexaware Technologies; Rajeev Gupta, veteran investment banker and founder of Arpwood Capital, Accel Partners, and SAIF Partners. The company recently received it's in principle regulatory clearance to launch a General Insurance business in India. It has received an R1 license and has filed for an R2 license with the insurance authority, noted the report.
Amazon And Insurance In IndiaInterestingly Amazon’s push on selling financial products in the domestic market follows closely rival Flipkart’s move start selling insurance products on its financial marketplace, announced November last year, according to the report. Flipkart's RoC filing stated, “The company intends to venture into the new line of business viz. solicitation and servicing of insurance policies by acting as a Corporate Agent. In this regard, the company is required to alter its objects clause in order to align its main objects clause in line with the new line of business the company proposes to undertake.”It was not clear at the time whether Flipkart has already received an approval from Insurance Regulatory and Development Authority (IRDA), the governing body of the insurance industry in India. However, Flipkart’s intentions to launch a financial services marketplace were first revealed in June 2017. It was also being claimed that Flipkart has already curated a team for handling its financial services and products domain, the report pointed out.When Amazon firms up the deal to buy shares in Acko, the latter will allow former to diversify its customer base and partake a piece of the fintech market in India. The Indian fintech market is estimated to touch $2.4 billion by 2020, a two-fold increase from the market size currently standing at $1.2 billion, concurred the report.The insurance space in India is currently dominated by banks and government agencies such as LIC, GIC, etc. Also, there is a slew of other online startups catering to the insurance of the consumers such as PolicyBazaar, CoverFox, among others. Online insurance aggregator PolicyBazaar, along with its lending platform Paisabazaar, is exploring IPO prospects and is planning for a public listing by 2019. With its investment in Acko, Amazon will be taking on the might of the existing players. As of now, a mere 3% of insurance is bought online in the country out of an overall $80 billion market but that share is likely to grow given the rising access to online insurance services, added the report.