Page 16 - Insurance Times March 2023

InsuranceDekho raises $150 m in series a funding LIC's M R Kumar likely to
InsuranceDekho, an insurtech platform owned by CarDekho Group, has raised get another term as
$150 million in Series A funding consisting of a mix of equity and debt from
chairman
Goldman Sachs Asset Management and TVS Capital Funds along with
The chairman of LIC is likely to get
participation from Investcorp, Avataar Ventures and LeapFrog Investments.
another term in office. Highly placed
InsuranceDekho was founded by Ankit Agrawal and Ish Babbar in 2016.
sources said that MR Kumar, Chairman,
Speaking about the fundraise, Agarwal said, "it is a good time to have capital
LIC, may get another 6-12 months of
in the bank. It just puts InsuranceDekho in a better place than a lot of other
additional term in office. Kumar is set
players. We would want to spend the money expanding into real Bharat, and
to step down on March 13.
focus on how can we go from 160 cities operations to 300-400 cities. We want
to spend more on the tech products, and a couple of M&A opportunities that
we have identified, among other things." Finance Ministry looking
The latest funding will also be used by InsuranceDekho to launch new into life insurers' tax
innovative products in the health and life categories, grow the company's
relaxation plea
micro, small & medium enterprise (MSME) insurance business, and strengthen
its leadership team. The company aims to achieve annualised premium run- The relaxations sought by the life
rate of Rs. 3,500 crore by March 2023. Agarwal also noted that the company's insurance industry on the Budget
burn rate has always been low and he expects InsuranceDekho to become announcement of taxing high-value
profitable in the next year. policies with premiums of Rs. 5 lakh
and above are currently under
examination by the finance ministry.
lakh, will be taxable under 'Income percent indicated a significant increase
Although deliberations are going on with
from Other Sources'. Following the while 10 percent showed a marginal
announcement, shares of listed life increase in fraud incidents," the survey the industry, no final decision has been
insurance companies fell 8-12 per cent. said. taken on this matter, a senior finance
ministry official said. The Centre, in this
Insurers have said that while the Further, even as insurers consider
year's Budget, proposed to tax proceeds
impact on their bottomline will be mitigating fraud as a priority, only 60
from high-value life insurance policies
minimal due to the taxation being per cent of the respondents plan to
applicable only on high value policies, increase their budgets marginally (non-unit linked plans).
demand for such covers is likely to fall whereas the rest are likely to keep This is to plug the arbitrage that high
substantially in the absence of any tax investments at the same level, the net worth individuals (HNIs) are using
benefit, as traditional products have survey showed. to get tax-free returns on their high-
largely been sold as stable, tax free The survey, conducted in Q2FY23, is value insurance policies through
return on investment. based on qualitative interviews with Section 10 (10D) of the Income Tax
key stakeholders/senior management Act. Soon after the announcements,
60% life, health insurers across leading private insurers. the life insurance industry agreed with
see rapid rise in fraud The major factors contributing to the the government's broad idea of taxing
rise in frauds include increased HNIs.
About 60 per cent of Indian insurance
digitisation, remote working post the
companies are seeing a rapid increase Further, instead of taxing the proceeds
pandemic and weakened controls. The
in insurance fraud, especially in the life from these policies under income from
survey showed that the top five
and health insurance space, according other sources, which could result in
challenges faced by insurers include
to Deloitte's Insurance Fraud Survey negative returns for the policyholders
issues with data protection and
2023. (adjusted for inflation), the benefits
privacy, lack of information sharing
"An overwhelming majority of amongst insurers, problems with data of redefined super HNI should be
respondents across life and health quality, limited use of analytical tools taxed under long-term capital gains
insurance have indicated that they in case of fraud detection and keeping (LTCG) with indexation benefits. This is
witnessed a significant increase in up with the modern fraudster modus given the long-term nature of the
fraud over the last two years. Sixty operandi. products.

14 March 2023 The Insurance Times