Digit Insurance plans Rs 6,500 cr in premium sales by October 2022, Auto News, ET Auto

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Fairfax has so far injected $ 140 million into the company, which has aggregate capital of $ 442 million. In the last $ 200 million round in July, Digit was valued at $ 3.5 billion, up from $ 1.9 billion in January 2021 when he became the first insurance unicorn.

Digit Insurance, promoted by Fairfax, is confident of raising its premium sales to over Rs.6,500 crore when it completes its five-year operation next October, a senior official at the Bengaluru-based general insurer said. .

The digital-only insurer sold the first policy in October 2017 and has since sold to more than 20 million customers. He broke even in the third year and entered the unicorn club in less than four years and is now valued at over $ 3.5 billion.

Its founding president, Kamesh Goyal, said the heightened optimism for sales growth stemmed from the near total normalcy at the pre-pandemic level and the likely ebb of the chip shortage, which is plaguing the auto industry, over the past few years. months, helping the industry recoup lost auto premium sales.

He added that first half sales have already exceeded Rs 2,200 crore.

While the industry grew 16-17% in the first half of the year, Digit grew more than 67% to Rs 2,196 crore, mostly thanks to the healthcare segment, Goyal said.

In the whole of the last fiscal year, he only had Rs 3,243 crore in sales, he added.

The industry expects to end the current fiscal year with 22-25% growth from last fiscal year, which should mean the industry is back to pre-pandemic levels.

“Based on the company’s fastest growth rate so far at nearly Rs 2,200 crore in premium sales during the first half of FY22, we will easily cross the Rs 3,243 crore of FY21 with a minor benefit that was reduced by the pandemic claims, ”Goyal said. .

He added that given a high base, “I hope to exceed Rs 6,500 crore with premium sales by the time we enter the sixth year of operation next October”.

In FY21, the company grew 44% to Rs 3,243 crore, compared to industry growth of 5% to Rs 2 crore, and made a profit of Rs 123 crore for year, up from Rs 175 crore due to higher pandemic claims. .

In the first quarter of FY22, its gross written premiums increased by more than 70 percent compared to 17 percent for the industry.

Goyal expects to break through the market share of 2% by then, from the current 1.68% of over Rs 2.2 lakh crore in June 2021. Its main indicator of profitability of the combined ratio is rose to 113.3% in the June quarter. In the market share draw, Digit owns 2.89% of auto insurance and 0.32% of health insurance.

He expects growth to be driven by autos and healthcare, which already broke the 300 crore rupee mark at the start of the year with a claims rate of 75-76%, although the he industry is both challenging and exciting with intense competition.

Goyal said Digit’s business mix is ​​led by “motor; which amounted to Rs 2,433 crore of total premium sales of Rs 3,243 crore of FY21, followed by ‘fire’ which recorded Rs 441 crore and ‘health’ at Rs 183 crore and ‘harvest’ at Rs 75 crore.

He also said he wanted to increase the company’s / group’s sales which are currently only 30 percent, with retail accounting for 70 percent.

When asked if the company is planning an IPO when the market is hot, Goyal replied “not in the near future but maybe in the next two years.”

The company is majority owned by Fairfax Holdings of Canadian businessman NRI Prem Watsa, with minority stakes from Faering Capital, Sequoia Capital, IIFL Alternate Asset Managers, TVS Capital Funds, A91 Partners, Indian cricket captain Virat Kohli and employees.

Fairfax has so far injected $ 140 million into the company, which has aggregate capital of $ 442 million. In the last $ 200 million round in July, Digit was valued at $ 3.5 billion, up from $ 1.9 billion in January 2021 when he became the first insurance unicorn.

Its valuation has increased almost five times in the past year.


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