Infosys founder NR Narayana Murthy-promoted Coverfox has filed an application to float a general insurance company to foray into Rs 1 lakh crore industry as Acko General Insurance.
Acko is one of the four applications filed with the Insurance Regulatory and Development Authority to set up general insurance company. There are three other applications – Dewan Housing Finance Limited, Fairfax and Edelweiss. While Dewan and Edelweiss have filed for a 100% subsidiary, Fairfax and Coverfox are joint venture agreements with foreign partner.
Coverfox is run by Glitterbug Technologies, a tech company which has received Series A & B funding from global funds such as SAIF partners, Accel and Narayan Murthy’s Catamaran Ventures. The online portal has been in existence for over 3 years has raised several rounds of funds to survive in highly competitive market.
â€œWe are not in a position to offer any comment at this moment,â€œ said Varun Dua, co-founder of Coverfox.
The Insurance Act allows foreign promoters to hold up to 49% in local operations. Post the amendment to the Act, many foreign promoters including Axa, AIG, and Ergo have increased their stake in the Indian joint venture.
General insurance industry is relatively less cash intensive than the life insurance industry. Companies in this sector turn profitable in five-seven years. In 2015-16, the general insurance industry underwrote direct premium of Rs 96,379 crore, registering a growth rate of 13.81%.
Government’s recent thrust on personal accident insurance and crop insurance has created newer avenues for insurers. Crop insurance, has become Rs 20,000 crore market. Dewan Housing Finance is an other entity that has applied for general insurance licence.
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