Acko’s Life cover biz to focus on term plans, pensions

Mumbai: Acko, backed by major private equity firms General Atlantic and Multiples Private Equity, plans to invest close to ₹1,000 crore in its life insurance business over the next five years, said founder Varun Dua, as the company looks to add pure-term insurance to its bouquet of products.

The company, which currently offers auto, health, gadgets, and travel insurance under the general insurance business, will centre its life insurance strategy around protection, particularly term insurance, rather than investment-linked products.

Acko may explore pension or retirement products, which Dua considers another form of protection. It will continue to leverage its direct-to-consumer approach, which has been successful in its general insurance business.

“We’ve already put in close to ₹150 crore-₹200 crore, and I think over the next 4-5 years, we’ll end up putting close to ₹1,000 crore,” Dua said.

Acko began its foray into life insurance a year ago with credit life products and the launch of a term plan a few months ago, with plans to expand quickly in the ₹55-lakh crore life insurance market.”Life insurance for us becomes very critical from completing the last, if I may say, but probably one of the largest decisions people take, which is around their life insurance,” Dua said.A Swiss Re report published earlier this year expects robust growth in life business, premiums up 6.7% from 2024 to 2028, supported by rising demand for term life cover by the middle-class and the country’s young population, and increasing industry adoption of Insurtech.”At least personally, I don’t believe that insurance is a great investment,” Dua said. “So, Acko will not be launching investment-related products, but pure protection-related products, like term products, and maybe term attached to credit.” Acko has recently launched a flexi-term plan, which allows policyholders to adjust coverage based on their life stage.

Looking ahead, Acko may explore pension or retirement products, which Dua considers another form of protection. “Term life insurance is, in my head, a cover for dying too early. And a pension product or a retirement product is living too long after not having an income, protecting your lifestyle and your expenses when you are no longer fit enough to earn,” he said. However, in the near term, the focus will remain on term life insurance.

The company does not aim to become a large life insurance player, but a dominant one in term. “We don’t have any specific ambition to become a very large life insurance company. We will do the products that are right for customers and offer more value and experience in those products versus trying to look at it from a vertical lens,” Dua said. “I can confidently say that we’ll be a fairly dominant player in the market as far as term is concerned over the next five years.”

Acko’s strategy in the life insurance sector will continue to leverage its direct-to-consumer approach, which has been successful in its general insurance business.