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Go Digit’s IPO mirrors the underwhelming reality of insurtech disruption

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Dr Srinath Sridharan

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Dr Srinath Sridharan

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Insurtechs are seen as a critical tool in achieving IRDAI’s target of 100% insurance penetration by 2047. However, as Go Digit’s lacklustre IPO has highlighted, these businesses haven’t proven their long-term sustainability nor solved for insurance’s biggest problem—trust.

May 28, 2024

10 MINS READ

Key Takeaways

  • Insurtech unicorn Go Digit went public last week. Despite being profitable and helmed by an insurance veteran, however, the listing was underwhelming
  • This anticlimax likely stems from doubts about the sustainability of the company’s future profitability. Go Digit’s case mirrors the wider insurtech space
  • While insurtech startups talked a big game about disruption, many now look increasingly like traditional insurance players, albeit in a shiny tech wrapper
  • And with their offerings and practices largely mimicking those of traditional insurance players, startups haven’t solved for the biggest challenge in the space—trust

Often, investors mistake their FOMO about an initial public offering (IPO) for the sustainable story of the company or its sector. With insurtech unicorn Go Digit going public late last week, it’s worth asking whether all is indeed well with the state of online insurers in India. Have they managed the disruption they promised and succeeded in pushing the insurance space into the digital era? Or, conversely, have they simply become that which they set out to upend?

Founded in 2016, Go Digit is India’s earliest insurtech company. However, despite elbowing its way into the ranks of India’s leading general insurers (it is also the fastest-growing), its IPO on May 23 flattered to deceive. The company’s stock debuted at just a 5% premium to its listing price on the National Stock Exchange (NSE). 

This is despite the company turning profitable in FY23 and being backed by the Fairfax Group and an insurance veteran. 

Indeed, Go Digit’s IPO, which was meant to signal the coming-of-age of India’s insurtech space, may have inadvertently highlighted the space’s shortcomings instead. 

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