Acko Aims to Achieve Profitability by FY27 with Focus on General and Health Insurance Segments

Acko, an insurtech startup based in India, is targeting to achieve profitability by fiscal year 2026-27 (FY27) by focusing on its general and health insurance segments, according to a recent interview with the company’s CEO, Varun Dua. Speaking with investment bank UBS Global, Dua revealed that Acko is expected to close FY24 with a premium of Rs 2,000 crore and is expecting a 35% year-on-year growth rate.

As of January 2024, Acko derives around 43-44% of its premium mix from the motor segment, with motor own damage (OD) accounting for 16% and motor third-party (TP) accounting for 27%. The company’s health segment contributes around 48% of its premiums, with group health accounting for 44% and recently started retail health contributing 2%. Interestingly, Acko’s embedded products (micro-insurance) which contributes 8% of the mix is already profitable and is growing at a 50% rate year-on-year.

Acko is also expanding its product offerings with the recent float of its life insurance company, focusing on the sale of term plans, which is currently in the beta stage. The company is concentrating on retention rates, with a retention ratio of 73-74% for the 13th month and roughly 85% for the 25th month in the auto insurance segment. Acko is also partnering with workshops in a seamless manner (about 65% of the claims are reported directly with no dealer intervention) to reduce costs and bring in higher visibility.

According to Dua, the company is on track to achieve profitability by FY27, with the general and health insurance segments expected to be fully profitable by then. Acko’s focus is to create a niche in servicing, leveraging partner workshops to reduce costs and improve visibility. With its innovative approach and growing premiums, Acko is well on its way to becoming a leading player in India’s insurance market.