Indian companies such as PayU and Juspay might consider applying and would be major candidates given the scale of their business and their experience in the space.
LIC launched the call for tenders (RFP) on February 5, 2021, for a contract that will be valid for five years
Razorpay, based in Bengaluru, has been invited to bid for LIC. The company will submit its proposal this month
India’s largest insurer, Life Insurance Corporation of India (LIC) is launching a business tender to enable digital payment of insurance premiums for over 250 million customers, which would automatically catapult any startup to the top country’s payment processors.
Bengaluru-based Razorpay has been invited to bid for LIC, while PayU and Juspay may consider applying and would be major candidates given the scale of their business and experience in the space. However, the names of the candidates are not yet known.
According to Business Insider, who first reported development, LIC launched the Request for Proposal (RFP) on February 5, 2021, for a contract that will be valid for five years. Razorpay told the publication he would submit his proposal this month. The proposal stated: “LIC wants to have a complete and fully automated end-to-end solution for all types of LIC collections, not just bounties, by integrating LIC’s website with an integrated Internet payments aggregator.” . “
LIC launched a similar offer in 2017, but that did not materialize. Although this year the state-owned insurance and investment company is ready for big things, including a debut on the stock market, as Finance Minister Nirmala Sitharaman announced during the Union budget 2021.
According to a report by market research firm RedSeer Consulting, the Indian digital payments market, driven by the increased adoption of the Unified Payment Interface (UPI), is expected to triple to reach Tn INR 7,092 ( 100.61 Tn USD) by 2025 due to government financial inclusion policies and increasing digitization of traders.
The biggest winners in the growth of digital payments will be the multitude of startups, such as Paytm, PhonePe, and Razorpay, as well as the digital payments wings of established players, such as Google Pay and Amazon Pay. Further innovations in the Indian digital payments ecosystem are planned with the introduction of new umbrella entities or NUEs, seen as having powers similar to those of the state-owned National Payments Corporation of India (NPCI).
Although the penetration of insurance in India is catastrophic. According to the Indian Government’s Economic Survey 2020-21, India’s insurance penetration at just 3.76% of GDP is “extremely low” compared to comparable Asian countries such as China, Malaysia and Thailand , as well as the world average.
According to data from the Insurance Regulatory Development Authority of India (IRDAI), LIC holds the majority of the insurance market share, over 66%, while private insurers hold around 34%.
In recent years, several Indian startups such as PolicyBazaar, RenewBuy, Digit and Toffee Insurance have also entered the space with a range of offerings, some of them even market themselves as full digital insurers.
According to a report by the Indian Brand Equity Foundation (IBEF), the Indian insurance market is expected to reach a market size of $ 280 billion by the end of 2020. The life insurance industry in the country is expected to grow 12-15% per year. over the next three to five years.