Digital insurer Acko is preparing to file for an initial public offering to raise an estimated $250–400 million at a potential valuation of $2–2.5 billion, according to people familiar with the plans. The company has mandated Morgan Stanley, ICICI Securities and Kotak Mahindra Capital as lead managers for the proposed listing.
Founded in 2016 by Varun Dua and Ruchi Deepak, Acko operates as a fully digital, direct-to-consumer insurer, bypassing traditional agents and brokers to lower distribution costs. A key growth driver has been embedded insurance—small, contextual covers offered at checkout on partner platforms such as Amazon, Ola and Zomato—enabling high-volume, low-friction policy sales.
Financial performance and path to profitability
Acko reported robust topline growth in FY25, with operating revenue rising about 35% to ₹2,836.8 crore. Net losses narrowed by roughly 37% to ₹424.4 crore as the insurer tightened cost controls and improved operating leverage.
Management has focused on expense discipline, trimming employee costs and reducing advertising spends. As a result, the cost to earn a rupee of revenue improved to ₹1.17 from ₹1.34. The company is targeting profitability by FY27, supported by steady gains in its motor and health insurance portfolios.
Acko has also expanded into life insurance with a simplified product suite, concentrating on term protection and retirement products while avoiding complex investment-linked offerings. Industry analysts say this focus could help maintain underwriting discipline and regulatory clarity.
Regulatory landscape and compliance
The Insurance Regulatory and Development Authority of India (IRDAI) has directed Acko to align with expense-of-management norms by FY26, declining additional time for compliance. The insurer previously faced a ₹1 crore penalty related to certain payment practices, underscoring the sector’s tighter oversight as digital players scale.
Service metrics and investor activity
Despite regulatory scrutiny, Acko’s operating metrics remain resilient, with a claim settlement ratio above 93% and most claims processed within 30 days, according to disclosures. Ahead of the IPO, a secondary transaction is underway, with some early backers selling shares to new domestic investors.
A confidential filing is expected ahead of a potential market debut in early 2027, subject to regulatory approvals and market conditions. The listing would mark a significant milestone for India’s digital insurance segment, which is benefiting from rising online adoption, embedded distribution, and data-driven underwriting.
