Strategy Note /

Emerging market insurtechs: Growth constraints and regulatory hurdles

  • Insurtech firms are expected to gain market share in the years ahead but face many challenges

  • Growth constraints: Competition from traditional financial institutions, regulation and funding/capital

  • Regulatory hurdles: Know your customer/anti-money laundering and data protection regulations

Emerging market insurtechs: Growth constraints and regulatory hurdles
Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Tellimer Research
30 December 2022
Published byTellimer Research

In this report, part of our Ultimate Guides series, we focus on the main growth constraints and the toughest regulatory hurdles facing emerging market insurtech companies.

Insurtech growth constraints

The top growth constraints for insurance fintechs are competition from traditional financial institutions, regulation, and funding/ capital.

Distribution capacity was the biggest limiting factor in our previous survey but is now not viewed as a major hurdle. Overall market size has also diminished in importance as a growth constraint.

Relative to the broader EM fintech population, competition from traditional financial institutions is twice as important as a growth constraint for insurtechs.

The top 3 key growth constraints for insurtechs:


Funding/capital is the lifeblood of insurtechs because the business requires significant up-front investment, such as marketing spending to attract unbanked/underbanked customers. Capital may also be required to meet regulatory requirements. Firms looking on funding/capital as a growth constraint include Pier (Brazil) and Prosto.Insure (Russia).


Insurtechs’ operations often differ considerably from those of incumbents, and rulebooks are being continuously updated as regulators catch up with the pace of innovation. Regulatory oversight also tends to rise as fintech firms grow. These factors can generate substantial regulatory uncertainty, which can act as a barrier to investment and growth. Insurance fintechs that regard regulation as a growth constraint include INSO (Vietnam) and Naked Insurance (South Africa).

Competition from traditional financial institutions

The use of mobile phones for financial services has allowed developing countries to leapfrog the traditional model of brick-and-mortar branches and make substantial gains in financial inclusion. However, many people still prefer to use traditional financial institutions, particularly for big-ticket or important financial decisions. Firms citing this as a growth constraint include Saphron (Philippines) and Tameeni (Saudi Arabia).

EM insurtechs: key growth constraints

Insurtech regulatory hurdles

The biggest regulatory hurdles for insurtechs are know your customer/ anti-money laundering regulations and data protection regulations. Relative to other EM fintechs, KYC/AML regulations are more important while capital requirements are less of an issue.

This actually represents a major shift in the industry. In our previous survey, capital requirements were the biggest regulatory hurdle for insurtechs, but this is no longer the case.

The top 3 regulatory hurdles for insurtechs:

KYC/AML regulations

KYC/AML rules can be tough to adhere to in countries with a significant undocumented economy, particularly when competing with informal providers. Insurtechs that have cited this as a major challenge to their operations include Tameeni (Saudi Arabia) and Policy Bazaar (India).

Data protection

One way insurtechs can generate competitive advantages is through the collection and utilisation of customer data. Data protection regulations play a key role in determining the extent to which these companies can obtain and use such information, and the processes they must follow to protect it. Insurtechs citing data protection regulations as a hurdle to their growth include Leapstack (China) and Inso (Vietnam).

Disclosure requirements to investors/lenders

Disclosure refers to the timely release of information about a company that may influence an investor's decision. It includes both positive and negative news, data, and operational details that impact the business. Insurtechs that have cited this as a growth constraint are Compareha (Egypt) and Zhongan Insurance (China).

EM insurtechs: regulatory hurdles

Our Ultimate Guide to Insurance-focused Fintechs gives a more comprehensive overview of the sector and can be accessed here.