India’s thriving MSME sector, responsible for 40% of exports and employing over 110 million people, is at the forefront of the digital B2B insurance revolution. According to a report by Policybazaar For Business, the traditionally offline insurance segment is witnessing a significant shift to online platforms, with tier 2 and tier 3 cities leading the way.
Tier 3 cities recorded a remarkable 46% growth in digital insurance adoption, followed by a 35% increase in tier 2 cities. Comparatively, tier 1 cities saw a growth rate of 27%. This growth is largely driven by the increasing demand for commercial lines insurance, which recorded a 37% year-on-year surge.
Workmen compensation, property, marine, and liability insurance are the key drivers of this expansion across all city tiers. Industries such as manufacturing and logistics, propelled by the “Make in India” initiative, are leading the demand for liability and marine insurance products.
As MSMEs continue to formalize, digital insurance solutions are enabling them to manage risks, ensure compliance, and scale operations more confidently, thereby strengthening their economic contributions.
