PF Fintech’s Policybazaar is India’s largest digital insurance marketplace.
Policybazaar is an insurance distribution platform that helps consumers compare and choose the right insurance policy. The company was founded in 2008 and currently operates India’s most extensive digital insurance marketplace. The company has a 93.4% market share of all digital insurance sales in India and 48 million registered users. In fiscal 2020, the company sold over 19 million insurance policies and derived $82mm in revenue. In addition, it captured behavioral data insights from consumers.
The unit economics of Policybazaar is based on the premise that it can make more money on each policy sold than it costs to acquire the policy. For example, IRDAI guidelines allow web aggregators to receive up to 25 percent of the first-year premium for new businesses. However, the average take rate of Policybazaar is lower than this level. Its commission on new business premiums was 9.4% in FY21 and just over 8% in FY20.
The IPO funding raised by Policybazaar will help it expand its consumer reach and international insurance business. The company has been doubling down on its overseas expansion and is planning an omnichannel strategy. In the meantime, it is also investing the IPO money in strategic acquisitions and investments. It received an insurance broking license in April this year and has already opened 15 physical offices. It plans to build 200 retail locations by FY24.
PF Fintech has gained a unique advantage over its competitors when launching a product with a global audience. Paisabazaar, a platform that allows Indian consumers to compare multiple credit cards and personal loans, was India’s most extensive digital consumer credit marketplace in fiscal 2020. The company’s model is asset-light, which means it does not retain credit risk or underwrite insurance.
It is an online platform for consumers and insurer partners to buy and sell core insurance products.
Policybazaar is an online platform that connects insurers with consumers and helps them buy and sell core insurance products. It has over 390 insurance products and is India’s most prominent digital insurance marketplace. The website offers consumers everything they need to make an informed decision. It allows consumers to research products before purchasing and helps them manage policies after the purchase. It also helps them with policy cancellations and claims facilitation. The website also helps insurers to improve brand awareness.
Policybazaar is owned by PB Fintech, which provides insurance and lending products to consumers. It also offers a wide variety of financial services and has a diverse consumer base. PB Fintech aims to increase financial literacy in India by providing easy access to various financial products. Its flagship platform, Policybazaar, serves consumers across credit profiles, income levels, and demographics.
With the increase in digital behavior, insurers must develop technologies enabling them to sell core insurance products online. This can be achieved by integrating digital channels with back-end systems and automating manual steps. It also requires upgrading third-party processes to improve the speed of digital processing. The online experience should be fast, easy, and convenient.
The company’s revenues come from insurance commissions from Insurer Partners and additional services offered to Insurer Partners. These services include online marketing, credit advisory services, and technology services.
It posts a loss of Rs 218 crore in FY20.
Online insurance broker Policybazaar has posted a loss of Rs 218 crore in the FY20 ended March 2019. The losses are up 2.4% year on year. However, the EBITDA margins have improved from -65.5% in FY19 to -34.1% in FY20. The company is currently working on an IPO, but it is unclear whether it will list domestically or go foreign.
Although the company has been making considerable investments in technology, it has not yet achieved its potential. Its revenue is still low, accounting for only a tiny part of the total premium. However, the company has tried expanding its product portfolio and reach in India by expanding its business into offline channels. FY20 had over 50 insurer partners, up from just eight a year ago.
The company’s overall expenses rose by 42% in FY20. As a result, it spent Rs 1.43 for every rupee of revenue in FY20, compared to Rs 1.69 in FY19. Its largest cost center remained employee benefits, which increased by 37%.
Policybazaar has an extensive list of investors. In addition to Tencent, it has also received funding from Japan’s SoftBank and private equity firm True North. Other investors include Tiger Global Management, Premji Invest, and Temasek. Its CEO Yashish Dahiya is a graduate of IIT Delhi and has completed seven Ironman triathlons. His interests include running, cycling, and swimming. He has also represented India at the Masters swimming world championship in Kazan, Russia.