PB Fintech, the parent company of Policybazaar, is focussing on its “New Initiatives” segment, which already contributes a third of its revenue. In this interview with FE, the company’s joint group chief executive officer Sarbvir Singh discusses what these new initiatives entail and their role in overall business growth. Excerpts:
What does the ‘New Initiatives’ segment encompass?
Until 2021, PB Fintech operated as an online insurance aggregator. In June 2021, we obtained a broker licence, enabling us to do things that a web aggregator couldn’t. We launched two new ventures: PB for Business (Corporate Insurance) and PB Partners (an agent aggregator platform). Both have now been running successfully for three years. Additionally, we have another initiative, Policybazaar.ae, which focuses on retail insurance in West Asia. These three ventures are part of our ‘New Initiatives’.
We are still investing in these businesses, unlike our core online business, which has been around longer and is already showing profitability. We are showing the business performance of ‘New Initiatives’ separately to distinguish them from our mature business, the core online platform.
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Could you elaborate more on these new businesses?
PB for Business focuses on corporate insurance. We offer a wide range of insurance products, including employer-employee health insurance, marine, fire, property insurance, and indemnity products. These services cater to both large corporates as well as small and medium enterprises (SMEs).
PB Partners, on the other hand, serves existing insurance agents. Several years ago, IRDAI introduced the concept of point of salesperson (PoSPs), who can sell simple insurance products like motor insurance, low-value health insurance, and some forms of life insurance. These PoSPs can join PB Partners and sell a variety of insurance products through the platform. Currently, PB Partners has over 200,000 agent partners and covers 18,200 pin codes.
PB for Business isn’t as well-known as Policybazaar. Your view?
Companies in the SME space are relatively smaller, with 50, 100, or up to 500 employees. An online platform can be extremely valuable to them, so we are working on improving our marketing efforts to spread the word that Policybazaar is not just for retail consumers, but also for businesses. Many of these companies may already have purchased insurance policies through Policybazaar, so there’s already some brand affinity.
On the larger corporate side, I would say it’s an evolving journey, as there are many established corporate insurance players. It requires a different kind of marketing to communicate our value proposition to them. However, over the past three years, I’d say our client list is quite impressive, with a good mix of large and small companies, including financial institutions, insurers, and startups.
What do agents gain by joining PB Partners?
PoSPs are usually small agents who are typically associated with only one insurance company. By aligning with PB Partners, we give them access to 25-26 general insurers and all their products in one go. This also allows them to diversify the types of insurance they sell. For instance, if an agent primarily sells motor insurance, they can now also offer health and life insurance policies that PoSPs are eligible to sell. This helps improve the agent’s income.
Additionally, agent payouts happen instantly through our platform, unlike the traditional model. Agents can also track their performance and view their ledger in real time using our platform.
Moreover, platforms like ours have a principal-to-principal relationship with insurance companies, which ensures that agents can provide better customer service and assist with claims processing more efficiently.
What trends do you see in retail health insurance?
The sum insured has increased significantly. Earlier, people predominantly bought policies with Rs 5 lakh sum insured. Now, especially in metro areas, the median is shifting towards Rs 10 lakh and above. We have also partnered to create health insurance policies with a Rs 1 crore cover, where the base sum insured might be Rs 5 or Rs 10 lakh, and the rest is covered through top-ups.
Another growing trend is health policies with features like restoration benefits. Even if the insured has made a claim, the sum insured is restored, effectively increasing the available coverage for the individual or family. These policies are becoming very popular.
We are also seeing a greater focus on specific segments. For instance, we are seeing more products covering maternity benefits, which were not covered in retail health earlier. There are also a lot of retail health insurance products covering pre-existing diseases, and senior citizens.
There were reports about your foray into the healthcare business. Could you clarify?
We have already made our position public on this matter. The idea is to increase the number of people with health insurance, and this can only happen if we can lower the cost of healthcare, making it more affordable. To that end, we are exploring the Health Maintenance Organisation (HMO) model. As we have shared publicly, this is still in the exploratory stage, and we have established some initial guidelines on how we approach it. We will be able to share more information as things progress.
