Initiating Coverage: PB Fintech
06-04-2023

PB Fintech has built India’s largest online platform for insurance and lending products leveraging the power of technology, data and innovation. It provides convenient access to insurance, credit and other financial products.

Policybazaar platform was launched in 2008 as an online platform for Consumers and Insurer Partners to, respectively, buy and sell core insurance products.

PaisaBazaar operates as an online marketplace that partner with various financial institutions to offer their products to consumers. The platform allows consumers to compare and choose from a variety of products, with a focus on personal loans, home loans, and credit cards.

Industry Overview

Life insurance penetration went up from 2.15% in FY02 to 3.20% in FY22, while non-life insurance penetration moved up by 0.44% to just 1% during same period. The world average for insurance penetration is 7 per cent. Insurance density (premium per capita), India’s overall insurance density stood at US$ 78 in FY21.

Premiums from India’s life insurance industry is expected to reach INR 24 lakh Cr (US$ 317.98 billion) by FY31. In FY23 (Until Oct 22), premium of life insurers increased by 12.93% in FY21-22 to INR 314,262.42 Cr (US$ 40.06 billion).

While that for non-life insurers till Nov FY23 increased by 16.4% toRs 165,360.44 Cr. Total Insurance agent associated with life insurers stood at 24.5 Lakh and with general insurers at 6.8 Lakh as of FY22. IRDAI approved web aggregator stood at 25.

Online insurance penetration in India is at merely 1% of premium as compared to 5.5% in China and 13.3% in the US.

Credit card lending as % of GDP stood 0.5%, while Indian household debt to country's Nominal GDP in Mar 2022 stood at 14.3 %. This is far behind peers, allowing growth for credit in the economy.

Business Model

PolicyBazaar

PolicyBazaar was as an online platform that allows consumers to purchase insurance products from a wide range of manufacturers. The company operates entirely through a digital model, but it recently expanded to include office and point of sales channels as well. PolicyBazaar holds 65% market share in policies sold digitally and 93% share in policies sold sold through digital marketplaces. It earns revenue from commission charged on various policies sold, via new business and renewal policies. Commission earned on new business ranges from 15-17%, while on renewal business ranges in 7-8% range of policy amount.

PaisaBazaar

PaisaBazaar operates as an online marketplace that partners with various financial institutions to offer their products to consumers. The platform allows consumers to compare and choose from a variety of products, with a focus on personal loans, home loans, and credit cards.

Company follows a revenue model where it earns take rate (around 3%) on credit disbursed and cards issued through its platform.

Point of Sale Personnel (POSP)

In June 2021, it obtained a direct life and non-life broker license, which allows the company to operate in the offline channels. This new license will allow PolicyBazaar to expand its reach and offer its customers a wider range of services.

Business Performance