Policybazaar gets insurance broking nod
Leading web aggregator Policybazaar on Friday said it has got approval from regulator Insurance Regulatory and Development Authority of India (IRDAI) to undertake insurance broking, a development that will help the company augment business and expand bouquet of services.
With this development, the company will surrender its web aggregator licence to IRDAI and undertake business including insurance aggregation under the broking umbrella.
“We received our licence to be a broker for which we have been in touch with the regulator for the last three years,” Policybazaar.com. chief executive officer Yashish Dahiya told PTI.
The broking licence will allow the company to venture into segments which it could not do in the past like claims assistance, offline services, and establish Points of Presence network.
From a revenue perspective, he said, “as a web aggregator we were not paid for life insurance renewals.” As a broker, he said, the company will be entitled for commission as well as fee for web aggregation.
With the help of broking licence, he said, “we will be able to do claims settlement and many other things and we will use this opportunity very wisely.” Policybazaar has a market share of 25% in the life insurance segment while 10% in health insurance.
The parent company PB Fintech also promotes Paisabazaar.com, which is an online credit comparison portal.
PB Fintech had attained the status of a unicorn in 2018 when it raised $200 million in a Series-f round led by Japan’s Softbank.
A company valued at over $1 billion is called unicorn.
Other investors include the likes of Info Edge, Premji Invest, Temasek, Ribbit Capital, Chiratae, Inventus Capital Partners, True North, Tiger Global, Wellington and Steadview.
Meanwhile, IRDAI had imposed a fine of ₹24 lakh on online insurance aggregator Policybazaar for flouting norms related to SMS advertising, according to an order issued last month.
The insurance regulator has also directed the Softbankbacked insurtech startup to be more “circumspect” in the future regarding their SMS ads to customers.
The order came after an inquiry on three counts of potential violation of IRDAI norms for an SMS ad that was circulated in March 2020.
The SMS ad, which read “life insurance prices are set to increase from 1st April (2020), save up to ₹1.65 lakh by buying a term plan now”, was deemed by the insurance regulator as “having potential to cause avoidable panic among customers”, IRDAI said in the order.
This SMS was sent to around 10 lakh customers by Policybazaar, according to the order.
The other two counts of flagging were on the measures taken to stop the circulation of the SMS, and the failure of the fintech firm to mention its full name in the SMS header. While IRDAI dropped charges on the former, the latter was deemed a violation, attracting the fine.
“As per Reg 9, every advertisement shall state the full name of insurer/intermediary/ agent. Policybazaar being a regulated entity ought to have known that the regulations must be complied in letter and spirit,” the order stated.