Jio Financial Services Gears Up For Insurance Licence, Eyes 2024 Launch

Pulling all stops for its insurtech foray, Jio Financial Services (JFS) is reportedly all set to apply for an insurance licence soon.

Sources told ET Now that Jio Financial is readying plans to approach the Insurance Regulatory and Development Authority of India (IRDAI) to apply for a licence. As per the report, the newly demerged company has underlined plans to offer full-fledged insurance services from 2024 onwards. 

Once the initial application is submitted, the insurance regulator will then take a call on the matter over the course of the next six to eight months. 

People familiar with the development further noted that JFS is looking to venture into both the general as well as life insurance categories. The conglomerate has reportedly set aside a capital of INR 1,000 Cr for each of these segments. 

The fresh development comes weeks after it was reported that JFS was hiring for its upcoming insurtech arm and has already recruited a former PSU personnel. 

With this, Jio could be looking to make a big dent in the country’s underpenetrated insurance sector. However, its entry could also intensify competition in the space, which is led by legacy players and new-age tech startups.

Apart from players like Life Insurance Corporation of India (LIC), HDFC, ICICI Group, Jio’s insurtech arm will also lock arms with digital-heavy startups such as IPO-bound Go Digit, Acko, and Navi.

At the heart of Jio’s strategy is the country’s burgeoning insurance sector. As per a report, the life insurance penetration in the country stood at a mere nearly 3% while non-life insurance penetration was much lower at 1% in financial year 2021-22 (FY22). It is this vast expanse, which offers an attractive proposition for Reliance Jio, which could leverage its digital infrastructure and resource base to create ripples in the insurtech ecosystem.

Meanwhile, the newly-demerged arm is gearing up its plans to foray into other financial segments as well. Just last week, Jio Financial announced that it has signed a joint venture with investment giant BlackRock to enter the homegrown asset management space. The two companies have earmarked $150 Mn each for the AMC entity, which has been named Jio BlackRock. 

With much at stake, the entry of Reliance into the insurance space could complicate matters for incumbents who have already been battered by adverse market conditions and customers cutting down on discretionary spending. 

Despite big investments and the deployment of tech, insurance penetration in India continues to be dismal. While other players have not been able to spur the metric, it remains to be seen if Reliance’s new insurtech arm is able to create the same storm that its telecom vertical created back in 2016.