Noida-based digital payments giant One97 Communications has infused INR 55 Cr into its digital insurance arm Paytm Insurance. Of this, the company has already received INR 21.98 Cr in exchange for about 2.19 Cr equity shares.
According to the ministry of corporate affairs accessed by Inc42, Paytm Insurance Broking Private Limited has allocated 5.50 Lakh at INR 10 per share at par to its existing shareholder on a right basis. Paytm refused to comment on this development.
Paytm started its insurance journey back in 2015 by partnering with insurance company ICICI Prudential Life, which was the first insurer to go live on Paytm’s platform. The company partnered with additional 15 companies over the next year to expand its services.
These companies included Religare Health, Reliance Life and Reliance General to assist customers in paying premiums through mobile and wallet.
Later in 2018, Paytm also incorporated two insurance companies — Paytm Life Insurance Corporation Ltd and Paytm General Insurance Corporation Ltd. The two companies were in direct competition with Bajaj Allianz, Aviva, United, HDFC, LIC, Future Generali and others.
As per the ministry of regulatory filing of 2018 accessed by Inc42, One97 Communication founder and CEO Vijay Shekhar Sharma, Shankar Prasad Nath and Madhur Deora were the three signatory stakeholders in the company.
Earlier this year, Paytm Insurance Broking finally gave up its corporate agency license in exchange for a brokerage license to enter the insurance sector more directly than before. Brokers are intermediaries between prospective customers and providers, whereas a corporate agent is just selling policies on behalf of the insurance provider.
In a subsequent press statement, Paytm Insurance Broking said it will be offering innovative insurance products in a seamless manner.
The company will be leveraging its 16 Mn merchant partner base to sell its insurance products all over the country. Besides this, the company wants to expand the reach of its products and empower the merchant by providing an alternate income source.
“Our entry into Insurance Broking is in line with our commitment to broaden our footprint into financial services and offering numerous and customised choices to millions of our customers. This would enable us to offer a wider suite of product offerings from a large set of insurance partners. The potential of the insurance business is huge as the market is still under-penetrated in India,” Amit Nayyar, president of Paytm, said.
Paytm Insurance Broking now offers insurance in four categories — two-wheelers, four-wheelers, health and life. Besides this, the customers can also avail of policy management and claim settlement at select merchant points.