Digital payments platform Paytm, on Monday (July 6), announced that it will acquire 100% stake in Mumbai-based private sector general insurer Raheja QBE for INR 568 Cr. Raheja QBE is owned 51% by Prism Johnson and 49% by QBE Australia.
“It is an important milestone in Paytm’s financial services journey, and we are very excited to welcome Raheja QBE General Insurance into the Paytm family. Its strong management team will help us accelerate our journey of taking insurance to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products,” Amit Nayyar, President at Paytm said.
In its press note, Paytm highlighted that the acquisition is subject to customary conditions, including approval from the Insurance Regulatory and Development Authority of India (IRDAI). The acquisition will be facilitated through tech company QorQl Pvt with the majority shareholding of Vijay Shekhar Sharma and remaining held by Paytm.
The acquisition will allow Paytm to leverage its reach to innovate insurance products and services to accelerate its reach and adoption. Meanwhile, this move will help Raheja QBE insurance business scale new heights by leveraging the large customer base and innovative products offered by Paytm. The company said that all employees of Raheja QBE would continue working at Mumbai and other locations.
Vijay Aggarwal, managing director Prism Johnson, added, “We are happy to announce the sale transaction of our entire 51% stake in Raheja QBE General Insurance Company Limited. Our decision to sell our stake in Raheja QBE is in line with our mission to create sustainable shareholder value and will enable us to focus our resources on our core businesses.”
Paytm, which was founded in 2010 by Vijay Shekhar Sharma, is currently one of the biggest digital payments platforms in India, standing neck-to-neck with other giants like Google Pay and PhonePe. In 2015, the company had decided to venture into loan offerings by partnering with several banks and non-banking financial companies (NBFC) ICICI Prudential Life, Religare Health, Reliance Life and Reliance General to assist customers in paying premiums through mobile and wallet.
In 2018, Paytm had 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.
Earlier this year, the company gave up its corporate agency licence in exchange for a brokerage licence 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.