Paytm Withdraws General Insurance Licence Application, Focusses On Insurance Distribution

Delhi NCR-based fintech giant Paytm today said that its associate entity – Paytm General Insurance Ltd (PGIL) is withdrawing its general insurance licenses application, instead has intensified its focus to distribute insurance through its wholly owned subsidiary Paytm Insurance Broking Private Ltd (PIBL). 

Paytm said, withdrawing of the application will enable OCL (One97 Communications Ltd) to conserve cash of INR 950 Cr which was earmarked for investment in PGIL.

In May 2022, One97 said it would invest up to INR 950 Cr in Paytm General Insurance Ltd (PGIL) to increase its stake to 74%. 

Paytm said that PIBL has intensified its focus to distribute insurance to Paytm customers, small merchants and SMEs. 

Paytm Insurance Broking will offer small ticket insurance solutions across various general insurance categories, including health, life, motor, shops, and gadgets. 

The company informed the stock exchange that PIBPL has strengthened its partnerships with prominent insurance companies such as Digit, Acko, ICICI Lombard, New India, Bajaj Allianz, TATA AIG, Aditya Birla Health, and Universal Sompo among others.

Paytm spokesperson said, “PIBPL brings affordable, easy to understand insurance products to our consumers and merchants, making their everyday lives easier. By focusing on small-ticket general insurance offerings and leveraging the strength of Paytm’s distribution, we are committed to increase general insurance penetration to a wider audience.” 

The fresh development comes almost three days after its quarterly results. Paytm’s net loss widened over 225% on an YoY basis to INR 550.5 Cr in Q4 FY24, from INR 167.5 Cr reported in the year-ago period.

The company’s revenue from operations dropped by 2.9% YoY to INR 2,267.1 Cr, from INR 2,334 Cr in the same period last year. 

The startup’s payments business revenue grew by 7% YoY to INR 1,568 Cr in the fourth quarter, whereas financial services revenue dropped by 36% to INR 304 Cr YoY. 

On the merchant front, the company witnessed the active point of sale device base drop by 10 Lakh despite a marginal increase in the merchant base, whereas on the loan disbursement, the company distributed loans worth INR 1,671 Cr, a 28% lower than a year ago. 

It is pertinent to note that this was the company’s first quarterly result after the Reserve Bank of India barred Paytm Payments Bank from onboarding new users and from offering various services including UPI payments and deposits.