Flipkart-owned payments platform PhonePe, on Friday (January 24), marked its entry in the insurance segment with the launch of international travel insurance services on the platform. Bajaj Allianz General Insurance is the insurance partner for this newly launched service on PhonePe.
Speaking to Inc42, Gunjan Ghai, head of insurance at PhonePe, said that users can get a travel insurance cover of up to $1 Mn with this new service. “The premium for travel insurance is as low as INR 216,” he added.
Explaining why PhonePe entered into this travel insurance segment, Ghai said that although travel bookings have come to mobile platforms, one has to go to online portals to buy travel insurance. PhonePe believes that being a mobile-only platform, the company will be able to offer travel insurance to users using the application for bookings.
Citing that distributors play an extremely important role in the insurance segment, Ghai believes that being on the mobile platform, PhonePe can add more value to the travel insurance segment. “The travel insurance market in India is estimated at around INR 800-900 Cr and being on a mobile platform, we can deliver a product better than the market,” Ghai noted.
Will Fintech Arms Help Achieve Profitability?
Recently, PhonePe has been entering into a lot of new segments, from launching mutual funds to converting merchants into ATMs. However, Hemant Gala, head of payments, banking and financial services at PhonePe, believes that the idea is not to enter into every segment but to look at focussed products which can really help its customers.
Recently, Sameer Nigam, CEO and cofounder of Phonepe, said that the company can achieve profitability in the next three or four years with the help of an additional $1 Bn fund. Speaking about profitability, Gala said that revenues are an important part of the company and these financial services will eventually help PhonePe in its path to achieving profitability.
Through distributing these financial services — mutual funds and insurances, Phonepe earns a distributor fee from the companies which eventually helps the company to increase its revenues.
One of the segments in the fintech space which has been tapped by a lot of startups, as well as established companies, is money lending. It even attracted smartphone maker Realme.
When asked about whether the company will enter into lending space or not, Gala said that PhonePe will enter this segment when the time is right. However, he assured that the company will be launching other financial services soon. For PhonePe, which already has over merchants registered on the platform, offering loans to these small and medium businesses might work out well for the company.
PhonePe claims to have over 175Mn users and provides them with its “super-app”, which integrates over 90 digital apps such as Goibibo and Oyo. Last year, the company also launched a new feature ‘Switch’, which allows users to use apps for groceries, shopping, food and travel bookings without downloading any other application.