PB Fintech said it has no plans to become a direct insurer since it would be a conflict of interest with its insurance partners
The company also said it collects data for evaluation of various developments in the relevant industry and nothing has been decided about the reinsurance business
Brokerages reckon that the reinsurance market could be an interesting opportunity for the listed fintech giant
PB Fintech, the listed parent company of Policybazaar and Paisabazaar, has rubbished a media report which said that the company was set to apply for an insurance licence.
In an exchange filing, PB Fintech said it has no plans to become a direct insurer since it would be a conflict of interest with its insurance partners.
Policybazaar currently operates as an insurance aggregator and offers life, health and motor insurance, among others, from various insurers to its customers.
Earlier, a report by CNBC-TV18 said that PB Fintech was looking to enter the reinsurance business and had held informal discussions with the Insurance Regulatory and Development Authority of India (IRDAI) to understand the reinsurance market.
However, PB Fintech in its filing said, “As part of its business, the company collects data for evaluation of various developments in the relevant industry and nothing has been decided about the reinsurance business.”
Incidentally, brokerages reckon that the reinsurance market could be an interesting opportunity for the listed fintech giant. According to Morgan Stanley, the listed startup has certain advantages in terms of access to significant data and a better perspective, being a distributor.
The brokerage, however, noted that insurance is a risk and capital-consuming business, unlike PB Fintech’s currently asset-light and low-risk distribution business. “Hence, we will reserve our opinion until there are more details from the company regarding the expected scale of operations, capital investment, etc.,” Morgan Stanley said in a September 10 note.
It must be noted that PB Fintech appointed Sarbvir Singh as the new joint group CEO of the company last month. In addition, the ex-WaterBridge Ventures managing partner was also elevated to the position of executive director of the startup from the current position of non-executive director.
PB Fintech reported a net loss of INR 11.9 Cr in the June quarter of FY24, a 94% year-on-year (YoY) decline from INR 204 Cr in the year-ago quarter. However, the net loss widened 28% on a quarter-on-quarter (QoQ) basis from INR 9.3 Cr, hurt by its new initiatives vertical. Meanwhile, operating revenue surged 32% to INR 666 Cr during Q1 FY24 from INR 505 Cr a year ago.
The fintech’s shares were trading 0.5% lower at INR 795.75 apiece on the BSE at 03:15 IST on Friday.