PolicyBazaar is an insurance aggregator and a financial technology start-up that help users to compare financial services from major insurance companies on the basis of price, quality, and key benefits.
Its insurance comparison portal and mobile application provides information across products such as medical, term life, travel or motor insurance, low prices ULIPS, and other investment products, enabling consumers to compare and analyse financial products. Based on user inputs, various options in the desired insurance product are showcased to him/her. To facilitate the user understanding of the products, there are special segments like “knowledge.policybazaar” and “ask.policybazaar”. Under these segments, customer queries are answered and information about new insurance products and trends are shared with the users.
If you have moved on from the craze around Zomato’s initial public offering (IPO), here’s another one that is likely to have the market swooning pretty soon. India’s largest online insurance aggregator — also the sixth largest fintech startup — the 13-year old Policybazaar is ready to raise ₹6,000 crore (about $850 million) from the market.
Policybazaar is one among a slew of tech IPOs to hit the Indian exchanges this year. It is also one of the country’s top fintech startups — the other one being Paytm — going for a public issue. 95% of Policybazaar’s revenue comes from commissions from insurance companies for selling policies.
Bank of America estimates the market size for insurance technology at $6 billion where Policybazaar is a leading player. Global peers include companies like the US-based Slice and Lemonade.
However, in India, only 4 in 100 Indians have any kind of insurance and, therefore, the headroom for growth is immense. The world average is 7.4. Insurance penetration in India, a year earlier, just before the pandemic, was an appalling 2.8.
The last one year has been good for insurers. According to a survey by Policybazaar, the average sum insured for health insurance policies bought on the online insurance marketplace almost doubled to ₹22.4 lakh by March 2021 compared to ₹11.4 lakh a year earlier. The company sold 7.2 million insurance policies in the year ending March 2021, up from 5.9 million a year earlier.
Policybazaar is one of the biggest beneficiaries of the boom in India’s insurance sector as a market leader in selling insurance online. Private equity firm True North Co’s partner Haresh Chawla, in an exclusive interaction with Business Insider, recalled a conversation he had with one of the top three insurance companies in India, a couple of years ago. The management told him that almost 10% of their business came through Policybazaar.