Policybazaar: Journey Behind India’s Largest Insurance Aggregator that Became A Unicorn
By Sonali Munda
About the Company and the Founder(s):
Policybazaar is a Gurgaon-based fintech company and an insurance aggregator. It is India's largest insurance aggregator. It was founded by Yashish Dahiya, Alok Bansal, and Avaneesh Nirjar in 2008. It is a digital platform that provides its users to compare insurance policies and other financial services from different insurance companies. PB Fintech Ltd is the parent company of Policybazaar. Policybazaar is the flagship subsidiary of PB Fintech Ltd which also owns the credit product aggregator Paisabazaar.
The founders of Policybazaar had one objective to bring transparency in insurance. They wanted to make the complex concept of policy easier for the people by simplifying all the information around plans, ending rampant mis-selling, and preventing policy lapses.
History of How The Company Became A Unicorn:
Initially, Policybazaar was an insurance comparison website. It listed the details of multiple insurance policies for customers to choose from. At that time, the Indian insurance industry lacked a lot of transparency, and policies were mostly sold through fraudulent agents. Back then it was a price comparison website and information on what insurance and insurance programs were present for its users to learn about these. One of the major reasons behind setting up this business was Yashish Dahiya’s close observation of fraudulent activity by an insurance agent. He said in an interview that he has closely seen his father get deceived for lakh of rupees by an insurance agent. Seeing this plight, made him wonder about numerous other people getting deceived like his father. So, in order to put an end to such swindling in the insurance market, Yashish established this startup. Yashish started out with a moto to help each and everyone getting conned by these agents.
It took Policybazaar almost ten years to achieve the unicorn status when Japanese behemoth Softbank raised over $200 million in a funding round in September 2018.
However, this label came with several repercussions to the founder. He said, “The Unicorn status hurts us.” “Ever since we have become a Unicorn, the number of complaints against us, not from customers but from the industry players, has increased dramatically.”
Investors and Their Investments:
Acquisitions by The Company:
Policybazaar acquired a 98.4% stake in Docprime Technologies on the 14th of January, 2022. Policybazaar has acquired its subsidiary company “Visit Internet Services Pvt. Ltd.” (VISPL) for Rs 22.4 crore in one or more tranches.
Current Market Valuation of The Company:
The current market capitalisation of “Policybazaar.com” stands at 2,846.37 million (227,424 million rupees).
Competitors:
Top competitors of Policybazaar are as follows:
InsuranceDekho Digit Insurance Turtlemint
Policygenius OneAssure Acko General Insurance
Coverfox QuoteWizard Easypolicy
SWOT Analysis of The Company:
Strengths-
Policybazaar has been a true innovation by helping to identify and meet several specific insurance needs on its website/app that is easy to use and ensures that transactions go smoothly.
Policybazaar has several services involving customers to calculate the premium, bonus amount, tax calculation, check the status of their policy, calculate loan amount, download forms and pay premium online.
Due to the company’s initiative of offering a wide variety, transparency, and convenience to its customers, the company owns a strong brand image.
A capital-efficient model with low operating costs because PolicyBazaar’s high renewal rates provide a clear view of future business and offer excellent profitability.
Weaknesses-
The company lacks talent due to the lack of diversity of employees. The company’s workforce is dominated by locals, with few workers from other racial groups. The racial mindset is the reason why, the company lacks diversity making it difficult for employees of different ethnic backgrounds to adapt to the workplace, leading to a loss of talent.
Policybazaar fails to serve a lot of customers on time who doubt their policies and insurances, which is affecting the brand name.
The company will face liquidity problems in the future because the company’s current metric, which measures its ability to meet short-term financial commitments, is below the industry average.
Even after Policybazaar is this transparent, a lot of customers still have privacy issues regarding whether to invest in such policies or not. This becomes one of the major weaknesses.
Opportunities-
Development in good telecommunication networks and an increase in more smartphone users have enabled consumers to book policies and loans online.
Threats-
If the policy market does not adapt to price changes, then, this fintech would lose market share because of the rising competition in this industry that is affecting the prices.
The new D2C(Direct to Consumer) companies like “Go-Digit” and “Acko” are investing heavily in digitalisation of insurance and underwriting. Resulting in more and more companies focusing on going digital-first, and competition increases for PB Fintech.
Government regulations on health care, mould, and terrorism can quickly change the direction of insurance. Rising expenses and shrinking profit margins will hit insurance companies hard.
Various new insurance aggregators have entered the market becoming the competitors of Policybazaar and are gaining market share by taking market share from existing companies, in which PolicyBazaar is also at risk because these new entrants could steal its customers.
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