News Update

Policybazaar to expand into reinsurance sector with enhanced license

• ByStartupStory     |    February 17, 2024

Policybazaar, an insurance marketplace, has secured an upgraded license as a ‘composite insurance broker’ from the Insurance Regulatory and Development Authority of India (IRDAI), paving the way for its entry into the reinsurance sector.

“The upgradation from ‘direct insurance broker’ is said to enable PolicyBazaar to deepen its stronghold on insurance products in the country with the help of technology, process control, and data analytics in the reinsurance capacity,” the company stated in a filing with the stock exchanges.

This approval pertains to Policybazaar Insurance Brokers Private Limited, a wholly owned subsidiary of PB Fintech, marking a significant milestone for the company’s expansion plans.

Reinsurance, a policy purchased from another insurance company to mitigate significant risks, presents a burgeoning market in India, aligning with the government’s efforts to establish the country as a global reinsurance hub.

“In August last year, IRDAI made amendments in the reinsurance regulations to enable a more favourable business environment and encourage the entry of a larger number of reinsurers,” highlighting regulatory efforts to stimulate market growth.

Among the regulatory changes, IRDAI reduced the minimum capital requirements for foreign reinsurance branches to Rs 50 crore from Rs 100 crore, aiming to streamline reinsurance processes and attract more players.

PB Fintech, encompassing core marketplace businesses like Policybazaar and Paisabazaar, reported a notable turnaround in its financial performance, closing the third quarter of FY24 with a net profit of Rs 38 crore, compared to a loss of Rs 87.3 crore in the corresponding period last year.

This positive trajectory in profitability is attributed to increased revenue from Policybazaar and Paisabazaar, reinforcing the company’s position in the competitive insurance and financial services landscape.

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