Sometime back at a summit on women empowerment, a business head of an insurance giant in the country, spoke about how the organization has empowered women across the board by providing them a livelihood.
Insurance agents as a professional class are perhaps as old as the business of insurance in this country. And while agents have surely benefitted, it may not always be true about the customer whom they sold the policy to.
One such bad experience with an insurance broker left a very bad taste in Yashish Dahiya’s mouth. His father was sold insurance policies that benefited the insurer and the agent who sold the policy but there was nothing in it for the actual customer. “Most plans that get pushed by agents are traditional commission based plans that benefit them. Once sold, such policies have 60% chances of lapsing,” says Yashish. This personal experience proved to be the foundation stone for starting PolicyBazaar.com.
Policybazaar (PB) was started by Yashish, Alok Bansal and Avaneesh Nirjar in 2008. All three are IIM alumni and Yashish is an IIT Delhi and INSEAD alumnus as well. To date the platform has sold over 26,000 policies and very recently PolicyBazaar announced its association with Bajaj Allianz to sell six of their products from their platform. This is the first formal partnership that PB has done with an insurance company.
Today things are stable and life is comparatively peaceful, but PolicyBazaar has faced many storms over its lifecycle. YourStory caught up with Yashish to discuss things in depth.
Life so far
PB started as an aggregator providing information on insurance policies of over 30 insurance companies. Customers coming to PolicyBazaar.com can check out products, compare them and then go back to the insurance company’s site to do the actual policy booking. “PB is the largest aggregator of insurance in the country. We were like a marketing and advertising site for insurance companies,” explains Yashish. They continued this way for three years, until the first set of regulations from IRDA — the insurance watchdog — put a break on their advertising revenues.
This mandate presented them with a problem because as per the new regulations they could only make Rs 1 lakh a year on advertising a product. At that point in time, PB had revenues of Rs 20 crores, but this new mandate made sure they were set back by over 90% in revenues. The new regulations led to a lot of internal restructuring of PB. They had to move out their marketing and call centre operations, and subsequently PB was relegated to handling sales and backend operations for insurance companies. While the regulations have not yet been completely transformed, there has been some breather and things at present are better compared to 2011, when the regulations were first introduced.
Regulations restrict PB from making commission on digital products sold – which is a bulk of what they sell, and advertising revenue is still banned in their business. However, despite the constraints, Yashish says they have a customer base exceeding 5 lakhs and growing at 100% YOY. Their revenues crossed Rs 50 crores last year.
Life insurance policies still form a bulk of sales at PB, and compared to traditional sales, Yashish says, they have a very less rate of policies lapsing. Even policy payouts brought through PB is just 1.5% of industry standards. However, conversion rates of policies sold online continue to be slow and Yashish says they are working on making PolicyBazaar akin to Flipkart or Myntra. “We get million plus unique visitors per month. They take about 3-6 weeks for decision making, research, payment, undertaking and the final issuance of the policy. The turnaround time will remain long for us,” he explains.
The product purchase happening through PB is mostly for death, disability, critical illness and health. But there is lack of pension planning and child growth planning purchases, which is an area of opportunity for the site, says Yashish.
80% of customers coming to PB have families and fall in the age group of 25-45 years. The average age of a PB customer is 39 years.
Earlier this year, PB raised Series C funding of $20 million from new investors. Approximate estimates put the value of funds raised by the venture so far to be in the excess of Rs 200 crore. InfoEdge, Intel Capital, Tiger Global Management, Inventus Capital Partners and Ribbit Captial comprise the consortium of investors in the startup.
A bulk of the fresh funds raised will be utilized to beef up its technology platform and to do advertising and marketing. They have in the past used TV and digital medium for advertising and will increase the advertising outlay there.
While the insurance business has less room to maneuver because of the regulatory concerns, Yashish says they are now looking at the whole space of financial advisory to boost revenues. “We are now looking at selling loans, credit card, MFs, corporate deposits, gold funds and ETFs. We are in the process of building a money supermarket of sorts called Paisabazaar.com. It has been in the beta for the past 6-8 months,” he reveals exclusively to YourStory.com.
To shoulder the responsibilities, Naveen Kukreja has been brought in as the CMO for the non-insurance business, and Satkam Divya is leading the mobile foray for PolicyBazaar. Talking about their mobile strategy, Yashish says: “We are building a mobile app and a mobile friendly business for all our products. We want to build in customer service, mobile wallets, KYC and analytics everything into our mobile product. We have 12 senior members from the industry in our tech team, who are helping us do this,” shares Yashish.
The journey so far has been full of hard work, and Yashish talks about the need to be persistent in the face of adversities. PolicyBazaar has had its fair share of challenges – of establishing trust for the platform among consumers, regulators and insurers alike. “We had to work very hard to make people realize the merits of purchasing insurance online and how comparison is truly the only way. No one succeeds without perseverance and this sole quality is what guides you through dark nights and difficult days. One always needs to have a steady course of action, persistence and holding your ground irrespective of difficulties, obstacles, or discouragement,” he advises.