Paytm ropes in Swiss Re as a strategic investor for its general insurance biz

Fintech unicorn Paytm has roped in global reinsurance major Swiss Re as a strategic investor for its general insurance business - Paytm Insuretech Private Limited (PIT).

Under this partnership, Swiss Re will invest around Rs 920 crore for a 23 percent stake by way of equity shares and compulsorily convertible preference shares. Of this, Rs 397.30 crore will be upfront and the remaining in tranches, subject to fulfilment of certain milestones.

Swiss Re is investing alongside Paytm’s Vijay Shekhar Sharma. This follows the announcement of the acquisition of Raheja QBE by Paytm Insuretech Pvt. Ltd. Both the investment by Swiss Re and the acquisition of Raheja QBE by Paytm Insuretech Pvt. Ltd. are subject to regulatory approvals. 

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According to a statement, Paytm Insuretech plans to leverage Paytm’s customer base and merchant ecosystem to develop innovative insurance products and offer best-in-class solutions. As part of Paytm's financial inclusion offering, this partnership is in furtherance of the company's mission to bring half a billion Indians into the mainstream economy.

Paytm founder Vijay Shekhar Sharma said, “We are excited to partner with Swiss Re for our insurance foray as a key strategic investor. It is an important milestone in our financial services journey of taking general insurance products to the masses. We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market.”

According to Paytm, India’s insurance market presents a significant opportunity, given the market's protection gap and under-penetration compared to the global average. Gross written premium for non-life insurance is expected to increase from $27 billion as of FY2021 to $50-60 billion by FY 2026.

Zurich headquartered Swiss Re Group is one of the leading providers of reinsurance, insurance and other forms of insurance-based risk transfer. It has 80 offices globally.

Paytm is one of the leading financial marketplaces in the country with over 333 million consumers and over 21 million merchants with a GMV of Rs 4,03,300 crore as of March 31, 2021.