Policybazaar parent PB Fintech enters healthcare with new subsidiary

PB Fintech Limited, the parent company of Policybazaar, announced plans to diversify into the healthcare sector with the incorporation of a wholly-owned subsidiary.

In a regulatory filing, the company disclosed that the Board of Directors approved the proposal through a circular resolution on December 3, 2024.

The new entity, tentatively named 'PB Healthcare Private Limited' or 'PB Healthcare Services Private Limited', will "carry on the business of healthcare services," the company said in a filing. The subsidiary will have an authorised share capital of Rs 5 lakh.

The healthcare subsidiary will be incorporated in India, with PB Fintech holding 100% ownership. PB Fintech also clarified that it is a professionally managed firm with no identifiable promoter group and emphasised that this decision is free of any related-party interests.

Regulatory approvals will be secured during the incorporation process, which the company expects to conclude soon.

In its latest earnings call, Chairman and Group CEO Yashish Dahiya outlined the strategic rationale of healthcare.

"The insurance ecosystem suffers from a lack of trust between providers, insurers, and customers. This distrust inflates costs and complicates claims processing. By addressing these inefficiencies, PB Health could reduce friction, enhance claims satisfaction, and potentially spur faster growth in health insurance adoption," he noted.

According to Dahiya, the company is building its strategy around the fundamental belief that the future of healthcare lies in prioritising the lifetime value of the customer rather than the current revenue-per-bed model prevalent in the industry. "We believe the healthcare model of the future will focus on the lifetime value of the customer, which starts with the insurance premium they pay," he said in PB Fintech's Q1 earnings call.

PB Fintech envisions investing up to $100 million in this venture, focusing primarily on infrastructure and operational frameworks. However, as Dahiya emphasised, “Policybazaar's involvement is not to generate financial returns from this entity but to catalyse broader industry growth and indirectly accelerate Policybazaar's market penetration.”

The proposed model involves partnerships with hospitals and insurance companies to establish standardised operating procedures, reducing claims discrepancies. Dahiya further explained, “If this outsourced facility succeeds, Policybazaar stands to gain from a more efficient insurance process, leading to a projected 5% acceleration in industry growth annually."

PB Fintech reported a 43.81% year-over-year jump in Q2 FY25 operational revenue to Rs 1,167 crore and profit after tax reaching Rs 51 crore, marking a turnaround from a Rs 21.11 crore loss incurred in the same period last year.