Seeing through it all clearly
Set up with transparency as its core policy, PolicyBazaar.com is an online insurance comparison portal that has sold about Rs.1000 crore of premium since its inception in 2008. Over the next four years, the company aims to take this number to Rs.10,000 crores.
For Yashish Dahiya, the co-founder and CEO of PolicyBazaar.com, the drive to set up his company stemmed from his father’s experience. He recalls, “My father, during 2003 to 2008, had invested about Rs. 20 lakhs in what was sold him as guaranteed rate investments but were actually ULIPs with high charges. While he was happy, that he got a return of about 4 per cent over the 5 years, what he did not realise that his returns were on a market which had grown at 70 percent per year in the 5 years of his investment. He did not realise how much money he had lost and had the market not grown at that 70 per cent, how much money he would have lost.”
Hence, in 2008, Dahiya set up PolicyBazaar with the vision of empowering consumers and help them compare and make an informed choice for their various insurance needs. He says, “There was a lot of mis-selling then and I wanted people like my father to know what they were buying. The main reason for starting the company was to offer transparency and choice to the consumer.”
While he admits that PolicyBazaar.com is not the only company in this space, but is also quick to add that the company differentiates itself with the information it gives on all the products and a wider range. The website also brings the pros and cons of the product and allows the consumer to take an informed decision. This has helped it grow steadily and from Rs. 10 crore to Rs. 15 crore of premium four years ago, it has grown by over 100 times and has touched Rs.1000 crores of premium on its website. Almost two million customers have bought products from the website so far as against a number of 1000 four years back. “More important is that we have stayed true to our customers. Almost 70 per cent of the products they buy still include health insurance, pure life insurance, motor Insurance and low cost ULIPs. We barely sell any of the high cost products,” says Dahiya.
Redefining a distributor’s role
“There are products that give us 3 times to 4 times more margin than the products sold and there is no reason for us to sell low margin product. The only reason we do so is that if a customer knew what he / she was buying, they would not be buying this expensive product,” says Dahiya. Citing an example, he says, “If you are buying car insurance and if you know that there is one available for Rs. 8000 premium and another for Rs. 5000 and there is practically no difference between the two, then why will you spend Rs. 8000. The only reason is if you are not aware of the Rs. 5000 premium product.” The company’s role here is to highlight all this transparently and allow the consumer to decide. “It might not seem like a big thing, but for our industry it is a big deal as that is absolutely anti-distributor,” states he and adds, “From a short term perspective, we are working against our best interests. Obviously, in the long run, this will help us gain consumers,” says Dahiya.
Effectively, the company offers them choice, transparency, makes them aware of right products and makes their processes simpler.
A market for growth
Insurance is a large market. According to Dahiya, the coverage of insurance that consumers have (sum assured) in India is about 40 per cent of the GDP as against 3 to 5 times of the GDP of the other developing markets. “Clearly, there is a long way to go before we achieve that kind of sum assured,” opines he. And the competition is intense too with almost 3 million agents and many banks in the sector.
To operate in this competitive sector, the company is differentiating itself by identifying the kind of products a consumer will need. And hence, it is working in partnership with insurance companies to create some new products for its consumers. “Eventually our experience with the consumer depends on what great products we can bring to them,” adds Dahiya.
To aid the growth of the company further, Dahiya has joined the advisory board of fitness start-up Fitso. PolicyBazaar sponsors events, including triathlons. In fact, the company has signed up to be title sponsor for some running events. “We are trying to take running to villages, especially targeting girls in the villages,” says he. The company spends about Rs. 40 crore in marketing every year and it wants a part of this budget to go towards sports events. Explaining this strategy, he says, “Most people participating in sports are usually fitter than the rest of the population and should be at lower risk. We want to engage with that group and make them insurance aware.” He also has another reason. Asa national-level swimmer and tri-athlete, he understands that besides cricket and of late kabaddi, very few companies support any other events as there is low participation. “I believe that it is a big opportunity for us to get involved in a small way. As we grow from being a small brand into becoming a larger brand, we would like to build our forte by having engagement in that entire sector, which is unaddressed sports category,”says he.
The company also has ideas on how to start leveraging wellness and fitness into insurance products. And as a result, if people become fitter, their health insurance claim will be lower. And this is a long term agenda driving the company in that direction. “So I would like more fitness people buying health insurance through our company website,” says Dahiya. He believes that one has to put the ground effort a few years earlier as it is a slow moving industry. And these efforts will reap the benefits a few years from now.
By March 2018, PolicyBazaar.com aims to be IPO ready. “Whether we do it or not will be a conscious decision. But we would have ticked all the parameters that will make us IPO ready. It will be a commercial decision whether we do it or not and not a capability decision,” says Dahiya. In the meanwhile, the company is working towards crossing a premium of Rs. 10,000 crores in the next four years from the current Rs.1000 crores. “I hope that 30 per cent to 40 per cent of Rs. 10,000 crore will come from products which we are planning to create in the next 4 years which would cater to specific consumer needs. As I look at next to four years, our focus is on areas where we feel there is a gap and we are working with insurance companies to fulfil that gap,” says Dahiya on a concluding note.
Founders: Yashish Dahiya and Alok Bansal
Concept:It is an online insurance comparison portal that aims to empower the Indian consumers, help them compare and make an informed choice for their various insurance needs.
Investors:The company raised funds from PI Opportunities Fund (Premji Invest), Steadview Capital, InfoEdge (Naukri.com), Tiger Global Management, Inventus Capital, Intel and Ribbit Capital
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