MC EXCLUSIVE MC Exclusive | BimaPay eyes 30–40% volume from ULIPs, nears launch of fully digital loan against life insurance platform

Hanut Mehta, CEO, BimaPay Finsure

BimaPay Finsure is in the final stages of launching what it claims is India's first fully digitised loan offering against life insurance policies,  and is targeting 30–40 percent of its volumes from ULIPs, said Co-founder and CEO Hanut Mehta.

"Once the integration with our insurance partners and the (insurance) depository is done, we’ll be ready to launch the platform,'' confirmed Mehta, though he remained tight-lipped about the names of the insurance partners.

While acknowledging that ULIPs, which are market-linked, can be challenging as collateral due to fluctuating surrender values, Mehta said he is confident about their long-term relevance.

"ULIP demand has dipped in recent quarters with market corrections. But that’s cyclical," he said during an interaction with Moneycontrol. “When markets rise again, so will ULIP volumes. We don’t see this as a permanent trend.”

He added that while ULIPs won’t dominate BimaPay’s lending book, they’ll still play a significant role.

Moneycontrol had earlier reported that BimaPay's upcoming product will allow individuals to take loans against life insurance policies, a practice that’s long existed in the offline world. The field is dominated by banks and NBFCs, and full of delays and paperwork. BimaPay aims to eliminate that friction.

The  few banks and large NBFCs that currently offer loans against life insurance do so through fragmented, offline channels, Mehta said.

"Some fintechs do it in six to eight hours. We’re aiming for four to five minutes, and fully online," Mehta said.

“Life insurance penetration in India is four times higher than health insurance,” Mehta explained. “The sheer scale of life policies in force  and the dormant capital locked in surrender values presents a massive opportunity.

“This space is evolving fast. By year-end, we plan to be at the forefront, with retail, corporate, and life fully digitised,” Mehta added.