MC Exclusive | BimaPay Finsure to digitise loans against life insurance surrender values in a few months: CEO

Whom do you consider your primary customers—individual policyholders, insurance intermediaries or both? How do you manage to balance the needs of each group effectively?

Our primary product, which currently accounts for about 80 percent of our portfolio, is retail premium financing tailored specifically for the health insurance ecosystem. Today, we primarily finance individual policyholders, with retail health insurance being the cornerstone, and that focus will remain.

Your platform supports not just policyholders but also entities like hospitals and garages, correct? How do you tailor your underwriting or repayment structures to suit the cash flow patterns of these non-traditional borrowers?

Yes, we provide financing to both individual policyholders and businesses like hospitals and garages. For individual customers, we offer a digital process using credit history and EMI patterns to approve loans. The policy acts as collateral, making the process secure and allowing for an approval rate of 80-85 percent. For businesses, we analyse their GST, cash flows and receivables to set working capital limits, helping to cover gaps like the 40-50 days brokers wait for commissions. This flexible support helps businesses manage their cash flow more effectively.

BimaPay processes loans for various use cases. What is the typical ticket size for these loans, particularly in your core portfolio of retail health premium financing?

For our core portfolio, retail health premium financing, the average ticket size is Rs 40,000-45,000. This typically covers multi-year policies or family plans, with most transactions clustering around that Rs 45,000 mark. We do finance premiums up to Rs 5 or 6 lakh, but those are outliers.

And do you see this ticket size hold strong throughout the year, especially with health inflation at 14 percent and rising healthcare costs?

The ticket size remains fairly consistent throughout the year, even with the rising health inflation. Healthcare costs and premiums are actually increasing faster than the government's 14 percent estimate, the demand for flexible payment options is growing. This is particularly true for senior citizens, whose premiums were previously rising by 30-35 percent annually, and for younger people who prefer EMIs, as they are more accustomed to this payment model. As premiums rise, premium financing has become more essential to making insurance affordable year-round.

Seventy percent of your premiums come from rural areas, right? Wouldn't that mean smaller ticket sizes?

Yes, tier 2 and 3 towns are where the majority of our audience is. Historically, as businesses expand into tier 2 and tier 3 markets, ticket sizes do shrink, and that has largely been the case. However, this trend is gradually evolving. With growing awareness, more customers are recognising the value of multi-year policies that offer long-term savings and opting for higher sum insured amounts instead of minimal coverage. Insurance companies and brokers are playing a crucial role in educating consumers on the benefits of these choices. As a result, we’re seeing a slow but steady shift. That said, ticket sizes in tier 3 cities still tend to be lower than in tier 2, which in turn are smaller than in tier 1.

Are you looking to venture into life insurance anytime soon?

Yes, we are. We are digitising loans against life insurance surrender values, a process that has been manual for decades. With IRDAI (Insurance Regulatory and Development Authority of India) pushing for higher surrender values and shorter lock-ins, policyholders can access these funds sooner. Traditionally, getting a loan against a policy required branch visits and paperwork, taking 10-12 days. We are changing that by integrating with a major depository that manages electronic insurance accounts (EIAs), enabling instant digital loans. We will be the first platform in India to offer this, going live in a couple of months. Instead of lending directly, we provide a plug-and-play solution for banks and NBFCs (non-banking financial companies), allowing them to offer these loans seamlessly. Since life insurance penetration is four times higher than health insurance, this opens a massive new market for secured, low-interest loans (9-11 percent). We will start with one insurer, adding more gradually, and scale by onboarding lenders already offering offline loans against surrender values.

Can you elaborate on your plans for the SME segment? What role do you see these businesses playing in your portfolio alongside your core focus on retail health financing?

About 20 percent of our portfolio goes beyond retail health financing to support SMEs and MSMEs by financing their GMC policies. Small businesses with 10 employees typically pay Rs 2.5 to Rs 3 lakh in premiums, while mid-sized enterprises and corporates average Rs 60 to 70 lakh. We are introducing EMI options for these businesses and have already partnered with one insurer, with plans to expand further.

We also finance insurance brokers, typically SMEs earning Rs 40 to Rs 50 lakh monthly, but with thin margins, and provide working capital to smaller hospitals. However, retail remains our core focus as it scales faster with fully digital processing, unlike SME financing, which often requires manual underwriting and slows operations.