Policybazaar to enter healthcare business in FY26, says CEO Sarbvir Singh

Sarbvir_Singh_Policybazaar_CEO

With an objective to reduce the cost of healthcare for the masses, Sarbvir Singh, CEO, Policybazaar revealed that the plan in FY26 for the company would be to enter the healthcare space. “We are going to build an alternate model which is not just based on first time health cost, but considering the overall health of the customer,” he emphasised in an interview to Moneycontrol. This apart, Policybazaar will also strengthen its foothold in the lending arena, with Paisabazaar pivoting from unsecured lending to an optimal mix from secured and unsecured loans. Singh believes that as the company readies for FY26, new business initiatives such as corporate insurance business and overseas expansion such as in Dubai will also augmenting financials more meaningfully. Edited excerpts:

The company received licence to operate as account aggregator late last year. How do you see this business adding up to overall numbers? 

Account aggregator is a very small portion of the overall business. These are a set of enabling businesses for our main platforms. It has a huge value to Paisabazaar. We will operationalise the account aggregator platform at some point. We are working on it. But NBFC is not a very big portion of our story anymore.

What’s the outlook for Paisabazaar in FY26?

Coming out of COVID, the company has had a very good year. A lot of digitisation of lending practices has taken place. In the current financial year, the Reserve Bank had cautioned lenders around subprime or near prime personal loans. That hit their (Paisabazaar) business. Paisabazaar is more a supply driven business. Right now, we are in a less flexible cycle as far as lending is concerned. We have chosen to use this opportunity to digitise our operations and be much more straight through to take a loan on the platform. We are working on the secured (loans) side as our business used to largely be unsecured loans. Our idea is that when the supply increases and we have a better quality of customer, and our ability to judge the customer is improved, we will emerge stronger,  with a portfolio which is more balanced between unsecured and secured.

How has the reception for secured products been so far?

The inquiries are higher for unsecured. But the ticket size also for unsecured is lower. In the case of secured, we are still building our building system for their documentation, security papers and so on, which is quite difficult. On the secured side, while the number of inquiries and number of loans may be smaller, but the ticket size is much larger and it compensates (for the volumes).

On the insurance business, at some point would you want to move from a distribution model to manufacturing?

Sixteen years ago, a widely held view was that an online platform could not be a big player in the insurance business. We have proven and created a channel with Policybazaar in the insurance space, proving that view wrong. What we have is a very different channel. We are selling protection, health insurance and term insurance products. We are selling the mandatory products, and some savings products as well, though a large portion of our business and of our value is our health and term insurance business. This is a very unique skill that has been built up. I think everyone has to do what they are best at. Customers come to our platform not just as a sourcing channel but because we are a brand. If you see our plans around healthcare and on the motor side, it is interesting.

Will this be your focus in FY26?

Our plans are becoming better and stronger in these businesses. It's a journey to fully go through it. But yeah, it's something in FY26 we will definitely focus a lot on. We are getting into the healthcare business in a way that we will be setting up facilities and will be an investor in the company where we will be setting these facilities. We are going to build an alternate model which is not just based on first time health cost, but considering the overall health of the customer. We will look at preventive, secondary, and tertiary care, who should go to hospital, who can be treated at home, and so on. It will take time to build this capability, But it will help the entire health insurance industry to have a lower cost of service. This is one of the biggest challenges that the industry faces today.

Contribution of new businesses is steadily increasing. What would you add further to keep this segment going?

We have three new initiatives. One is Policybazaar in Dubai. We are continuing to grow well there. We started a corporate insurance broking business and it's building up. We are still early. That business will continue to grow in FY26. PB Partners is another business, where we help existing insurance agents to sell more insurance in an efficient manner. In FY26, we will start seeing the top line and the revenue to grow, and the investment in these business will move towards better outcomes on the EBITDA front. Our core business will also continue to grow pretty fast. We have been growing well ahead of industry and we are growing faster than what we have grown even as a much younger company.

From single digit profitability margin, when do we see an improvement on this front?

We have a strong back book. As we continue to grow the back book, it will supply the profitability and some profitability will come from the fresh business. This trend should continue. For every rupee that we earn, we get 45 paisa as contribution. Once the fixed costs growth is slower than the revenue growth, profitability will start to emerge. That's what is happening. The driver of our profitability is the quality of our business. If we did not have the renewal rates and loss ratios that we have, we would not be able to show profit from the back book. Scale matters because that dictates the absolute amount of revenue and profit we will make, and quality also matters, because without that we won't have a business.

You’ve just turned positive on the bottom line. Will you maintain it in the long run?

Our business is very straightforward. If we make EBIDTA, then we make profit before tax, and if we make profit before tax, we make profit after tax. There's no loss in translation. Over a year’s period, we see Rs 150 crore plus kind of delta has been coming to the financials. We feel that that should continue.