The coronavirus outbreak and the lockdown have left the fintech sector reeling but the insurance business seems to be growing in these times of economic uncertainty.
Policybazaar, the largest online insurance aggregator in the country, has seen a 40% spike in term and life insurance policy sales in March and April compared to the same period in 2019 and consumer interest is only growing.
“At a time when a lot of our competing channels-- the bank branch network and the agent network--found it harder to do business, we continued to get customers. Further, we have continued to be very aggressive on television and other media channels to tell our customers that we are open for business,” chief executive Sarbvir Singh told Moneycontrol in an interview.
Term insurance saw the largest growth, said Singh, who took up the corner office in the Gurugram-headquartered startup in December 2019.
April has been one of the better months for business, even though a large number of people might have income stress because of pay cuts and job losses.
The government on April 14 extended the nationwide lockdown to May 3 though some of the restrictions have since been eased to resume partially economic activity in places that free of the highly contagious virus.
Policybazaar doing good business is important at a time when the slowdown has hit fintech businesses. Lending and payment startups are looking at massive slowdown as income levels fall and consumption has taken a hit.
Singh thinks perhaps the fear of a deadly disease and increasing awareness was helping the insurance sector find more takers in India’s under-penetrated market.
The company has also been seeing many inquiries on insurance cover for senior citizens, but most drop off looking at the high prices.
Besides insurance, Singh said the savings business, too, had seen a 10 to 15% growth, indicating that consumers were expecting a quick economic recovery. Given most of the offline channels were closed, online sales picked up.
Many people looked at Policybazaar as a front-end lead -generating entity but the company was a comprehensive sales and service partner to the customer as well, the former venture capital investor said.
“Right from introducing the customer to the policy, to explaining the policy to the documentation process and even medical checkup, everything is offered by us,” he said, adding it was this end-to-end process that had held the platform in good stead.
Given the strong financial situation, the company is worth more than billion dollars, Policybazaar would not go for “specific salary cuts” due to the coronavirus outbreak but would look to streamline business and rationalise costs, the CEO said.
“We will be very mindful of the costs and will be careful on all spendings, hirings, cost to vendors, etc but we are thinking more structural and long-term in that matter,” Singh said.
The remote-working experience during the lockdown could change the way the company works.
The management realised that 30 percent of the staff could work from home and this would rationalise real-estate spends and enable the company to expand to newer places, Singh said.
“Ninety-five percent of my workforce is in Gurugram, we can now have small offices in other locations and ask our staff to work remotely, for training, they might have to come to the office,” he said. “The cost we save can perhaps be used to incentivise our agents better.”
Policybazaar is a part of ETechAces, which owns multiple businesses other than the insurance marketplace. It includes lending marketplace Paisabazaar, doctor consultation platform Docprime and software as a solution company Zphin.
At a group level, the company has more than 13,000 employees, with offices in Gurugram, Mumbai, Chennai, Bengaluru, Hyderabad, Pune and Dubai.The company is backed by Tiger Global, Softbank, Chiratae Ventures, InfoEdge, Tencent and some other marquee investors.