Shares of PB Fintech, the parent company of Policybazaar, were trading 3% higher on the afternoon of September 8 after reports indicated that the company is looking to enter the electronics manufacturing, insurance, Enhance the position of the general insurance value chain.
PB Fintech will start in the business-to-business sector, focusing on reinsurance, CNBC-TV8 reported, a day after reporting that rival Paytm had abandoned plans to enter the insurance segment.
At 12:37 pm, PB Fintech was trading at Rs 797.95 on the BSE, 3.35 per cent higher than its previous close.
The report said PB Fintech held informal conversations with the Insurance Regulatory and Development Authority of India (IRDAI) to understand the reinsurance market and its commercial foray.
Insurance producers refer to life insurance, general insurance and reinsurance companies that develop and sell such policies and programs. Currently, Policybazaar brings together life insurance and non-life insurance products from many different companies on its platform. It allows customers to compare prices and features of different products and provide guidance on purchasing these products.
Participating in the insurance manufacturing market means having your own product.
IRDAI is also working on an insurance aggregator platform, Bima SUGAM, which will facilitate sales, services and claims around life insurance policies, general and health insurance.
The regulator also urged insurers to focus on direct sales. These measures will only increase competition for companies like PB Fintech.
The report also said PB Fintech will seek to start a reinsurance business without a foreign or domestic partner. It will later explore the possibility of attracting investment from foreign or Indian partners in its reinsurance operations.
Broker opinion
In a recent report, brokerage firm Macquarie said it expected PB Fintech shares to fall 25%. Since IRDAI’s Bima SUGAM platform is an initiative by insurance companies to create a neutral insurance market, it poses a major threat to Policybazaar’s moat. The brokerage has given the stock an ‘underperform’ rating with a target price of Rs 560. Macquarie’s earnings estimates lag management and consensus forecasts for FY27E by 25% and 30%.
PB Fintech stock has returned 39.62% in the past six months, compared with 11.58% for Nifty50.
