Yashish Dahiya, CEO & Co-Founder, PolicyBazaar.com holds a Bachelor’s Degree in Engineering from IIT Delhi, a Post Graduate Diploma in Management from IIM Ahmedabad, and an MBA from INSEAD. He started his career as a Business Unit Head at Illinios Tool Works and later moved on to Bain & Co. to work as a Management Consultant. Before starting his entrepreneurial journey with PolicyBazaar.com, he worked with First Europa, a Global Online Insurance Broker, as their CEO. At First Europa, he was responsible for leading the global expansion and managing the business of the company across 9 geographical locations. He has also had experience of working with an online travel aggregator, ebors.com, a leading pan-European online travel agency and led their business as the Managing Director.
Policybazaar is India's largest online financial services platform and is an InfoEdge (Naukri.com), Intel Capital, and Inventus Capital Investee Company. The company began operations in 2008 as a key force in establishing an informative online financial services platform in India. Over the next five years the company has marked a staggering growth in terms of revenue and customer acquisition to become the largest online aggregator in India. Policybazaar.com boasts of over 20 million unique visitors each year who compare the best suited financial products for them and the sale of over 15,000 policies on a month. A recent feather in our hat has been the securing of 5 million series B funding, an investment that has helped strengthening the brand and enhancing the platform and customer service.
Replying to Anil Mascarenhas and Yash Ved of IIFL, Yashish Dahiya says, "In 2013-14, we hope to record revenue of Rs 70-75 crore and touch the Rs 100-crore mark in 2014-15. We also hope to break even in the coming financial year."
What are the changing trends being witnessed in the last decade?
In India, in the last decade, we have seen a significant shift in the way people buy insurance. The reason for this is that post privatization of the sector, we saw great innovation happening in the product arena in both life and general insurance space making insurance a very attractive proposition for customers. Also, with online platform emerging strongly for insurance, customers find it much more convenient to buy insurance. Additionally, with the advent of web aggregators, who enable customers to compare different policies at the click of a button and help them make an informed choice, customers today feel empowered and are confident that they are buying the product which is best suited for them.
Could you share some insights on how the online insurance space is doing in other countries?
Online/Direct insurance is the way almost every matured insurance market moves. While in some countries this is done through aggregators and other distributors, in others it is done directly by the insurance companies. While there is no consensus as such on which approach works best, the clear opinion which comes out is that direct to customer/online is a model which works. Now interest trends also emerge when you look at the products being sold. In the UK for example, motor insurance is the largest product by volume and premium to be sold online.
With most insurance firms offering their own page for buying a policy online, how do you compete with them?
We are a web aggregator platform which enables the customer to compare and buy policies online. Customers come to us when they want to compare the already existing policies before going ahead with the buying decision. Insurance companies with their own products are not our competition in any way.
What were your revenues and profit? Where do you see it headed?
In financial year 2012-13, revenues stood at Rs 45 crore, against Rs 25 crore in 2011-12 and Rs 11 crore in 2010-11. In 2013-14, we hope to record revenue of Rs 70-75 crore and touch the Rs 100-crore mark in 2014-15. We also hope to break even in the coming financial year.
What are your capex plans and how will you fund it?
We are currently funded by Infoedge, Inventus capital and Intel Capital. We currently have the funding we require and we are on track with our expenses, costs and revenues.
What is the amount invested so far in setting up and maintaining the portal?
Till now there has been an investment of around 88 crores in setting up the portal. This includes 3 rounds of funding by VCs such as Infoedge, Intel Capital and Inventus Capital Partners.
Brief us about your business model?
Policybazaar.com is an aggregator website, which helps customers research and compare the features of different insurance policies within a category, hence enabling them to make an informed choice. We have tied up with insurance brokers which help us procure information such as price, benefit, insurance cover etc directly from the insurers for the customer to compare. Basis the information provided by us, the customer then chooses the best option. We do not charge our customers anything for this service. Our revenue comes from fixed marketing and advertisement fee from the insurance companies.
What are your plans going forward?
We believe that insurance is still a category which is not understood properly by majority of the customers who purchase it. Online insurance currently contributes to approximately 1.5% of the entire insurance market in India. Which means, its not that people are not buying insurance (though India is still woefully poor in insurance penetration), but a lot of people who are buying insurance may not be doing so optimally. We want to increase awareness further about the idea of buying insurance only post comparing all prices and features.
We hope to be a catalyst in this movement and we plan to help increase the share of online insurance to up to 3% within the next 2-3 years. Luckily, we have the support of most insurance companies who also see this as a key goal for the insurance industry to be successful in India. Proper insurance benefits companies and customers and it’s a win-win for all.
Apart from this, we wish to increase our share of influence on the online insurance market by playing a pivot role in the education and information of customers. We believe at the end of the day we provide a service and we want more and more customers to adopt that service.
What is your outlook on the insurance sector?
The insurance sector today is in a very interesting phase. After growing exponentially within the first 5 years of privatization, I believe the sector today is in a consolidation phase. After a series of regulatory changes taken up by the IRDA since 2010, the insurance products in India today are more customer-friendly. We are witnessing innovation in both product and distribution and are emulating the more mature markets in many ways, which is a very good thing. I am confident that the insurance sector is headed towards a growth phase now.
What is your revenue model?
Our revenue comes from lead generation for the insurers, advertising and policy sales. However, there is a very interesting trend that we noticed. Till 2011, 85% of our revenue came from lead generation and advertising and the rest 15% came from policy sales. Now, 85% comes from e-commerce or policy sales.
Any new product category on the anvil?
Apart from insurance, we are also present in the loans and cards space. We currently offer Life, Investment, Money Back, Tax Saving, Health, Critical Illness, Personal Accident, Accidental Death, Car Insurance, Two Wheeler Insurance, Travel Insurance and Home Insurance. We will look at diversifying our insurance portfolio to allow niche products such as pet insurance, SME insurance, etc onto our platform depending on customer feedback and requirements.
What are your investment plans?
We believe that people and technology are our biggest assets. And these are the two avenues we invest in the most. We will expand our team size by about 50% over the coming year and invest heavily in technology to make our service more accessible and easier to adopt.
What are your hiring plans?
We have approximately 900 employees right now. And over the course of the next year we plan to take this number up to 1400-1500.
What is the shareholding pattern of the company?
We have a certain stake held by the PolicyBazaar.com management the rest is held by Info Edge, Intel Capital and Inventus Capital Partners. We would unfortunately not be able to share the breakup of the share holding.
Any plans to sell stake? What is the current valuation of the company? Would you look at getting listed?
Again, no such plans as of now. We would keep all of you updated on any changes in this.
How many registered users do you have?
We currently have a registered user base of approximately 7-8 Million.
What is the number of policies sold through your portal?
On an average, we sell about 25,000 policies per month.
Give us a break-up of the policies (how many term policies etc)
30% of the policies sold are term plans. Health and motor plans account for 30% each. While the remaining 10% account for investment cum insurance plans. In comparison, insurance cum investment plans account for 90% of the industry sales.
Misselling is mostly associated with insurance intermediaries. What steps have you taken to ensure there is no misselling?
The very business proposition of Policybazaar.com is to enable customers to make well informed decisions and therefore the chances of misselling are miniscule. To further check on misselling, a Policybazaar.com customer service executive always calls up the customer post a purchase is made to reconfirm and recheck on all the products features as well as the terms and conditions. This further reduces the chances of any product being mis-sold. We also have an extremely robust complaints and feedback procedure for a customer to ask any question that they may have post purchase.
What after sales service do you provide?
We have a customer service vertical which is responsible for cross checking and reconfirming the product features of the policy that the customers buys off our portal. Since the premiums are paid directly to the insurer, we are not involved with the claim settlement or the policy cancellation processes. We do however request customers to also inform us in the event of a claim so that we can assist them by doing additional follow ups with the insurance company on their behalf.
Whatever the rules, do you find high incidents of pass-backs by individual agents? How does it impact your business?
I would not be in a position to comment how many such cases do occur. But there are definitely a few cases we encounter. Typically what we have seen is that customers do come back to us informing us that they are being offered lower costs by an agent and often we have seen that it is because of the pass backs being offered. However, this trend is on the decline and this is something we also realize that customers are being swayed by this lesser and lesser each year.
What are the opportunities and challenges of being in this space?
With insurance penetration in India being at around 4%, the opportunity is huge. Indian insurance industry is at a stage where we are seeing a lot of innovations happening. We are slowly moving towards emulating the mature markets which is a very good thing. The customers today are also well educated about insurance products and understand the importance of comparing to a certain extent. Also, in the last 2 years, online platform has also emerged in a very big way and with increasing internet penetration, we hope that the aggregators will become the agents of financial inclusion.
For us, the biggest challenge has remained the regulations. IRDA’s regulations for web aggregators have made it very difficult for us to run a profitable business. We hope that in the coming year, the regulator relaxes the norms and makes them more conducive for us.
What changes do you seek to make online insurance purchase better?
According to me, online insurance purchase is great for both insurer as well as the customer. However, most insurance policies available online are simple vanilla term plans. In the last month though we did see few insurers like Aviva and Max Life innovating and launching term plans with deferred payouts on this platform. We need more such innovations. In 2014, I look forward to insurers launching more such products which add value to the customer. Insurers can also explore launching riders as a part of the online offerings.
Your advice to those buying a policy online?
My only advice to the customers would be to compare the policies carefully before making the purchase. This will help them choose the right product and help their financial plans in the long term.
What is your marketing strategy and marketing spend?
Till about a year and half ago, 95% of our marketing spends were on the online/digital platform. However, we currently spend about 50% of our marketing budget online and the other 50% has been moved to our branding/offline marketing. We expect to spend more and more on our offline campaigns as we believe that when it comes to online presence in insurance, we are already one of the top performers. Even with reduced expenses on online, we haven’t seen a dip in our customer visits, which to me implies are brand is growing since we are getting more and more direct customers.
We have a 3 pronged marketing approach:
- Make customers more knowledgeable about the insurance sector by helping them get all the information they would require about insurance. This enables customers to make the right decisions when it comes down to it. We also try to keep our communication as 2 way as possible and take consistent feedback from our customers and answer their queries to the best of our ability.
- Make customers aware about the benefits of comparing before you buy and about the fact that PolicyBazaar.com is the marketing leader in this space. We want more and more customers to adopt our platform.
- Enable end to end customer satisfaction by providing the best platform and experience to customers to make the process simple and easy to understand.
Are you happy with the response you have received for your service?
We really look forward to the day when all customers realize the value which aggregation and comparison bring into the purchase decision. We do face instances where we are still viewed as a glorified insurance agent, whereas this is far from the truth. We do assist customers in making the correct choices, however our core strength is our ability to provide all information in an easily consumable format to our customers so that they can make the right choices.