Credit a better bet for fintechs eyeing expansion: PBFintech's Yashish Dahiya

economictimes.indiatimes.com:

fintech startups looking to enter insurance after tasting success in payments or wealth management should focus on credit, given the higher margins available there, PBFintech chairman Yashish Dahiya told ETtech. In a free-flowing conversation from Dubai, Dahiya, who helms the Gurugram-based company that runs insurance marketplace Policybazaar and credit marketplace Paisabazaar, pointed out that those wishing to invest in the insurance space should put their money onpeople who have shown some returns already.

Most of the disruption in the insurtech space is taking place in distribution, which is just a $250 million revenue opportunity, he noted. While admitting that there is a viable business to be set up in digitising the physical agent network, Dahiya said there is definitely a bubble building up in the insurtech space with respect to sky high valuations.

“You have to always pass on 95% of what you earn to these agents and on top of that it is a ‘buy’ market with almost no loyalty,” he said. Policybazaar itself is pushing into the physical distribution space with the PoSP (point of sales person)business, but Dahiya wants to grow slowly, keep costs under check and wait forthe competition to burn out.On technology in insurance Dahiya pointed out that technology is one way to reduce costs, and that embedded insurance is an even more efficient route.

Without data analytics and tech, the long term growth and viability of the insurance industry will be under question, he said, adding that the regulator (Insurance Regulatory and Development Authority of India) is also moving in that direction. Though 95% of insurance in India is still sold offline, if one takes a 20-year view, then data and tech is the future, he added.Super