Policybazaar's agent business may need to change under Irdai's draft rules, says CEO Yashish Dahiya

What happened

PB Fintech said its Policybazaar point-of-sale person insurance distribution business may need restructuring if Irdai's proposed rules are adopted in their current form, but it will wait for final regulations. The proposals say open-architecture distributors will be paid less than closed-architecture ones.

Proposed

Global impact / market context

The proposed pay gap would reduce what PB Partners earns per policy, which matters because the platform already runs at a loss and pays partners before insurers pay it. Lower revenue against fixed partner payouts could widen losses and force a costly redesign of the business.

Analyst inference

PB Partners brought in Rs.698 crore in the September quarter, up 39% from a year ago, out of Rs.2,178 crore consolidated operating revenue. It has 131,000 active partners, and tier-II and tier-III towns made up 76% of its premium, so changes there would affect a large share of the business.

Analyst inference

What to watch

1. PB Fintech will wait for Irdai's final regulations before deciding its next steps, so the timing and content of the final rules are the first thing to track. Confirmed
2. Irdai's proposal to pay open-architecture distributors less than closed-architecture ones is not final; watch whether this payment gap survives in the adopted rules. Proposed
3. Watch whether PB Partners can become a services player as the CEO suggested, since that transition would change how it earns revenue and covers partner payments. Analyst inference

Evidence

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