BENGALURU: Online payments major Paytm plans to apply for a licence to operate as a life and general insurer, people aware of the matter said.
Paytm, which has set up two separate entities named Paytm Life Insurance and Paytm General Insurance, will file an application with IRDAI. Paytm’s move to aggressively chase the overall consumer finance sector is aimed at accelerating growth in its non-payments business.
E-commerce major Amazon and Flipkart are also gunning to get a slice of this market. TOI had reported that Amazon was in talks to invest in an onlineonly insurance startup Acko. The deal, if it goes through, will see Amazon co-create financial products with Acko, besides being its distributor.
Backed by Japan’s SoftBank, Paytm will have to go through multiple levels of regulatory checks which may take another year before it starts offering its own insurance schemes, people familiar with the matter said. At present, Paytm runs as a corporate agent for group insurances on its platforms in partnerships with insurers. If granted a licence, Paytm will be able to underwrite the risks of a policy on its own.
While the regulatory framework requires a minimum of Rs 100 crore to start an insurance company, Paytm is expected to double down on its capital requirements for the insurance business as it is places an aggressive bet on this business. This is part of the broader strategy of looking to be a one-stop shop for financial services needs of consumers. The online payments firm recently launched a wealth management business as well.
“The focus initially will be more on general insurance. Right now there is discussion on how these products will integrate within the Paytm ecosystem,” said a person aware of the plan. Paytm SVP Shankar Nath is looking after the group insurance offerings for all products on Paytm.