The share of PB Fintech, the parent company of Policybazaar, was trading over 3 percent higher on September 8 afternoon after a report said the company was looking to enter the insurance manufacturing market, moving up the value chain from being an insurance aggregator.
PB Fintech would start with the business-to-business sector, focusing on reinsurance, CNBC-TV8 reported, a day after reporting that rival Paytm had junked the plan to enter the insurance segment.
At 12.37 pm, PB Fintech was trading at Rs 797.95 on BSE, 3.35 percent higher from the previous close.
PB Fintech reportedly has had informal conversations with the Insurance Regulatory and Development Authority of India (IRDAI) on understanding the reinsurance market and its business foray, the report said.
Moneycontrol couldn’t verify the report independently.
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Insurance manufacturer refers to life, general and reinsurance companies which make and sell such policies and schemes.
At present, Policybazaar aggregates life and general insurance products from various companies on its platform. It lets customers compare prices and features of the various products and directs purchasing of these products.
Entering the insurance manufacturing market would mean having its own products.
Also Read: Bima Sugam a big risk for PB Fintech, Macquarie foresees 25% downside
IRDAI is also working on an insurance aggregation platform, Bima Sugam, which will facilitate buying, servicing and claims around life, general and health insurance policies.
The regulator has also been urging insurers companies to focus on direct sales. These moves are only expected to increase the competition for companies like PB Fintech.
The report also said PB Fintech would look to start its reinsurance business without a foreign or domestic partner to begin with. It will explore the possibility of getting investments from a foreign or an Indian partner in its reinsurance business only at a later stage.
Brokerage Views
In a recent report, brokerage firm Macquarie said it foresees a 25 percent downside in the PB Fintech stock. As IRDAI's Bima Sugam platform is a move by insurers to create a neutral insurance marketplace, it is a big threat to Policybazaar's moat.
The brokerage house assigned “underperform” rating to the stock with a target price of Rs 560. Macquarie's earnings estimates trail both consensus and management guidance for FY27E by 25 percent and 30 percent.
PB Fintech stock has given a return of 39.62 percent over the last six months against Nifty50’s 11.58 percent.
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