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Updated August 31st, 2021 at 12:50 IST

PhonePe gets IRDAI nod for insurance broking license, can offer products from all firms

Calling it a big milestone, PhonePe said that the insurance broking licence will allow it to market insurance products from all insurance firms in India

Reported by: Piyushi Sharma
PhonePe
Image: Shutterstock/PTI | Image:self
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Digital payments platform PhonePe announced, on Monday, that it has gained preliminary approval from the Insurance Regulatory and Development Authority of India (IRDAI) to act as a broker for life and general insurance products. The company said that as a result of the approval, it can now provide insurance advice to its 300 million subscribers.

Broader selection of insurance products

Previously, PhonePe had entered the insurance market last year with a restricted insurance corporate agent licence that limited the company to only three insurance companies per category as partners. The company informed in a press release that the IRDAI had granted it an insurance broking licence, allowing it to now market insurance products from all insurance firms in India, PhonePe said that the new brokerage licence will also allow the company to start giving customised product recommendations, with a far broader selection of insurance products, to its 300 million+ users.

Gunjan Ghai, Vice-President & Head of Insurance at PhonePe, said, "This licence is a big milestone in our insurance journey. PhonePe is India's fastest growing insurtech and this move to broking will give us further momentum and accelerate our growth in this space."       

PhonePe's business model includes multiple financial services 

According to Ghai, the company is developing a comprehensive, full-service platform for its customer base by partnering with high-quality insurers to develop unique solutions. The network has more than 20 million users, with 80% of them from non-metropolitan areas.

According to reports, the company's goal is to reach 900 million people in the next 8 to 10 years. In 2021, PhonePe entered the financial services market with the introduction of gold, giving consumers a secure and convenient way to acquire 24-karat gold on its website. PhonePe has also developed a number of mutual funds and insurance products, including tax-saving funds, liquid funds, foreign travel insurance, and Corona Care, a COVID-19-specific insurance programme. It also debuted its Switch platform in 2018, allowing clients to order from over 600 apps directly from the PhonePe mobile app, including Ola, Swiggy, Myntra, IRCTC, Goibibo, RedBus, and others. For the past five years, PhonePe has supported 8-10 languages. The company recently completed five years on 28 August. 

PhonePe's collaborations with Flipkart 

According to reports, Sameer Nigam, the company's founder and CEO, says to have around 20 million merchants, with about 16 million of them being Tier 2 and above. PhonePe is concentrating on utilising technology to make the offering considerably more user-friendly for Tier-2 and Tier-3 clients who are new to the platform. In December 2020, PhonePe signed an agreement to raise $700 million in primary capital at a post-money value of $5.5 billion from current Flipkart investors, including Tiger Global, led by Walmart, the world's largest retailer. This was done in order to scale up such efforts and expand across the country. Flipkart, the e-commerce company, has completed a partial spin-off of PhonePe. This is expected to allow it to access committed, long-term funding to fund its expansion plans. Reportedly, these plans also include an IPO by 2023.

(With inputs from PTI, Image: Shutterstock/PTI)

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Published August 31st, 2021 at 12:50 IST

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