 "Noida-based Paytm General Insurance withdraws application with Irdai")
Paytm General Insurance Limited (PGIL), an associated company of One97 Communications, has withdrawn its application for registration as a general insurance company with the Insurance Regulatory and Development Authority of India (IRDAI).
The Noida-based company said it will focus on the insurance distribution portfolio built by Paytm Insurance Broking Private Limited (PIBPL), moving away from making its own general insurance products for users.
The move will enable One97 Communications Limited (OCL) to save Rs 950 crore, which was designated for investment in PGIL.
In May 2022, the company had announced its plans to invest the amount in PGIL in tranches over a period of ten years. OCL’s board had approved an increase of the firm’s stake in PGIL to 74 per cent from 49 per cent in the same month.
“PGIL, an associate entity of One97 Communications, will be moving its focus away from the capital-intensive insurance manufacturing business and withdrawing its general insurance licence application,” the company said in a release.
The focus on distribution of the insurance portfolio closely follows with the company’s decision to adopt a distribution-first model for its lending product such as small-ticket personal loans.
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The change in strategies across business verticals such as lending, and insurance comes after the Reserve Bank of India (RBI) cracked down on the firm's associated entity, Paytm Payments Bank, in January this year.
At present, the firm is focusing on doubling down on insurance distribution of health, life, motor, shop and gadgets coverage.
The company has partnered with insurance firms such as Digit, Acko, ICICI Lombard, New India, Bajaj Allianz, TATA AIG, Aditya Birla Health, and Universal Sompo, among others.
Meanwhile, PIBPL offers embedded insurance products and provides coverage for health, life, vehicle, mobile screen damage, loss from cyber fraud, EMI protection, and job loss. It provides insurance covers for merchants pan-India, including shop, business interruption, and health insurance.
“By focusing on small-ticket general insurance offerings and leveraging the strength of Paytm’s distribution, we are committed to increase general insurance penetration to a wider audience,” a Paytm spokesperson said.
Paytm reported a wider consolidated loss of Rs 549.6 crore in the fourth quarter (Q4) of 2023-24 (FY24), compared to Rs 168.4 crore in the same quarter last year (2022-23/FY23). Sequentially, the loss doubled from Rs 219.8 crore in the third quarter (Q3) of FY24.
Net income declined by 2.6 per cent year-on-year to Rs 2,398.8 crore in Q4FY24 compared to Rs 2,464.6 crore in Q4FY23.