PB Fintech Ltd (NSE: POLICYBZR) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Yashish Dahiya — Chairman and Chief Executive Officer
Mohit Khopragade — Investor Relations
Sarbvir Singh — Director and Joint Group Chief Executive Officer
Alok Bansal — Executive Vice-Chairman and Whole-Time Director
Santosh Agarwal — Key Managerial Personnel
Analysts:
Unidentified Participant
Sachin Salkar — Analyst
Sachin Dixit — Analyst
Manas Agrawal — Analyst
Dipanjan Ghosh — Analyst
Dipanjan Ghosh — Analyst
Nidhesh Jain — Analyst
Nishin Chawate — Analyst
Questions and Answers:
Mohit Khopragade
Foreign. A very good evening everyone and a very Warm welcome to PB Fintech Ltd. Earnings Conference Call Quarter 3 FY26. Today we have with us Mr. Yashish Dahiya, Chairman and Group CEO PB Fintech. Mr. Alok Bansal, Executive Vice Chairman VB Fintech. Mr. Sarabhdev Singh, Joint Group CEO PB Fintech. Ms. Santosh Agarwal, CEO Pasa Bazaar Mr. Mandeep Mehta, Group CFO PB Fintech and myself Mohit Khopragade, Head Investor Relations PB Fintech. I now request Yashish for his introductory note.
Yashish Dahiya
Thank you Mohit. As I start, you know a very clear thing which is becoming crystal clear to almost everyone and specifically to us is that people will buy insurance from the person who can help them at the point of claims.
This is becoming super clear and specifically in the Indian market and I think Policy Bazaar with the efforts that it has put over the last three, four years is clearly outstanding in that space. And that is leading to a huge amount of positive pr. And I really want to commend the entire team on that before I start this. And that’s the primary reason why we are growing. Now one more thing I would add. The right to settle these claims, the right to help people at the point when you settle their claims comes from the fact that you have done the right disclosure up front.
Because without that right disclosure you we or anybody loses that right. And we retain that right because we stay very good at disclosure capture. As far as the Q3 results go our total premium grew 45% led by new protection premium at 68%. Within this health was at 79%. Pat grew 165% year on year. 289 crores. From a scale perspective now net of GST our insurance Premium is almost 8,000 crore. 7,965 up 45% year on year. The core online insurance premium is up 44%. And I’ve already explained the health and term leading leading this lending dispersals are up 84% year on year.
This is the overall dispersals. The core online dispersal is up 8% quarter on quarter. From a financials perspective our operating revenue is at 1771 crores which is also up 37% year on year. Just wanted to break this up for you. Core insurance is 42% up. Pesa Bazaar is 4% down year on year. But quarter on quarter it’s 8% up. And all the new initiatives are 41% up year on year. Adjusted EBITDA grew 154% year on year 299 crores and the margin is up 6% from 6% to 11%. PAT grew 165% from 71 crores to 189 crores.
Our core for those who are watching that particular number, our core renewal trail revenue on a 12 month rolling basis is now 841 crores. Of this, the insurance renewal revenue is at an ARR of 863 crores up from 538 crores in the same quarter last year. When you do the ARR and what that means is an increase of 330crores over the year. This is obviously a key driver of long term profit and growth. However given our life business is also growing and our term business also growing, that is also a significant driver of growth. Growth accelerated for the core new insurance premium net of savings see this number has been between 35 to 45% over the last 11 quarters which itself is a very high number.
But this quarter is 56% so it’s clearly accelerated from where it was. We continue to improve our customer onboarding and claim support service and the insurance CSAT has consistently been above 90%. Our credit revenue for the quarter is 115 crores and disbursal is 2470 crores. We continue to strengthen our leadership in the new initiatives with revenue growth of 41% and adjusted EBITDA margin moving to minus 3% from minus 7% with a 6% contribution margin. As I see the new initiatives part of our business I think here onwards we should be largely breakeven, breakeven or profitable from here onwards.
So I think as you look at the P and L overall what’s starting to happen is of course Policy Bazaar is doing what it’s doing and PESA Bazaar here onwards is profitable and new initiatives here on are going to be at break even, not profitable. So overall from a profits perspective we seem to have very sound ground and of course the growth continues across the board. PV Partners, our agent aggregator platform consolidated its leadership, has been consolidating this leadership and accelerated growth momentum. It is clearly the number one player and far ahead of whoever the number two would be.
We have moved the business increasingly towards smaller and high quality advisors and this is really driving growth in tier 4 tier 5 towns now and we have the most diversified portfolio across the business. Our UAE insurance premiums grew 62% year on year aligning more and more towards health and life. And this is another interesting thing. When we entered the UAE the entire market was just motor insurance. Today more than half of our premiums come from health and life. And that is, that is a change we’ve driven and today we are the market leader in the UAE as well.
We have a unique value proposition of cross border health insurance products and claims. A short program both for motor insurance and for health. This business is now consistently profitable for the last four quarters. Our PAT at 189 crores is 2.38% of the insurance premium. And overall it’s an 11% margin on the revenue. To summarize our performance, since our public listing in November 2021, our revenue has grown at a CAGR of 48% from 367 crores in Q3.22 to 1771 crores in Q3.26. And our PAT margin grew from minus 81% in Q3 2022 to 11% in Q3 this year.
With that I’ll open up to questions, please.
Mohit Khopragade
Thank you. Yashish. We will now take the first question from the line of Sachin Salkar from Bokwan Tachin. Please unmute yourself.
Sachin Salkar
Thanks Mohit. Hi Management. Congratulations on a great set of numbers. I have three questions. First question is about the QIP announcement. Would love to understand how management is thinking in terms of investments particularly on the lines of international markets and which area could be of interest for you guys from an international market point of view.
Yashish Dahiya
You want to finish the other two questions or take them all?
Sachin Salkar
Okay, sure.
So second question again wanted to understand some impact or you know, anything management could, you know, given clarity in terms of impact from transitioning towards a CoR based model for health and term. I understand the impact will be seen in subsequent quarters on the P and L. Anything you guys could help in terms of allowing us to model that properly would be helpful. So that’s the second question. And third question wanted to understand generally how the premium growth has been since the quarter because a part of a growth in the last quarter was largely driven on expectations of a price increase in premiums.
So has something change out there, you know, from an expectation point of view? And Yashish would love to understand your thoughts on multiple media article which talk about potential commission cuts happening in the sector. Thanks.
Yashish Dahiya
Sure. So on the qip we have I think asked for a board meeting on the 5th of this month. Assuming we get that time from all the board members, that will be happening and then we will go to shareholders to take approval. Our approach in this has been a long drawn one. We have spent the last three, four years Looking across markets, Middle East, Southeast Asia, European markets, as you would appreciate.
You know, when we, when we look at these, we look at size of market and we look at our ability to transform that market, which has two components. What is what we have done in India, how does it apply in that market and how could we bring that to bear but more importantly our comfort with that market as well. And so when we look at these three, we seem to be zoning in on certain market areas which we think are very interesting for us. We have not identified any target as of now. That’s what we mentioned in our note.
But it’s an area we want to definitely work towards. And a fairly convinced is the right thing for the company to do at its stage where our Indian business is very, very strong. We have whatever 93%. I don’t know who the remaining 7% is by the way, but we have arguably 93% market share and growing the way we are growing. See, what is very clear is yes, GST came and our health business, let’s say growing at 60 and once GST came it grew at 80. And I think it’s becoming crystal clear that we are growing at about 40% more than the rest of the market.
And it’s being driven by a very fundamental force which is. So I think the India business is in a very, very strong position and thus it’s the right time. I will request Sarabi to come in on the core premium growth and commission cuts. Maybe both of us can pitch in, but that’s fine.
Sarbvir Singh
Yeah. So I think, Sachin, I think in terms of transitioning, I would say two things. One is that, see, we have always worked with insurance companies based on the quality of our business. And I think what is happening is that as the especially in health insurance, as the size of the book has increased, it has become very important for obviously both insurer and policy bazaar to look at it that way. So I would say that it’s not like something is dramatically going to change next quarter or two quarters from now or something like that. This has been a journey that we have been on and I think we have continued to go down that journey.
I think the reason it got discussed this time perhaps more than what it has been in the past is because of this whole lot of questions around GST and you know, how commission would be handled based on GST etc. And I’ll say the same thing that we said last quarter that I think we work closely with our partners. It is truly a partnership and we have figured out solutions which are Win, win for both sides. I think you’ve seen that the amount of business that is happening has gone up post gst. So that is obviously helpful.
I think the quality of our business is there. So that gives you room even as an insurance company to share more with Policy Bazaar. And then so, you know, there are a bunch of such things which we have been able to do and I think things have worked themselves out. If you see in Q3 so far as far as price increase, etc is concerned, I think that is a very, you know, very small or I would say a very tactical thing. Right. Prices do go up from time to time, etc. Etc. And as you know, they have not gone up at all.
Right. In health insurance for the last four months. So I, I think, you know, there is no, there is a tailwind because GST got cut and there was a lot of discussion about health insurance. A lot of people came to search for health insurance and obviously we were able to convert a fair share of them. But I don’t think that there’s something inorganic that happened beyond this extra 20, 30 points that we got. We have been growing fairly rapidly and I think it is on the back of what Yashees explained that we have good disclosure and we provide support at the time of claims so customers can buy with confidence.
And if you see the whole point in insurance is trust and if you can build that trust and obviously we have a long way to go. It’s. We have just got started. But I think as we go down this journey of trust, I think it really helps. So yeah, I think that’s kind of what I’d like to say.
Yashish Dahiya
Sure. Coming to, you know, various debates that have been going on in commission, etc. Look, I can’t comment on the debates and what’s going on there. See, we as an industry graduated about, I would say 21 months ago into what I would call, what I would call the EOM framework. What is the EOM framework? The framework basically says that the customer will, you know, basically have a certain amount of. Because what matters from a customer’s perspective is how much expense is going in. And so for general insurance industry is 30%, for health insurance 35%. This is largely in line with global norms.
It’s not different from global norms now. And I think this is a great framework. And I’ll explain why. Because there are different companies at different stages. Some company wants to put money in its own marketing, its own call center, its own employees and get sales perfectly fine. You can do that within 30% or 35%. Please go ahead and do it. Some companies would pay somebody on a variable basis the same amount. So it’s actually fungible. What you, you know, some companies may have a hybrid model, they may use somebody to attract data, etc. And they put their own call center or their own people to make those sales happen.
But whatever you do, whichever hybrid model or single model you follow, you have to stay within the 30 or 35%. Secondly, I’ll tell you where my heart lies in this. I believe I would always welcome anything that reduces the EOM across the industry. I would also welcome anything that reduces take rates as long as the benefit actually goes to the consumer, which is the right thing to happen. And please do understand where we stand in this situation because our quality of book and our efficiency is mostly higher than most other people in that situation. That leads to a disproportionate market share gain towards us.
Suppose, let us say argument’s sake, tomorrow commissions are X and they are equal for everybody and our quality of business is much better. What would happen is we would request for a discounted price for our customers which would mean that price may not be available anywhere else because other people are not able to operate at the same price point. And that would mean it. So look, and that’s what I tried to explain to you guys. You have now seen us over 17 years, you have seen the point when our, when there were commission controls, but that is nothing.
You have seen us at a point when life insurance commissions were zero for us till 2018. Our life insurance commissions were meant to be zero. Right. You’ve seen us through all these stages. Our take rates have never changed. There is a particular reason why that, you know, solidity has stayed because we add value. We actually bring in customers and we bring in good quality customers and good to do, good quality disclosures. And you’ve now got the last 10, 12/4 of recordings every time. I’ve said I would always welcome reduction and take rates as long as the benefit does get passed on to the consumer.
I don’t know Sarabi, if you have anything specific to add on that.
Sarbvir Singh
No, no, I, I again I just, only thing I want to say is, you know, EOM framework was introduced about two years and nine months ago. I think it’s just been less than three years. I think it’s playing out. We should, you know, hopefully we’ll see how it plays out into the future. And I think the fact that it makes costs fungible is a very powerful point. It allows different Companies to choose different routes to market, as Yashish explained. And I think we, we are, we are very happy to work within that framework and you know, whatever number that comes out, we are, we will work towards.
Sachin Salkar
Thanks guys. Just maybe one quick follow up out here. This is typically we found Indian companies going out of India in search of growth when the growth in the core market starts slowing down. But for you guys it’s the opposite. If anything, the growth in India is accelerating and clearly there is a huge Runway from a growth point of view. So I was just trying to understand, is it something really great in an international market that makes you guys look at an international market or, or is it just, you know, I mean, whatever you guys are looking to do in India, trying to replicate that in other markets.
So what is that, you know, area of expertise which you guys have been looking to bring into the international market?
Yashish Dahiya
I think it would be fair to say that Policy Bazaar is perhaps the most evolved and maybe it’s not fair. Maybe it is fair. I think it’s fair that Policy Bazaar is the most evolved insurance distribution model across the world. And we add a lot of value to the consumers, a huge amount of value to the consumers and a huge amount of value to our insurance partners. We bring them profitable business, lots of business, and to the consumers, we make sure that the price stays controlled, but also that their claims are settled.
I think it’s a very, you know, if you actually walk around the world, you will not find too many distribution pieces doing all of this. Now if you look at certain markets, you know, the US is I think 30 times bigger than the Indian market. Europe is 15 times bigger than the Indian market. And genuinely, given that we have been observing like I have been particularly observing, please do appreciate in 2006 I was meant to lead confused.com, right? I’m just saying that was the offer I had. That is where Policy Bazaar started from. So we’ve been observing those markets for the last 20 years very, very closely.
They are very profit rich markets, but they have almost zero innovation. Almost zero. And of course they are crying for innovation. So I do think we will add a lot of value. If we did not think so, we wouldn’t, you know, want to expand globally. And I also think in financial services, many of the people who’ve operated worldwide in financial services will agree with this, that diversification has its advantages, clearly. Right? So you, you want to be in multiple countries. And also I think it’s time for India to have its own MNCs. Why should only Google and Facebook operate in India.
Why would companies with their head offices here not operate abroad and serve international customers and international partners? So I see many reasons why this is a good thing. Let’s hope our board agrees. Let’s also hope our shareholders agree. Let’s hope we get all the regulatory approvals and then, you know, let’s see where we head.
Sachin Salkar
Very clear. Thanks a lot.
Mohit Khopragade
Thank you, Sachin. We will now take next question from the line of Sachin Dixit from JM Financials. Sachin, please unmute your mic.
Sachin Dixit
Hi Ashish and team. Congratulations on a great set of results again. So my first question is on the growth basically on core insurance side, new business premium.
Obviously you have highlighted the reasons why you should get the growth. But if we try to look into this contours of this growth, right? So where is it coming from? Right. Because most of the industry data does talk about a much lower growth. Some of the partners who work with you more closely have grown faster but still probably half of what you have grown at. So can you give more color on what is happening? How are you driving this growth?
Yashish Dahiya
I think Sarabir is the best person to answer that.
Sarbvir Singh
So I think the first point, Sachin, I think which has been written in the press release also is that you know, we’ve grown our protection business 68%, right? So if you see protection is over half our business. So if you’re over half of your business is going at 68 then at least mathematically you can get to the numbers, you know, that we are talking about. Now coming to the how of this whole thing, I think protection or risk products have a unique, unique property which is that actually in the end they cannot be sold on commission alone, right? Risk products have to be sold on the basis of disclosure and the fact that in general insurance especially that you are able to produce or help a person at the time of claim because that’s the only way that that person will renew the policy again, will stay with you, etc.
Etc. So I think the point that comes through in risk products is that it takes a while to build capability. One is in sourcing, right? One is to attract customers. So if you see Policy bazaar has spent 18 years of solid advertising talking about why you should buy health insurance and term insurance. So we are not talking about just why you should buy from Policy Bazaar but we are talking about the genuine need for these products because of which obviously customers come here and because they come on their own they have a tendency to disclose more.
We deploy, you know, state of the art models, whether it’s gen AI, now ML, earlier, etc. Etc. To make sure that we capture that disclosure, make sure that we have a sales culture which ensures disclosure, which is captured, which is communicated, etc. Etc. This allows the insurance company to price the risk appropriately. Once the risk is priced appropriately, you are able to then obviously pay the claim and move forward. So it’s a virtuous circle. This circle takes a long time to set up. So I think what we are seeing today is the benefit of decades plus of effort that Policy Bazaar has put into the market. And I think that effort is today paying off and that takes, as I said it takes a while to get going this cycle and once the cycle gets going, obviously then if you can run it properly it should go to your favor.
So I think that’s exactly what is happening. And yes, you know, you if you see when the industry grows stronger, we also grow ahead of that and when growth is not so great in the market, we still are able to find the growth. So I think this is the core reason in risk businesses I think you have to get this virtuous cycle going. And I think at this point, you know, touch, I would say we have it going. That’s I would say the key reason.
Sachin Dixit
Right, thank you. Thanks for that. My second question is on the commissions that we are effectively getting right if. And let me know if I am doing a wrong math. Right. So if I am looking at your business yoy health and term which are probably the highest commission product in year one have grown fastest. So ideally it should have gone up in this quarter. In particular your new business premium has also grown almost at similar rate to renewal. So again don’t see any dilution from that. Still they were roughly flat. Are we reading too much into it or as Yashish used to mention earlier because this is more of a quarter thing.
Sarbvir Singh
Yeah Sachin, you might be reading too much into it. There are various pieces that move. We have different products, even the same product. See I will give you where what I was saying to you, one of our highest selling products and I will refrain from on such a large forum talking about a particular company etc. In health. In health, our largest selling product is also our lowest commission product. Why is that? It is a product in which we give disproportionate benefit to the consumer. Disproportionate benefit. Right. And we do that because it’s the right thing to do and we do that because the insurance companies agreed to pass that benefit on to the consumer.
Usually what happens? The insurance company struggles with something like this because they say, hey, you can do it, but others simply can’t because they don’t have the ability to, you know, do that level of whatever diagnostic, etc. And that causes issues. But I’m just sending you where our heart lies. That is the product that we sell pretty much the most. Right. And, and yes, because the company allows us to sell that product, that company also grows faster. So I don’t think we, we’ve laid our heart out quite clearly here. And I don’t know, you know, how else we can convince you guys that we are not commission centric, we are consumer centric and we make ourselves so efficient in risk.
Exactly what Sarabir said in risk capture and you know, disclosure capture. So that at the point of claim we are standing there to do that. And I think what has happened over the last four years, the discipline in the claim support has become very high and the ethos and the culture is very, very strong. So that is leading to positive outcomes.
Sachin Dixit
Got it. Thanks for the clarity. Yes, she’s there. My final question is on the size of this potential QIP that we are looking at. Right. We already have 5000 odd crore of cash. We are looking to add more.
Are we looking at something very sizable or this is more of a multiple acquisitions that you’re looking at?
Sarbvir Singh
See, I think in three days time we go to the board. I don’t have the permission to talk about it till I have board approval.
Sachin Dixit
Sure, sure. All right. Thank you. And all the best. Thank you.
Mohit Khopragade
Thank you. Sachin. We will now take next question from the line of Maharaj Agrawal from Bernstein. Manas, please unmute your mic.
Manas Agrawal
Hi team. Thanks for the opportunity. This COR approach on health, is it a right way to say that this is a defensive move against any potential regulations on commission? The question I’m asking is will the non commission part of the total take rate be outside any potential commission cap? That is question number one.
Question number two, in case there are commission, commission cuts or deferrals in whatever way, what are the levers that you have? Can you touch call center costs or it’ll be marketing only that you can play with. And third, from a capital allocation perspective. So I see there is a chunk of cash on the balance sheet. If you guys are looking at some potential acquisitions and talking about a qip, how should one think about future cash deployment and then other income is a meaningful part of the bottom line today? So those are the questions.
Yashish Dahiya
So Manas, I’m going to Let Sarbir answer most of that question.
Sarbvir Singh
But I will just say a very simple thing to you which we’ve been saying again and again. I think we are very very comfortable within the eom. Also our take rates are not extremely high. They are actually quite moderate compared we are at whatever 16, 17% which is, which is fairly average for the industry at our scale specifically you would struggle to find anybody there. However. Whatever. Look, first of all these things, whatever you’ve been hearing in the news, etc, these things take time to fructify. I think we some time ago moved to the EOM model which is a far more evolved model. You tell me when the insurance company has been told you manage everything in 30%, maybe the 30 becomes 25 over time, maybe it becomes 20 over time. That’s fine, that’s acceptable. What is the advantage of saying no? 15 will be for this, 15 will be for that. What if a company does not want to do 15% of operating costs because it has a different model, it has a distribution LED model And you know, I think that just forces, you know, wrong outcomes.
If you would Right now at a very fundamental level we are a more efficient player. The reason we went to combined operating ratio with our partners is because we wanted to ensure we settled higher percentage of claims for our customers and gave better products to our customers which others are unwilling to because we do better quality disclosure. We wanted to take the advantage of our disclosure capture. Right? That is the reason we went there. We did not go into it to make more money. That is not our intent. I don’t know how to say it.
We actually don’t want to make more money. We don’t want to. I know that sounds stupid because this business is meant to be more mission than just creating profits. It is creating profits as a byproduct of that mission but it is not running to make more and more money. That’s not like that’s, that’s not what we are here for objectively. We are here just here to make the high the highest possible impact on the customer. If you are the most efficient player in the market, or let’s say you’re the top quartile of efficiency and you’re the most efficient player at risk disclosure capture anything that makes the market condition harder plays to your benefit in terms of market share gains and you may anyways be below that threshold.
But I’ll kind of let Sarbin answer the more detailed part because I’m talking more theory and mission and all that stuff which yeah, I don’t know no.
Mohit Khopragade
No, I. I think Manasish explained everything. I’m not sure what detail I can add, but I just, you know, give you one or two nuances. I think the first thing is that this defense versus offense kind of thing comes from a thinking around as if you’re trying to defend a profit pool or something. See, we are not trying to defend anything. I mean, we are a company which barely made any money some time back and you know, we’ve started making some money and if you. I don’t know if you were there at that time, but I think we very consistently said one thing, that the way we will make money is because our premium will go up, our revenue will go up, our contribution will go up and our fixed cost will go slower than that.
And this will be done because we have a large renewal revenue stream that is building up. If you think about it, you can actually see the numbers. This is exactly how it has played out. It is not that we have cut call center spending. In fact, Yashish has a heart attack every second and third quarter because we add so many people. And then he gets scared that what will those people do, et cetera, et cetera, because you have to add those people in advance of demand. And that’s a risk we take every year because there is no other way to do it.
Let’s say we get it wrong, which we do from time to time. We can’t do anything. We have to add those people ahead of that. So we are not driving to a business model number. We are driving to serving more and more customers. And if you just think about one, I’ll throw one number at you. In the IID annual report, retail health insurance added 40 lakh new lives in 2024, 25. We estimate that policy bazaar accounted for somewhere around 40% of those new lives. So something is, you know, there is something that we are doing which is kind of working.
And I think that’s what we are doubling down on. We are trying to increase the number of people we cover. We are trying to increase the number of people we can serve by giving, you know, obviously unbeatable propositions. I think that’s our goal always to create unbeatable propositions. And when we do that, I think profit is a byproduct and obviously it may go up and down here and there, but that’s where we are headed. And honestly, I think it’s working. So that’s what we are trying to do.
Manas Agrawal
Understood. Thanks for that. On the capital allocation piece, if you can put some color around that as a
Yashish Dahiya
capital allocation, all of our businesses are, from here onwards, whichever new initiatives we have are generating money. You know, we may, we may think around investing once we get the pension model right, we may think about investing a bit there. But again, as I said, that will be minuscule compared to the overall organization in terms of profit capability etc. Yes. If we get board approval and shareholder approval and everything goes ahead, we would over time like to diversify both in India and internationally.
And so some of the capital allocation might go in that direction. And I think I would like to make one statement just to kind of allay some fears here. Right. I think whatever we do would be significantly, would be significantly EPS accretive or whatever, you know, PE accretive. So I don’t think, you know. We. Are going to just, you know, throw money at something just like that. So I think we should be, we should be quite fine. It would, it would be something bought as a value investment which we can transform and make far, far stronger than it is and, and make that those entities more competitive in their home markets. And we would leverage our Indian skill base and our Indian skill pool while also leveraging what those entities might have. So I think we’ll do a good job on this.
Alok Bansal
Yeah, this is Anuk here. See one Whenever we get these questions around the growth rates and are we doing something very different from the market, the real fact is this is aggregation led business.
You have to keep on doing it day in and day out. There’s no secret sauce. You just put customer at the center of everything that you’re doing and you know, try to do the best that you can at that particular point of time. And you know, lot of times market may think that it’s insurance company versus us. That’s not the case. We are not a distributor only, we are a partner. We work very closely with them to serve the same customer. So aim for both of us, whether it’s insurance company or whether it’s the same.
So you know, there’s no tussle going on between two entities in terms of how I can do better than the other. We are here to serve the customer and we are very, very focused on that. And there is no single one thing that, okay, you do this and suddenly you can become another punishment. There are hundreds of small, small things. You keep on doing it slowly, slowly, slowly, slowly improve every quarter, every month. Eventually we get to where we are, but it takes 18 years. And on the other side, you know, now that we are talking about capital allocation, see, just think about it we have gone deeper and deeper into the value chain.
When we think of going deeper, what does it mean? You got into the insurance brokerage, you got into, you know, garage networks, now getting into PV health, now PB pay. There’s so many different parts that we are now trying to do. Claim servicing, physical meetings, all that stuff funded from our own accruals, internal accruals. Similarly, we have also gone wider. We have started bonds, we have started pensions, we are starting a lot of stuff. So you know the both depth and width, you can see that. We have tried in India, we have been hopefully doing okay job there.
We tried one experiment with Dubai and Middle east which seemed to work quite okay over the last five, six years in terms of growth, in terms of transforming that market, in terms of profits. And now those learnings potentially can be taken to other markets. Whether it’s Southeast Asia, whether it’s Middle east, whether it’s in Europe, we don’t know yet, 100%. But be very, very sure as yes, he said it has to be strategically somewhere fit with what we want to do. A great opportunity, large market ecosystem in terms of customer dynamics, distributed dynamics, regulatory dynamics have to be somewhere aligned to what we want to do.
And yes, the financial team have to be something which we are comfortable with. So we look at everything before we decide. But you know, we are just requesting the shareholders and board to give us that freedom right now.
Manas Agrawal
Got it, got it. Thanks for the detailed answer. We’ll await details on whatever potential acquisitions are around.
Mohit Khopragade
Thank you. Manas. We will now take next question from the line of Dipanchan Ghosh from Citi. Dipanjan, please unmute your mic.
Dipanjan Ghosh
Hi. Hi. Hope I’m audible. So just few questions from my side. You know first, you know, when you’ve studied some of these international markets, just wanted to get some sense.
I mean, in case, if you were to go for an international expansion, is there a possibility that some of the cost base can be shifted to India or domiciled in India? I mean, does the regulations in some of those developed markets really allow for that? And if yes, would you kind of consider that in case you were to, if you were to go for an international expansionary strategy? The second question is on the POSP side of the business. I think there’s a lot of consolidation that has been going on in the industry over the past few quarters or years and I think that has benefited you guys both in terms of growth and margin profile.
But you know, if you have to look at the B2, B2C business in some of the other sectors like let’s say mutual funds, we see that the margin profile on a steady state tends to be far higher than where we are currently. So given this consideration, do you envisage the path to profitability in the POS business let’s say over the next two to three years to be, let’s say tad better than what you guys would have been anticipating, let’s say two years back. The third question in your, in some of your conference calls previously have mentioned that you are focusing on expansion, kind of expanding your hybrid strategy into newer locations.
So just wanted to get some color on what the progress on that front. And finally one last question on Pasa Bazaar. You know Alok mentioned in the answer to the previous participants question that you have introduced bonds previously, you had also stated that you might want, kind of want to go into regular distribution of mutual funds or even broking at a certain point of time. So holistically thinking more from a long term perspective, what do you think could be, you know, the overall product suit of Paisa Bazaar out there? Those were my questions.
Yashish Dahiya
Sure. So when we think about international markets, I think many markets and India both have a lot of talent and sometimes talent for somewhat different sides of things clearly technology, finance, processes, etc.
Etc. India does tend to have a very significant advantage and even in product thinking, etc. You know, specifically when you think about products like health life policy Bazaar brings a lot to bear in those. So there is, there is clearly going to be a lot of integration opportunities as you point out and cost synergies for sure on the posp profitability. See insurance, mutual funds, credit, business, all are slightly different. Insurance is a high level push sale, the actual process of policy issuance. So if I, if I look at insurance agent, he would spend about 95% of his effort trying to make a sales and then maybe 5% of his effort trying to coordinate, you know, things actually the back end payments etc are quite smooth in the insurance industry.
You know people just get paid on time, things happen, various things happen. And that’s not the biggest pain point because insurance companies are also quite keen to you know, issue those policies. So it’s a, it’s a demand generation problem that is the biggest problem in the insurance industry. You appreciate it, right? It’s not as big a problem in many other areas now. And that is why in insurance the person who brings in the business takes a disproportionate share of the value. And obviously now we are all fairly scaled up players. Right? I don’t know, we are doing maybe what, 7, 8000 crores? Yeah, we’re doing 7, 8000 crores.
The number two may be doing 4, 5000 crores etc. Etc. If at those numbers, you know, so does that mean at 20,000 crores we will make, you know, 100 crores of profit? So the margins are very, very thin. The margins just tend to be maybe, you know, a small sliver of the revenue. And the revenue itself is let’s say 20% of the premium. So you, you know, if you had 5% of that also as your profit you make 1%. That is if you had no fixed cost at all, as you realize in these businesses you have fixed costs as well.
So I genuinely don’t think they are supremely profitable. They do get you scale on the, on the new location. Yeah, please.
Alok Bansal
So I think on the posp, I just want to explain to you, since you asked about other B2B2C profile and I think Yashish was alluding to this, but if you think about it, in posp, we sell motor insurance, right? Whereas the area that you are thinking of where profitability is high in India at least is mutual funds where people have been able to build a AUM over a long period of time and now they are able to, you know, attract or get the economics from that. And mutual fund is a pull product where a customer wants to buy a mutual fund.
Whereas here we are selling motor insurance which does not have that same AUM concept over a long period of time because it is largely being bought for the commission that that was being given. So I think the two businesses could not be more separate. And I also want to just give you a little bit of caution on this whole word of consolidation that you know, is being discussed. But the reality of life is that the number of insurance agents in India is fixed. See, the same agents are available everywhere and they work with those platforms where things are smoother, where they get paid properly, etc.
Etc. So consolidation in this business is actually not as valuable as it may seem at first blush because the underlying people are not that different. So you don’t necessarily buy anything. You buy management, which obviously can be very valuable. But beyond a point, the people they’re working with is roughly the same. So I think what we are trying to do in PV partners and I think it will take a long time to make meaningful money for sure is really build skin, right? So this year let’s say we do 7,000 odd crores in premium. Our goal next year and the years after that is to increase the scale of this business, not necessarily to extract profit right away.
I think profits will come when they come, when the structure, etc. When our servicing is very good. But our goal is to drive scale in this business because it allows us to be meaningful partners for our insurance companies, especially general insurance companies. And that’s a position that Policy Bazaar finds very valuable. So I just want to explain, the nature of the product is very different in the 2B 2B 2C scenario that you spoke about. And secondly, our goal from our B2B2C business is different. We want to drive scale and we want to drive efficiencies from that.
Yashish Dahiya
It also does not make big losses because actually the fixed costs in this business are very small. It is mostly a variable cost. Now the variable cost comes in many forms, right? You could be paying a commission, you could be paying somebody marketing fees, you could be paying somebody something else. You could also have your own employees who are actually managing those people. But those people are also, you know, you can only manage 10 or 20 agents per employee. So everything is a variable cost in this and the, the fixed cost is very limited. So what that, what that means is there’s no big marketing cost, there’s no big tech cost.
So what that implies is you essentially can scale up quite rapidly. And that’s what you see. Anybody who’s had money has succeeded at this business till the money runs out. Once the money runs out, the business fails. It’s as simple as that. You look across the board. Who has failed? Whoever had money, nobody failed at this business. Now coming to a new location. You wanted to say something about new locations?
Alok Bansal
Absolutely. So in health insurance, we continue to expand. We are up to, I think over almost 300 cities now where we have a presence where if, if a person wants to meet somebody from Policy Bazaar, they will come and meet them in their home, explain the process, etc in savings. We have started a new model about a couple of quarters ago where we are now going to mid sized cities and we are setting up smaller offices or smaller centers where our advisors not only take calls but they also go out and meet people. So it’s a slightly different model.
We’ve always maintained that in life insurance it helps a lot if you can have the same person talk to the customer throughout the process, whether on the phone or in person, etc. So we are taking this model out to these next level of cities. I think we are now in about 20 odd cities and I would say that we are very delighted with the Results of this model. It’s very early days but if this model starts to work then I think it will open up a whole new set of cities and opportunities for our.
Yashish Dahiya
Savings business on Pesa. I will let Satosh answer that question on how she’s thinking about building out the different services alongside credit. But I just want to remind everybody, Santosh is the one who built our life insurance business which was selling 5000 crores odd of savings products before she left. So she obviously knows a little bit about building the savings businesses.
Santosh Agarwal
Thank you. Thank you Ashish. See, I think the idea for Baisa Bazaar is to become a full financial, I would say platform that is able to manage both assets and liabilities for customers. We get a lot of middle class Indians who we were helping them discover credit and help them borrow money. They also need, they also need to save. And savings and investments I think are a natural extension of what we are doing. We were very, I think deep into loan discovery, cars discovery and also building healthy credit for consumers. We then scaled into secured credit and I think this is just coming through the circle of helping them now invest and save.
And I think bonds was a very exciting time to enter. It’s a new market in India. It’s taking shape and I think we are entering it at the right time also. It’s a, I think a pull product. So both fixed deposits and bonds are something we’ve launched and we are seeing it build up, you know reasonably well. Mutual funds will also be added to the portfolio maybe a quarter later. But yes, we want to over time I would say improve LTB for a customer and instead of being just a transaction led platform, we want to maximize engagement so that we are available across the life cycle and that will improve stickiness and engagement and that’s, that’s the reason for you know, adding some of these products.
Dipanjan Ghosh
Thank you. Sure. Thanks everyone for the answers and all the best.
Mohit Khopragade
Thank you. Dipanjan. We will now take the next question from the line of Nidish Jain from Investec. Nitesh, please unmute your mic.
Nidhesh Jain
Thanks for the opportunity. So my first question is on that the GST impact is behind us and whatever we have seen in this youth quarter that should sustain in coming quarter. Is that the right takeaway?
Sarbvir Singh
I think, I think that’s a very optimistic takeaway. I think yes, we got you know, good bump from gst but you know things always even themselves out over a period of time. Customers will get used to the new price level. It is incumbent upon us and our team to continue to drive the fundamentals of why insurance is needed and how it works and how it helps people. So yes, it was good. I think, you know, the JFM is normally a seasonal, you know, strong season for insurance, etc. But I would definitely not say that it would continue forever or something like that.
Nidhesh Jain
I was talking more about from a take rate perspective and economics perspective. There was a negotiation with the partners. So all of that is behind us or it is still ongoing?
Sarbvir Singh
No, I think we’ve always maintained that, you know, our negotiations are always very cordial and as Yashish explained to you in a lot of detail, we work towards maximizing customer value and I think we continue to do that. And I think GST is yet another example where we’ve been able to work with our partners and come to what I would call win win kind of outcome. And yes, I agree with you, that part is behind us and we are proceeding with confidence.
Yashish Dahiya
But in Sarapir’s answer you should have picked up the mind or how the mind thinks because that was more important. You asked a question about impact of GST and Sarah, we spoke about volume while you were actually talking about. Right. So it’s just in the mind we are all tuned to think volume. It’s just that’s how we are. And I think the quicker that sinks into investors, the better it is because that’s just our reality. It won’t change ever. It’s just the take rate is the outcome. Sure, sure. Second question is on how should we think about customer acquisition costs going forward.
So we are showing very strong growth but from a cost efficiency perspective, specifically in terms of new customer acquisition and cost of let’s say doing the entire transaction. How are we, what are the steps we are taking to improve the cost efficiencies?
Sarbvir Singh
I think nitesh our teams work very hard. I think day in and day out. If you see as I just reflect over the last many years, you know we have gone from on television, we were TV then we went to regional television, we did ott. We learned how to deal with the new reality that TV is a fragmented now medium. We are on connected TVs now. On the paid side we used to be a lot of non brand search which is Google. We’ve now started doing a lot more from Facebook or Meta. We’ve started doing a lot of influencer marketing.
You know we’ve learned a lot of sort of getting our app downloaded by customers. So I think every year if you ask me, our teams come up with newer and newer strategies to acquire Customers and to explain the value of insurance. So that keeps going, you know, keeps going ahead. Yeah. So I don’t see any major change in customer acquisition costs. I think they are continuing to, to, to do well. And yeah, Rasleen is pointing out that actually the spend over revenue has gone down in the last three years from.
Yashish Dahiya
But again that’s an outcome. That’s, that’s not like there was no strategic intent to bring it down or anything. It’s an outcome.
Sarbvir Singh
Yeah. So again I would say that, you know, this is the biggest, the biggest problem in insurance sales is demand generation. There is no doubt about that. So marketing is the key thing and you know, you have to keep thinking of where the customer is and how do you get in front of the customer and explain your proposition. And that’s what I would congratulate our marketing teams. I think we don’t talk about them enough. I think they do a great job in bringing customers to the platform.
Nidhesh Jain
Sure. And last question is on PB Health. Any update on PB Health? When is our first hospital is going live, etc.
Alok Bansal
So I mean again that’s more of an execution business. There are a few moving parts there. We are building physical capacity. So we have taken up a hospital in Noida. We are going live with a, you know, one small in Gurgaon in another three months maybe. Really interesting part is the way tech is shaping up with a huge amount of focus on making tech more easy for both consumers and medical professionals to use. And as much as possible use AI from day one also thinks of lot of customer experience, customer interactions with that system at the physical health infrastructure.
And that is, that’s one part, you know, but the whole aim about this, the PD Health was to keep people out of hospital. So hospital, yes, we will do what we have to do but we are focusing a lot on building services which can keep people out of hospital. Whether it is OPD services, whether it is digital dp, whether it is preventive services, chronic disease management, all those sort of things. So yeah, it’s, it takes its own time, it’s building up but happy with the progress the way it’s happening right now.
Yashish Dahiya
So Nidhish, if you think about PV health and I know a lot of people in the.
And so I’ll just take the time to kind of explain it because a lot of people are confused. Do they think of it as some kind of hospital chain? And that leads to a lot of confusion. See at heart there are 14,000 odd hospitals in the country. What we are saying is if you had to work with maybe 500 of them and break them down into secondary, tertiary, primary, actually secondary, tertiary and route your customers to a smaller set. You would be able to control quality better and you would be able to control experience better.
That’s the first thing that’s happening. There’s a network which is PB Health. It is not very different from what we do in PB wheels, which is the garage network. Then what we say is because hospitals are a little more complicated than garages, some of these capacities, maybe 15, 20% of it is self owned. And in that we have deployed some level of tech experience which is quite differentiating. So consumers have a better experience when they visit those. But that’s the second part of it. Right. And the third element is the preventive part that Alok spoke about. But from an insurance perspective, the biggest benefit actually comes from when the customer comes in. Can you point him down to the care pathway so that a person with malaria does not end up at a tertiary care hospital, but instead ends up at a care hospital which is right for them. So right treatment for the right situation and that changes incidence rates and that changes your cost per incidence. And of course, because you have so many customers, you are able to fill up capacity and because you were able to fill up capacity you work with.
So I think it’s a, that is what PB Health is about. PBL is about integrated health care at some level, just exactly like PB garages. So I, I’d say things are progressing quite well. We have done a very good job of building the network. We now, from a hospital’s perspective, I think now we have action on four different properties where something is happening. One is, one is fully acquired and ready hospital. One is at some level of development. One is at a point where in three, four months it should go live. So, but that’s just the infrastructure part.
Nidhesh Jain
Sure. Thanks, Ashish. Thanks.
Mohit Khopragade
Thank you. Thank you, Nitesh. We will take the next question from the line of Subratim Dutta from Jefferson. Please unmute your mind.
Unidentified Participant
Thanks for the opportunity. My first question is on the acquisition, you know, and the qip. So just wanted to understand what would be the boxes that an acquisition would need to take for it to be, you know, a lucrative opportunity for you. I do understand you cannot talk about, you know, which are the target audio things or acquisitions that you’re looking at. But if you could give us a. Checklist of what that acquisition would need to take for it to be, you know, opportunity that you would consider that would be Helpful. And secondly on, you know, MGAs now being allowed in the new Insurance act. Just wanted to understand how are you looking at that as an opportunity and would you, you know, use that to underwrite policies under PB’s own name? So, you know, basically PB led policies, you know, that, is that a road that you will go down? If you could give us some color on these two, that would be helpful. Thank you.
Yashish Dahiya
Sure. So as we look at the international expansion opportunities, our criteria are large market stable player. So there is not much damage we can do to it through the acquisition. That’s number one. Right. Because that is, that is sometimes a big problem. Right. The second part is can we transform it to the better? And what does that mean? Our skills here have something that we can add and more importantly, our familiarity with the market is high. I’ll give you a very simple example. Suppose I went into Indonesia and I don’t know how to operate in Indonesia. I think it will be tough. And that is what I would call a low familiar market. Right. On the other hand, if you kind of, you know, like the UK is like the back of my hand.
Right. So all I’m saying is there are, there are different familiarity levels and I guess we’ll, we’ll, we’ll work through things as we go through. Now on an MGA side, I believe MGA is the single most transformation move that can happen in the insurance. And I believe that at not just the policy bazaar level, but at a strategic level. And why do I say that? See, when the distributor who is in touch with the consumer, who understands the consumer at that point becomes responsible for both the underwriting and the claim settlement and at a wholesale level is working with the insurance company.
This is exactly what NBFCs were to banking. Imagine where our banking services would be if there were no NBFCs in the country. So NBFC is exactly what the MGA is. And I think, Sarbish, you want to add something here, but otherwise I think MGA is the biggest transformation that can happen in the insurance sector if allowed.
Sarbvir Singh
No, absolutely. I think we have been, you know, talking about this for a long time. I think it, it, if you think about it, neatly ties into our model of focusing on the customer from the beginning till the end. And it allows us the freedom to make the, basically to make the underwriting as well as the claims decisions at the policy bazaar level. As far as the brand is concerned, you know, it will largely always you are selling a product which belongs to an insurance company and we are very Comfortable with that. I don’t think at this point that is a very big attraction for us.
I think the main attraction is the fact that we would have the flexibility, the freedom. And as Yashi said, overall I think the concept of MGA’s will really drive insurance distribution in India and it will help. You know what, that’s what we want, right? We want penetration of insurance to go up. We want more and more Indians to have health and term insurance. And I think the only way you can do that is by empowering distribution. See, insurance is a distribution business. 95, 96, 98% of insurance is sold by intermediaries of one kind or the other.
So it’s up to you. You want to double down on your strength or you want to move that 3% to 5%, right? You can try both. But I think the right thing to do is to double down on your strength always. And I think the strength of insurance is distributors. And giving them the freedom and flexibility will I think take this whole thing to a next level.
Unidentified Participant
Sorry, you know, thanks a lot for the answers. I have just one follow up, you know, on you know, the opportunity and you know, possibility of you know, any acquisition on that bit. Just wanted to understand is are you looking at only insurance focused platforms or you know, could it be insurance plus you know, other products as well? So let’s, let’s see, let’s, let’s wait and see. I have to first get board approval. You know already I’m you know speaking a bit out of turn here. I have to first get board approval, then we have to get shareholder approval.
Let’s see if we get those two and once we get those two, let’s then you know, get the money in the bank and then let us see what all we can approach and how we can do it. Sure. Okay, no problem. I don’t want to get you in trouble. Thank you. Thank you. Supratim. Thank you. We would now take next question from the line of prayers. Jain from Mujila Prayesh, please unmute your mic. Yeah, hi, just extend, just trying my luck here on the acquisition bit. Would you look at, just insure if you stay within insurance, would you to also look at insurance manufacturing or it would be restricted to insurance distribution.
I don’t think we are going into manufacturing quite yet. Got that. That’s helpful. Second is on the health insurance growth. Right. You know there are multiple things that would have played out. One would be your you know, existing customers going for higher sum assured. Second would be the number of people taking Long term policies that would have gone up and then obviously new lives coming into the segment. How would you kind of contribute? How would you say that each of these parameters would have contributed in the growth? You think about it, mathematically, nobody can deliver the kind of growth we are delivering over the last 12 quarters by any of those means.
It’s just impossible. It’s mathematically impossible. There is something else that has to be happening there. Right. That something else is very, very simple and it’s the hardest thing to achieve in the insurance industry. People believe when they buy from Policy Bazaar they will get a better claims experience. Simple. Of course there’s a lot of other things we are segmenting, we are working hard, our marketing is better, our people are, are working better, their training is more, we are creating new products. But if you ask the core answer it is that we have the right to settle claims because our risk underwriting is better or our, our disclosures are better, not risk underclosures are better.
Because of that, we get the right to settle claims and we put a huge amount of effort in settling claims. So. And that’s, that’s what plays up.
Sarbvir Singh
Yeah, and, and I just want to add that each of the points that you mentioned, see these are new customers. So the 79 is the new fresh growth. Right. So there is no, I mean whether they take, if they take more, some insured, that only increases the, you know, ticket side. Right, but so, so I think that is, that is a small factor. Yes. Ticket sizes, I mean some insurance have been going up in the industry. As far as the second thing is concerned. You said that about, you know, I think people. Yeah, sorry. No, multi year policies for us has not changed.
So the proportion of multi year policy last year and this year is roughly the same. And finally, you know, portability. I just want to say you didn’t say that, but I would let me address that elephant in the room. Also portability this year is lower than portability last year. So actually we have, you know, our, if you look at the contribution of fresh lives to our business is at its highest. And again I think that you’ll find in the industry also that portability has gone down a little bit, but for us it was always low and it has become lower this year.
Unidentified Participant
Right. And, and just the last question. You know, generally when we talk about health insurance, you’ve been talking about new health insurance being a drag on contribution margins. But if you look at the core online insurance business, it’s kind of margins have remained flattish and that’s Just scale or is it something else to be read into it as well?
Yashish Dahiya
Prayesh, in health you mostly make your profits from renewals. In life you may mostly make your profits from fresh business. Because both term and health are growing. It’s become like a double engine contributor. For a while term growth was lower, health growth was higher, but now both are contributing.
So that’s becoming. And of course what we sold. See for 12 quarters you have been growing at a rate of, let’s say 60% on health. Then your renewals also start to grow at the same rate, which is what is starting to happen now. Right. The renewals growth is really speeding up.
Unidentified Participant
Got that? That’s helpful. Thank you so much.
Mohit Khopragade
Thank you. PR we would now take the last question from the line of Nishin Ch from Kota Nishin, please. Unmuted mind.
Nishin Chawate
Yeah. Am I audible now? Yep. Yeah, thanks. You said that you know, term and health are around, you know, half your business and that that’s grown around 70 odd percent. So I was just curious if you could explain, you know, some color around it. Is it that, you know, number of customers have gone up 70%, number of policies have gone up or is it the ticket size increase, you know, what is it, what is it that has driven this growth? B.
Longevity of the growth? I think, I think it was. It’s very fair to say that, you know, it can’t consistently continue at this phase. But is the new normal sort of, you know, somewhere between this quarter and what we saw in the previous quarters? Or do you think this is just preponing of growth?
Yashish Dahiya
Christian, me and Sarabir were joking today morning because you were saying one day this growth won’t be there. And we said that doesn’t seem like an immediate problem. And obviously we had reviewed our January numbers. So all I would say is let’s just leave it there.
We seem to be doing quite well. It’s pretty hard for us to say that we are going to be at 30% growth on health anytime soon, but it might happen here because that’s what we’ve always said that long term growth, 30% is sufficient. But it just seems hard right now.
Nishin Chawate
So. And, and any color in terms of, you know, what has grown, whether it’s ticket sizes, it’s.
Yashish Dahiya
It’s number of customers, it’s number of. Customers,
Sarbvir Singh
largely number of customers. I think health, a little bit of ticket size has also grown year on year, but that’s a smaller contribution to the overall story.
Nishin Chawate
Sure. And you know, just on the, on the international foray, if you could give some financial, you know, texture. I, I, I, I know we understand how you think in terms of new markets, but are there any, any, you know, Threshold, ROC, or, you know, any of the other financial, financial benchmarks that one needs to keep in mind when you’re looking at these acquisitions?
Yashish Dahiya
I would say I don’t want to bore all of you with the same answer again and again. I think we’ve, we’ve said everything that we know. You know, I’m usually known to be saying more than what I’m allowed to say anyway, so I think we’ve said everything we know.
We don’t know more than this yet.
Nishin Chawate
Okay, great. Thank you very much. And all the best.
Yashish Dahiya
Thank you.
Mohit Khopragade
Thank you so much. With this, we will end this conference call for today. Sa.