India’s newest unicorn is disrupting a 200-year-old industry

In the big leagues.
In the big leagues.
Image: Reuters/Kieran Doherty
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How do you build a billion-dollar company selling insurance policies in a country like India?

A 10-year-old Gurugram-based online insurance aggregator cracked the code, and has joined the growing list of Indian unicorns (private companies valued at over $1 billion).

On June 25, PolicyBazaar said it had raised over $200 million (Rs1,330 crore) in a funding round led by Softbank, with participation from existing investors, including InfoEdge, which operates job site

PolicyBazaar aggregates insurance plans and serves as a marketplace for policies. It claims to process nearly 25% of India’s life insurance and over 7% of the country’s retail health cover. And there’s lots of headroom for growth since only 4% of the country’s total population is insured.

Now, PolicyBazaar plans to expand into health care itself.

“We are going to be launching a free-for-all doctor-on-call service where customers anywhere in the country can call in for free or chat for free to a doctor,” Yashish Dahiya, co-founder and CEO of EtechAces, which owns PolicyBazaar, told the TimesNow news channel. A chunk of its latest funding will go into this diversification.


PolicyBazaar was launched in June 2008 by Indian Institute of Management (IIM) alumni Dahiya and Alok Bansal, currently the company’s CFO.

At that time, the 200-year-old Indian insurance industry still lacked transparency and policies were mostly sold through agents. Dahiya and Bansal’s firm changed that largely by listing the details of multiple policies for customers to choose.

PolicyBazaar has till now enjoyed its early-mover advantage, said Ashvin Parekh, managing director of consulting firm Ashvin Parekh Advisory Services. It has managed to lead the sector despite the entry of several new players like EasyPolicy and CoverFox since around 2011.

“The biggest asset they (PolicyBazaar) have is the customer traffic and stickiness,” Vivek Belgavi, who heads financial services technology for PwC India, told Quartz. “In this space, it is tough to create too many brands, but if you have the kind of recall they do, which attracts a lot of traffic as well as customers, that is definitely a strength.”

Over the years, PolicyBazaar has gradually expanded its business to allied services that generate higher revenues. “What started as a pureplay price comparison website has now moved to a place where you can buy insurance online. As you get into these spaces, you start getting a greater chunk of revenue,” Belgavi said.

Now, PolicyBazaar says it has over 100 million visitors annually and facilitates over 300,000 transactions a month. “Our revenue overall as a business for both financial services and insurance…would be to the tune of Rs600 (crore) to Rs700 crore. We would have a profit of about Rs100 crore,” Dahiya told TimesNow.

The road ahead

PolicyBazaar’s holding company now intends to launch a platform that will give consumers free access to the company’s empanelled doctors and medical consultants. It also plans a range of other offerings like in-hospital concierge services for its health insurance customers.

“A large part of our business already comes from health care. We want to tap into that existing user base and offer them a network of doctors and other services,” Dahiya told the Mint newspaper.

However, as it forays into newer areas, PolicyBazaar must hold on to its customer-focused approach. “The key is to keep on improving the conversion ratio—how many people are landing on the site versus how many are transacting,” Belgavi said.

Having Softbank as an investor will go a long way in helping the company on the technology front as the investor has a history of building tech-based companies. In India, Softbank has backed some of the most successful internet firms like e-commerce major Flipkart and ride-hailing unicorn Ola.

“There are challenges in reaching the last mile and they (PolicyBazaar) have taken an innovative digital-first model for solving for that problem. (With this investment, they) get further support for the mission they’ve set for themselves,” Belgavi said. “Overall it is a great sign for the (online insurance) sector.”