Huge gap in healthcare spend and insurance cover
All India Management Association (AIMA), the apex body for management in India today organised the 58th edition of LeaderSpeak session. Mr Alok Bansal, Co-founder & Executive Vice Chairman, PB Fintech Limited engaged in a candid conversation with Mr C K Ranganathan, President, AIMA and Chairman and Managing Director, CavinKare Pvt Ltd. Mr. Bansal deliberated on the current state of the industry and the challenges and opportunities facing it. He also spoke about his journey at Policy Bazaar and how the organization evolved since its inception in 2008.
Ms Rekha Sethi, Director General, AIMA anchored the session which was attended by over 600 participants on Zoom and on AIMA’s Social Media channels. The insurance sector in India has huge potential and Mr. Bansal is bullish about Policy Bazaar’s continued growth and dominance. He said, “Today the middle class presents the biggest opportunity especially for term life insurance and health insurance. India has around 100-120 million middle class households, however there are only 3-4 million term life insurance policies. Similarly, the total health care spend in India is around 300 billion US dollars and not even 2-2.5 % is paid by insurance companies.”
However, he added a word caution in terms of growth for the industry. Although the numbers suggest a huge opportunity, the industry is unlikely to grow at a very rapid pace. This can be largely attributed to lack of trust of the consumer for the industry, especially in terms getting the right product and subsequent claim settlements. Also, an inherent mindset of Indians which, when comes to financial planning is largely skewed towards investment than protection. Hence insurance is mostly an afterthought unless they are are mandated by regulation.
Mr. C K Ranganathan remarked, “Digitization of finance has largely changed the way we bank, transact, invest and insure. The insurtech sector is likely to see significant innovations in the future and will potentially have a big impact on heath, mobility, business and environment. Policy Bazaar is clearly the pace setter in the insurtech sector and is becoming more than an insurance intermediation platform.”
On being asked if Policy Bazaar is looking at acquisition for expansion, Mr Bansal said, “We have a DNA of build against acquire. We typically want to do it ourselves and this is largely because it provides an inherent stand to the business. Even at the very beginning when we have limited funds, we created products, which paid dividends later. However, there are specific use cases where we may want to invest or acquire. We don’t want to acquire purely for scaling up but if we believe in capabilities and the team; and if it can have a potential strategic fit to the current business. We are looking at acquiring at an early stage of an organisation so that we give full freedom to the founder(s) to build the business.”
Speaking about how things have changed post going public, Mr. Bansal said, “The business part has not changed. We have been open with our investors and as a company we are not looking at short term performance or focusing on quarter to quarter results. The ethos and values remain the same. There is always a risk of senior executives moving out post IPO, but in our case there were almost no exits. Business has remained as usual and the opportunity is big and we continue to evolve.”
Mr. Bansal is bullish about Policy Bazaar’s growth and firmly believes that it will continue to grow and remain ahead of competition through its customer centricity and product innovation.
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