An AlphaStreet preliminary transcript of PB Fintech’s Oct. 30 earnings call records Chairman and Group CEO Yashish Dahiya saying India’s draft insurance rules may require the company to rethink its point-of-sale person (PoSP) business.
Dahiya said the proposal “does not leave scope for PoSP the way it is today” and floated “maybe a services play” as one possible direction. He also said the regulations were not final.
The Insurance Regulatory and Development Authority of India (IRDAI) issued its two-part Recalibrating Economics of Insurance Distribution consultation paper Sept. 23. A PoSP is an individual who sells insurance through a distributor. Under the proposal, a PoSP engaged by an Insurance Distribution Entity (IDE) could sell that entity’s products but could not work with multiple IDEs. The PoSP’s commission would come from the engaging IDE’s own commission. Under open architecture, distributors can sell products from multiple insurers; the draft sets lower commission caps for that model than for closed-architecture distributors.
PB Fintech has not announced a specific change to its business. It reported that PB Partners generated ₹6.98 billion in revenue in the quarter ended Sept. 30, up 39% year over year. Premium totaled ₹19.89 billion, excluding goods and services tax, a 36% increase. PB Partners had 131,000 active partners, up 55%, and Tier 2 and Tier 3 towns accounted for 76% of its gross written premium.
IRDAI says its proposal is intended to make insurance distribution less costly and tie payments more closely to the benefits policyholders receive. The consultation paper says distributor remuneration increased at four to five times the rate of premium growth from FY23 to FY25. The draft would also let IDEs and insurance distribution persons offer non-insurance financial products and other services, subject to requirements from relevant regulators.
Feedback on IRDAI’s proposal is due Saturday, Oct. 31.
