Paytm owner One97 Communications Ltd. received the insurance regulator's nod for the registration withdrawal application of its general insurance business as it shifts focus to a distribution-only model for insurance.
The company had approached the Insurance Regulatory and Development Authority of India in May for the withdrawal of its application for registration as a 'General Insurance Company' for Paytm General Insurance Ltd. being a manufacturer of general insurance products.
The unit will now focus only on insurance distribution to Paytm consumers and small merchants and enterprises across various general insurance categories, including health, life, motor, shop, and gadgets via its wholly owned subsidiary, Paytm Insurance Broking Pvt.
The firm's similar approach to its loan business got mixed reviews from brokerages, with Bernstein saying that a permanent shift to distribution-only loans would create "a much weaker model", as Paytm will be more of a loan distribution agent than a partner that adds more value as loan service provider.
Paytm said that it aims to innovate on small ticket insurance products for consumers and merchants alike by focusing on small-ticket general insurance offerings along with partners and leveraging the strength of the company's distribution to increase insurance penetration to a wider audience.
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