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    Paytm General Insurance withdraws application for manufacturing general insurance products

    Fintech company Paytm announced on May 25 that its associate entity Paytm General Insurance Limited (PGIL) has withdrawn its application for registering as a general insurance company with the Insurance Regulatory and Development Authority of India (IRDAI) for the manufacturing of general insurance products. The company said this will help it conserve Rs. 950 crores which was “earmarked for investment in PGIL.” 

    In its stock exchange filing announcing the withdrawal of PGIL’s application, the company said that instead of manufacturing general insurance products, it would focus on the distribution of insurance products via Paytm Insurance Broking Private Ltd. (PIBPL). Insurance product distribution would be focused on consumers, small merchants, and small and medium enterprises (SMEs). The filing mentions that the company intends to focus on small-ticket, innovative insurance solutions across various general insurance categories, including health, life, motor, shop, and gadgets. 

    As per its latest earnings report, Paytm says it has seen a strong product market fit for its insurance business where it can leverage merchant insights to co-create shop insurance. 

    Paytm’s focus on cost optimization

    In February this year, the RBI barred PayTM Payments Bank Limited (PPBL) from carrying out a range of activities, including accepting deposits, carrying out fund transfers, and credit transactions to list a few. In the earnings for the quarter immediately following the regulatory action, Paytm reported a dip in its revenue from Rs.2850 crore in December 2023, to Rs.2267 crore in March 2024. The revenue from financial services halved from Rs. 607 crores in the last quarter (Q3FY24 ending in December 2o23) to Rs. 304 crores in this one (quarter ending in March 2024) while the value of loans disbursed decreased from Rs. 15,535 crores to Rs. 5,776 crores in the same time period.

    As such, the company mentioned that it would focus on “ creating a leaner organization structure and pruning non-core businesses” to optimize costs and focus on profitability. The withdrawal of PIBPL’s application seems to be one of the steps being taken in this direction. 

    Also read:

    The post Paytm General Insurance withdraws application for manufacturing general insurance products appeared first on MEDIANAMA.

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