IRDAI Issues an Insurance Broker License for PhonePe
On August 30 2021, IRDAI issues an Insurance Broker License for PhonePe. Last year, PhonePe had entered the insurance sector with an insurance corporate agent license, which allowed the company to associate with only three categories of insurance companies such as health insurance, general insurance, and life insurance. With this Insurance Broker License, the company can distribute insurance products from all insurance companies all over India.
By issuing Insurance Broker License for PhonePe by IRDAI, they can begin offering personalised product recommendations to its more than 300 million users in India and providing a much more varied portfolio of insurance products for Indian consumers.
Insurance Broker License – An Overview
Before we move forward to the latest news regarding IRDAI issued an Insurance Broker License for PhonePe, it is necessary to know about Insurance Broker License. An Insurance Broker is a company or an individual that protects policies for the client; Insurance Brokers would protect commission from an insurance company on various types of policies they offer customers. A company that wants to become an Insurance Broker would have to apply to the IRDAI for a license.
There are specific prescribed rules regarding Insurance Brokers in India. Such rules are planned by the IRDAI. These rules would comprise the IRDA Act, 1999 and IRDAI (Insurance Brokers) Regulations, 2018. Thus, once an Insurance Broker License is protected by the applicant, they would have to comply with the necessities of the above rules & laws. A broker would act as a mediator between the public and insurance companies.
There are three different types of Insurance Brokers in India:
- Direct Brokers
- Re-insurance Broker
- Composite Broker
PhonePe – About
PhonePe is a mobile payment platform where you can transfer money by using UPI, pay utility bills, recharge phones, and many more. It works on the UPI (Unified Payment Interface) system, and all you need to feed in your bank account information & create a UPI ID. There is no requirement to recharge the wallet because the money will be directly deducted from your bank account at one click in a secure and safe manner.
The mobile application of PhonePe is safe & secure that will help provide all your banking requirements under a single roof in a suitable manner. You don’t need to go through the burdensome process of registering a beneficiary; all you need to get is a VPA or Virtual Payment Address using which money can be sent at any time and from anywhere.
PhonePe Private Limited is the foremost e-commerce payment platform in India. The e-wallet company was established in 2015. This e-commerce payment platform offers different services in over 11 languages. As a user, you can use the app and pay the bills, buy tickets, book cabs, etc. You can carry out transactions in the app by various methods like UPI Credit Card, UPI Debit Card, through linked Bank Account, using PhonePe Wallet.
Insurance Broker License for PhonePe – Background
Last year in January, 2020 PhonePe forayed into the insurance sector as a corporate agent and has since launched offering various insurances. The great response of its initial insurance product launches from millions of clients boosts the company to apply for an Insurance Broker License so it can quickly expand its insurance offering for customers, as said by PhonePe.
As we already know that PhonePe is the fastest growing insurtech in India, and this move to broking will give them more speed and boost their growth in the insurance sector. They are building a strong, full-service platform for their highly engaged client base via innovative products in partnership with high-quality insurers. The Vice President and Head of Insurance at PhonePe Mr. Gunjan Ghai, said, “This step will lead us closer to our target of becoming a one-stop destination for all the insurance needs for our clients”.
Also, last year, One97 Communications Ltd. received its Insurance Broker License from the IRDAI (Insurance Regulatory & Development Authority of India), allowing it to offer various insurance products such as health, life, and auto.
Business Model of PhonePe Include Various Financial Services
According to Mr. Ghai, the company is developing a complete full-service platform for its client base by collaborating with high-quality insurers to create unique solutions. The network has an exceeding 20 million users, with 80% of them from Non-Metropolitan areas.
As per reports, the goal of the company is to achieve 900 million people in the next 8 to 10 years. In 2021, the PhonePe entered the financial sector with the introduction of gold, giving customers a safe and fitting way to get 24-K gold on their website. It has also developed a number of mutual funds & insurance products, including liquid funds, foreign travel insurance, tax-saving funds, and Corona Care, a Covid-19 specific insurance programme. It also debuted its Switch platform in 2018, permitting customers to order from over 600 applications directly from the PhonePe mobile app, comprising Swiggy, Myntra, RedBus, IRCTS, OLA, and many more. For the last five years, PhonePe has supported 8-10 languages. Currently, the company completed five years on 28 August 2021.
Earlier, the PhonePe had a limited insurance corporate agent license which allowed them to collaborate with only three insurance companies. But, after getting Insurance Broker License for PhonePe by IRDAI, they will be able to offer more insurance products to their users across India.