Vijay Shekhar Sharma, Paytm To Acquire General Insurance Company
Paytm, along with its founder Vijay Shekhar Sharma, will acquire 100% in Raheja QBE General Insurance Company Ltd, the company disclosed on Monday.
In a statement, Paytm said that it would acquire the 51% stake currently owned by Prism Johnson and the 49% held by QBE Australia in Raheja QBE General Insurance, subject to approvals from the Insurance Regulatory and Development Authority of India.
According to a stock exchange notification, Prism Johnson will sell its 51% stake in the insurance company to QorQL for an aggregate sum of Rs 289.68 crore.
With this acquisition, Paytm will enter into the general insurance business inorganically. The company had earlier applied for a standalone licence but will now withdraw that application, the person quoted above said.
Raheja QBE General Insurance reported Rs 189.46 crore in revenue in March-ended quarter.
The acquisition is another step by Paytm and its parent company, One97 Communications Ltd, towards building a full-scale financial services platform, beginning with a payments wallet back in 2014, a digital gold product and a payments bank in 2017 and an investment advisory arm, Paytm Money, in 2018. In March this year, Paytm Insurance Broking secured a license from the IRDAI through which it can sell insurance products. It now adds a general insurance company to its ecosystem.
The Raheja QBE acquisition will be made by QorQL Pvt Ltd, a health-focussed technology startup where Sharma owns a majority stake and the remaining is owned by Paytm, the company said. Sharma and Paytm had bought a stake in the startup for an undisclosed amount back in 2017.
The acquisition will help take insurance “to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products,” said Amit Nayyar, president, Paytm in a press release.
As of May 2020, a majority of the policies issued by Raheja QBE were in the motor and liability insurance segment, according to IRDAI data. The person quoted above, however, said the company will focus on health insurance as well given the likely increased demand for such products in the aftermath of the Covid crisis, the person quoted above said.
The new venture will distribute its policies through Paytm Insurance, a broking arm of the company, as well as through third-party websites. The group will also continue to look for inorganic opportunities in the life insurance segment, this person said.