Through an investment in PIT, Swiss Re and Paytm will work towards closing the insurance protection gap in the market
Paytm on Wednesday announced that Swiss Re will invest (by way of equity shares and compulsorily convertible preference shares) approximately Rs 920 crore (Rs 397.3 crore upfront, and the remaining in tranches, subject to fulfilment of certain milestones) in Paytm Insuretech Pvt. Ltd (PIT) for an aggregate stake of 23% on a fully diluted basis, subject to regulatory approval. Through an investment in PIT, Swiss Re and Paytm will work towards closing the insurance protection gap in the market.
Moreover, Paytm Insuretech plans to leverage Paytm’s customer base and merchant ecosystem to develop innovative insurance products and offer best-in-class solutions. As part of Paytm’s financial inclusion offering, this partnership is in furtherance of the company’s mission to bring half a billion Indians into the mainstream economy, the company said in a statement.
“We are excited to partner with Swiss Re for our insurance foray as a key strategic investor. It is an important milestone in our financial services journey of taking general insurance products to the masses. We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market,” Vijay Shekhar Sharma, chairman, MD and CEO of One 97 Communications, said.
Swiss Re is investing alongside Paytm’s Vijay Shekhar Sharma. This follows the announcement of the acquisition of Raheja QBE by Paytm Insuretech Pvt. Ltd. The investment by Swiss Re and the acquisition of Raheja QBE by Paytm Insuretech Pvt. Ltd. are subject to regulatory approvals.
The company further added that India’s insurance market presents a significant opportunity, given the market’s protection gap and under-penetration compared to the global average. Gross written premium for non-life insurance is expected to increase from $27 billion as of FY2021 to US$ 50-60 billion by FY2026, as per RedSeer data.