The Unicorn Label Is Hurting Policybazaar. Here's Why Yashish Dahiya, co-founder and CEO of Policybazaar Group of Companies gets candid about starting his business during the 2007 crisis, changing the insurance landscape in India and why he doesn't like talking about the unicorn status

For Yashish Dahiya, business is about resolving problems at hand and not chasing valuations. "You will rarely hear me talk about our premium or valuation or revenue," the co-founder and CEO of Policybazaar Group of Companies told Entrepreneur India in an interview.

"We are only concerned with solving the pressing issue of death, disease and disability—which affects everyone—through insurance."

It is perhaps the result of his steady focus on solving the consumer's problem that the insurtech Unicorn is at present the largest insurance Web aggregator in the country, which claims to hold 93 per cent market share in the online aggregation space. The online platform provides comparative analysis of life, health and general insurance products on the basis of their features, benefits and price.

Solving the Issue of Death, Disease and Disability

The genesis of Policybazaar lies in the twin problems of misselling and low penetration of pure life and health insurance products ailing the insurance industry. "Our first campaign was "Ullu Mat Bano' to spread awareness against misselling of insurance products," Dahiya recalls. The IIT-Delhi and IIM-Ahmedabad alum co-founded Policybazaar in 2008 along with Alok Bansal and Avaneesh Nirjar.

The idea was so powerful that even the recession of 2007-08 did not deter the trio from starting up. "We thought there's a whole industry which has a major communication problem. Wrong products are going to the consumer and the reach of right product—which is protection against death, disease and disability—is very limited. It was too big a problem to worry about whether it's a downturn or an upturn. The idea was clear and we had to implement it," he says.

Definitely, Policybazaar has addressed the problem to a great extent. In fact, according to Dahiya term insurance was almost not sold at all before Policybazaar started and the company has been a driving force in creating a market for the product in the last 10 years.

What is more important is the change it has brought about in the manner insurance reaches consumers. From agents going door to door selling insurance, to consumers coming to a platform asking for insurance is perhaps the biggest victory for Policybazaar.

Of course, door-to-door selling still continues and even insurance penetration in the country continues to be low—at 3.7 per cent (life and non-life combined) according to the annual report 2018-19 by insurance regulator Insurance Regulatory Development Authority of India (Irdai)—but Dahiya is determined to bring about a complete digital transformation in the industry.

Regulatory Challenges

The biggest challenge for Policybazaar has been to accommodate their business model into the regulatory framework.

"The regulatory architecture was largely based on a person going to somebody and selling insurance. I don't think anybody had envisaged a situation where customers would start asking for insurance, so the regulatory body was looking at something anew," Dahiya explains. "It took a long time for laws to change to accommodate this phenomenon." And the struggle is still not over, as Dahiya would say.

"If you don't do something difficult, it will be easily replicated."

However, Dahiya doesn't believe is backing down. For him, entrepreneurship is about doing the difficult thing. "If you don't do something difficult, it will be replicated very easily," he says.

Today, Policybazaar makes up 18-20 per cent of the country's overall life insurance cover and 7 per cent of health insurance cover. It hosts about 150 million visitors annually, carries out about 1 million transactions per month and underwrote premiums worth INR 3,500 crore in financial year 2019, up from INR 1,800 in financial year 2018. The company broke even in financial year 2018 but slipped into losses again the following year. It aims to regain profitability in financial year 2021.

The Unwilling Unicorn

Almost 10 years after starting, Policybazaar entered the Unicorn club after raising over $200 million in a funding round led by Japanese behemoth Softbank in September 2018. But, ask Dahiya and the label doesn't make him too happy.

"One, if I wanted the company's valuation could be double of what it is. Second, the Unicorn status hurts us," says Dahiya. Elaborating on the latter, Dahiya points that the talks of several million-dollar valuations get them undue attention in what according to him is a highly political industry. "Ever since we have become a Unicorn, the number of complaints against us, not from customers but from the industry players, has increased dramatically."

As a result of one such complaint filed with Irdai, Policybazaar had to cough up a penalty of INR 1.11 crore in August 2019. According to the regulator's order, the online portal had violated regulations by tying up with a non-insurance entity, Indian Health Organization by Aetna (IHO) to offer consultation and also advertised IHO's services.

"Given what all goes in the insurance industry, the largest fine cannot be reserved for such things. I think most other players in that position won't even get fined," says Dahiya. "It's the worst thing when somebody says Unicorn because it tickles someone and then we get hammered."

The Risk-Averse Entrepreneur

Contrary to the popular narrative of entrepreneurship and risk-taking going hand in hand, Dahiya is on the lowest end of the risk spectrum.

In fact, in his opinion a full-time job is just as, if not more, risky than starting your own business. "We just have the assumption of security around jobs, whereas that's not true. Most companies themselves may or may not survive 10 years. We could also fail and if that happens, 17,000 jobs are lost," he says.

For the cautious person that Dahiya is, he started up only after income from his investments and rentals equaled his salary to financially protect his family. Initial investment of $5 million from InfoEdge even before Policybazaar was started also gave Dahiya the necessary push. "If I had to go totally out on a limb, I probably would not have done it," he says.

That said, he firmly believes that if one has a powerful idea, then the risk is in not doing it. "The bigger risk is not being part of the future." This belief of Dahiya enabled him to build one of the country's first Internet start-ups and that too a successful one.

Beyond Policybazaar: The Way Ahead

In the last one-and-a-half years, EtechAces group, the parent company of Policybazaar, has expanded its areas of business with the launch of health-tech venture DocPrime and Zphin, a technology solution provider to the banking, financial services and insurance (BFSI) sector.

"Zphin is an attempt to make the technology we have built over the last 12 years available to the market," explains Dahiya. In a recent development, Dahiya overtook the broader CEO role in the Policybazaar Group of Companies and will have a larger role to play in other subsidiaries of EtechAces, including DocPrime and Paisabazaar.

Going ahead, Dahiya wants to get deeper into healthcare through DocPrime. "Healthcare industry is $200 billion, whereas the health insurance retail industry is $2-3 billion. We want to become big in health insurance but to do that one cannot only focus on health insurance but also expand to health care, which was the attempt with DocPrime," says Dahiya.

However, in its one-and-a-half years of operations, the venture has not yielded expected results, Dahiya says. For this reason, the company plans to get a strategic partner onboard for DocPrime and co-invest with them. "We realize that our understanding of healthcare is not as strong as financial services, so instead of building DocPrime entirely on our own we'll get a partner to take it forward," says Dahiya.