Competition has heated up in the insurance corporate agency segment as payment bank Paytm can now sell life, health and general insurance products. This follows the IRDAI granting a corporate agency licence to One97 Communications, the parent of Paytm.
The Chinese e-commerce giant Alibaba-backed Paytm, a leading player in the mobile payments and e-commerce platform, claims a registered user base of over 250 million, has been granted a composite licence, reported Times of India.
Paytm received final approval from the Reserve Bank of India (RBI) to set up a payments bank in January this year. Paytm will face competition from banks who dominate the corporate agency business.
Payments banks such as Reliance Payment Solutions and Airtel Payments Bank have already received a composite corporate agency licences from IRDAI. These banks have however yet to sign up officially with insurers, IRDAI filings showed. While Reliance received the approval in August last year, Airtel received it last November. According to IRDAI rules, a corporate agent (including banks, small finance banks and payments banks) can tie up with three life, three nonlife and three standalone health insurance companies.
Banks act as corporate agents through bancassurance agreements with insurance companies. Currently, over 400 corporate agents have registered with IRDAI to sell insurance products.