A very good evening, everyone. A very warm welcome to PB Fintech Limited Earnings Conference Call for Q4 and Full Year Financial Year 2026. Today, we have with us Mr. Yashish Dahiya, Chairman and Group CEO of PB Fintech, Mr. Alok Bansal, Executive Vice Chairman, PB Fintech, Mr. Sarbvir Singh, Joint Group CEO, PB Fintech, Ms. Santosh Agarwal, CEO Paisabazaar, Mr. Mandeep Mehta, Group CFO, PB Fintech, and myself, Mohit, Head of Investor Relations, PB Fintech. I now request Yashish for his introductory note.
Thanks very much, Mohit. Hi, everyone. Before I just start giving you the numbers, which some of you may have already seen because the press release went out about an hour and a half ago. See, we spent the last two, three months just thinking a little harder about various data points, et cetera. One of the interesting pieces that we came out with was that when you look at health insurance data over the last 10 years that we have had, customers who joined us 10 years ago and we explore that data more deeply, only 5% of these lives. Only 5%. Out of 100 customers bought insurance 10 years ago, only five of them used a claim more than once.
Another about eight or 10 used the claim once, and the rest never claimed for 10 years. I won't take a long time. The remaining 85 odd customers you're talking about, that represents about 67% of all insurance policies have no customer who has ever claimed for the last 10 years and have been paying premiums for a 10-year period. Those 67 do not interact with anybody. Usually the one who's responsible for bringing these customers into the insurance fold is some kind of mandation. If you look across the insurance industry, you will usually find customers buy products when they are mandated. Otherwise, it's a very difficult job to bring this 67% of policies into the insurance fold to pay premiums year on year without claiming for a 1 year over a 10-year period.
This is a job that is entrusted to the insurance industry. I think this is the part every time somebody wakes up in the morning and tries to compare health insurance and term insurance with any other product in the, like a mutual fund or even the insurance savings products, et cetera, I think they make this mistake that this 67% actually is not gonna claim at all. Let's stop there. That is our job, and that is what Policybazaar really, really specializes at bringing in that 67% of people who are not gonna claim because without that, please appreciate that 5% of lives will simply not be able to afford their situation. Because even over a 10-year period, their claims ratio at a life level is almost 700%-800%.
At a policy level, it is about 300%. They cannot afford these policies, right? They cannot afford their healthcare without the insurance policy. Coming to the results, we grew 42% year-on-year to almost INR 30,000 crore. I wish it was INR 30,000 crore, but it's INR 29,934 crore. Led by new protection premium, which grew at 57% year-on-year. The PAT is at INR 670 crore, which represents 2.2% of our premium. For the full year, our insurance premium obviously grew at 42%, for the quarter it grew at 46% year-on-year. What I'm trying to say is, as we get towards the end of the year, the speed has increased a little bit.
The core online insurance premium is up 39% for the year, and the new protection premium is up 57% for the year. When you look at the same numbers on the quarter, they are 44% and 67% each. This, obviously, the fact the last two quarters were somewhat faster growth bodes well as we go forward. Also because the savings business came out of a low cycle, you're starting to see some higher growth. The lending dispersal is also clearly in the positive territory now. We are up 11% year-on-year. Overall, at the financials, the operating revenue is INR 6,794 crores. The operating revenue for the quarter is just about INR 2,000 crores. The new, the overall protection business was up for the year 57%, health at 68%.
Even in this, you know, 67% year-on-year story, health continues to be slightly ahead of the pack, which is a, you know, positive sign. Term is catching up fast. As we look into the new year, term is certainly gonna be challenging health. For the overall year, the consolidated operating profit, operating revenues grew 37%. I think we've given you all these numbers. When we look at, you know, our core renewal revenues, as I explained why the quarter is doing better and why we feel confident about the financials for the coming years. As I said, in the past, our renewals is a large contributor to our, you know, future growth of profits.
That has gone up for the last 12 months rolling from INR 668 crore to INR 935 crore, up to INR 167 crore. For the quarter, this is at an ARR of INR 1,126 crore, up from INR 689 crore. That's a growth of 63% year-on-year. This is one of the key drivers, not the only driver. I must emphasize that the new business is also contributing to increasing profits and doing so very handsomely. The second part is the growth has been obviously accelerating. As we said, net of savings, we look at 1 thing, which is net of savings. Over the last few years, we've been in the 30% to 40% range, mostly around 35%. This quarter, we were at 59% year-on-year.
That is basically savings coming into growth territory again. Including savings, we were at 48% year-on-year for the quarter, for the new insurance premium. Again, new versus renewals. New is still outgrowing renewals. New health is outgrowing everything else. We continue to improve our customer onboarding and claim support, and the insurance CSAT is now consistently above 90%. Our Paisabazaar CSAT, which used to be at about 72%, has finally reached about 90%, which is a very positive turn. Our credit revenue is up 7% year-on-year, and the dispersal is up 11% year-on-year. I must emphasize Paisa has made very significant difference in the last one year in terms of the stability of its supplier base, in terms of the service that we provide as a platform. We are no longer just a redirection platform.
We are increasingly an end-to-end platform and in terms of its customer service. The core reasons why our business exists, it has improved remarkably on. Obviously, our new initiatives, as you've seen, have continued to do well. We are EBITDA is at minus 4% with a 5% contribution margin. We've grown at 43% year-on-year. However, I must emphasize, new initiatives is no longer. I don't know why we call it new anymore. It's about three, four years old. Okay, I'll speak a little slower. The new initiatives is now growing pretty much at the same pace as the other businesses. There is nothing very specific about the growth rate here. PB Partners has 450,000 advisors, and it is the most diversified business. 99% of the pin codes in the country are covered.
Our UAE business grew 54% year-on-year. They have built their strength on the basis of cross-border health insurance and life insurance products, as well as the claims assurance program. Again, learning from Policybazaar in India and taking those learnings there and applying them beautifully. The consolidated PAT, as I said. Yeah, I've already said all this. To summarize, you know, once in a while, it helps to look back at November 2021 and now where we are. Our revenue has grown at a CAGR of 48% over this period, over the last 4-5 years. Our PAT has grown from -58% to +10% in the full year of 2026. I'll stop there and take questions, please.
It's inclusion equal.
Equal, yeah. Hi, everyone. May I now request, you know, to ask your questions? Hi, Sachin. Please go ahead.
Thanks, Mohit. Congrats management on one more time, a great set of results. I have a few questions. First question, want to understand a bit more on what's driving the new insurance premium growth. It's as has around 59% YOY in this quarter. Any color on some of the drivers in terms of the product mix, volume growth, and so on and so forth? More importantly, how could we think about this growth in coming years?
Sarbvir.
Yeah, sure. Sachin, I think the drivers of new insurance premium growth remain the same. I think health has been growing fairly rapidly. There was a little bit of a bump up that we got after September. I think after GST, in the last quarter also, if you saw, we did grow, I think, quite strongly. In this quarter also, that growth continued. I think it's on the basis of two, three things. One is a superior product proposition. We have modular products which allow us to segment the market and, you know, produce the most appropriate product for every person, whether you are young, old, you have preexisting diseases, you're a non-resident Indian, et cetera. The second thing on the health side that we provide is a superior claims experience.
I think increasingly the confidence that both our sales advisors and the customer who's coming to Policybazaar have in this proposition that if you buy from Policybazaar, the chances of getting a claim become higher and higher, closer to 100%. I think this proposition is beginning to take root, and I believe this story has a long way to go because, you know, as you can imagine, this is the most important issue. I think on the term side, in Q4 we had a great quarter. I think the team has been bringing things together, and I think they all sort of came together in Q4. There was a little bit also that last year, Q4 was not as strong, so, you know, the comparison was also a little bit favorable.
Savings, as Yashish mentioned, had not, you know, we had a little bit of a tough last 3, 4 quarters, starting from Q4 of last year. We returned back to growth. In fact, savings would have had an even better quarter in Q4, except that in March, because of the situation in the Gulf, et cetera, the non-resident business, you know, definitely took a little bit of a hit in that, in that way. The other businesses, motor, two-wheeler, you know, travel, of course, was a little soft, but motor and two-wheeler continued to grow. I think overall, all the businesses, I would say, contributed. The drivers are the same. We got a little extra in Q4, in health term and to some extent in savings.
In terms of steady state growth, what could be the growth one could think about?
We always guide about 30%. We always beat that guidance.
Okay. Fair point. Second question, Yashish. You know, your presentation does mention a lot on AI in terms of PB AI Operating System. It's used across different functionalities, right from a risk to claims and to everything. Any way to quantify the margin benefits we could see on the back of AI implementation? Not immediately, maybe from a medium-term perspective, the benefits of AI on the revenue and cost. How could one think about that?
I think, Sachin, the best way to think about it is that we are not actually right now, if you ask me, in the stage where one is trying to optimize for cost and, you know, margin, et cetera. I think right now we are in a stage where we want to make sure that we are leveraging AI in the best possible way. We've tried to give you a flavor for that, which is to say that we are focused on increasing right now the productivity of our sales team, of our customer service team, of making sure that our customers can get an amazing experience when they come to the platform. I think right now the focus is on these things. you know, obviously, we are trying a lot of experiments to, you know, see beyond this also, on the frontier kind of stuff.
The idea, I would say, from a outside perspective, is to make sure that we are doing all these things and delivering. You can see that, you know, conversions have been going up, quarter-on-quarter, year-on-year. It's always very hard to break it down as to how much is due to AI or how much is due to other things. I would say overall, what gives us optimism and hope for the future is that we, I think all our team, it's no longer, you know, a few people using AI or something, the entire company is on it, and a lot of organic, you know, things are coming up. We can see the productivity going up. Exactly what will happen three years from now, five years from now, I think, you know, that remains to be seen.
My view is that over the long term, you know, these things adjust. The main thing for us remains to drive fresh growth. If you ask me, the structure of the P&L, I think is in, if I could say it myself, is in pretty good shape. The main thing now is that we must continue to drive fresh growth, bring new customers to the insurance industry and, you know, service them well. That's really our focus. I'm not sure we are looking at this as some kind of margin driver, you know, going forward. Is that fair?
No, that's a very fair statement. As you think about AI, I'm not just talking about Policybazaar, but also the insurance industry, I think the biggest use case in the insurance industry is going to be risk, not efficiency. I think we are, as a people, more focused on the efficiency part, but the insurance industry is actually not about distribution, it's actually about claims, and it's about cost of claims and underwriting and all those things. I'll just give you an example that only 5%— 5 out of 100 people who bought an insurance policy 10 years ago have ever made more than 1 claim. Obviously, the next thing we want to know is, okay, how do we identify those five before they become those five, right?
Because that's appropriate pricing. Of course, AI is gonna help a big time in that. At the point of claim, identifying, you know, whether a claim is right or I think that is the immediate and the most critical use case. The second use case is more about building our capability as people. I think the answer is spot on. Our priority is not for one year or two years, but for, I would say the next five years and hopefully much longer, is growth and customer excellence.
Those of you who see us from the outside in and maybe compare us to an Amazon or something might feel like, "Oh, what's so great about this customer excellence?" But the moment you compare it to the industry dynamic and the complexity of the industry, I think we are phenomenal in customer excellence and we have a very long way to go in that. Those two are the primary drivers, and as long as we keep driving on that, I think everything else will fall in place.
Got it. Very clear. Third question, Yashish, is on the growth and the new opportunities. Clearly when we look at the kind of cash flows, PB Fintech is going to generate in coming years, it's pretty huge. When you think about growth and new opportunities, what are some of the areas of investments, either in the current business or adjacencies we are looking? A relative question is, PB Health clearly is in the market to look to raise money. Is PB Fintech looking to invest in the next round?
On both of them, today, we are not exploring either as a board or I can tell you as a management any other growth opportunity. We have not come across any in the last three months, and we are not actively looking at anything, and we've not even discussed anything. I'm not even saying at a board level, even at a management level. Number two, you asked about PB Health. Yes, PB Health is going to be raising capital. They will be close to that. They have not come to PB Fintech to raise capital yet.
Okay. You know, there remains a possibility PB Fintech might invest in PB Health at some point?
That has to come to the board. When it comes to the board, yeah, PB Fintech might consider it. It might, it has the right to do a pro rata. It has about 26%, 28% shareholding. It has the right to maintain that.
Got it. Last question I would say is, you know, any incremental discussion on any cap on commissions or tighter commission regulation? As you know, this was all around in media around three to four months back, as of now, there appears to be no news flow on this topic.
No, no, there's news flow even today. The media is much more active than either the regulator or the insurance industry. Nobody else knows, only the media knows.
All right.
I think earlier you had only one, now you have two, three of them competing with each other for the same news flow.
Nothing from the regulator on this topic, right? Basis your discussion with the regulator.
I haven't seen anything, neither have any of the insurance companies seen anything.
Got it. Very clear. All the best for future. Thank you.
I don't think most of the people in the regulator have also seen anything. Only the media has seen it.
Thanks, Yashish.
Thank you. Thank you, Sachin.
No, look, I think, what we hear, I have to be a little less jovial about it, a little more. It doesn't mean that we don't track. What we track is, I believe there are two different conversations that go on. Actually, multiple conversations that go on. One conversation that's been on in the life insurance industry is about some form of deferred revenues. We don't want to participate in that debate. We are very positive about it. If that happens, that's a very good thing for us. The second conversation that goes on is some kind of, you know, lower EOM structure in the health insurance industry. Once more, we welcome it. If it happens, we have no kind of comment to offer on this.
The remaining conversations that you hear, we only hear from the media, honestly. We actually don't hear it from the regulator.
Fair point. Thank you.
Thank you, Yashish. We will take the next question from the line of Jayant Kharote from Axis.
hi, Hello.
Hi, Jayant.
Am I audible?
Yes.
Hi. Thanks for the opportunity and congratulations the whole team for once again delivering above expectation numbers. First question is on the margins. If you can help us break down the core business margins. I see this 25%, meaning if Paisabazaar has turned around this quarter, then does that mean how does the YOY margin look in the insurance business? Basically, if you could break down the margin movement in Paisabazaar and the core insurance business.
I don't think we get into that level of detail. I don't know if we've done that historically. We will simply avoid it.
Okay.
Both are doing well. At the contribution level, both are doing well. Both are quite similar now at the contribution level. Yeah, maybe insurance.
But-
a little better.
has Paisabazaar turned around on EBITDA? Is it positive or is it?
Paisabazaar on an operating basis is positive on EBITDA this quarter. Honestly, internally at least, we expect it to be significantly positive next year. We actually expect quite a strong year from Paisabazaar. I don't know, Santosh Agarwal, if you want to speak a bit about it.
Yeah, I think right now, quarter four, I think, the contribution margin is healthy. At an EBITDA level, it is still minuscule, I'd say very small.
It's positive.
It's positive, of course.
Yeah.
This financial year, I think we should make a lot of progress. I think we're seeing growth every quarter. That's all I would say. For it to be meaningful, I think it's a while away.
In Paisabazaar, only if I could double-click, you know, Santosh ma'am, if you could help. See, the main issue has been that our fixed cost base is roughly in that range of INR 200 crores plus, minus. I don't know the exact number. The revenues, unfortunately, have been facing some downward pressure, whether it's credit card issuances or whether it's even the take rates in unsecured, right? There is industries having a lot of channels that are doing that. Of course, Paisabazaar has its moat, but there is a take rate directionally that's getting compressed. Where do you see that delta coming from?
Again, while you are building new businesses, does it mean, it's not, adding up indirect costs, on the balance sheet?
You rightly mentioned the numbers. The cost numbers are roughly similar, right? They've stabilized. I think what we will see this year is operating leverage because of that. The fixed cost absorption will be better. As we scale, the margins will, the PAT margins will emerge. That's what we're expecting in this financial year. We are starting a few new initiatives, but those will not add to incremental costs. I don't see the cost side increasing too much. As the revenues scale, the margins will improve.
Ma'am, is the credit renewal revenue improving or that continues to struggle a little bit because of what has happened in cards?
Largely, Paisa is a origination revenue. This renewal revenue is actually not too significant. Most of what you see is one-time origination revenue.
In fact, Jayant, we are moving away from I know what you mean by renewal revenues, what we used to receive up to one, two years ago. We still receive some component of that, but that's becoming less and less important. We are more and more focused on upfront payments rather than renewal revenue. However, as we move towards the savings business, some of it will appear. Honestly, you're probably from a revenue perspective and a meaningful revenue both at PB Fintech and even Paisabazaar level, you're probably talking not the next two years from a renewal revenue of that.
Great. Great. Last question is on this whole while I know there is no consultation paper that is out there, but one hypothetical question to you, Yashish. If at all there is some take rate reduction, we operate at a blended between 16 to 18, if there is a 50, 100 basis points. The only question is how much can we manage the costs?
So-
Basically, I think these agents are very lean, right?
Jayant, I'll give you all the very, very straight answer as I see it. You either accept it or don't accept it. See, if we were an insurance company, if Policybazaar was an insurance company, I'm talking about health insurance because as I explained, you have to break this up, right? POSP, what happens honestly doesn't matter to us. You know, whether I say it or not, we do that business for different purposes, growth and whatever defensive play, et cetera, et cetera, right? In the core business, if we talk about it, if you look at life, I think whatever happens, we will benefit. Whenever you have deferral of, you know, payments, the larger, more consolidated players benefit because they are the ones who can play that game out very well.
I think the story everybody may be worried about is health, let me address that. If Policybazaar was an insurance company, our total costs and the claims paid out on our book, and when I'm looking at a fully loaded delayed book, are less than 80%. There is no insurance company in the country who can compete with that. All I'm saying is we have the most profitable book in the industry by a 20% delta from the rest of the industry. That, that 20% profit will go somewhere, whether to us or to the insurance company, and it will be a fair outcome, right, between us and the insurance players. How? You have to trust us. It can always take us three months, six months to put that in place, that will come in place.
Whether it comes through whichever mechanism it comes through, whether from a reinsurance, whether from a reinsurance broker, whether from a JV, whether from whatever mechanism it comes through, but it will come through. I also explained to you, and I think you guys should start catching the clues of what I'm trying to give. We know that 95% of customers were not claiming, so I just leave it there. I know the part of my book which is operating at, you know, less than 10% claims ratio. It is visible to me. Those customers deal with me every year at every renewal. I'll stop there. You can just imagine the kind of conclusion I'm saying.
No, no. Of course. This is.
Yeah
as clear, I think.
Please don't worry about my 16%. I take the 16% because I only want to take 16%. It's not because I can only get 16%. I'll park it there.
No, this is very helpful, Yashish. Sorry, just what I was asking was on the agent side, right, we have essentially how much do you think we can pass on to the telephone, I mean, the tele agent network? With the AI also coming in, can we offset? Basically, I was trying to say, even if we were to take 30, 40 basis, can we offset that through more IVR and tele agent pass on? Is that a right thought process or I shouldn't be thinking like that?
Jayant, I just want to be very upfront with you. It's not like that we are today not trying to be more productive because we are getting paid X percent, right? I mean, our teams are seriously working hard, and we will not leave anything. I mean, it doesn't matter whether the commission goes up or down. We want to be more productive. Yes, I understand where you're going. I think Yashish was trying to indicate that the economics very much support the take rate that we get, and we leave significant profitability for our partners also. Hopefully, as things work out and depending on where they go, I think it's kind of speculation is not required. Wherever we end up, we have a very high probability of being able to manage the economics. I think that's what the message we are trying to give you.
I do want to assure you that we are making every effort every day to be more productive and reduce costs, whether through AI and all other, you know, routes available to us.
Great. Great. Thanks a lot, and congratulations once again to the whole team for the great set of numbers.
Thank you.
Thank you, Jayant. We will now take the next question from the line of Dipanjan Ghosh from Citigroup. Dipanjan, please.
Hi. Hope I'm audible.
Yes, you are audible.
Just few questions from my side. You know, first, you know, when I look at the evolution of Policybazaar, I mean, from insurance and PSAS, now pension. In your presentation, you have mentioned about PB marketing, your intention to get into even stockbroking, if I'm not wrong. You mentioned in your presentation you're applying for ARN license for MF. When I look at the landscape, the way it is developing and some of your listed peers or even unlisted peers, it seems all of you would start, you know, becoming a digital-native platform for distribution of all sorts of financial products or most sorts of financial products. There are two questions. One is, how do you really differentiate yourself from others? Maybe not today, but let's say five years out.
Second is, you know, in terms of leveraging your existing customer base, whether it's Policy or Paisabazaar, for this new product classes or kind of cross-selling, what sort of data sharing practices are there? I mean, can you really do that? I mean, how do you really leverage the existing customer base? My second question is on PB Connect, the physical leg of the lending business. It seems that the volumes were quite low compared to last quarter.
Yes.
Is there any change in strategy on that business?
Yeah.
My last question is on the insurance business and PB, I mean, the POSP business on the insurance side. Not the POSP. I mean, basically the phygital leg of the business on the core insurance side, in terms of you deploying manpower in 200 plus cities. I just wanted to understand in terms of capacity that you have currently to service and the product mix or margin profile. How do you really look at the phygital business versus core online business? I mean, over long term, will there be any difference in the margin profile?
Sure. No, thank you. First of all, we have two businesses at Policybazaar. One is Policybazaar and one is Paisabazaar. A lot of what you mentioned actually applies to Paisabazaar, so I'll pass that on to Policybazaar stays extremely focused on one problem, and it's a very, very deep problem, and I don't think anybody else is trying to solve that problem, which is solving for social security of the middle class. Which implies protection against death, disease, disability, and old age, which can be pensions. There are basically four products required, and I've always said that health I'm becoming a bit like Trump, huh, saying the same thing. I always said it. No, should not say that. Health, term, pensions and waiver of premium.
Waiver of premium is basically, you know, in case something bad happens, if you invested in a mutual fund, you only get the three months you've invested for. If you've died then, you know, you get the waiver. These are the four products, right? That goes for child education. These are what Policybazaar is focused on. Paisabazaar and, the future that it wants to build, I will just pass on to Santosh to explain. Before I go there, maybe, Sarbvir, you can cover the insurance physical versus online. I know there's no difference, but yeah.
Yeah. Again, just to be very clear, Deepanjan, that the person comes to our platform, and either the same person who is speaking to them on the phone goes to visit them or they pass on, they make an appointment, and one of their colleagues who's in that city goes to meet the customer. The journey is exactly the same. It's just the fulfillment which is physical. It's about 25% right now of our savings term and health business on app if you just looked at together. It has been growing quite rapidly, but so has the rest of the business. The percentage, you know, grows very, very slightly every quarter, every year.
As far as the economics of the business are concerned, they are actually very, very good because as you can imagine, the lead cost is the same. Now we're getting extra conversion from that lead, right? We have spent money to get the customer. Now we're getting extra conversion from that. That conversion, of course, comes at a very, I would say, very high contribution margin. The biggest challenge that we have been working on from day one is the quality of the business, because suddenly you we have a situation where you are not on a recorded line, et cetera, et cetera. We do verification calling. We focus, you know, from a cultural perspective to ensure that our team understands the importance of quality, et cetera.
I think the skill that has been built, the first skill to be built was how to manage a physical workforce, which I think our team now has got pretty good at. The second skill that we have built is how to manage the quality of that sale so that there is no deviation, because, you know, all the things that we tell you about, the quality of business at Policybazaar is one of the key ingredients, and that is measured in terms of, you know, claim settlement rates, loss ratios, in terms of persistency and renewal rate. These are the clear metrics which tell you whether the quality is good or bad, and all, I would say, all four of them are at all-time highs right now. So far it appears that we are managing it well, but it's something that we are very watchful about.
I'll now pass on to Santosh. Before I pass on to Santosh, you know, this is not a board-approved thing, but our idea is that Paisabazaar goes on to list itself maybe in four years, five years, whenever. That's the whole idea to which the team is driving towards. I'll kind of pass on to Santosh to kind of explain what her strategy for doing that is.
So-
Not for doing that, but yeah, overall.
Deepanjan, see, largely Paisabazaar has about 5.8 crore consumers that is acquired till date. A lot of credit, you know, and that almost represents 50% of the active credit Indians in India. How do you do more of these consumers is basically the idea. We are transitioning into becoming a more engagement platform than a one-time origination platform. You can of course do that through credit, but you can also do that through savings. People want, you know, both kind of products. To do the savings business, we of course wanted both the bonds and mutual funds. The stockbroking license that you are talking about is a prerequisite for acquiring a bond license, so that is why you see that license being applied.
Bonds, I think, is a very good consumer product, very efficient and a good fixed return product that consumers like. We've done some initial experiment with, you know, partnering with the platform, and we've seen some early success. That gives us a lot of confidence that this area will really build. I think it's the right time to also, I think, start this product in India today. It's a very new industry and, you know, there is some activity happening, but I think we are at the right time entering the space. On the mutual fund side, it is an established industry. If you ask me, really, the right to win will be harder.
What we are attempting is instead of moving to a monthly SIP format, bringing in a daily SIP format, and that can build a lot of engagement. It really, you know, improves, I would say, affordability. People, when you put in, say, even INR 100 every day, and when you see it compound over five years, it can be a meaningful number. I think that is the path of building the savings area. Of course, it'll take another two, three years to actually flesh that out fully. That will build a trail that's also, you know, building a recurring revenue stream. That's largely the idea.
Yeah. A customer engagement.
Yeah.
On PB Connect, just to explain, we had two kinds of businesses. PB Connect is basically, just for everybody's sake, it's like the POSP of home loans. In that we have two kinds of businesses. one is more focused at retail agents, so very, very small micro agents. One is dealing with other agents who are large enough, so more like wholesale. We have decided to stop the wholesale business, that is why. It's a decision that we've taken because we don't see any strategic value of that business. Because we decided to stop that, you have seen a decline in the revenue. It has no impact on the overall profits. Like, maybe we were losing INR 0.5 crore a month or something. That INR 0.5 crore loss is gone.
Got it. Thanks everyone, and all the best.
Thank you.
Thank you, Deepanjan. We will now take next question from the line of Supratim Dutta. Supratim, please unmute your mic.
Hi. Thanks everyone for the opportunity. I'll start off on the Policybazaar side. You know, you have indicated that the fresh business growth has, you know, continued to remain very strong, driven by protection. Just wanted to understand, you know, how are the customers that you're getting post-September different to the ones before that? Is there a ticket size different? Is there a product, you know, the kind of policies that they're taking, is there a difference there? Just because, you know, that would be very important in extending this growth. That, that's the first bit. The second bit is on the, you know, the change, you know, how you're trying to expand the Paisabazaar platform.
Wanted to understand, one, on the mutual fund side, would these be direct mutual funds that you're doing or, you know, the regular mutual funds? It seems like you're going, you know, towards a more of a distribution or wealth management, kind of a setup, with, you know, bonds and mutual funds. Wanted to understand that, you know, maybe five years out or, you know, seven years out, is that the ultimate aspiration that you want to be a kind of a wealth management platform for retail mass affluent customers? You know, that's the second bit. Lastly, on, you know, for the POSP platform, you have indicated that you are going for, you know, more granular, smaller agents.
Wanted to understand currently what is the proportion of these smaller agents, you know, be it in form of number of agents or contribution to re- premiums, and, you know, what was it, you know, maybe one year back or, you know, two years back. You know, just some color, you know, how is that actually playing out. Those are my three questions.
Sarbvir, do you wanna just explain the customers before September, post-September?
Sure.
Maybe also the POSP story.
Supratim Dutta, as you can imagine, the customers are roughly the same. What has changed is the fact that, one, there was a lot of exposure to people about term insurance and health insurance because there was a lot of discussion during the GST time. What has happened post-GST is that in health insurance, for instance, people are buying higher sum insured than they were buying earlier. If you look at the proportion of policies below INR 10 lakhs and greater than INR 10 lakhs, now a vast majority of policies are being bought which are INR 10 lakhs and above in terms of sum insured. That has pushed up the ticket size somewhat, and that is helping. There have also been couple of insurers have launched unlimited sum insured products, which are towards their pricing is around INR 25 lakh sum insured type range.
Those also have helped because now people are attracted by the fact that they can have unlimited sum insured. On the term side, the change has been, again, because the customer is seeing a 18% reduction, because, see, prices have not changed on both health and term insurance. What that has led to is that people are buying. The sum assured hasn't gone up by that much because, you know, people tend to think in bigger buckets. You think of 1 crore or then 2 crores, et cetera. People have been buying a little bit more of the riders. You know, things like a critical illness rider, there, the attachment of that has gone up. Some of the accidental protection rider, their attachment has gone up.
I think that has changed, you know, post-September. Both of these changes are dwarfed by a different change, which is the fact that our conversion rate has gone up. For the people who are coming, more of them are buying because I guess they are a little bit more aware about the value of insurance.
On the POSP, before we move on, Sarbvir obviously has this data. We just looked at yesterday. 99.5% of the agents make less than about whatever. They are below, well, they make less than INR 20 lakh revenue in a year from us. Only 350 agents or so make more than that. In terms of premium, 83% of the premium comes from the small agents now. If you look at the same number a year ago, that would have been close to 50-50 in terms of premium. I think our growth is despite the fact that we're cutting out a lot of the other part, and it's actually reducing year-on-year. It's gone from about 50-50 to about 80-80 in terms of premium.
Understood.
In terms of agents, 99 point some %, yeah.
Got it. On the Paisabazaar bit.
Yeah. On the Paisabazaar side, basically at this stage, look, we're a lending company. Lending has certain advantages, but it does not have engagement with the customer as much, and it's also a little, you know, every time there is a downward trend. One of the things we've done is because every time there's a downward trend, we used to get hurt. We have improved the quality of partners that we are operating with. See, what we noticed over time was the larger banks, the larger institutions, even in down times, support their partners, and maybe our efforts in that direction was lower in the past. We have put in additional efforts in that direction, we've got more of those partners. Our end-to-end journeys have increased.
In down times, and quality is something that we're really focused on. Lending is going to keep doing well. I think you will see a very good year from Paisabazaar. In terms of the long term, at this point it's not very crystallized, yes, you are right. We are going to do pretty much everything that anybody does to take care of our customer base and engage with them in more and more products and create more and more opportunities for them to visit us. There are various things we are doing. We're doing points, we're doing tokens, we will do mutual funds, we will do bonds, and we will find our own space like we've done in everything else. Yeah, we were never the market leader when we started anything. We'll find our own space.
Understood. You know, one last data keeping question. Can you split that 67% protection growth into how much is term and how much is health?
Maybe a little more in health than in term.
Just little, yeah.
Yeah, just a little extra.
Both are very close.
Very close. Yeah, maybe 35, 32, if you want to have a number. Maybe something around that.
69.
67% growth. Oh, that way.
Yeah.
Oh, sorry.
Yeah.
I thought, no, health is ahead. Health is ahead. We just want to stop there. We don't want to give out our exact health growth. It's quite high.
Got it.
It's interesting.
Got it. Thank you.
Thank you, Supratim. We will now take next question from the line of Neeraj Toshniwal from UBS. Neeraj? Neeraj, please un-mute your mic.
Yeah. Hi, everyone. First question is on, I think Yashish mentioned that there have been possible scenario of deferral, well, in the life insurance, in terms of, you know, commission. Just wanted to understand in such scenario, what will the impact of deferral revenue recognition and the cost which we incur, how would that change?
Neeraj, first of all, I don't want to speculate on any scenario. This is just what we hear in the market. It might happen, it might not happen. All I'm saying is for us, we find we've been asking the industry for this for the last 10 years, that we would like to get paid on a deferred basis. We are the ones who've been going and asking for it. I don't want to kind of add fuel to this fire by kind of saying Policybazaar has this view, Policybazaar has that view. We'll just chill there, yeah, that's all. I think I don't want to answer specific questions on what we will do with this deferral and all that stuff.
Got it. second is on Paisabazaar.
Actually.
Sorry.
I just want to-
No, go ahead.
Neeraj, I just want to explain because, you know, this is a very emotive topic, and I think what Yashish is trying to say is that if you look at it on a persistency adjusted basis, right? We are there. It's not that what we get paid as would have a major impact if you were to defer it because of the persistency that our portfolio has. Having said that, we are not necessarily, you know, we are okay both ways. Whichever way, in the wisdom, whatever way is there, we will cope with it. I think the point that he's trying to make is that because we have the persistency, it doesn't really affect us that much because of that. Overall, we are very happy with the current system.
I would just want to say one more thing, that life insurance contracts are 30, 40 years, especially in the case of term insurance. The way to think about it is not, the first year commission should not be seen as divided by the first year premium. You have to look at it on a NPV basis over the life of the product, obviously persistency adjusted. When you do that, then you'll actually find that especially in term insurance, the commission is not as high as people think it is.
Commission is less than 5%, yeah.
So, so it's a-
That's the quality, yeah.
That's kind of where we are. I think that's what we are trying to say. I don't think we necessarily want to advocate one direction or the other direction.
Yeah. We are certainly not participant in this debate of whether it should be deferred or not deferred.
Also, you know, we have, see, basically there's a P&L part and there's a cash flow part. If you just look at the NBIS accounting on P&L, actually there should not be any impact whatever happens. Cash flow, there may be a small impact, but we'll see when the rules actually come out and what sort of rules will come.
Definitely very, very helpful on this. The second is on Paisabazaar. As we are mentioning that there's sort of growth which you're expecting, are we also deploying more resources and that could lead to somewhat of higher expenses as well? Are the cost base totally intact and only we can get is operating leverage from here? How should one think about it?
I think I'll let Santosh answer it. I know the answer, but yeah.
I think we'll see a lot of operating leverage this year. I think the costs are stabilized, I think the absorption of that will be much better. See, as we improve scale, and like Yashish mentioned, a lot of supply work has happened. Our conversions are going up. People are seeing more offers that can translate into actual disbursements. Those rates have significantly improved, and hence the scale will improve. With that, you know, I think from a cost perspective, we should be roughly similar this year.
See, on Paisabazaar, I would just say, and Santosh probably didn't say it because she's too nice. Compared to last year in terms of quality of business, productivity of employees, we are supremely high right now. For the same inquiry, how much are we getting out? We are supremely high. I think we are at a point where we're not expanding employees for some time. We think there is some leverage left for us to get, maybe about 30% or so is something that we can get with the current employee base. I'll just share one thing with you.
Like last year, if we looked at when Santosh took over the CEO position, if we looked at how many of our employees were making incentives, it was very, very few, because they were not operating at a very high quality. Today, if we look at that number is a lot higher, and incentives is a higher percentage of their compensation, because that's the way you can see if a sales team is driven or not. Incentives is a much higher percentage of their comp. You know, they're almost unbelievable because it has almost come to Policybazaar levels in that respect. You know, what percentage of your total compensation is variable. I think I'll stop there. I'll let time, you know, reward Santosh rather than kind of me doing it in advance of time.
No, that is helpful, Yashish Dahiya and Santosh Agarwal. The last bit in, on this is secured disbursements have meaningfully dropped. It's a change of strategy or the take rates are not favorable, so we are kind of, you know, pushing back on this.
No. They have only dropped in one area, which was wholesale POSP distribution, which we were doing for one supplier. Look, it was not making strategic sense. We've decided not to continue that business. We stopped it in January. It takes 15 days to stop the business. After that, we are not doing that business. It was a meaningful part of this, of the.
Paisa
home loans, part of the Paisa revenue. That's fine. It was kind of fluffy revenue in the sense it didn't really have profits. It would never make massive profits. It was Yeah. wholesale POSP is what we've stopped.
Sure. Okay. Thank you. Thank you, team.
Everything else is up.
Thank you, Neeraj. Next question is from the line of Manas Agrawal from Bernstein. Manas, please unmute your mic.
Thanks for the opportunity. Great momentum on operationally everything. Couple of strategic questions. I think we have discussed take rate extensively. The other thing that comes up in investor conversations is capital allocation. Are we in a position that we want to comment on use of money that is lying on the balance sheet and the accruals that we are expecting? That is one. The other is on PB Health. Can you give an update on what operationally is happening on the ground? Because I may be wrong on this, but I thought the investment last year was going to be a one-time investment. If we are looking at a follow-on round as well, would be good to know what is actually happening on the ground on that business. That's it.
There are multiple layers to PB Health, but let's go with the hospital part. We've acquired one hospital, which is an operating hospital. Makes about INR 20-30 crores of profit in a year. Does about INR 150 crores of revenue. That's operational and running in Noida. Our next hospital is to go live in the next few weeks. In fact, next week is the sort of starting of it. By this month end, it should be operational. That's in what do you call that?
Gurgaon
Gurgaon. Central Gurgaon. We are getting into another hospital in Gurgaon. There's another one we're looking in Delhi, and we've also started looking outside of Delhi. That's the hospitals part. On the second hand, there is something called PB Care Plus, which is a network of. Basically, our customers go to all hospitals today. We are creating a preferred network of our, you know, for our customers, and that preferred network is about 500 hospitals strong. For example, if you had cataract, today across the country, if you were our customer, we would direct you towards Agarwal Eye Care because that is part of the PB, you know, care plus network. That's happening. Now, what you will see over time emerging from these two. One you see is an absolute operation-less.
Operations is involved, but it's the entire hospital, the healthcare is somebody else's responsibility. We are only coordinating between our customer and the healthcare. The second is full-blown hospital development. This is where you're seeing two parts. These will start to come together over the next one year, where you will see O&M operations. Of this 500, 600 hospital network, we will take on some of them and start operating them under the PB Health brand. I'll stop there. As I said, PB Health has no immediate requirement of cash. They have not even used 30% of the cash they had. They are in conversations where to raise capital. They are in late-stage conversations. Should they come to PB Fintech, PB Fintech will consider it. We will think about it.
It has not come to PB Fintech yet, and it may not. PB Fintech has the right to invest up to its pro rata, which it can decide. It can decide not to, it can decide to do it. It doesn't have the right to invest more than pro rata.
Understood. Anything on capital allocation, balance sheet cash accrual?
I'll explain. I'll explain. Over the last three months, because, see, you're asking, in a way, I've already said we've not had any discussion at the board level. You're asking, "Okay, what's in your head?" In our head, at least once we've had a conversation about buybacks and dividends. That's it. I can just say that. That's a dividend. That's a conversation. It's not even gone to the board. It's not even been discussed properly at the management level. We don't know what we will do yet. We don't know right now, but right now we don't really have a plan on what to do with the capital.
Got it. Thank you.
Thank you, Manas. Next question is from the line of Nischint Chawathe, from Kotak. Nischint, please unmute your mic.
Yeah, hi.
Hi.
Yeah. I hope I'm audible now. Yeah. Yeah, just, you know, two questions. One is, you know, can you give some update on what happened and how did the UAE business fare this quarter? Is there a particular outlook, you know, on this business, you know?
No, no, absolutely. Absolutely. I'm amazed by those guys. I'll tell you why. In fact, you know, I would've spoken about them in the beginning of the thing, as I usually do, about something amazing out there. You know, if you really think about the bombing started kind of on Feb 29th or some Feb28th. I don't know if 29th was there, even there this month, this year. It started some point in March. Should have been a washout month for them. About five days in, AWS got knocked out. We were on AWS. Just imagine this scenario. 10 days, we had the ability to do zero bookings. Our entire system is down.
I go there for the review, like I usually do at the end of the month, I'm trying to be encouraging about everything. They review the thing, they say, "We are 3% year-over-year up." I'm saying, "What the hell are you talking? How is that possible?" Right?
I was thinking that the competitor would have taken everything from them, because the competitor was not on AWS. The competitor's not as much up. Boss, all I'm saying is, thankfully, and I was explaining to the board also yesterday that while we're a public company and everything, we somehow are very, very driven and we have deep ownership in the company. Not in terms of stocks, but just in terms of deep ownership of the processes. I just feel super proud about the situation.
Yeah.
I think they are in bad times, we'll perform okay. In great times, we'll really shine. That's all I can say. You can't get worse than this, right? Your entire network is gone, you've been bombed, and you still grow 3% year-on-year. That's top then.
Got it. Great. The other one.
That's for the month, huh? For the quarter, they are actually 10% or 12% up. For the obviously, Jan, Feb, they were growing beautiful.
Okay. Got it. You know, on the term and health, you know, we have seen a beautiful J curve post GST cuts. And if I look at the savings business, it's, I think we're at an industry level.
GST was also going on before that, man. You know, in health, for the last 13 quarters, we have grown at 60% last year. I mean, people's lives are at stake. After that, you're saying with GST, I mean, instead of 60, it might have become 70, man. In that, I mean, the J curve happened suddenly. Before that, there was no J curve.
The term has definitely been there, right? Okay.
60%, 16% growth over four years. We do realize what that does, in terms of multiplications. You know, GST becomes the J curve. Yes, term, I agree. You know, term is not GST. It's actually our guy. We got a very special guy who started to really make changes. You know, I said he's the, he's the hire of the year for us. Sorry, Sarbvir, I'm taking your thunder.
No, no. There's no thunder here. Sorry, go ahead, Nishchin. I think you have something.
Yeah. The question was actually on savings business. You know, what, you know, when do you see the similar J curve in savings business? I think more from a broader industry point of view as well, right? I mean, the life industry, new business premiums have sort of stagnated at low double-digit levels. You know, what can the industry do or distributors do, or what can the government do to nudge both the parties to kind of have a similar J curve in the savings business?
I think, Nishchin, I mean, avoiding the use of the term J curve, I would say that savings for insurance, we have to figure out what is the customer proposition. See, total amount of savings, we can see the growth in SIP, we can see the growth in, you know, mutual funds, et cetera, bonds, everything. It's not that the total amount of savings in the country is a challenge. I think just savings coming to insurance is definitely, to some extent you can argue, is a challenge. I think the main thing is the customer proposition. One of the things that we have always tried to do is to start from the customer rather than starting, you know, from what we want to sell.
Many years ago, when Santosh was leading the business, she introduced the concept of a capital guarantee, right? Where we said that your premium will be guaranteed. You will ensure that we get your premium back, and then you have upside in terms of the market. That was a innovation that did well. Now we are trying to go to the next level, where we are saying that the reason you should invest in a ULIP is that you at least have to be in the product for five years. That's the, you know, the base term of the product. Obviously, you can stay 10, 15, 20 years. We are saying that the reason is that you tie a goal to the investment.
It's not a frivolous thing that, okay, let me put some money into the market and see whether, because there's a war going on or whatever. It's a goal that you have. one goal, it could be child education, could be buying a house, could be, you know, your retirement. These goals are serious goals for which you have to remain in the invested. That's what a ULIP really does well. Second, ULIPs have a feature which is called waiver of premium, which means that should something happen to you, the insurance company will continue to pay your premiums, also pay out the sum assured, give a monthly income to your family. Here you have not just planned for the goal, but you have protected the goal.
The third thing is that still ULIPs enjoy a tax advantage up to two and a half lakhs. They are actually right now the best investment. Within that two and a half lakhs tax advantage, you also have the ability to switch from equity to debt. It's the only debt product available in the country without having to pay tax on it. There are three very big advantages of ULIPs. I think we are going to promote this more and more. This is something that we have been doing even earlier, but we are going to promote these things more. We believe that this will attract customers for the right reasons.
Many times we forget that despite all the discussion about SIPs and mutual funds, after five years, the number of active SIPs is in, you know, the estimates vary from 3%-11% or something. We are still, after five years, in our ULIP, the persistency is somewhere in the 70%-75% range. The customer that we are getting is a good customer. I think we just need to talk more about the advantages. It's not for me to say what the industry should do or not do, but I do believe that all of us have to start from the customer and offer a proposition which is good for the customer.
But do you think-
Can I answer first? Waiver of premium is a great proposition to give.
Yeah. Sorry, go ahead.
Do you think, you know, a meaningful change in commission, origination expenses, operating expenses, you know, EOM can kind of, you know, make the proposition much more attractive? I mean, is that something that can trigger customers to, you know, buy more of savings products?
See, Nishchin, the, our take rate on the ULIP side are probably the lowest take rates probably of the entire business that we do, right? Because as you can imagine, when you sell low cost ULIP, that too with, you know, waiver of premium type of feature, there's not much that is left, right? We are giving actually everything to the customer. The products that we sell, I don't think there's any, you know, story around commission in that because we don't take much commission. The story for commissions is in other types of products that the industry sells. In those products, yes, the commission, again, because it's the first year, commission can appear very high and things, you know.
The customer has no clue about that commission. Quite honestly, without distribution, that industry would not be there. With lower benefits. As assuming, Nischint, quite bluntly, in some product there is high commission and you say, "Okay, like equate it to what Policybazaar gets." Suppose the entire industry's commission structure became, for savings business, the same as what Policybazaar makes on the savings business, I think it would pretty much stop. It'll probably be 2% of the industry left besides Policybazaar. You know, why should I make those statements, right? I think everybody who's smart can see those statements eventually, and that's why I when earlier, you know, Deepanjan was asking that question, I did not want to answer it because it's a speculative question which would never happen, right?
If it happens, it's industry disruption, not industry expansion in my opinion.
That's that. That's fair. Great. Thank you very much.
See, this is not a mutual fund product. It's not something that the customer is saying, "I really want to buy this. I really want to invest in this." That's why I'm saying Santosh started this business from scratch, took it up to when we were doing INR 5,000 crores of this kind of business. Imagine what she will do when she actually gets the mutual fund product, because she wanted to always sell mutual funds, and she's finally there. All I'm, all I'm saying is that is a, that is a much easier, much more attractive product. As, you know, if you take it, take it on a AUM basis, eventually we make less than that also.
Yes.
you know, there's lots of existential questions around that part of the story.
Got it. Thank you very much, and all the best.
Thank you, Nischint. Next question is from the line of Paresh Jain from Motilal. Paresh, please unmute your mic.
Yeah. Yeah, hi. Just my question is again on the health insurance bit and a phenomenal growth journey, growing for so many quarters at 60% plus. Post GST, obviously we've seen some tailwinds coming in, more tailwinds coming in. Just wanted to understand more color of it, you know, apart from, you know, new customers coming in and some assured increases that have happened. Is long-term policy also has picked up momentum? We keep hearing about, you know, people kind of marketing about a price hike that could come through and lock in of a price and probably a long-term policy, and that is kind of also coming into your premium and driving the growth.
Related to that, you know, obviously we have seen a phenomenal growth in this year and, in the second half of this year. Do you think that a 30% growth on that high base is still achievable? What are your thoughts there? Yeah.
I'll just explain the question that you asked in terms of the long-term policies. For us, long-term policy proportion of our premium has remained very stable between last year and this year. What has changed, however, is that some of the people are buying four, five-year policy. Traditionally, in health insurance, the highest term used to be three years. Now, we have four and five-year policy, so that proportion has increased. The overall proportion of people buying long-term policies or the premium, you know, on multi-year policies has not changed very much, at least for us. I think, again, I think this question was asked on the last call also.
I just want to explain to you that there is no tricks in the business growth that we have achieved, because it's been going on for three years now. Again, no one can say whether it will remain at this rate for next year or not. I mean, I don't think that's something we want to speculate about.
Next year though I think you can say, but.
Yeah. I don't want to say. I would say that the thing to focus on is the fundamentals, that the fact that we have the segmentation of customers, we have the products for those appropriate products priced correctly. The fact that we have our trained, well-trained sales team, which has tools, you know, now increasingly using Generative AI, et cetera. Then we have the service and claims experience. I cannot stress enough that the service and claims experience is the keys to a kingdom. Everybody buys insurance policy for that rainy day when something will happen. I think when you show up on that day and they're able to get the claim, that changes the equation. Honestly, the feedback that we are getting shows that we are making progress.
Not just, see, one is the CSAT and all those kind of numbers, but the other is to see the anecdotal feedback. To my mind, those are the building blocks, and it's not that we are selling more multi-year this year versus last year, et cetera, et cetera. None of that stuff is happening.
A large number of customers who have not bought from us are coming to us saying, "Please just help us at the point of claim," because whoever sold it to us or whichever it's. Yeah. That is becoming a massive USP, and I think, Sarbvir is, has been my senior and is very careful always. He's, you know, learned what the right things to say. I'm okay to just say what I feel. Next year growth, no problem. We will beat last year. Okay.
Wow.
What we will do is in one year, we will give the growth of what we promised in two years. We promised 30% growth in two years, we will give that growth in one year.
Wow. Amazing.
As much as we can.
Yeah. The other question was on a claims bit, you know, the physical support that you offer on claims, with, you know, people on the ground in hospitals, helping customers settle the claims. What is the kind of penetration that we have in the country today? How do you kind of see that increasing and the span increasing over the next few years?
I think, Paresh, if I'm right, we are at 248 cities. You know, I think there are two things that are going on. 1 is this 248 may go up a little bit, but that's not really the story anymore. The story now is actually shifting towards this PB Care Plus that Yashish mentioned, where there is a preferred network. If you go to that network, you will get preferential treatment, right? The cataract example that we discussed, the customer, because it's a planned procedure, the customer is taken straight to their room. The procedure is done. You know, depending on how much time they have to stay, they then go home. Again, no billing desk, nothing. What we are trying to do is to create this, you know, totally red carpet type of experience.
There will be a PB person in that hospital, et cetera. Combination of technology and operations, and I think, you know, the experience will be at next level. That's what we are really trying to do. Today if you have the Policybazaar app, you can consult a doctor 24/7. We have worked with all our insurance partners to offer this service to our customers. You can consult a real doctor, you can call an ambulance. I mean, the whole story is changing from just even physical presence in cities to presence in hospitals and, you know, giving just an amazing experience to the customer.
Paresh Jain, if you look at the data, I'll just take one minute on this. There are three segments of customers, but they're on the corners. There are two segments of customers. A very small percentage that are regular claimers and/or, and there's a large percentage that never claims. I think as we look at the next five years or so, what we have to do is we have to give something back to the non-claimers also. Whether that comes in terms of maternity cover, whether that comes in terms of, you know, some gym access, some wellness benefits, et cetera. Somewhere, we have to sweeten the deal, OPD benefits. We have to sweeten the deal for them because right now they're getting nothing, right? Young people, et cetera, coming in are getting nothing.
As we talk about the people who are regular claimers, we have to bring them into participation. Please understand, you know, right now, participation is hated as a word, but participation can be in terms of copay, can be in terms of limited networks, can be in terms of tiered networks, various things. Without this participation, please appreciate the cost is gonna become, you know, we're not doing this out of joy. We are doing this out of necessity. The cost will become unsustainable for the industry. Those are the two things that we have to work on. Make it better for the people who do not claim so that more and more of them come and get something out of it, and bring participation from the regular claimers, because without that it won't be sustainable.
The participation, and they're very few to work on. Sorry. Any new question? Any other question?
No, that just last one bit, you know, Yashish, you were rightly mentioning, right, the new initiatives have been in existence for some years now, and they're no longer new initiatives and scaled up beautifully. You know, if we start bucketing new initiatives like what we've spoken about in Paisabazaar, you know, what would be those in terms of, say, five years out? Do you think that these could be, say, about 10% of your revenues in, like, five years out?
Sorry, I missed that. Do you wanna answer that?
No, it's about the new initiatives. New initiatives.
Yeah, I think new initiatives will come. There are new things happening already, whether we talk about embedded insurance, whether we talk about the savings business, whether we talk about home loans business. There are new things happening constantly. PB Care Plus, PB Wheels, PB Pay. There's new things happening. See, if you look at the new initiatives, where did the big revenue impact come from? It came from POSP. POSP is like wildfire. You can expand that business very rapidly, and doing it with the right quality is hard. That is what our team has been doing for the last three years. They're building it to the right quality. I think that kind of growth coming from a single lever is not going to be that easy. We'll see. We always stay open.
All the time, there are three, four new things we are doing. The reason we are still calling them new initiatives and not old, we don't want to confuse the market by kind of just combining them and stopping, you know, disclosure around how much is what. That's all. It's just for disclosure purposes, nothing more than that. The growth rates are very similar now.
No, that's super helpful. Thank you.
Thank you, Paresh. We will now take the last question from the line of Sanketh Godha from Avendus. Sanket, please unmute your mic.
Thanks, Manish. My first question is on the contribution margin of the new initiatives coming down a bit. Actually, for last eight quarters, it has been steadily improving. We see a dip in the current quarter.
Sanket, sorry, your audio is not very clear.
Okay. Is it better now by any chance?
Yes.
It is better, yes.
My first question was on the contribution margin of the new initiatives, which is seeing a bit of decline after eight consistent quarters of improvement. Anything to read there? 4.3% seems to be lower compared to 5.7%, what you reported last quarter.
what is this?
No, it's the contribution margin of new initiatives.
New initiatives' contribution margin, I'm saying.
No, it is, it is same. You know, there is some small mix changes. Sometimes there are quarterly annual shifts. Please, in our numbers, just look at them on a 12-month rolling basis. Do not focus a huge amount on quarterly numbers, because sometimes you get rewarded for some action or penalized for some action in the last quarter. That always happens.
It's part of it. It is connected part of it. Actually, since this may be one of the last questions, I do want to talk about how we are thinking about POSPs in general. See, POSP has been growing, yes, you know, still growing faster than our core business. We believe that right now is a very opportune moment for us to deepen our penetration in the country. The reason for that is that we have now, you know, learned how to go to smaller cities. The model is kind of becoming better and better. I think that you will find us being very aggressive this year on POSP because we see that opportunity.
There is also a bit of an industry structure issue because some of the competitors, you know, A, we are now much larger than the competition than we've ever been. The number two thing is that there are some, you know, changes going on. Somebody is, you know, merging with somebody. Somebody's trying various other things. We see a very big opportunity for us to really go hard on POSP this year. I would not get too worried or excited about contribution margin. We should see a meaningful improvement in growth in the next financial year, and that's what I would, you know, look towards. Yeah.
Understood. The second question, again, maybe related to Q4 only, that the PB Corporate business grew 140 odd %, which you highlighted in the slide. Anything to read there whether it's a one-off or you think that you are going to scale this business meaningfully faster?
Yeah
You last time told that your UAE is profitable. How do you see PB Corporate to play out from profitability point of view?
I think the reason PBFP's growth looks very high, of course, is the fact that we are still, you know, growing in that business. We are the fastest growing corporate broker, we are still small compared to where we want to be. We had a great Q4 on the corporate side. We won some very prestigious accounts, which were with other brokers, which we were able to win, especially in the banking and financial space. I think those accounts obviously then led to revenue, et cetera, and that's why you're seeing that very dramatic growth. Again, you know, it's 140%, we have a long way to go on corporate. I think corporate business will require investment still in the years ahead.
If you ask me honestly, at this point, we're very happy to make that investment because every year we are building strength in that business. Not only just in employee benefits, but now on the commercial side, the P&C side, where historically we were not as strong, I think we are getting much, much stronger. I think there is, again, a lot of reasons to invest in that business in the next few years.
Sanket, we've come from 0, and we are now in the top 8 brokers in the country. Obviously we don't want to stay in top 8. We want to be very, very big. We will invest in this. What we are seeing is a very good team. We are barely hiring from outside. It's mostly internally built and internally driven. We are building our own culture, which is, you know, as most of you appreciate, is quite strong. I think we feel very good about that business. That business is not just a distribu Again, we are thinking of it the same way. It's again lending us leading us into healthcare, leading us into various places.
You know, we're very happy with the progress of that business. Yes, it does make a small amount of loss, which is perfectly fine. I think the group can easily afford it for a few more years.
Yashish, do you think this business to become very quickly profitable given after you achieve a scale, the kind of growth what you're delivering right now? Compared to POSP, naturally.
Yes, this can be significantly more profitable than the POSP business. I have no doubt there. As I said, that's not the immediate focus. The immediate focus. See, across the board, our immediate focus is growth and quality. I think there are three levers you can think of, right? Growth, quality, profits. Please read us. While a lot of questions come around profits, that has not been our focus. Our focus is the other two. This leg will just follow along. Of course, if you are doing growth and quality, eventually profits can't elude you forever.
Understood. Lastly, on the revenue side, we know that in long-term plans, we recognize the revenue, but naturally it is receivable. Just wanted to understand from the full year point of view, around INR 6,800 crore of revenue, what we have reported. How much of the revenue we have recognized but yet to be received from the insurer? Just want to understand the portion of the revenue coming from there.
I think, Sanket, it's a complicated question. There is multi-year policy, there are multi-year, you know, monthly mode policy, et cetera. Mohit can help you on that directionally. I think the point remains that it's not a large portion of the story and, you know, it's kind of growth is from last year to this year.
See, there was a cycle, there was a cycle which kind of started about October 2024. That cycle has run its course. Yes, you have the impact of one year, but that should not keep playing out forever. It should start clearing out now. As Sarbvir said, yeah, that we can explain that in a more closed setting.
Understood. That's it from my side. Thank you very much.
Thank you.
Thank you, Sanket. Thank you, Yashish, and the other management. With this, we now close the call and, if you have any further queries, you may please reach out to Industry Relations. Thank you so much.
Thank you, Mohit.