Mobile wallet company Paytm announced a range of new partnerships with major Indian insurance companies to power digital premium payments for its more than 100 million users.
The Alibaba-backed eRetailer, which recently got licensed as a "payments bank" in India, said it is looking at processing over $1.53 billion in premium payments by the end of the fiscal year through its partnerships with three insurance companies.
"We are targeting to tie up with over 15 companies by the end of next quarter," said Nitin Misra, vice president of products at Paytm. "We will go live with HDFC Ergo, Religare Health Insurance and ICICI Prudential. It is an integration of the process where policyholders can log on to the app and pay premium using the Paytm wallet."
While the partnership is expected to help boost Paytm's transaction volume and revenues, it would essentially speed up payments processing and would "increase the renewal rate" for insurance companies, said Paytm Senior Vice President Kiran Vasireddy.
Paytm's move into the insurance payment sphere comes at a time when Indian insurance companies are increasingly investing in transacting through digital processes, such as mobile wallets. According to results from a Gartner study released Wednesday (Oct. 28), Indian insurance companies are expected to spend over $2.16 billion in the next year alone on IT products and services — marking a 9.6 percent annual increase. The spending predictions for insurance companies forecast an increase in internal and external IT, hardware and telecommunication expenditure.
“Our research shows that Indian insurers are prioritizing their technology investments for 2016 into digitalization, and particularly analytics capabilities,” said Derry Finkeldey, research director at Gartner. “They are primarily looking to digital to grow their businesses in the domestic market.”
In a bid to expand its business from being just a digital wallet for utility bills, Paytm is also working on tapping into the hyperlocal market with new partnerships with Zomato for food services and BookMyShow for events and movie tickets. The company said it hopes to derive about half of its revenue in 2016 from hyperlocal services.