Will PB Fintech's healthcare push help Policybazaar?

PB Fintech's healthcare unit, PB Health, has set up two hospitals in Delhi-NCR and is partnering with select operators to build a larger network of medical facilities under the PB Care Plus brand.

PB Health reportedly plans to invest Rs 10,000 crore to create this ecosystem over the next few years. An early aim is to hit an annual revenue run rate of around Rs 500 crore and break even by March 2027, group CEO and co-founder Yashish Dahiya told analysts recently. The healthcare push is expected to complement PB Fintech's core business, insurance platform Policybazaar. Customers who buy insurance on Policybazaar could also use PB Health hospitals and affiliated facilities, giving the company a presence in both insurance distribution and the healthcare services against which claims are ultimately made.

This bet is unfolding just as PB Fintech's insurance distribution business under Policybazaar faces a new regulatory challenge. The IRDAI's proposed changes to broker commissions could put pressure on this profitable unit's economics. Some industry executives believe that PB Fintech may feel compelled to prioritise its core insurance business and scale back investments in other, longer-term initiatives. Regulation is only one uncertainty. Hospitals are capital-intensive businesses, and PB Health will have to compete with corporate hospital chains while attracting good doctors and maintaining the quality of treatment.