PolicyBazaar is India’s largest online insurance marketplace. It has changed the way people buy insurance by comparing policies from multiple companies on a single platform. Whether it’s term plans, health insurance, motor insurance, travel insurance, or investment-linked products, PolicyBazaar helps customers compare features, prices, and benefits before buying.

But PolicyBazaar itself does not sell insurance. So how does it actually make money? Here’s a complete breakdown of its business model.

Understanding PolicyBazaar’s Core Business

PolicyBazaar operates as a digital insurance aggregator. It connects:

• Customers
• Insurance companies
• Agents and service providers

It offers:

• Policy comparison
• Premium quotes
• Online purchase
• Renewal reminders
• Claims assistance

The platform builds trust by offering transparency in a market that traditionally relied on offline agents.

Key Components of PolicyBazaar’s Business Model

a) Marketplace for Insurance Products

PolicyBazaar lists policies from more than 50 insurance companies across life, health, motor, and general insurance categories.

b) Quote Comparison Engine

Users can compare policies based on:

• Price
• Sum assured
• Coverage
• Add-ons
• Claim settlement ratios

This comparison tool is PolicyBazaar’s biggest value proposition.

c) Online Buying & Digital Paperwork

Customers can buy policies directly on the website or app without visiting an agent or bank.

d) Customer Data & Analytics

Because millions of users search on the platform, PolicyBazaar has deep insights into customer needs, which helps improve conversions.

How PolicyBazaar Actually Makes Money?

Here are the major revenue streams:

a) Commission from Insurance Companies (Primary Revenue Source)

Every time someone buys a policy through PolicyBazaar, the insurer pays a commission.

This is the company’s biggest source of income.

Commission rates vary by product:

• Term insurance: 10–15% of premium
• Health insurance: 15–25%
• Motor insurance: 10–15%
• ULIPs / investment plans: higher commissions

Because millions of policies are sold every year, commissions generate massive revenue.

b) Lead Generation Fees

Insurance companies pay PolicyBazaar for generating high-quality leads.
These leads come from users who:

• Compare policies
• Enter personal details
• Request quotes

This is especially valuable for companies selling term and health insurance.

c) Renewal Commissions

Many insurance policies renew every year.

PolicyBazaar earns:

• Renewal commission from health and motor insurance
• Repeat revenue for policies sold in previous years

This creates a stable income base.

d) Advertising & Sponsored Listings

Insurance companies pay for:

• Featured listings
• Sponsored results
• Banner placements
• High-visibility slots on search pages

Advertisers compete heavily for visibility during festive seasons and year-end tax planning months.

e) Cross-Selling Financial Products

PolicyBazaar also earns from products like:

• Loans
• Credit cards
• SIPs
• Investment plans

These categories bring extra commission from banks and financial institutions.

f) Insurance Advisory & Assisted Sales

A large portion of customers prefer help before buying.

PolicyBazaar earns money through:

• Call-centre assisted sales
• Video-based advisory
• POSP agents (trained insurance advisors)

Assisted sales improve conversion rates and increase commission revenue.

g) Corporate Partnerships

PolicyBazaar provides group insurance and financial wellness services to companies.

Revenue comes from:

• Group health insurance
• Employee term plans
• Wellness packages
• Consultation and data insights

Corporate deals are high-value and profitable.

h) Policy Renewal Services

Customers receive reminders and renewal support through the app or phone.

PolicyBazaar earns:

• Renewal commissions
• Processing charges (in certain cases)

Because millions of policies need yearly renewal, this becomes a reliable revenue stream.

i) PolicyBazaar App Ecosystem

The app includes:

• Claims support
• Document storage
• Premium calculators
• Consultation services

Extra services sometimes carry small fees or increase conversion, boosting overall revenue.

Why PolicyBazaar’s Business Model Works?

a) Transparent Comparison

Customers trust the platform because it shows unbiased comparisons.

b) Digital Convenience

Buying insurance online is faster, easier, and often cheaper.

c) Strong Brand Recognition

PolicyBazaar’s marketing and recall are extremely strong.

d) Insurance Demand Is Rising

India has low insurance penetration, so growth potential is huge.

e) Recurring Revenue

Health and motor renewals bring long-term repeat income.

f) Data Advantage

With millions of users, PolicyBazaar understands consumer behaviour better than most insurers.

Challenges PolicyBazaar Faces

Despite success, challenges remain:

• High competition from Acko, Coverfox, BankBazaar
• Regulatory restrictions on commission caps
• High customer acquisition costs
• Need to ensure unbiased recommendations
• Dependence on insurance partners for product supply
• Complex claim-handling experiences

Maintaining trust and delivering a smooth claims experience is crucial.

The Future of PolicyBazaar’s Growth

PolicyBazaar is focusing on:

• Expanding term and health insurance sales
• More offline service centres (phygital model)
• Improving claim support
• Building India’s largest insurance advisory network
• Entering micro-insurance and rural markets
• Selling more financial products
• Data-driven predictive insurance

As India becomes more digital, PolicyBazaar is well positioned to remain the largest online insurance marketplace.

Conclusion

PolicyBazaar makes money through insurance commissions, lead generation fees, renewal commissions, advertising revenue, advisory services, corporate partnerships, and cross-selling financial products. Its digital platform simplifies insurance buying, drives transparency, and creates a strong recurring revenue model. This combination makes PolicyBazaar one of India’s most successful fintech and insurtech companies.