Jio Financial to enter insurance, plans global tie-ups

“JFSL will enter the insurance segment to offer simple, yet smart, life-, general- and health-insurance products through a seamless digital interface, potentially partnering with global players,” Ambani said at RIL’s virtual annual general meeting.

Although Jio Financial has been seen as a disruptor in the financial-services space given Reliance Jio Infocomm Ltd’s runaway success in telecom, many believe it wouldn’t be easy to replicate that success in insurance and other financial-sector products. That is because the financial-services space is more tightly regulated and established entities such as banks, non-banks and insurance firms have built their businesses over years.

Still, Jio’s entry could lead to greater penetration of insurance in India. Insurance penetration, or the ratio of total insurance premiums to gross domestic product (GDP), in the country rose from 2.7% around the turn of the millennium to 4.2% in 2020, and remained the same in 2021, according to the Economic Survey 2022-23.

The company, Ambani said, will use predictive data analytics to co-create contextual products with partners. Last October, RIL announced the demerger of its financial-services business. As part of the demerger, each RIL shareholder received shares in Jio Financial on a 1:1 basis in July.

So far, Jio has tied up with BlackRock, the US manager of $11 trillion in assets for an asset management venture in India.

“JFSL has been conceptualized to fill a critical gap in the financial-services needs of a large section of the Indian economy, mainly in the informal and underserved sectors in rural, semi-urban, and urban areas,” said Ambani.

He said for tens of thousands of small businesses, merchants, and self-employed entrepreneurs, the ease of doing business must mean ease in borrowing, investments, and payment solutions. Jio Financial, he said, plans to democratize financial services for 1.42 billion Indians, giving them access to simple, affordable, innovative, and intuitive products and services. “In payments, JFSL will consolidate its payments infrastructure with a ubiquitous offering for both consumers and merchants, further driving digital payment adoption for India,” he said.

Ambani said Jio Financial products will not just compete with current industry benchmarks but also explore features such as blockchain-based platforms and central bank digital currency (CBDC).

“They will adhere to the highest standards of security, regulatory norms, and ensure protection of customer transaction data at all times,” he said.

RIL has capitalized Jio Financial with a net worth of ₹1.2 trillion to create one of the world’s highest capitalized financial-service platforms at inception, he said, adding that it has a strong board, led by veteran banker K.V. Kamath.

“A highly motivated leadership team is being built with a combination of financial industry experts and young leaders who are eager to take on big challenges,” Ambani said.

Updated: 29 Aug 2023, 12:35 AM IST