A leading Indian insurance brand, with a national footprint across in-house and third-party agents and a fast-growing direct-to-consumer (D2C) digital channel, partnered with ShopSe to embed Instant Premium Financing, marketed to customers as Policy on EMI, into its policy checkout journey. Within two quarters of going live, the partner saw a step-change in how many customers who reached checkout actually completed their purchase, and in how much of that improvement came from fixing approvals rather than just adding a new payment button.

The core lever was ShopSe's multi-lender marketplace. Instead of routing every applicant to a single financier and accepting whatever that financier's risk appetite allowed, ShopSe cascades each eligible customer across a panel of banks and NBFCs in real time, inside one continuous journey. The result was a materially higher approval rate, a large lift in checkout conversion, and a financing option that worked identically for fresh policy purchases and for annual renewals, the two use cases with very different buyer psychology.

About the Partner

The partner is a leading Indian insurer offering health and allied insurance products through two primary distribution channels:

• Agency channel: a large network of individual agents and point-of-sale personnel who originate both fresh policies and renewal conversations, typically in person or over a call.

• D2C channel: the insurer's own website and app, where customers research, compare, and buy policies with no agent involved.

Annual premiums for the partner's core products range from a few thousand rupees for basic individual cover to well over Rs. 50,000 for high sum-insured family floater and top-up plans: precisely the ticket sizes where asking a customer to pay the full premium in one shot creates the most friction.

The Challenge

Health insurance in India is sold almost entirely as an annual, lump-sum premium. That structure creates two related problems:

• Fresh sales friction: a customer evaluating a large sum-insured or multi-year policy sees a big number at checkout and defers the decision, the single biggest reason for cart abandonment on higher-ticket plans.

• Renewal drop-off: policyholders who are happy with their cover still lapse at renewal simply because the once-a-year lump sum is a harder ask than a monthly outflow, especially when it coincides with other annual expenses.

The partner had experimented with financing through a single NBFC tie-up before ShopSe, but approval rates were low enough that the option barely moved conversion. Agents stopped offering it because too many customers were declined after going through the effort of applying, which hurt trust more than it helped.

What Is Premium Financing? How Instant Premium Finance Works

Insurance premium financing (also called premium financing, or Policy on EMI) lets a policyholder pay their annual premium in monthly instalments instead of one lump sum, without changing the policy itself. A financing partner pays the full premium to the insurer upfront at policy issuance, so the insurer's economics, underwriting, and cash flow are unaffected, while the customer repays that amount over a short tenure, typically 3 to 12 months, often via a No-Cost EMI where the interest is absorbed by the brand or distributor rather than charged to the customer.

On ShopSe's platform, the mechanics behind an Instant Premium Financing transaction are:

1. Selection: the customer picks a fresh policy or a renewal, on the insurer's website/app or through an agent, and reaches the payment step.

2. Instant Premium Finance as a payment mode: alongside card, net-banking, and UPI, the customer sees an EMI option powered by ShopSe.

3. Real-time eligibility: ShopSe runs a light-weight, near-instant eligibility check the moment the customer opts in, with no paperwork and no branch visit.

4. Multi-lender waterfall: behind a single API and a single customer-facing journey, ShopSe simultaneously evaluates the applicant against a panel of PA banks and NBFCs. If one lender declines, the application cascades automatically to the next, invisibly to the customer.

5. Digital KYC and e-mandate: on approval, KYC, consent, and the repayment mandate are completed digitally, typically in under two minutes.

6. Instant disbursal: the approved lender pays the full premium to the insurer immediately, and the policy is issued or renewed without waiting on the customer's instalments.

7. EMI repayment: the customer repays the lender in fixed monthly instalments over the chosen tenure.

The key design point is that the customer never needs to know which lender is underwriting them, or how many lenders were tried behind the scenes. They experience one Instant Premium Finance journey and one outcome: approved, or not.

The ShopSe Solution

A Single Unified Journey

Rather than integrating each lender separately, each with its own redirect, its own UI, and its own rejection message, the partner integrated once with ShopSe. That one integration exposed every lender on ShopSe's panel through a single SDK, usable across the D2C web checkout, the mobile app, and agent-facing tools, with a consistent look and feel throughout.

Multi-Lender Marketplace and the Waterfall Effect

This was the single biggest driver of impact. Under the previous single-NBFC setup, roughly half of applicants were approved. ShopSe's panel, a mix of PA (bank) partners and NBFCs, cascades each decline to the next lender automatically, lifting cumulative approval into the high 80s without the customer filling anything out twice.

• Single NBFC (pre-ShopSe): 54% cumulative approval

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• PA Bank 1: 68% cumulative approval

• PA Bank 2: 78% cumulative approval

• NBFC 2: 85% cumulative approval

• NBFC 3 (full waterfall): 89% cumulative approval

The D2C Channel

On the partner's own website and app, Instant Premium Financing appears as a self-serve payment option. Customers complete OTP-based eligibility and e-KYC entirely on their own device, with no agent involved, which suits the digitally native, comparison-shopping D2C buyer well.

The Agency Channel

For agent-originated sales, the agent shares a payment link or QR code rather than collecting sensitive financial data directly. The customer completes eligibility, KYC, and the mandate on their own phone. This mattered most for high-premium fresh policies, where agents had previously lost sales to "I need to think about the full amount." A financing option they could offer on the spot changed that conversation.

Indexed financed-policy volume growth by channel, over four quarters post launch:

• Q1: Agency 1.0x, D2C 1.0x

• Q2: Agency 1.3x, D2C 1.6x

• Q3: Agency 1.7x, D2C 2.3x

• Q4: Agency 2.0x, D2C 3.1x

Fresh Policies vs. Renewals

The two use cases behave differently, and both mattered. Renewals started as the larger share of financed premium (existing policyholders already trust the brand and are the fastest to adopt a new payment mode), while fresh policies grew fastest, as financing removed the single biggest objection on higher sum-insured, family floater, and multi-year plans.

Share of financed premium value by quarter:

• Q1: Renewals 70%, Fresh 30%

• Q2: Renewals 66%, Fresh 34%

• Q3: Renewals 61%, Fresh 39%

• Q4: Renewals 57%, Fresh 43%

Results and Impact

Across the metrics that mattered most to the partner (checkout conversion, approval rate, and speed), Instant Premium Financing produced a step-change rather than an incremental gain:

• Premium checkout conversion rate: from 38% to 61% (+23 points)

• Lender approval rate: from 54% on a single NBFC to 89% on the full multi-lender waterfall

• Decisioning time: from hours of manual review to under 90 seconds

• Financing at checkout: from none (full lump-sum only) to 3 / 6 / 9 / 12-month EMI, including No-Cost EMI

• Channels live on Instant Premium Finance: D2C web/app plus Agency point-of-sale

• Average financed ticket size: approximately Rs. 18,500 per policy

Financed premium value grew steadily through the first year post go-live: indexed at 0.8x in month one, 1.4x by month three, 2.9x by month six, 4.6x by month nine, and 6.6x by month twelve.

Beyond the headline numbers, the partner's teams reported two second-order effects worth calling out. Agents who had previously stopped mentioning financing, after being burned by low approval rates on the old single-lender setup, started offering it proactively again once approval odds crossed into the high 80s. And customer support saw a meaningful drop in renewal-related payment-failure tickets, since a declined card or an insufficient lump sum no longer meant a lapsed policy.

Why This Matters for Insurance Stakeholders

For a Chief Distribution Officer, a Head of Bancassurance, or a Chief Product Officer evaluating insurance premium financing, the questions rarely stop at customer experience. They extend to persistency, underwriting integrity, agent economics, and whether a new payment rail introduces regulatory or balance-sheet risk. Instant Premium Finance is built to answer all four directly:

• Persistency and renewal retention: 13th-month persistency is one of the most closely tracked KPIs in Indian life and health insurance. Converting a lump-sum renewal into an affordable monthly instalment targets the single biggest cause of policy lapse: the customer's inability, or unwillingness, to pay the full premium in one go.

• No impact on underwriting or loss ratio: because the insurer is paid the full premium at issuance regardless of how the customer repays, premium financing sits outside the insurance contract itself. It does not touch claims experience, reserving, or the combined ratio. Credit risk on the EMI stays with the financing partner's lender panel, not the insurer.

• Agent retention and productivity: agent attrition is a persistent challenge in the agency channel, and commission-earning agents are quick to abandon tools that create more customer friction than they resolve. A financing option with a high approval rate gives agents something they can offer with confidence on the first conversation, rather than a fallback that often ends in an awkward decline.

• No product refiling required: because the EMI is a separate lending transaction running alongside the policy, rather than a feature of the policy itself, product, actuarial, and compliance teams are generally not required to change policy wording or pricing to offer it. Confirm specifics with your own compliance team for your product lines.

• Cross-sell and up-sell headroom: affordability often caps the sum insured a customer is willing to buy upfront. Spreading the premium over months makes it easier for distribution teams to sell higher sum-insured plans, top-up covers, and family floaters without discounting the premium itself.

"The single biggest unlock wasn't just offering EMI at checkout. It was making sure almost every eligible customer actually got approved by someone on the panel. Moving from one lender to a waterfall is what let our agents start recommending it again."

Product & Growth leadership, partner insurance brand

Why Instant Premium Financing Works

• Insurer economics stay unaffected: the partner is paid the full premium at issuance regardless of the customer's EMI tenure, so premium financing is purely a conversion and retention lever, not a credit-risk exposure for the insurer.

• Approval rate, not just EMI availability, drives conversion: a financing option that declines half of applicants erodes trust, while a multi-lender waterfall is what actually moves the conversion needle.

• One journey, many lenders: a single integration and a single customer-facing flow made it possible to add and rebalance lenders over time without touching the checkout experience.

• The same rail serves two very different buying moments: fresh acquisition, where financing overcomes sticker shock, and renewal, where it prevents lapses, with no separate product build required for either.

Frequently Asked Questions

What is premium financing in insurance? Premium financing, also called insurance premium financing, lets a policyholder pay their annual premium through a short-term loan instead of a single lump sum. The lender pays the insurer the full premium upfront, and the customer repays the loan in monthly instalments.

How does Instant Premium Financing work at checkout? At the payment step, the customer selects Instant Premium Finance instead of paying by card or net banking. ShopSe runs a real-time eligibility check, routes the application across a panel of lenders, completes digital KYC, and disburses the premium to the insurer, typically within two minutes.

Is Policy on EMI the same thing as premium financing? Yes. Policy on EMI is the customer-facing name for converting an annual insurance premium into monthly instalments through a financing partner. Insurance premium financing and Instant Premium Financing describe the same underlying mechanism.

Does premium financing affect an insurer's underwriting or loss ratio? No. The insurer receives the full premium at policy issuance regardless of how the customer repays, so the arrangement does not affect underwriting, claims, reserving, or loss ratio. Credit risk on the EMI sits with the financing partner's lender panel, not the insurer.

Can Instant Premium Finance be offered through both agents and a D2C website? Yes. A single integration typically supports both channels: a self-serve EMI option on the insurer's own website and app for D2C customers, and a payment link or QR code that agents can share for point-of-sale, agent-assisted sales.

Does premium financing work for policy renewals, not just fresh purchases? Yes. On renewals, it reduces lapses caused by lump-sum affordability. On fresh policies, it removes the sticker-shock objection that often stalls higher sum-insured, multi-year, or family floater purchases.

About ShopSe

ShopSe is a Mumbai-based Lending Service Provider (LSP) that connects merchants and brands, including insurers, travel platforms, and retailers, with a panel of banks and NBFCs through a single embedded EMI/BNPL financing layer. Partners integrate once and get Instant Premium Financing, or point-of-sale EMI more broadly, across web, app, and agent-assisted channels, with multi-lender approval routing built in.