Ah – financial markets: a place where buyers and sellers come together to nail each other to the wall.
Like a giant Thunderdome of capitalism, buyers buy because they think the value of a security is going to go up, and sellers sell because they think it’s going to go down. It’s “two people enter, one person leaves”… having got the better of the other.
At least, that’s the way it’s supposed to work. But, apparently, PolicyBazaar, an India-based online marketplace for all types of insurance (and our customer), did not get the memo.
No, our friends at PolicyBazaar seem to think that a marketplace for financial products is where buyers and sellers come together to have a giant tea party, where both parties hold hands, exchange goods for services, and magically find themselves enriched, and wiser, for having engaged in a transaction.
By leveraging analytics to create a more transparent marketplace, PolicyBazaar has delivered valuable insights to sellers, helping them enhance their offerings to provide better, more-competitive products that more people want to buy.
On the other side of the transaction, PolicyBazaar has leveraged analytics so that their service team can counsel buyers, helping ensure that they get the best policy for the best price.
And why do they do this? Are they working both sides of the street to get consulting fees from the sellers and tips for good service from the buyers?
No. They do not.
The reason is that they do make a set fee on what’s sold online. And, as it turns out, that’s a great model, because they sell a whole lot of insurance. In fact, PolicyBazaar has captured a 90 percent market share in insurance in India in just a few years.
In the end, the radical transparency embraced by PolicyBazaar ensures that buyers buy more and are more satisfied, and sellers have better products and sell more. And absolutely nobody gets nailed to the wall on the deal.
But what’s the fun in that?
In this episode of Radical Transparency, we talk to the architect behind PolicyBazaar, CTO Ashish Gupta. We also speak to Max Wolff, Chief Economist at The Phoenix Group, who talks through malevolent markets (used cars) and benevolent markets (launching smartphones) to explain where PolicyBazaar resides.
Wolff also discusses whether analytics-driven markets approach what has been only a theoretical construct – a perfect market outcome – and whether the PolicyBazaar model is original, sustainable, and ethical.
You can check out the current episode here.
About Radical Transparency
Radical Transparency shows how business decision-makers are using analytics to make unexpected discoveries that revolutionize companies, disrupt industries, and, sometimes, change the world. Radical Transparency combines storytelling with analysis, economics, and data science to highlight the big opportunities and the big mistakes uncovered by analytics in business.