I am not in the race for market share, says SGIC's Anil Kumar Aggarwal

"The main focus for the coming years will include the recruitment of the manpower and opening of branches," said Aggarwal

Early this year, US private equity firm KKR became a part of Shriram General Insurance Company by acquiring a 9.9 per cent stake in it. The company’s Managing Director and Chief Executive Officer Anil Kumar Aggarwal talks about its five-year roadmap, changes post KKR's entry, growth strategy and how IRDA’s plans like Bima Sugam are going to change the sector in an exclusive interview with Shine Jacob. Edited excerpts:

What are the changes that KKR investment has brought to the functioning of Shriram General Insurance? What is your growth roadmap?

KKR is a big investment for Shriram General Insurance. I will say, we are working together very efficiently. They have shown confidence in our company, because we are a motor insurance company and have been continuously making profits over a period of 13 years, throughout the lifecycle.

We have a 5 year plan as far our growth in concerned. Last year, our gross written premium was Rs 1,700 crore only. Within 5 years, it will be around Rs 3,500-4,000 crore. During the current year, it appears to be around Rs 2,400 crore. We are also in the process of hiring 1,000 employees during the current financial year – out of which 600 have already been recruited. In March 2022, we had around 2,800 employees. We are also adding 50 more branches to our existing 223 branches.

The main focus for the coming years will include the recruitment of the manpower and opening of branches.

During the last financial year, your market share in the non-life insurance space declined and gross direct premium underwritten also saw a dip of 18 per cent. Is this a cause for concern?

I am not into the race for market share at all. Last financial year was one of the special cases because of Covid and for two years continuously there was a degrowth. During the first 6 months of the current financial year, we saw premium growth of 27 per cent with the industry growing at 15.2 per cent. We expect it to maintain it at around 25 per cent for the entire financial year.

Why are you not focused on market share?

For us, profitable growth is very important. We will never grow to gain market share. We are the best when it comes to return on capital. We have invested Rs 259 crore in equity and returned Rs 2,143 crore in dividends to the promoters. That is 8.27 times returns, which is the highest in the industry when the nearest competition has returned just 2.32 times. And most important, we maintain the highest solvency ratio in the industry.

What is your strategy on the health portfolio, where you have products like Shri Criti Care and Shri Hospital Daily Cash?

Frankly, we never wanted to be in health. Because of Covid, we just took baby steps to start with the benefit policies. And we don't have an aggressive plan for that. The plan is to slowly sell those policies to our existing customers. I don't think we are expecting a huge premium from that.

Going forward we will focus on reducing the dependency on the motor business. At present, the motor business has become just like a non-motor design, where discounts and payouts are very high. Now, we are looking to increase the share of the non-motor business.

Our market share in the motor segment is 8 per cent, among private players. We are doing everything online. Right from the issuance of the policy till the settlement of the claim, everything is paperless. We are making the 50,000 agents associated with us more confident. Earlier, we took more than 35 days for commercial settlement claims, whether it was a small claim or a big claim, including total loss claims. Now, this has come down to 17 days from the date of the accident.

IRDA is working on Bima Sugam, a direct-to-customer platform, where insurers will sell insurance products to customers online. How will this change the industry dynamics?

Bima Sugam will be a game changer. I think brokers, aggregators and consolidators may suffer because of this. They have created a big infrastructure. Now, they are saying everything will be linked with the KYC and if any customer wants to see the premium of a new vehicle, he can check the premium from Shriram General Insurance Company directly, he can check the premium with my agent, he can check the premium with my broker, and he can check the premium of other three or four insurance companies, whatever you want to select.

So, no doubt my premium will definitely be cheaper than the broker's premium. I think it will be a big game-changer for the end user and the company will also get the advantage.