Shriram General Insurance plans aggressive rural push, eyes 16% income

Shriram General Insurance, which nets over 90 per cent of its premium income from the motor segment, is planning to wean itself away from this heavy dependence by aggressively going rural from where it eyes at least 16 per cent income by FY2024-25.

Shriram Group is expecting around Rs 750 crore profit this fiscal, up from Rs 700 crore last year, as its expects gross written premium income to touch Rs 2,200-2,300 crore this year.

It has set a target of growing the assets under its management to Rs 15,000 crore by FY25 from Rs 10,000 crore now.

Shriram General Insurance is the seventh largest private sector general insurer in the motor segment which fetches over 90 per cent of its AUM now and even for the general insurance industry motor is the bread-and-butter.

"We are targetting a gross written premium of Rs 550 crore or 16 per cent of the total premium income from rural markets by FY25. Rural sales were only Rs 90 crore in FY21 and is likely to touch Rs 175 crore this fiscal," Anil Aggarwal, managing director and chief executive of Shriram General Insurance told PTI.

The company expects rural expansion to talukas, where insurance penetration is miniscule, driving its overall growth strategy during between now and FY25 and as part of this, it will recruit at least 1,500 employees to make its products available across 25,000 points of sales over the next three years, Aggarwal said.

As part of the rural push, it plans to target 600 talukas in the next one year where population is under 1 lakh and hopes to sell policies with comparatively low sum assured, he said.

For distribution, it plans to use electronic kiosks of the state governments apart from employing sub-dealers, life insurance agents, common service centres, bank branches and other informal methods, he said.

The Chennai-based Shriram Group firm has closed the first half of the fiscal with around Rs 800 crore in premium income and expects it to nearly treble in the second half on the back of the better-than-expected economic recovery, Aggarwal said.

He said Shriram General was the first private sector general insurer to underwrite only motor premia when it began 13 years ago.

Shriram General is a joint venture between the Shriram Capital, the holding company of Shriram Group, and the South African financial services group Sanlam and was set up in 2009. Today it's the seventh largest motor insurer in the private sector.

During the first half, over 43 per cent of total motor cover sales, massively down from 80 per cent a few years back, came from the group firm Shriram Transport Finance, the largest standalone truck financier in the country. It services over 40-lakh outstanding policies through 200 branches across 24 states.