We are looking at tying up with small finance banks: Manoj Jain

Interview with managing director, Shriram Life Insurance

Private life insurance company Shriram Life Insurance, which crossed Rs 1,000 crore of gross premium for 2015-16, is looking to expand its base in smaller towns. The company’s managing director Manoj Jain talks to M Saraswathy about the way forward.  Edited excerpts:

How was the performance on the premium front in FY16?

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We crossed premium of Rs 1,000 crore and touched Rs 1,020 crore of gross premium in FY16. We also had a healthy growth of 38 per cent in new business premium, collecting Rs 706 crore. Similarly, the annual premium equivalent grew 52 per cent to Rs 454 crore in FY16. This was in comparison to Rs 299 crore collected in 2014-15.

There are concerns that while new business premiums are growing, the number of policies is staying stagnant. Your view?

While there has been a flat growth in the number of policies among some players, we’ve seen a 40 per cent growth in the number of policies. For a company like us, which does not have a bank partner, this is good growth. Also, with respect to renewals, we grew 37 per cent in FY16 compared over FY15.

Did the tie-up with Telenor play a big role in new policy sales?

We had partnered with Telenor to offer free insurance to its customers. We have seen good success in it since we have been able to provide a cover to six million of Telenor subscribers. Since it was a simple product with a minimum premium of Rs 10,000, it was beneficial to customers. Overall, we have covered 14 million lives, of which six million came from Telenor and eight million came from micro-insurance and micro-finance customers.

Earlier, you had a big presence in south. Have you shifted focus to other parts of the country as well?

In the past three years, we have opened around 300 offices. These have been predominantly located in other parts of the country since we have already have good presence in the South. Earlier, the South accounted for 90 per cent of the business, which has now come down to 50 per cent. Every year, we plan to open 70-75 branches. This year, we will open branches in northern, eastern and western parts of the country.

Are you looking to tie up with any banks in the near future?

We do not have a bancassurance partner. We realised that we since we missed the bus in tying up with banks earlier, we should look at small finance banks. We have identified two of them.

Shriram Life has taken around three per cent stake in Ujjivan Financial Services and five per cent stake in Utkarsh Micro Finance. Since they will be getting into multiple corporate agency model to sell insurance products, they will also sell our products. This will give us a level-playing field.

Has your foreign partner raised its stake in the life insurance company?

We had applied for the stake hike of our foreign partner South-Africa based Sanlam from 26 per cent to 49 per cent. Currently, we are waiting for the approval from the Insurance Regulatory and Development Authority of India and the Competition Commission of India. After that, 23 per cent stake increase will be done in the life insurance and general insurance company.