Aim is to double individual first-year premiums in 3 years: ABSLI CEO

We were focused on strengthening our margins and our persistency figures over the past three years, said Kamlesh Rao, MD & CEO of Aditya Birla Sun Life

Aditya Birla Sun Life Insurance has rationalised agent count to improve efficiency and productivity with nearly 39 per cent of business now coming from proprietary channels and 61 per cent from bancassurance, says Kamlesh Rao, managing director (MD) & chief executive officer (CEO), in an interview with Aathira Varier in Mumbai. Edited excerpts:

How was the company's performance in FY24 and what are your plans?

We were focused on strengthening our margins and persistency figures over the past three years. Our 13th month persistency is now at 87 per cent, our 61st month persistency is 62 per cent, which is better than perhaps some of the listed players. Having achieved our trajectory goals earlier than anticipated, we are now poised to shift our focus towards growth, aiming to further enhance our position in the market. We would be happier if we could double our premium numbers over the next three years. Currently, our individual first premium would be in the Rs 3,000-Rs 3,200-crore range. We want to take that to about Rs 6,000 crore in three years.

What are the plans for your distribution channels to achieve this target?

We have nearly 39 per cent of our business from proprietary channels and around 61 per cent comes from bancassurance.  Now, we have three new banks and are also investing in our direct and agency business. We will keep the ratio of business around similar levels as we grow over the next three years. The agency business also needs to grow, so we are investing in our agency business right now. Three years ago, contribution from our direct marketing business used to be about 2 per cent to 3 per cent. This year, it will be roughly about 7 per cent to 8 per cent of our business. We want to take that to 14-15 per cent in the next three years. As we wanted to expand our business, we set out for new banks and added three new banks. Of this, IDFC First Bank and Bank of Maharashtra have started business. We recently also signed a partnership with Axis Bank and business will start from April. In terms of distribution channels, we have expanded. In the last three years, we didn't put any incremental capacity in the agency. This is because we were adding capacity in some of the new bank tie-ups. This year, we have put more capacity on our direct business. 

What are your expansion plans?

We have about 370 branches of our own across the country. We added about 100 branches last year. We will add another 50-70 next year under the same plan.

What is your view on Insurance Regulatory and Development Authority of India’s (Irdai's) proposal to increase life insurance coverage in gram panchayats across the country?

I think if you look at the regulator and the chairman specifically, he has a very clear focus that insurance penetration in this country needs to increase. A lot of work is happening in that area. We are on the verge of creating a product, which will be cutting across health, life and property — Bima Vistaar. I think it is a great move. Insurance companies are also putting their heads together to see what they can do to get more rural, in line with the regulation.