Life insurance more accessible with GST cut: Shriram Life Insurance CEO

The company's managing director and chief executive officer Casparus J H Kromhout talks to Shine Jacob about its future, the impact of recent regulatory decisions on business, and the new GST relief

Shriram Life Insurance, promoted by Shriram Group and Africa’s Sanlam Group, has set ambitious growth targets for FY30. The firm’s managing director and chief executive officer, Casparus J H Kromhout, talks to Shine Jacob in Chennai about its future, the impact of recent regulatory decisions on business, and the new goods and services tax (GST) relief for customers. Edited excerpts:

 

Is it true that the impact of Insurance Regulatory and Development Authority of India’s (Irdai’s) special surrender value (SSV) norms may dent your growth rate from an expected 30 per cent to around 20 per cent this year? Also, what will be the impact on margins? 

It does have a solvency impact, which may reflect in our growth rate. We have been able to mitigate it mostly by adjusting commissions where appropriate, and through technology and cost-efficiency measures. 

We will continue on our growth path, but because SSV affects solvency, we need to be more cautious about the pace of growth.  

Regarding the free-look cancellation facility and other key aspects, the regulator had warned you last week. 

During our last inspection three to four years ago, they had several observations, which we addressed immediately. Now, they have raised it formally, and we need to submit an action-taken report. 

What will be the impact of GST 2.0, which exempts individual life insurance premiums, versus the 18 per cent rate earlier? 

It’s a boost for the industry from the customer’s perspective, making insurance more accessible and affordable. We are very supportive, especially since we operate in a segment where every rupee counts for the customer. Considering the SSV impact and other factors, it’s difficult to predict precisely how it will settle down. 

However, it will support our growth aspirations. It’s very positive as it helps expand the market in a segment that really needs it.  

There were reports that the top four insurers reported a major drop across both retail and group segments in 2024-25 (FY25) versus 2023-24 (FY24). How do you assess this situation? 

Overall, there hasn’t been strong growth in the number of policies. To achieve insurance for all, we need strong growth in policy numbers. Our penetration is still low. For ‘Insurance for All’, the number of policies has to increase. 

The industry is moving towards higher premium sizes — the average is now ₹1.13 lakh, while ours is around ₹30,000. For true insurance inclusion, we need more affordable policies, and we are focusing on that.  

What is your FY30 target for new business and assets under management (AUM)? 

We have an aspirational vision for 2030 and are already ahead of the targets set in 2021-22. For a fivefold to sevenfold growth in new business premium, we needed around 27 per cent growth. 

In 2022-23 (FY23), we grew 24 per cent; FY24, around 39 per cent; and FY25, around 45 per cent. With roughly ₹1,300 crore now, our compound annual growth rate exceeds the required mark. We are targeting ₹3,000–3,500 crore by FY30, and this aspirational target is achievable at a 20 per cent growth rate. In terms of AUM, we have crossed ₹14,000 crore, and by FY30, we aim to reach ₹30,000 crore. 

How are you planning to improve your claim settlement ratio, as some companies even have 99.5 per cent and above?

 

Our claim settlement ratio is around 98.3 per cent. Companies with higher ratios typically have fewer fraud cases, better persistency, and higher premium sizes. In the lower segment, there is more risk of fraud — not by customers, but from external factors. We are targeting closer to 99 per cent.

 

Considering the segment we cover, it’s a small miracle that we are already at this level. We continue building trust with customers. To make this business work, we are improving backend technologies and bringing in innovations. Our focus remains on being the insurance provider for the masses, with a strong rural presence of 40 per cent, compared to the industry average of 20 per cent. 

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