Shriram General Insurance Company plans re-entry in crop business

A month after South African financial services group Sanlam increased its stake in Shriram General Insurance Company (SGIC), SGIC said it is in the process of diversifying its product basket.

SGIC is all set to re-enter the crop business and also expand its presence in the non-motor segment to 15 per cent.

At present, the share of its motor business is around 91.5 per cent and non-motor contributes the remaining 8.5 per cent. It plans to increase the share of non-motor business to 15 per cent by 2026-27. 

“We want to go back to the crop business also, if it is based on our terms and conditions. If we get into the crop business, we can even achieve 15 per cent during the current year. In terms of health, we are taking baby steps,” said Anil Aggarwal, managing director (MD) and chief executive officer (CEO) of SGIC.

The company moved out of crop insurance business in 2015-16 owing to heavy losses. The current re-entry is mainly due to the government policy of capping losses in crop insurance. In the non-motor segment, it is also focusing on the small and medium enterprise (SME) segment like fire and engineering. 

“In 2024-25, we want to grow by 30 per cent and take the non-motor business to 10 per cent. Over a period of three years, we want to take it to 15 per cent,” Aggarwal added. 

Last month, private equity firm TPG Investments had completed its exit in SGIC by selling its stake to Sanlam, which was one of the major shareholders in these companies. Sanlam's economic shareholding in the company now comes to around 50.99 per cent.

On Wednesday, SGIC announced that its gross written premium (GWP) during Q4 FY24 increased by 30 per cent to Rs 876 crore, over the same period last year. 

For the financial year ended March 2024, the insurer witnessed a 34 per cent growth in GWP, surpassing the industry growth of 12.8 per cent. 

The company wrote 1.47 million policies in Q4 FY24 and earned a net profit of Rs 121 crore during the fourth quarter of FY24.

Profits rose 22 per cent year-on-year (Y-o-Y) at Rs 455 crore.

The company has settled 55,997 claims during Q4 FY24, compared to 42,442 in the year-ago period.

The solvency ratio was 4.02 as of March 2024 against the regulatory requirement margin of 1.5. The number of live policies has gone up from 5.29 million in FY23 to 6.25 million in FY24.

“The year gone by has been a milestone for our business as we recorded the highest ever growth since we began our operations in 2008. Our GWP rose to 34 per cent, exceeding the industry growth of 12.8 per cent. We expect the FY25 growth to be around 30 per cent,” Aggarwal added