LUNCH WITH BS: Shikha Sharma

Life is beautiful

The head of ICICI-Pru, India's largest private insurance firm, has a great work-life balance but gets fazed when asked about heading ICICI Bank.

Her company has been the market leader in the private insurance space since the time the industry was thrown open six years back. And it will probably be one of the more direct insurance plays that Indian investors will get a taste of, since the insurance and asset management businesses of ICICI Bank have been spun off into a separate entity. If the market gives the IPO, scheduled for 2007, a thumbs up, the credit will go almost entirely to ICICI Prudential's down-to-earth and unassuming managing director Shikha Sharma who's built the business from scratch. This is not the first time we've invited Sharma to Lunch with BS. But she says she quite likes the idea and so we decide to meet at the Sea Lounge in the Taj Mahal. We find ourselves a table by the window looking out at the colourful boats in the harbour, a pretty sight, writes Shobhana Subramanian.

About four years back Sharma decided to take up light classical music mainly to encourage her two children to learn. She gave it up for a while but says she's looking forward to getting back to it. But it's not to de-stress that she's doing this. "De-stressing is a state of mind and I find I can switch off from work very easily," she says, adding that relaxing with her teenage children helps. You can afford to relax, I say, ICICI Prudential has done well for itself. But Sharma's not ready to drop the pace just yet. "We need a bigger footprint. We have 500 branches and are in 400 locations today, but we're looking to double the number of branches in the next few years," she says.

We don't need to really pore over the menu because Sharma's decided she wants to have some chaat. Recollecting how she used to come to the Taj with her family many years back, Sharma says she'll have the dahi bata puri, a favourite. I decide to keep her company with some sev puri which is really very nice. So, is ICICI going to be doing things very differently in the next phase of growth? Not really, she says, we'll continue to use the same channels to sell and also similar products though, of course, there will be continuous innovation and more inroads into the health and pension spaces.

Sharma believes ULIPs will continue to be the mainstay of insurance products in India as they are in much of Asia and even in countries like the UK. That's because people still prefer savings schemes as opposed to protection products "" almost 80 per cent of products sold in India are ULIPs. "It's possibly because ULIPs are more transparent and flexible than typical endowment products. In fact, we're quite surprised that ULIPs have become so popular," she says.

The starters are quite filling so we decide to share a platter of fish for the main course""an assortment of prawn, salmon and pomfret with pineapple in a sauce. Why is it that mutual funds haven't been as successful given that the products are similar and that they've been around for much longer, I ask? Sharma thinks it's because the industry, at least initially, focused on the wealthy rather than the masses. Besides, they positioned the schemes more as short-term products and also focused both on companies and individuals. The split in the focus, Sharma feels, might not have worked, though she does point out that the markets being targeted are slightly different.

"Everyone's been surprised by the growth of the insurance sector and the rate of acceptance of the private sector. I think consumers understand that ULIPs are designed for long-term sustainable retains and that there are advantages of systematic investing. That's possibly why the private sector has 30 per cent of a growing market in the sixth year," she observes. Has there been competition for participating in the savings of an individual? There has been, she says, adding that it's possible insurance has managed to attract some savings that might have gone into other products.

Her life has been so busy of late "" travelling, catching up with the housework and spending time with her children that Sharma hasn't managed to read the romantic novels she loves. She doesn't like to cook but she's managed to catch up with most of the latest films. She didn't like Nishabd "" felt it was too radical to relate to "" but loved Saif's performance in Omkara and found Guru interesting. "I'm waiting for India to win an Oscar, it will happen" she says, adding that Rang De Basanti might have made it except for the negative messaging. Sharma's also all for more low-budget films like Iqbal, wishing producers had more money to push these films.

Is it a good idea, I ask, to sell only through the banking channel as some players are planning to do? Cross selling of products through banks is a good strategy, she points out, because consumers will trust the bank they deal, with but it's hard to become a significant player, if you limit yourself to one channel. Sharma adds that since both agents and banks are equally cost-effective it makes sense to have both channels, which she believes, are going to remain the main distribution channels for some time. "For independent financial advisors to play a bigger role, you need a more mature market," she points out.

We skip dessert, opting for some coffee instead and talk about the phenomenal pace of the industry's growth ""100 per cent in 2006-07. I ask whether it's a good time to unlock the value of the business. The value has certainly not been maximised, says Sharma, but since this is a business that needs a lot of capital, she believes it makes sense to unlock some of the value to get capital to put back into the business.

What is the one big thing you'll do if you become chairperson of ICICI Bank, I ask? Sharma's a little taken aback. "It's a hypothetical question, really, I think Mr Kamath will be here for quite a while longer," she says, recovering quickly. "But I think ICICI Bank's done almost all things right and whoever's going to eventually succeed Kamath is going to have very big shoes to fill. Their task is going to be to carry the legacy forward. And I don't see the need for whoever's going to be there, to really make any dramatic changes." Touche.