Leading private sector insurer Reliance Life Insurance Company (RLIC) has recorded a four- fold jump in third quarter net profit to Rs 40 crore on the back of improved product portfolio and distribution base.
In the three-month period ended December 31, 2012, RLIC, part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital Ltd, registered a net profit of 40 per cent as against Rs 10 crore in the year-ago quarter.
Reliance Life's total premium (net of reinsurance) in the October-December quarter was Rs 930 crore, while the total funds under management stood at Rs 19,366 in the quarter ended December 31, 2012, an increase of 17 per cent over the corresponding quarter a year ago.
"A change in the product basket with a focus on traditional products, productive agents, customer centricity and use of enabling technologies helped us reap higher profit.
"Our number of policies have started growing... As long as we are selling more and more policies, we are confident that going forward our profits will continue to increase," Reliance Life Insurance CEO Anup Rau told PTI.
Reliance Life has tweaked its product basket, with 80 per cent of its business coming from traditional products and the rest 20 per cent from unit-linked products.
In the last six months, the company has launched three alternate distribution channels, Face-to-Face, Life Plaza and Career Agent, and hired over 5,000 people under the new sales formats, with a view to increase its reach and productivity.
Reliance Life Insurance is the only company among the top 10 private insurers which achieved higher profits without having a bank partner. The company has a distribution gap as it does not have any bancassurance.
Rau said, "Our focus continues to be medium and smaller towns and cities, addressing the under and uninsured opportunity. In spite of that, we have been able to increase our average ticket size to over Rs 15,000 in the third quarter from Rs 14,000 in Q2 FY'13".
With RLIC focusing on productivity, customer acquisition and retention, profitability and growth, the company aims at showing further improvement in profitability on the back of quality products and services.
Reliance Life Insurance recorded its first full-year net profit at Rs 373 crore for the fiscal ended March 31, 2012. It had sold over one million policies in 2011-12 and garnered a total premium of Rs 5,498 crore in that year.
Nippon Life, Asia's largest private life insurer and seventh biggest globally with an asset size of USD 650 billion, holds a 26 per cent stake in Reliance Life, which it had acquired for over Rs 3,000 crore.
Reliance Life was the country's seventh largest private life insurer in terms of total new business premium and sixth in terms of individual new business premium for the last fiscal ended March 31, 2012. At present, the company has a market share of 4.9 per cent of the private sector life insurance industry.