Reliance Life Insurance has sold more than 6 million insurance policies in less than five years. The company is looking at more than tripling its premium collections, to Rs 20,000 crore, by 2011-2012 and hire nearly 30,000 people as agents. Malay Ghosh, president & executive director of the company, spoke to FE?s Tanu Pandey about the company’s future growth plans. Excerpts:

What are the future plans of Reliance Life Insurance?

The company has moved to a different growth orbit by selling 6 million policies in such a short span of time. Of the policies, 2.3 million were sold in the last fiscal. The company ended 2009-10 with business premium, including renewals, of over Rs 6,605 crore and is bullish on business growth. We have set a target of Rs 10,000 crore premium by the end of March 31, 2011.

What are your AUM targets in the coming years?

We are aiming to treble our asset under management to Rs 40,000 crore by 2013 from the current Rs 13,677 crore. Reliance Life targets to double its overall market share to 10% from the present 5.5%.

How do you see Irda?s Ulip-related move impacting your product portfolio?

Yes, we had seen a significant growth on the back of Ulips and I think Ulips are still one of the major growth drivers for us. The new norms on Ulips will push their sales as they will be more saleable than earlier. I feel the impact of the new guidelines are good for customers in terms of lower charges and guaranteed returns among others. So far as our strategy is concerned, we have planned to change our product portfolio in this fiscal to 60:40 for Ulips and traditional insurance products.

Has the launch of a traditional product and a pension plan with guaranteed returns paid off?

We have seen some positive signals in the market in terms of changing trends of selling and buying of insurance products. In April-June quarter, we have noticed almost a 50:50 sales trend between Ulips and non-Ulips. In the first three months of this fiscal, we have collected Rs 603 crore of premium and this is a 20% growth over what we did last year.

Where do you see the booming health insurance sector heading and what are your plans for this segment?

We are very hopeful about the health insurance market and are focusing on this segment. There is a huge growth potential and a sizeable growth opportunity in the health insurance space. Currently, we have a plan in this category called Reliance Health and Wealth. Now, we are strengthening our health insurance portfolio with innovative products.

What are your plans for bancassurance business?

We have a gap so far as bancassurance is concerned. Actually there is always an advantage when you have a bank to distribute insurance products. An open architecture model in bancassurance will work well for us as well. Look, we do not have a bank but still Reliance Life Insurance has a strong agency network with about 2 lakh advisors. We are planning to hire 1.5 lakh more in 2010-11.

When do you expect break-even in your business and what are your plans for capital infusion this fiscal?

We expect to break even in the next fiscal. However, we are trying our best to do it as early as possible. So far, as capital infusion in concerned, we require Rs 250 crore in 2010-11, of which Rs 70 crore has already been infused.

Reliance Life plans to reduce its expense ratio to 14% by 2012 from 30% now. How will you do that?

Look, expense management and persistence are going to be key focus areas for us and we plan to reduce our expense ratio in the next three years, in line with the best global practices. Currently, private insurers are operating at a relatively high expense ratio, which affected their bottom lines. Over the last few quarters, these insurers are trying hard to bring this ratio down to become profitable or sustain profitability.

There has been something in the market about Reliance Life?s plans for IPO and stake sale. Could you update us on the both?

We are looking for a strategic investor and also keen to come out with an initial public offer (IPO) once the guidelines are put in place by sectoral regulator Irda and market watchdog Sebi. We are in talks with foreign players to sell a 10 to 15% stake. It would be 10-15% strategic disinvestment and remaining 10% through the IPO.