Shriram Life Insurance, co-promoted by India’s Shriram Group and Africa’s Sanlam Group, doubled its individual policy sales to 283,000 in the first half of the current fiscal. In an interview with Narayanan V, managing director and CEO Casparus JH Kromhout discusses the company’s recent performance and how it is creating insurance awareness. Excerpts:
Tell us about the performance in H1FY25.
It has been the best half-year performance in Shriram Life’s history. Our retail new business premium income grew 57% to ₹542 crore, reflecting investments and efforts made over the past 18-24 months to build capacity. Our renewal premiums increased by 19% year-on-year to ₹715 crore. We believe this marks the start of a sustained momentum.
What propelled this growth in premiums?
Our focus as a life insurance company is on serving low- and middle-income segments, especially in rural areas, which aligns with the DNA of Shriram Group. Our average premium is ₹18,000, compared with ₹80,000-₹100,000 in the industry. For a family with an annual income of ₹400,000-500,000, we offer affordable insurance solutions. The 100% growth in policies sold in H1FY25 was driven by our ability to reach more families who need coverage.
Has life insurance awareness reached low- and middle-income segments, especially in rural areas?
The awareness remains very low. Most of the individuals and families we reach are first-time insurance buyers. Our customers seek value for money and want to see returns for the premiums they pay. It’s important to convince them that term plans offer coverage for their families, even if they don’t get return on the premium. That’s how term plans work. This concept is difficult for many to digest, so educating them about life insurance is crucial. We are working hard to create awareness, with our agents reaching deep into rural areas to drive this message.
What are the biggest challenges in building trust with low- and middle-income customers?
We cross-sell life insurance to Shriram Finance customers, such as drivers and cleaners, many of whom are first-time buyers of used trucks. This has allowed us to scale volumes in this segment. A key focus has been prioritising the claim settlement process. It’s one thing to tell people about life insurance, but showing them how it delivers value is crucial. We have settled 30,884 claims in H1FY25, compared with 22,535 claims in the year-ago period. Our individual claim settlement ratio is 98%, and for group business, it is nearly 100%. As claims are paid, communities see the real value of life insurance, leading to greater acceptance among families.
Why don’t you offer savings or guaranteed return products?
The industry focuses on products that offer guaranteed returns to higher-income segments, which is a very competitive space. In our segment, needs are different. It’s not just about returns; life insurance’s primary purpose is to provide family coverage. Our customers — often farmers and small business owners — may miss renewal payments when they need funds for their businesses. We are developing solutions tailored to support these customers, rather than just offering standard products sold across the industry.
Will the recent surrender value guidelines impact you?
The guidelines do offer better value to customers, but we see a small risk. Providing higher surrender values might motivate or incentivise more customers to surrender their policies early. This is something we’ll need to monitor in the short term. While there could be some negative impacts initially, in the long term, it is beneficial for the industry to offer greater value to customers on all fronts.
