Shriram Life Insurance (SLIC), a part of the Shriram Group, is banking on efficient use of capital and low cost of operations...
Shriram Life Insurance (SLIC), a part of the Shriram Group, is banking on efficient use of capital and low cost of operations to aid its expansion plans. In an interaction with BV Mahalakshmi, Manoj Kumar Jain, CEO & wholetime director, says FDI will give a much-needed boost to the industry in setting up base in rural India. Excerpts:
What are your projections for this year?
As of January end, we grew at 26% against the private industry’s growth of 19%. We expect to close the year with 25% growth and expect to post a gross business premium of about R750 crore. We believe in catering to the aam-aadmi segment and reach out to them through our multi-channel approach. We stand in the eighth position in the private insurance segment, with a solvency margin of 5-8%. As of January 2015, the life insurance industry has de-grown 9% due to a steep fall in LIC’s business even as the private insurance sector registered a growth of 19% in total business premium. Till January 2015, we sold 1.36 lakh policies — a growth of 30% over last year compared to a 48% degrowth for the industry.
How many products have you lined up for launch this year?
We launched three products in the individual category and one in the group category. Shriram Assured Income Plan, a product we launched in December, is one of our best-selling products. It offers guaranteed returns in addition to tax benefits. We also launched Shriram Wealth Preserver and Shriram Easy Life Cover in the individual category and Shriram Life Group Traditional employee benefit plan in the group insurance category. Considering our target segment, we believe our guaranteed return products — Assured Income Plan and Wealth Preserver — are being well received in the market as they combine benefits of life cover with guaranteed returns.
Your views on expanding the reach of insurance in India?
Insurance industry needs money; there is no doubt about it. It needs more branches and infrastructure to cater to tier-III and tier-IV cities. If we see telecom or FMCG, the growth engine over the last decade has been rural India. Insurers needs to set up infrastructure in rural India to expand reach.
Higher FDI will give a much-needed boost to the industry in setting up base in rural India. The passing of the Insurance (Amendment ) Bill in the Rajya Sabha is a step in the right direction. Another framework that can go a long way in expanding the reach of insurance is ‘open architecture’ with bank as brokers. There are more than 1 lakh bank branches in the country out of which only 10-15% contribute to the insurance business yet. Let there be competition, let customers have product choices. Insurance continues to be a push product; rewarding the intermediaries adequately is important. An agent needs to make multiple visits to a customer for making a sale and the revenue he earns must compensate him for his time and effort.