'In life insurance, it is about creating distribution capacity and solutions for customers. We are constantly working on that.'
Shriram Life Insurance Company, a joint venture between Shriram Group and South Africa-based Sanlam Ltd, has set a target of increasing its rural penetration by 50 per cent in the next three years.
Casparus J H Kromhout, managing director and chief executive officer, tells Shine Jacob/Business Standard in a video interview about its performance in FY24, rural market goals, and strategy for increasing penetration in Telangana, where it is the lead insurer.
How are you seeing your performance in FY24, which is drawing to a close?
The year is going quite well. We are at a growth rate above 30 per cent. In terms of the number of policies, our growth is around 43 per cent so far.
On individual APE (annual premium equivalent) or retail APE, our growth is around 38 per cent.
We are quite confident that we will end the year with a growth rate of over 30 per cent.
In life insurance, it is about creating distribution capacity and solutions for customers. We are constantly working on that.
The Insurance Regulatory and Development Authority of India (Irdai) has appointed you as the lead life insurer in Telangana.
What are your plans for taking forward Irdai's mission of 'Insurance for All' by 2047?
It is a strong state for us and where the company started. We have our largest base of customers here.
We have embarked on a number of initiatives, on the awareness side and engaging with other life insurers, to ensure that we come together.
We are trying to find ways of increasing the penetration in the state.
At the same time, we are doing a huge amount of awareness campaigns by engaging with the Telangana government.
Our focus is more on the rural, lower, and middle market segments.
What are your plans regarding entering the northern, western, and north-eastern markets?
We have around 15 states that we focus on. We are blessed to be in a very large country.
We feel that the need is highest here, and there is an opportunity to serve that need.
We also have the presence of the Shriram ecosystem, through which we are able to cross sell to customers.
That also gives us an opportunity. We have clarity on how we should cover each of these states -- traditional agency model or new routes.
We are expanding in Gujarat, Karnataka, and Maharashtra.
On the individual new business number of policies, ecosystem cross-selling is approximately 48 per cent, but on total individual premium, it is 10 per cent.
For group business premium, ecosystem cross-selling is around 45 per cent.
We are able to reach a large portion of society. We know that everybody will not be able to afford a premium of Rs 80,000-plus, which is the average premium in the industry now.
We focus on creating products that are affordable to a slightly lower segment of the population.
You are known for your rural focus, the share of which is 44 per cent now. Going forward, will you continue this rural focus?
Our growth plans are very ambitious. We will cover a broader spectrum of rural and cities. Our core segment will be rural.
Our target is to bring 50 per cent of our business from rural markets in the next three years.
We get larger premium sizes from cities and smaller premium sizes from rural areas.
In terms of getting the number of families covered, we are seeing a good number of growth.
The key reasons for this growth are the size and potential of this market. Reaching out to villages is difficult, we have been doing that for 17 years.
What will be the impact of this Irdai proposal of increasing the surrender value for life insurance companies?
That is something that the industry is discussing with Irdai. The final guidelines are not yet out.
In our company, since our premium value is low, a regulation of this kind will have less impact.
Our average premium value is Rs 20,000. We are not too worried about it.
Feature Presentation: Aslam Hunani/Rediff.com
