Replying to Sarika Kodag of IIFL, Manoj Jain, CEO & Whole Time Director of Shriram Life Insurance says, “India’s growing consumer class, rising insurance awareness and increasing domestic savings will promote to transfer savings from physical assets to financial assets, especially with markets performing well and will help to improve insurance penetration in the country.”
What outlook do you see for the life insurance industry in India?
Last five years have not been so good, but the growth is just around the corner. The increase in cap in FDI will bring investment to the industry to develop the distribution network in Tier III and Tier IV.
‘Pradhan Mantri Jeeven Jyoti Bima Yojana’ shall help in increasing awareness about the concept of life insurance.
India’s growing consumer class, rising insurance awareness and increasing domestic savings will promote to transfer savings from physical assets to financial assets, especially with markets performing well and will help to improve insurance penetration in the country.
What are the current opportunities and challenges that you face in the online insurance?
As per a BCG report, by 2018, there will be more than 500 million internet users, and e-commerce shall also grow significantly, which offers an opportunity to push life insurance as a commodity via online distribution channel.
However, influencing the customer’s buying decision online and a glitch free standardized and transparent user experience is challenging because insurance is a concept based push product and there exist very low awareness about it amongst Aam Aadmi.
Comment on your new business premium collected last fiscal.
During the year 2014-15, the company collected a new business premium of 498 Crores on 1.91 Lakh policies. The new business premium saw a growth of 28% over last year. Pre-tax surplus continued to be strong at 103 Crores while the retained earnings have climbed to 328 Crores at the end of last fiscal.
Also, Q1 and Q2 have been very good for us, we currently rank 6th in Policy Count with y-o-y 84% growth in NOP as of September 2015. The New Business Premium collected by SLIC witnessed growth of 36% compared with the previous year for the same month.
What will be your growth strategy going forward in online business? What target have you set for FY16?
Our target is ‘AAM AADMI’, who is not even aware about insurance; however, we are developing a strategy for selling online insurance which will take much time as we have just started. Targets are far, we are yet to streamline our online strategy.
Explain to us your distribution model? How much of it comes from online?
Since our inception, we have been selling life insurance product to our captive group user base, and have now tie-ups with NBFCs, Microfinance companies like Muthoot Finance, SEWA, Spandana Sphoorty etc, for sale of life insurance cover to their customers.
We are still setting up our digital business.
Currently, how many policyholders does your company have?
Company has already insured more than 1 Crore lives including group and individual business.
What measures are you taking to focus on insuring rural lives?
50% of lives assured are from rural segment. Of the 1.9 lakh policies sold by the company last year, at least 85,000-90,000 came from rural markets which shall continue. We are reaching out to at least three lakh villages along with two fold our branch base, mostly in tier III or IV towns in the next 3 to 5 years.
What are the new product launches in the pipeline?
We have one product pending for approval with IRDA, and we have filed a couple of new products recently. These are ULIP-Endowment, Pure endowment, and pure term plans.
Shriram Life Insurance Company recently announced its tie up with Telenor India Communications Private Limited to bring life insurance services to the subscriber base of Telenor. Tell us something about the tie-up.
This tie-up is a breakthrough initiative to extend the benefits of life insurance to the socially weaker segment especially as Shriram Life Insurance Company (SLIC) works in Tier 3 and Tier 4 cities where Telenor has strong presence. Shriram Life finds this tie-up in line with one of the ways to spread message of life insurance to the masses in a cost effective way. This will create life insurance awareness among millions of telecom subscribers and cover a large number of them in the process, thereby increasing insurance penetration in the company.
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