Jain: Novel plan
Mumbai, Sept. 29: Shriram Life Insurance Company Ltd hopes to buck the negative growth in the sector by tapping clients of group firms and focussing on affordable products.
The insurance joint venture between Rs 60,000-crore Shriram Group and Sanlam Group of South Africa expects its first-year new business premium to grow 20 per cent this fiscal and gross premium to jump 15 per cent.
The domestic life insurance industry’s new business premium saw a negative growth of around six per cent last fiscal.
Experts say the sector is yet to come out of the challenging conditions, with the decline for this fiscal forecast at around 10 per cent.
Manoj Jain, CEO of Shriram Life Insurance, told The Telegraph it expected a higher growth rate on account of a different strategy followed by the company.
“The strategy that we adopted from Day One was instead of focussing on the bigger cities, we concentrated on the smaller ones,” Jain said.
According to Jain, the life insurance joint venture gained significantly from cross-selling to other customers of the Shriram group.
This, along with affordable products, resulted in more than 60 per cent of the sales coming from existing customers.
For instance, Shriram Life Insurance tapped the customer base of Shriram Transport Finance Company Ltd — a major player in commercial vehicle finance.
The company came out with an affordable product to protect loans taken from truck finance companies such as Shriram Transport.
The product, Jain said, met with a good response, particularly from single-truck owners. The company is now providing cover for at least 60,000-70,000 truckers per month and expects to end the year with around 7 lakh customers.
Similarly, by tapping the customers of another group company — Shriram City Union Finance — the insurance venture is providing cover on loans to small and medium enterprises.
The company, which is based in the south, is aiming for a national footprint.
The company recently expanded into the smaller cities of Bihar, Madhya Pradesh, Uttar Pradesh and Rajasthan.
Jain said the next phase of expansion would be in the eastern region, with branches set to be opened in Jharkhand and Bengal.
At present, 80-85 per cent of the company’s premium come from traditional products. For the current year, Shriram Life expects to see a 20 per cent jump in policies sold.
Last year, it sold 1.54 lakh policies; the number is expected to touch 2 lakh in the current fiscal.