Reliance Life Insurance is on a fast track and claims to have grown thrice as fast as private sector peers.
Reliance Life Insurance is on a fast track and claims to have grown thrice as fast as private sector peers. Chief executive officer P Nandagopal spoke to Nandini Goswami on the company’s achievements and plans for the new year.
Could you take us through the final premium figures and growth rates of your company vis-à-vis the industry?
We ended the year with a new business premium of Rs 2,754 crore over Rs 930 crore, almost three times of what was achieved last year.
Our year-on year growth rate was 232%, which again is three times the private sector growth (roughly 70%) and ten times the industry growth, taking into account LIC as well. In February, our market share was around 8%, which is likely to be higher in March, once other companies come out with their figures.
What has been key to your aggressive strategy for growth?
Numbers are not achieved just like that. We feel that our agency distribution channel, which contributed to 60% of revenues along with alternate channels, has been instrumental in achieving these numbers in just two years, compared to players who have leading market shares after six to seven years.
What are your targets for the current year?
We have just closed the year and are yet to submit our business plans for 2008-09. We would like to maintain the same rate of growth and get to a leadership position.
With 744 branches at present, we would like to see a 100% jump in the expansion programme. The average ticket size of our policies is around Rs 21,000 and this is a good indication that there is money to buy insurance.
How much do you depend on your group for cross-selling purposes?
Almost 99% of our business is through our own life company. In three years, Reliance Life should be a strong company in its own right and then, perhaps, we will leverage some of the network of the group.
For example, Reliance Communication is present in 5 lakh villages and has a huge network, which we could use for expanding the rural channel of business.
Do you see any trend emerging in the next one or two years?
In urban areas, with growing awareness, I feel people will buy more of pension and simple term insurance products. For us, 22% of our portfolio is pension products and we could take up stronger marketing measures like worksite marketing, payroll deduction plans, etc to make it more effective.
In non-urban areas, it will be simple unit-linked products that will sell more. We may come up with simplified health, term and micro insurance products.
Can you sustain your pace of growth this fiscal, given the general sluggishness in the stock markets?
Market volatility is short-term and unit linked plans are sold as long term products. Even in February/ March, when the stock market was going through a downturn, we were able to rake in a substantial market share and business premium.
Are there any plans to infuse capital this year?
We have an equity capital of Rs 1,350 crore and the renewal premium which will be garnered could help reduce the some gap in capital needs. However, we may need some capital, the amount, which is yet to be decided.
g_nandini@dnaindia.net
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