- NS Kannan has been appointed as MD of the company effective June 19, 2018 subject to IRDAI approval.
- Punnet Nanda has been promoted as Deputy Managing Director of the company.
- 94 of the top 113 managers have been with the organization for more than 10 years.
- Company boasts a strength of 17,000+ employees.
Strategy & Performance
- Focus continues to be on growth of absolute Value of New Business (VNB)
- The path to growth is reflected in 4 Ps of “Premium growth”, “Protection focus”, “Persistency improvement” and “Productivity enhancement”
- Range of product have been increased to ensure customers’ on-boarding and service through distribution architecture.
- A diverse distribution architecture helped translate product and service into business.
- Even with growth in new business, Annualized Premium Equivalent (APE) has declined by 18.1% and market share being 11.3%
- Nuclear families are growing and need to protect loved ones from losing family income is on the rise.
- Retail customers are borrowing to make assets and need to secure them through insurance.
- The company is devising solutions and products to cater to this need.
- The protection APE growth was 48.1%, with protection accounting for 8.2% of APE.
- Customer retention has improved by changing the organization and partner culture.
- Customer retention actually creates profitability to the company and is best parameter to gauge customer experience.
- The efforts to increase customer retention led to 13% growth in total premium and 29% growth in yearly retain renewal. Also, 13th month persistency was 85.8%.
- 49th persistency has also improved to 63.7% from 59.2%
- Focus was on technology and re-engineering to improve on expense ratios. But, increasing focus on protection will lead to increment in cost ratios.
- Expense ratio for the saving business was at 13.7% mainly due to decline in the business
- The Value of New Business for Q1-2019 was Rs. 2.44 billion with a margin of 17.5%.
- The growth in VNB was 34.1% even with the decline of 18.1% in APE
- The growth would be led by rising working population and increasing per capita income for both savings and protection businesses.
- Retail business accounts for 96% of new business APE. It has marginally reduced because of increase in group protection business.
- Total AUM growth in the quarter was 12.7% to Rs. 1.43 trillion. Retail AUM constituted of Rs. 1.28 trillion, i.e. 89% of the total AUM
- Private market share continues to be around 21.0%. Whereas total market share of 11.3% was a decline from 11.8% in FY 2018.
- The first 2 months of FY 2019 saw 30% decline in RWRP numbers because of strong first-quarter in last year due to demonetization.
- RWRP numbers for June were 36% higher than that of May.
- Year-on-year decline was low at -5%.
- Non-bank channels contributed to almost 45% of APE.
- Different channels like agency, bancassurance partnerships, proprietary sales force, corporate agents and brokers including web aggregators have been developed.
Customer centric Products
- ULIP were focal point in delivering lower cost and lower persistency risk to customer while offering transparency.
- Individual life/health, credit cover, and group life are three key segments of protection all of which saw growth in Q1-FT2019
- Cost to TWRP ratio was Q1-FY2019 as compared to 14.2% for Q1-FY2018.
- Cost to TWRP for saving business was 13.7% compared to 12.5% for Q1-FY2018.
- Commission Ratio is stable at 5.5% is stable and is higher than Q1-FY2018.
- Non-commission component of cost has gone up by 40%.
- For Q1-FY2019, 73% if new business policies are issued within 2 days, 61% of renewal premium is receipted through electronic mediums and 99% of customer-initiated pay-outs are processes electronically.
- Total premium increased be 13% to Rs. 55.18 billion in Q1-FY2019.
- Profit after tax for Q1-FY2019 was Rs. 2.82 billion down from Rs. 4.06 billion in Q1-FY2018
- The decline in profit is because of increase in expenses with focus on protection business.
- Expenses grew by 43.4% in Q1-FY2019 because of increased ads and publicity.
- Solvency ratio continues to be a very strong number at 235%.
- AUM grew by 12.7% to Rs. 1.43 trillion and 86% of linked portfolio has performed better than the benchmark indices