Shriram Life to tap clients of group companies
By IANSWednesday, January 12, 2011
CHENNAI - The Rs.611 crore ($135 million) premium income Shriram Life Insurance Company Ltd will tap the client base of its sister companies this year and also beef up equity capital by Rs.25 crore in two months, said a top company official.
“We will soon promote our Shriram Credit Guard policy to the clients of group company Shriram City Union Finance that extends loans for purchase of consumer durables and two wheelers. We are getting around Rs.7 crore business from this product from the clientele of another group outfit, Shriram Transport Finance,” Managing Director Akhila Srinivasan told reporters here Wednesday.
Shriram Credit Guard is a policy that offers protection against loan default in case of the death of a borrower.
According to her, the shareholders - Shriram Capital and South African Group Sanlam - would together put in Rs.25 crore as additional capital in two months.
“We started with a capital of Rs.125 crore and recently added Rs.25 crore. With the proposed infusion, the capital base will go up to Rs.175 crore,” Srinivasan said.
S.P. Raghunathan, director, Shriram Group, told IANS: “The target for the current year is Rs.1,060 crore (Rs.700 crore new business and Rs.360 crore renewal premium) as against Rs.611 crore premium (new Rs.419 crore and renewal Rs.192 crore).”
While new regulations governing unit linked insurance policies (ULIP) may force reworking of the targets, the company would post at least 30 percent growth in this fiscal over the previous year, Raghunathan said.
According to him, the persistency ratio - that measures continuity of a life insurance policy - ranges around 70 percent and is in line with the industry trend, he added.
Speaking about expanding the distribution network Srinivasan said the company would increase its agency force by 10,000 this year to 30,000.
She said the company gets nearly 70 percent of the new business from the agency channel.
Shriram Life Wednesday signed a bancassurance deal with The Tamilnadu Co-operative State Agriculture and Rural Development Bank Ltd.
According to the life insurer’s executive director S.K. Choudhury, the company hopes to generate around Rs.12 crore premium from selling Shriram Credit Guard policy to the borrowers of the cooperative bank.
