The Hindu Business Line : Shriram Group set for insurance foray — In talks with foreign players for alliance

Mr R. Thyagarajan, Chairman, and Ms Akhila Srinivasan, Managing Director of Shriram Group, getting ready for a press conference in Hyderabad on Monday. - - A. Roy Chowdhury.

Hyderabad , Oct. 11

THE Chennai-based Rs 4,000-crore Shriram Group is all set to foray into the insurance industry by next fiscal, preferably the life insurance segment to begin with, to be the 13th life insurance player in the country, according to its Chairman, Mr R. Thyagarajan.

Disclosing this to a group of mediapersons here on Monday, he said the group has already initiated negotiations with a couple of global insurance companies, which are keen to forge alliances with it both for life and non-life insurance businesses. The group proposes to consider entering the non-life insurance segment also if a good partnership model evolves.

Though the Chennai-based financial services conglomerate prefers to enter the insurance arena with a foreign partner, "the group is not very particular on the issue of foreign player, since we are of the view that we have all the strengths including the customer base, agents force and capital required for entering into life insurance on our own," Mr Thyagarajan said.

According to him, a foreign partner is not required for its strengths in designing the insurance products. "We think we are quite competent of designing the life insurance products that are suitable for the people of this country. We also have the required expertise for investment management. We may prefer foreign partners only for their financial strengths."

Stating that the group has already started training its chit fund agents across the country for selling insurance products and is currently in the process of registering the company for insurance foray, he said the idea is to issue the first insurance policy on July 1, next year.

"We will apply to the Insurance Regulatory and Development Authority (IRDA) shortly and expect to get the licence in six months time. We plan to finalise all the modalities for life insurance foray by the year-end."

According to Mr Thyagarajan, the Shriram Group is also in talks with few banks for roping them as equity partners in the life insurance venture.

The initial investment requirement was estimated at around Rs 100 crore with another Rs 25 crore over the next few years.

The group is confident of breaking even in the third or fourth year of operations, owing to its strengths of customer base and agency force, compared to the industry average of six to seven years.

"We expect Andhra Pradesh to contribute at least 40 per cent of our life insurance premium income due to our strengths in the State. Though we are a Chennai-based entity, our business from AP is three times more than Tamil Nadu in chit funds as well as truck finance, in terms of both number of customers and quantum of business," Mr Thyagarajan said.

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