After enjoying strong growth in the past three years on all fronts, IDBI Federal Life Insurance, a bancasurrance-led company, is now looking to bolster its financial position as it rides on the improved demand for individual life insurance in the country post demonetisation.

Vighnesh Shahane, Chief Executive Officer and Whole-time Director, was quite ecstatic about the growth recorded by the company in the individual insurance business in the recent June quarter. He shared with BusinessLine the strategic intent of the company for the short and medium terms. Excerpts:

How has the just ended June quarter been for the company?

It was very good for us. We recorded 65 per cent year-on-year increase in new business premium (NBP) on the individual insurance segment. We are clearly a company that is focussed on individual insurance business and not on the group side.

So, have you now set a larger business goal for the entire fiscal 2017-18?

Yes. We are now very hopeful that this fiscal we will be able to achieve new business premium of ₹1,000 crore. This will be significant as last fiscal we had closed with NBP of ₹700 crore. We are eyeing 30-35 per cent growth in NBP. Already, in the June quarter, we achieved an NBP of about ₹220 crore. Given the expected increase in demand and the favourable macro trends in the country, we should be able to hit the ₹1,000-crore milestone.

Two years ago, we never thought it would happen. There is also the January-March period ahead of us, which is traditionally the best quarter for insurance.

Will there be any strategic shifts on the distribution front?

We will remain primarily a banca-led company. Nearly 80 per cent of our NBP comes from the bancassurance channel. Our focus and energy will be mainly to strengthen this channel. I believe that bancassurance as a channel will continue to be a force to reckon with in India in the years to come. At the same time, we are not neglecting other channels. We are looking to grow our agency channel (which gives 12 per cent) and online channel (3 per cent).

Now that open architecture is allowed, will you look to sign up more banks beyond your principal promoter banks IDBI Bank and Federal Bank?

Yes. We are open to signing up more banks. But I feel that open architecture has not really taken off in India.

To me, bancassurance is more about getting deep rather than going wide.

What about IDBI Bank and the recent turbulence faced by it? Has it impacted business for you?

Yes, IDBI Bank has been in choppy waters.

Despite the challenges they faced, they gave us the best year possible in 2016-17 in terms of policies, premium and persistancy. IDBI Bank to me is a very resilient bank.

Their commitment to life insurance has been strong. They kept their foot on the accelerator as far as insurance goes, despite challenges on the commercial banking side.

Will you look to pursue inorganic growth? What about listing?

As on date, there is no talk about listing. Listing has both advantages and disadvantages. There is nothing holding us back. We may explore listing, say, after two to three years. There is also no plan to grow inorganic for now.

Our immediate focus is to strengthen banca and look for profitable growth. We know we can’t enter into the top five league.

That’s not the end game. There is still room for us to grow bigger if we continue to focus on creating value to our shareholders/customers.

Do you see any move forward on the foreign partner Aegas’s stake increase plans? What is the current status?

I really cannot comment on this as it is a shareholders’ issue.

What about the marketing efforts through sports? Has it helped the company?

Yes, it certainly has. Our marketing efforts through cricket at the grassroots level and now in badminton and running have improved visibility and branding.

Four years ago, people were not aware of IDBI Federal Life as a life insurer. Today, that has changed.

Running culture is spreading and badminton as a sport is picking up in India. We are finished with cricket and few years back tied up with Gopichand for badminton.

comment COMMENT NOW