Money & Banking

DHFL Pramerica Life aiming at 50% growth in revenues this fiscal

NS Vageesh Mumbai | Updated on January 23, 2018

Anoop Pabby, MD & CEO, DHFL Pramerica Life

There has been a serious effort at doing things differently, says MD

DHFL Pramerica Life Insurance Company (DPLI) has turned the corner, said Anoop Pabby, its Managing Director and CEO. The last fiscal was a good year with profits touching ₹40 crore after breakeven was achieved in the earlier fiscal (2013-14). Gross written premium was at ₹735 crore while total assets under management doubled to ₹1,574 crore in the last fiscal. The company is targeting a 30-40 per cent growth in profits and a 50 per cent growth in topline this fiscal, he said during an interaction with BusinessLine.

DPLI, which started out as DLF Pramerica Life Insurance in 2008, slipped in rankings and remained directionless for a while. The trend was arrested following a new joint venture agreement inked between DHFL and Prudential Financial Inc, US, in July 2013.

Up in ranking

There has since been ‘a rebooting of the company’ with a new mindset and direction after DHFL came in as the partner in place of DLF, he said. With its performance in 2014-15, the company has jumped eight places to the 13{+t}{+h} rank among 24 players in the industry.

There has been a serious effort at doing things differently, he said. One such strategy has been to segment the market and ask its agents to focus on sub-segments — teachers, self-employed, small shopkeepers and para-military personnel.

Agents who often hail from these segments (ex-servicemen or ex-teachers) target their respective affinity groups. This focus on selling only to affinity groups has started paying dividends — it has reduced the possibility of mis-selling and agent productivity has gone up, he said.

There has also been tangible improvement in persistency of the policies.

For instance, persistency at the 13{+t}{+h} month, which was at around 40 per cent, has moved to 50 per cent and the plan is to take it up further to 60 per cent this year.

Business through DHFL accounts for nearly 60 per cent of its turnover. The balance 40 per cent of the income comes from affinity segment agents, rural cooperative bank partners, and normal agents.

Enough capital

Anoop said that the company was well-capitalised for now and would not require any fresh infusion for the next couple of years. Promoters have infused about ₹1,250 crore so far.

The net worth is around ₹750 crore and the solvency ratio is quite comfortable, he said, adding that the company was open to exploring inorganic growth opportunities given that both promoters have encouraged inorganic growth in their respective businesses. “Twenty-three private players in the industry are far too many and some are getting tired,” he said.

DHFL Pramerica operates through 70 branches, primarily in the northern and western regions. It also recently opened six branches in the South and five in the North-East. The company expects to open 12 more branches this year, Anoop said.

Published on August 21, 2015

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