Growth has been satisfactory across all products: Kotak Mahindra Life MD

It’s the busiest period of the year for life insurance companies as sales teams try to push their products. Historically, most of the sales of life policies are done during the last few weeks of the fiscal — partly for tax purposes and, of course, the pressure to achieve targets.

Like many other CEOs, G Murlidhar, MD and CEO of Kotak Mahindra Life Insurance Company, says to his team often, “Keep the faith and be at it.”

That, he says, is done to reiterate the message that the life insurance business is a marathon and not a sprint. His team certainly appears to have taken that to heart and delivered the numbers needed. Premium income for the current year is expected to cross ₹6,500 crore, a growth of nearly 27 per cent over the previous year.

Up to December 2017, individual new business premium grew 38 per cent while renewal premiums grew 27 per cent. The company, which is the seventh largest among the 25-player life insurance industry, has been consistently growing faster than the market during the past few years.

The growth for the company has been satisfactory across all products, Murlidhar said, adding that about 35 per cent of the premium comes from ULIP products while another 60 per cent from traditional products. He said that the company would strive to broadly retain this balance in the coming years with perhaps a slightly higher emphasis on traditional products.

Individual premiums have contributed about 48 per cent and group business 43 per cent of the premium so far this year.

Murlidhar said that the company was looking at growth from both agency and bancassurance channels.

About 35 per cent of business comes from individual agents while about 55 per cent comes from corporate agents (principally banks). And about half of that is through its parent — Kotak Mahindra Bank.

The recurring theme in Murlidhar’s conversation is the need for ‘balance’ in all ways — whether it is in the way the income is earned or spent — and which, he is quick to emphasise, doesn’t come by accident but due to careful planning.

There is constant monitoring to see that there is no risk of being ‘overweight’ on a particular channel or product. The focus on quality has also resulted in improved persistency ratios for its policy sales. The 13th month persistency ratio which was around 66 per cent in 2013 is around 82 per cent now and the effort now is to increase this further.

Asked about the possibility of going for a public offer and listing as some of its competitors have done, Murlidhar makes clear that for the company there is no requirement for capital right now. The solvency ratio is twice the 150 per cent required by regulators. “It is a call for the shareholders to take,” is how he puts it.

Asked about consolidation in the industry and whether the company would be looking at some acquisitions, Murlidhar laughs away the query.

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