IDBI Federal Life Insurance has been through “tough times” in the past two years with uncertainty over stake-sale by IDBI Bank. The company’s business was affected and attrition rates went up. Though LIC has picked up a 51 per cent stake in IDBI Bank, expectedly putting to rest the need for stake-sale by the bank in the life insurance venture, uncertainty still looms large. In a freewheeling discussion with BusinessLine , Vighnesh Shahane, MD and CEO, IDBI Federal Life, spoke about the way forward for the company. Excerpts:

You have been going through rather difficult times in the past two years. How has that affected the company?

I will be lying if I tell you it (the uncertainty around stake-sale) didn’t affect us. It was the toughest two years. Business was impacted, morale (of people) was impacted, we lost some good people, and a lot of people did not come for interviews because they did not want to join a company with an uncertain future. But the team that stuck around did their best; they handled the deck and tried to focus on the road ahead and not worry about the noise happening around us.

So, did the level of attrition in the organisation go up in the past two years? How do you see the situation, moving forward?

The rate of attrition at mid-to-top level went up to around 30-35 per cent compared to around 25 per cent earlier. But what is more significant is the vintage of people leaving the organisation. We were losing people who had been with us for nearly three to five years, and the ones who were good performers.

One thing is losing people physically which you can measure, the other is the psychological switch off which cannot be measured, and it is often underrated and underestimated.

From hereon, we need to regroup, try and get back good people, and more importantly, focus on the people who have stayed back and have displayed loyalty and commitment during the adverse period.

Has the acquisition of 51 per cent stake by LIC in IDBI Bank helped put to rest those uncertainties?

LIC has picked up a 51 per cent stake, and they are in the same market as we do. So what implications and repercussions it will have and how much time it will take, we will have to wait and see. But I am confident that as a company we will emerge stronger.

Uncertainty or ambiguity happens everywhere. The shareholders are discussing various options.

Your new business premium for the April-December 2018 period dropped by nearly 7 per cent compared to last year. What do you attribute this to?

Our topline, which was growing at a CAGR of close to 30 per cent for the past three years, witnessed single-digit growth so far this fiscal.

Total business premium grew by nearly 8 per cent to ₹1,224 crore during April-December 2018. But that is also because industry has de-grown due to the high base effect of demonetisation. This apart, volatile equity markets impacted those who were predominantly ULIP players.

But we did great on managing costs, persistency, declared record profits, had a good solvency ratio of around 385 per cent, maintained best-in-class operating expenses, and ensured lowest surrender, thereby ensuring a holistic growth. The only thing that hurts is that we lost a few good people.

So, how do you see FY-20 panning out for the company?

We will be looking at 25-30 per cent growth in FY-20, aided by a low base. The strategy would be to grow on distribution. Nearly 85 per cent of our sales is currently through bancassurance. We will look to boost other channels such as agency, online, and direct sales. Online is currently around 3 per cent of our total sales, and we would like to double that every year.

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