Shriram General Insurance (SGI), a joint venture between Shriram Capital, the holding company for Shriram Group’s financial services business, and pan-African financial services group Sanlam Ltd, on Monday indicated that it will recruit about 5,000 people in the next 2 years to grow the non-life business in small towns while announcing the 9.99 per cent stake acquisition at KKR, a leading global investment firm, in the company.  

Shriram General Insurance and KKR have signed an agreement for the deal, subject to the receipt of necessary regulatory approvals.

According to industry sources, SGI was valued at ₹18,000 crore and KKR is acquiring the stake of Shriram Capital, which holds about 77 per cent in SGI. The money that is going to the holding company will primarily be used for consolidation of the Shriram Capital’s holdings in the group companies.  

“KKR being a large PE firm, we look to benefit from their global insurance expertise, and experience taking Indian companies to the next level. Also, the exposure to various international markets will help us out in understanding the products and strategic decisions taken by the companies globally,” Anil Kumar Aggarwal, MD and CEO of Shriram General Insurance told BusinessLine.  

Shriram General Insurance, according to Gaurav Trehan, Partner and CEO of KKR India, has been one of the standout performers in India’s fast-growing general insurance industry. “It continues to build on its record by developing new capabilities, channels, and products to meet the growing needs of Indian consumers,” he added.  

The 13-year-old SGI said it does not need capital now as it holds an impressive solvency margin ratio in excess of 4 as against the industry prescribed ratio of 1.5.  

Outlining SGI’s growth plans, Aggarwal said the company will strengthen its digital capabilities via the ‘Shriram One’ app and ramp up the workforce to strengthen the untapped customer base in small towns and rural markets.  

“We will be recruiting around 5,000 people for our general insurance business. Now, we have around 3,000 employees and hope to increase the headcount to 5,000 in the next 24 months. We will increase the strength to 10,000 in about 5 years. “The idea is to expand to C and D category towns where the competition is less,” he said.  

Shriram General has approximately 43 lakh policies currently in action. Of this, Close to 95-96 per cent were issued on digital mediums. “This will give you a flavour that we are reasonably well ahead on the technology side,’ he said adding, “the proposed ‘Shriram One app will go live in the next 13-14 months, will have a structure in place whereby all the group companies will be able to sell their products to customers of all other companies. This will be a big game-changer for the group as a whole,” he said.   

In FY22, Shriram General Insurance’s gross direct premium income (GDPI) fell 18 per cent to ₹1,753 crore when compared with ₹2,139 crore in FY21. Of the 25 general insurers (excluding standalone health insurance and specialised companies), only Shriram General, National Insurance and United India reported a decline in GDPI for FY22, while others reported positive growth.   

“We don’t want to chase the topline at all. We would like to drive profitable premiums.  Profits only can ensure that the customers’ claims are paid within time when the claims are payable. If you don’t have the premium available at your disposal, where will the money be available to pay the claims?” said Aggarwal.  

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