Kotak Mahindra Life bullish on growth; registers 27% growth in H1FY23

Kotak Mahindra Life is on course to grow above the industry consistently and has registered a 27 per cent growth in the first six months of this fiscal, as against the industry growth of 21 per cent, its managing director Mahesh Balasubramanian has said.

Pre-pandemic, the Uday Kotak-controlled life insurer, which unlike most of its peers doesn't have a foreign partner, having bought back the 26 per cent held by Old Mutual in 2017, had a paltry 2 per cent market share among private sector insurers, and it fell further to 1.6 per cent in the first half of this fiscal.

However, since the beginning of this fiscal, the company has been on a better footing on growth rates.

"We've been growing steadily and profitably. Of course, we can grow much faster given our strong capital base, but our focus is sustainable growth and not just ramping up top-line," Balasubramanian told PTI on Tuesday.

Balasubramanian said "our solvency capital is ₹4,500 crore, which is much higher than the regulatory requirement, as our total premium income is only a tad above ₹6,000 crore. So, there's enough growth opportunities and so is our growth capital."

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Kotak Life Insurance plans to double the share of its protection portfolio from 3.2% to 6.8%

When asked for a market share target, he said, "our target ... is to grow steadily and sustainably. Also setting a target is not always feasible. However, our immediate target is to double the share of our individual protection income to double-digits from under-6 per cent now, over the next few years," he said.

Upbeat on growth

Balasubramanian said, this is achievable as the share of protection as a percentage of GDP is a low 23 per cent in the country, which is amongst the lowest among emerging markets and way below the advanced economies' where it averages 250 per cent.

"We're working on a holistic growth model wherein all our five product segments — protection, term plans, participatory plans, non-participatory plans and Unit Linked Insurance Plans (ULIPs) should continue to do well as they are doing now.

"All of them more or less contribute equally to the top-line now. But I'd love to increase the share of ULIPs a bit more from the present 20 per cent," Balasubramanian said.

Hiring and agency network

The company is also increasing its agency network and has hired around 25,000 so far this year, taking the total number close to 1 lakh now, he said, and claimed that this makes them the biggest agency hirer among private sector peers this year.

Similarly, it is also adding the talent pool, and will have around 2,000 more joining them by March, taking the total headcount to 10,000.

Branch expansion

The company is also investing in branch expansion and has already opened 65 branches so far this fiscal, taking the total footprint to 290 now, he said.

The company is heavily investing for growth by way of people, agents, products, technology and branches, so that we grow steadily and profitably in a sustainable manner, Balasubramanian said.

Kotak Life began operations in 2001 as a joint venture with the South African Old Mutual Life, which held 26 per cent equity. Kotak bought out the equity in April 2017 for ₹1,293 crore. Old Mutual had invested ₹185 crore in the joint venture since 2001.

The company has around 37 million active customers, serving over 290 branches across 167 cities by around 1 lakh agents.

New service

Meanwhile, Kotak Life on Tuesday launched a mobile cardiac treadmill test (CTMT) for its high premium term plan customers, under which its mobile vans, which is a partially equipped ambulance, will reach a customer's doorstep and take the text for free.

According to the extant regulations, anyone over 45 years who wants to take a life policy of ₹1.5 crore and above or a non-life policy of ₹2 crore and above must undergo medicals, including a stress test, to evaluate cardiac health.

The mobile medical van is equipped with all necessary instruments, facilities and a full-time doctor to carry out the prescribed test and services.

After a successful pilot in Delhi, the company is rolling out the CTMT service in Mumbai and will roll out the same to the other six top metros in a phased manner beginning with Bengaluru, Hyderabad and Chennai.

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