Shriram Life Insurance Company has said it will double its individual new business premium by FY25, supported by deeper penetration of rural markets and digital initiatives.

The company — a joint venture between Shriram Capital Ltd, the holding company of the Shriram Group, and South Africa-based Sanlam Ltd — garnered individual APE (annual premium equivalent) of about ₹525 crore in FY22 and it aims to grow the same to ₹1,000 crore by FY25.

“We will reach close to ₹650 crore in this fiscal and we expect it to grow significantly in the following years,” said Casparus JK Kromhout, MD & CEO of Shriram Life Insurance.

Rural market

A two-pronged focus is expected to help the company achieve its FY25 target. Firstly, it will ramp up its rural penetration. Shriram Life has been a strong player in the rural market as it secures about 44 per cent of its individual new policies from rural markets against the private industry average of 20 per cent.

Kromhout said the company’s unique focus of targeting the vulnerable sections (lower-income people) of society to bring into the safety net of life insurance has helped establish itself as a strong rural player in the life segment.

The average sum assured of its customers is in the range of ₹4.5-5 lakh per annum and its low average ticket size for individual policies is ₹19,700, while the private industry average ticket size is about ₹75,000.

“Our target segment — income group in the range of ₹2-5 lakh per annum — is hugely untapped and requires protection as these families will run into financial crisis if they lose breadwinners unlike the HNIs or higher income categories,” he said.

“We will stay focused on these rural customers to secure more policies in the coming years,” he added.

The company also attributed its rural success to the strong leverage of digital technologies. Predictive analytics developed with the help of group IT firm Novac Technology Solutions has come in handy for Shriram to do the risk assessment and onboarding of new rural customers quicker. Also, the Indian government’s Digital India and payment-related initiatives have helped it drive digital transactions.

Digital drive

For instance, about 80 per cent of new customer on-boarding now happens through its app, and customer on-boarding turnaround time (TAT) has been reduced to 7 minutes from 24-48 hrs earlier. Also, close to half of premium payments are done digitally. By 2025, it aims to go paperless and cut TAT further among other digital transaction targets.

Shriram Life has rolled out Smart Suraksha Card, which will carry QR codes hat can be used by customers for policy renewals.

Kromhout said Shriram Life would remain a profitable company and expects to end this fiscal with a net profit of about ₹150 crore against ₹3 crore (mainly due to higher claims in certain States) in FY22 and ₹106 crore in FY21.

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