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Surabhi
It is business as usual at IDBI Federal Life Insurance despite talk of a potential stake sale and significant investment at its parent IDBI Bank by the Life Insurance Corporation of India.
“The last 15 months have been a challenging time for the company because of the proposed stake sale. But ironically, we had our best year last year,” said Vighnesh Shahane, CEO and Whole Time Director, IDBI Federal Life Insurance.
Asked if there would be any impact of LIC acquiring a majority stake in IDBI Bank, hesaid: “The transaction is only with the bank.”
Noting that the company registered a 94 per cent jump in its net profits in 2017-18, Shahane said it is looking at “holistic growth” in the current fiscal.
“In the last four years we have made progress in every department. Our focus this year would not be to do anything different but to fortify these themes… There is no use of growing a business if the business is leaking, if customers aren’t happy, employees are not happy, cost mix is high or product mix is wrong,” he told BusinessLine .
Gross written premium
The life insurer doubled its gross written premium in three years last year, and it plans to do so again in the same period of time. Similarly, it is also planning to further improve its persistency ratio, which was at 81 per cent for the 13th month as of February 2018.
When asked about the challenges from the proposed stake sale, Shahane said that it has caused uncertainty among employees and some amount of attrition. “That has caused a bit of uncertainty among employees because all kinds of reports keep coming in. What is important to an employee is job security. We also lost employees. The other challenge is that the reports also cause distraction,” he said.
Most of the employees have, however, stayed back, and Shahane said internally the insurer had the best year in 2017-18since its inception in 2008.
“I can’t say what will happen in the stake sale,” he said, declining to comment further.
IDBI Federal Life Insurance is a three-way joint venture between IDBI Bank, Federal Bank and Belgian insurer Ageas. IDBI Bank owns 48 per cent stake in the life insurer and has been keen to exit it completely, while Federal Bank and Ageas hold 26 per cent stake each.
He was also optimistic about the life insurance industry and said companies are focussing not only on top-line growth but also on cost control.
“There were three listings at good valuations, the persistency ratio of the industry is coming down,” he said, noting that there is also a lot of technology being infused in the sector.
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