Exide Life Insurance drops ambition of ‘breakneck’ growth in FY21: CEO

K.R.Srivats New Delhi | Updated on May 26, 2020

Kshitij Jain, MD & CEO, Exide Life Insurance

Exide Life Insurance Company Ltd (Exide Life Insurance) has, in the wake of Covid-19-induced lockdown, put its ambitions of achieving ‘breakneck’ growth this fiscal on the back burner, said a top official.

However, growth will certainly remain on the agenda of the nearly two-decade-old private life insurer this fiscal and it would be segmented, Kshitij Jain, Managing Director and CEO, Exide Life Insurance, told BusinessLine.

“Our long-term plan was to grow at twice the pace of industry, thereby gaining market share. That was the plan till March 15 this year. However, post Covid-19 lockdown, breakneck growth aspiration has been put on the back burner. Our growth aspiration has become a bit muted due to Covid-19,” he said.

He highlighted that the entire industry focus has changed towards business continuity and serving existing customers better and managing existing books well. “Focus on quality, customer retention, and persistency has gone up measurably so that we can build the business and start pursuing growth aggressively when the market makes a turn and allows it,” he said.

Jain said that he does not see any need for the company to raise capital this fiscal, given that it enjoyed comfortable solvency position and could fund growth through internal accruals. Also, Exide Life, which has remained profitable for over seven years consecutively, has no immediate plans to tap the capital markets for an IPO even though this was a shareholder call, Jain confirmed. In FY19, overall net profit doubled over the level of the previous fiscal.

Exide Life Insurance, which is wholly-owned by Exide Industries, has an assets under management of about ₹16,000 crore. Jain said the life insurer has not lost a single day of work through the entire lockdown, but admitted that business had been hit in the first three weeks since March 15.

Business lost

Asked if Exide Life can make good the lost business of early part of this fiscal in the remaining 10 months, Jain replied in the negative.

“Will I be able to make good the loss of business between March 15 and April 15, the answer is probably not. That would expect us to have a disproportionately high growth in the balance ten months, which I don’t think will happen. Some people are saying, life insurance industry is going to grow 15 to 20 per cent this fiscal. I don’t think so. I do believe the quality of growth we see this year is going to be superior to past.

We (Exide Life) are seeing 100 per cent growth in protection products, which is the core of this industry. We are going to see large growth for traditional products, which has been the focus area of the company. Today, the share of traditional products in our overall product mix is 95 per cent – probably the highest in private life insurance industry,” he said.

Exide Life proposes to continue its current approach of focus on traditional products with heightened push around protection portfolio, he said.

“In last two years, we had been focussed on protection. Last year, more than 20 per cent of my customer acquisition happened through protection. This year in the first six weeks, 40 per cent has come via protection,” he said.

Published on May 26, 2020

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