'We have a solution for every need of a customer'

Bengaluru-headquartered Exide Life Insurance, which commenced its operations in 2001, aims to grow at twice the pace of the industry. In an interaction with Uma Kannan of Deccan Herald, Kshitij Jain, Managing director and CEO of Exide Life Insurance, explains that the industry is growing really well and how the company plans to grow its business. Edited excerpts:

What is India's life insurance penetration at present? Has it undergone any changes in the last five years?

Insurance penetration is seen in very different ways globally. One way it is seen is gross written premiums of the entire industry as a percentage of the GDP of the country, which means that you take all the premiums picked up in the life insurance industry and all the premiums picked up in the general insurance industry, combine them and take that as a percentage of the GDP of the country.

The reason why everyone is excited about the insurance industry is that even today insurance penetration is under 4% of GDP in our country. While in developed economies, for instance, in the UK, and even in Asian markets like Taiwan, insurance penetration is in the double digit – between 12% and 15%- of the GDP.

Also, we can look at the number of people who buy insurance policies every year and how many policies are in force, which in the life insurance industry is quite exciting, as over three crore policies are sold every year.

How big is the insurance industry in India?

There are over 25 crore policies in force in the country. That's a very large number, and this would include individuals who have more than one policy. The insurance industry is a very large industry and in the last year, it has come back to growth.

Though there was a relative slowdown in the industry after the financial crisis in 2009-10, if you look at the first seven months of this financial year, we have new business, and the industry has grown the fastest in this period as compared to the last seven years.

Demonetisation has had an impact on what has happened in the industry. The large amount of cash that people had found their way into the financial services, as a result of which bank deposits have gone up, the mutual fund industry is doing very well, and so are we.

Also, if you look at the other options available in the market, it is no secret that hard assets, especially gold and real estate today are not as attractive as they used to be as savings options, and therefore, very clearly the beneficiary is the financial services industry.

How do you look at the future of the industry? Will insurance penetration touch two digits?  

Two digits may be difficult. However, we can be certain that the overall industry will grow. I am confident about this. At least twice the pace of GDP of this country.

How well is Exide Life Insurance growing, especially after demonetisation?

Our organisation till six years ago was not making profits so the entire focus of the organisation was to make sure that we can take this business to profitability.  Over the last five years, we have had a secular improvement in our profits year-on-year. We witnessed Rs 112 crore of profit in the last fiscal, 27% growth over the previous year. Our total premium income was Rs 2,409 crore, and assets under management (AUM) stood at Rs 11,105 crore. We serve over 15 lakh customers in over 200 cities in India.

After Rs 100 crore profit, the other exciting number would be Rs 200 crore, but it will take more time. But in two years down, we should be in a position to double again.

How many products are you offering at present?

We have a very wide portfolio of products. We do business in two platforms - one is the individual life insurance where we have 23 products and we have three riders, riders are add on options which you can buy along with products to get an additional cover. In addition to this, we have five products and one rider on the group platform which is for corporate customers.

We have a solution for every need of a customer and for every life stage, and that's the reason  why there is such a large product portfolio.

Are you planning to expand your presence?

To build  distribution, physical infrastructure is not that crucial anymore. So, the only reason we are opening offices now is to be able to service customers who are in large numbers in a particular geography. Instead of expanding our own physical offices, we are tying up with like-minded partners, for example, banks, brokers and corporate agents and through them in addition to the 200 cities, we are actually close to 800 more.

Going forward, the business will depend more on digital interventions to be able to both sell and service the customers. We want to  grow this business in terms of new business at over 35%. That would be the first internal check but more than new business, the big thing that we are attempting to do as an organisation is actually focusing on increasing the number of policies enforced by the organisation.  

In the recent past, many insurance companies have gone for IPO. Do you have any plans to go for the same?

Not in the immediate future. Our principal shareholder Exide Industries is invested for the long-term. It is a very cash-rich ownership, and it is debt-free. There are no plans for an IPO, but when our shareholders feel the need, we will see.