“Our physical approach is the main driver during the quarter. While we remain focussed on existing business streams, we believe newer areas like EV insurance and developing a stream of combo insurance plans will help the market and drive growth for us,” Anil Aggarwal, MD and CEO said in the statement. Additionally, the company is looking at expanding into the non-motor segment for SMEs, he added
Chennai:
Shriram General Insurance Company posted a 37 percent growth in net profit at Rs 98 crore during the first quarter of FY 24. The insurer on Tuesday said it wrote 13,03,340 policies driven by higher digital selling of traditional and new combo products.
About 82 percent of all its policies now come from online purchases and the company introduced three new products during the quarter, the insurer jointly owned by Shriram Group and Africa’s Sanlam Group, said in a statement.
Its gross written premium (GWP) stood at Rs 560 crore, a rise of 39 percent growth over the same period last year.
The company’s solvency at the end of June 2023 was 4.83 from 4.48 a year ago. It has settled 39,076 claims in Q1 FY24 compared to 33,811 in the year-ago period.
“Our physical approach is the main driver during the quarter. While we remain focussed on existing business streams, we believe newer areas like EV insurance and developing a stream of combo insurance plans will help the market and drive growth for us,” Anil Aggarwal, MD and CEO said in the statement. Additionally, the company is looking at expanding into the non-motor segment for SMEs, he added.
Managing Director & CEO Anil Kumar Aggarwal also said the company will be hiring about 700 people this year, expand its branch network by 35 to 278, and reduce the focus on motor insurance by looking at other lines of business like cyber insurance.
Referring to the Insurance Regulatory and Development Authority of India’s (IRDAI) new norms of a single 30 per cent cap on expenses of management, he said the company would be able to meet that limit in three years’ time.
Last year, the company’s expenses of management stood at 40 per cent and this has come down to 35 per cent during the first quarter and by the end of this fiscal, it will be about 33 per cent.
“The management expenses will be brought down from operational efficiencies, reducing the cost of acquisition of new business from digital sales and other modes than the traditional mode,” Chief Underwriting Officer Shashi Kant Dahuja told IANS.
Under the earlier norm, there were sub-limits as well as overall limits for management expenses of a non-life insurer.
Aggarwal said the company plans to increase the premium from underwriting electric vehicles to about Rs 200 crore this fiscal up from Rs 82 crore earned last year.
He said the underwriting loss, or simply put, premium minus claims went down to Rs 53 crore during the first quarter of FY24 from Rs 75 crore for previous year first quarter.
Shriram General Insurance earned an investment income of Rs 185 crore during the first quarter, up by 6 per cent over the previous year corresponding period.
Aggarwal said the company was able to control its motor third party claims through a proactive negotiated settlement than waiting for the court to give the award. The average outgo under the third party claims head for the company is about Rs 8 lakh far less than what the court would award but after years of litigation.
Agreeing that the solvency margin of 4.83 in a way means the company has excess capital, Aggarwal said the growth in business will bring down the solvency margin. The statutory solvency requirement is 1.5.
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