?Insurance will grow faster than IT sector?
THE BAJAJ Allianz Life Insurance has topped in the country with a whopping 467% growth over the last year. The company registered Rs 351.23 crore business in December?05, the highest among the private insurance players and Rs 100 crore above the nearest rival. Company?s CEO SAM GHOSH ? a mechanical engineer & chartered accountant speaks to DEBOBRAT GHOSE on expansion plans and strategies to maintain on the top slot.india Updated: Feb 03, 2006 01:39 IST
THE BAJAJ Allianz Life Insurance has topped in the country with a whopping 467% growth over the last year. The company registered Rs 351.23 crore business in December’05, the highest among the private insurance players and Rs 100 crore above the nearest rival.
Company’s CEO SAM GHOSH – a mechanical engineer & chartered accountant speaks to DEBOBRAT GHOSE on expansion plans and strategies to maintain on the top slot.
How your company has maintained top position amid stiff competition from the public sector major LIC and 13 private players in the insurance sector?
There lies a huge untapped potential in life insurance market with private players having an overall 27% market share. Now customers are realising importance of private companies and their growth rate will be higher in coming days.
In the last six months (July- Dec’05), as per IRDA results our company has been numero one in new business with Rs 1900 crore of total premium business. We’re waiting for results to be declared by the end of current fiscal.
What’s your USP for being on top?
From the very beginning we’ve been focusing on small towns and we’ve established a vast network of 550 offices and 90,000- odd agents. By next year, our plan is to set up 1000 offices across the country. Growth is fast in smaller towns, which we would leverage for achieving our targets in cities.
To remain on top do you plan any change in product portfolio?
Our first and foremost motto is better customer service and continuously improving upon it. Then come innovative products to suit customers’ demands and cost leadership, by focusing on low cost. Along with traditional products, customers are now largely going for unit-linked insurance products (ULIP). In December, we introduced new ULIP products, which have given an extra edge to our business. Our ULIP allocation is highest in the market.
What plans are in the offing for MP & Chhattisgarh?
Presently, we’ve 25 offices, 4000 development officers and 7600 agents in two states, which would be doubled. As insurance penetration is low, a lot of potential exists and we would explore it to the fullest. Barring LIC, we’re ahead of all the competitors and number one in each location. Major thrust would be on in-house training of staff. In this fiscal, till date, we’ve collected Rs 75 crore with Rs 19 crore in January itself. We would further consolidate our position.
What’s the company’s plan for the rural sector?
Share of business in rural sector is 18% - 19%. With our large network, we would accelerate and solidify our position. We’re also coming up with policies for rural sector and open up more branches in nearby areas. We’re also into selling of policies through NGOs in these areas. Following the guidelines of IRDA, we’re planning to come up with products – a combination of health and life in micro-insurance. We’re also on our way to send proposal to IRDA for approval.
How far pricing determines selection of an insurer?
In small towns much depends on relationships. However, allocation plays a major role in ULIP and we offer 105% allocation.
Insurers are big investors. What’s your investment philosophy?
It’s as per IRDA guidelines. We’ve in-house team to design innovative products and special emphasis is on training agents to bring business in equity side. DSP Merrill Lynch advises us on portfolio management.
Do you see any threat?
Taxation could be the only dampening effect. If tax treatment changes, it would adversely affect customers’ incentive.
Finally, how do you see the future of life insurance sector in coming years?
Very bright. Bigger than the IT sector. We can grow five times and in few years the expected growth is 40 – 50%. Thrust should be on long-term insurance products, so that fund could be utilized in infrastructure development.