Private life insurer IndiaFirst Life Insurance is planning to break even in 2015-16 and will further strengthen presence in the individual customer segment this financial year. According to its annual financial results for 2012-13, the company has seen its new business premium increase 34 per cent, from Rs 980 crore in FY12 to Rs 1,316 crore in FY13.
P Nandagopal, managing director and chief executive officer, said they'd started with the bancassurance model and would look at expanding other channels, including the agency model. He said they'd been able to percolate into the institutional segment and would expand in the individual segment as well.
He said, "We choose to follow a straightforward and simple strategy of introducing customer-friendly products and processes from the start. Our business strategy of keeping operational expenses low and pushing efficiency by introducing new technology initiatives is paying off."
The company has reduced its operating expenses ratio to 16 per cent from 19 per cent; its operating expense costs to total revenue have reduced from 2.2 to 1.5 times.
This year would be a difficult period for life insurers, he said, taking into account the regulatory changes and need to re-file products to confirm to the traditional product guidelines issued recently.
"There is a tight schedule and the industry has huge work to do," he said.
The company is present in various segments of the life insurance business. These include health, protection, savings, investments and pension. Nandagopal said they would consolidate their position in the health and pension segments this financial year. They are also planning to file an individual pension product, in line with the new pension product norms. It has consolidated its bancassurance business, while simultaneously working on multi channels.
While IndiaFirst Life Insurance has seen growth in new business premiums, insurance industry experts said other life insurers might post positive results for FY13 owing to corrections in the last two quarters. "Growth would be mooted in the initial few quarters due to companies gearing up to re-file their traditional products. But, new premiums are expected to pick up from September onwards," said a senior official with a private life insurer.
Another official from a new private life insurance company said while there would not be exponential growth, the phase of decline in new business premiums is partially over for private life insurers.
According to the Insurance Regulatory and Development Authority, total new business premium collection of life insurers till February stood at Rs 84,501.74 crore. The industry had collected Rs 90,015.83 till February 2012.