Aditya Birla Sun Life Insurance (ABSLI), which ended FY24 with around Rs 17,500 crore in gross written premiums (GWP), aims to double its business in the next three years. In a conversation with Narayanan V, MD & CEO Kamlesh Rao outlines the company’s growth strategy, distribution mix, and the impact of recent regulatory changes.
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How was your business performance so far in the current fiscal?
In Q1, we achieved a 20% growth, slightly below the private industry’s growth of 26%. However, in Q2, our GWP growth surged to 44%, significantly outperforming the private sector. For H1 FY25, our GWP increased by 33%, surpassing the industry growth of 21% and the private life insurance sector’s 24%. ABSLI ended FY24 with Rs 17,260 crore in GWP. Our goal is to double our business in three years, requiring an annual growth rate of 25-26%. We have exceeded that target in the first six months of this year. Moving forward, we will focus on driving premium growth through a balanced mix of proprietary channels (agents and digital) and partnerships (bancassurance), while improving productivity and capacity.
What is your distribution strategy to achieve premium growth?
Proprietary and bancassurance channels contribute 38% and 62% of ABSLI’s business, respectively, with both showing strong performance in H1FY25. Proprietary business grew by 32%, while bancassurance grew by 34%.
We currently have over 59,900 agents and 11 banking partners, including recent additions like IDFC First Bank, Bank of Maharashtra, and Axis Bank. Business from Axis Bank is expected to pick up in H2FY25, and the three new partners are projected to contribute 10-15% of our topline this fiscal. In addition, business from our largest partner, HDFC Bank, has grown 35% year-on-year. We have also made some significant investments including agency and direct business. That will also help the premium growth on the proprietary side of the business.
FM and Irdai chairman recently urged banks to focus on core products rather than selling insurance. Will this impact your distribution strategy?
The mention, perhaps, was to urge banks to focus on deposits. I can’t comment on what banks will do. Our strategy remains centred on increasing contributions from banks. Insurance penetration among savings account holders is still very low and we believe it can get better with time.
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