Shriram General Insurance Expects Rs 750 Cr Underwriting Profit This Year

Jaipur-based Shriram General Insurance, which is primarily into motor insurance with over 90 per cent of the business coming in from this vertical, is expecting around Rs 750 crore underwriting profit this fiscal as its expects gross written premium income to touch Rs 2,200-2,300 crore.

The Chennai-based Shriram Group firm has closed H1 of the fiscal with around Rs 800 crore in premium income and expects it to nearly treble in the second half on the back of the better-than-expected economic recovery, says Anil Aggarwal, the managing director & chief executive of Shriram General that was the first general insurer to underwrite only motor premia when it began 13 years ago.

Shriram General Insurance, which manages Rs 10,500 crore of AUM which it expects to cross Rs 50,000 crore over the next five years, is a joint venture between Shriram Capital, the group holding company, and the South African financial services group Sanlam, and was set up in 2009.

Today it's the seventh largest motor insurer in the private sector.

During the first half, over 43 per cent of the total motor cover sales, massively down from 80 per cent a few years back, came from the group firm Shriram Transport Finance, which is the largest standalone truck financier in the country.

It has made losses only thrice since operations began in 2009, making it the third largest general insurer in terms of profitability.

It booked Rs 1,001 crore of net income in FY20 on a premium income of Rs 2,466 crore and Rs 700 crore in net income of Rs 770 crore from Rs 1,100 crore of premium income, of which almost 92 per cent came from the motor vertical, and just the rest from all other verticals Aggarwal, who has been leading the company since inception, said, adding he wants to pare the motor dependency to around 70 per cent and expects the forthcoming rural thrust should help it achieve this, Aggarwal said.

"Our focus has always been profitable growth. One can do aggressive underwriting and forget profit. Our premium income has crossed Rs 800 crore in H1 which we expect to close with Rs 2,200-2,300 crore and earn around Rs 750 crore in net income by March," Aggarwal told PTI.

Aggarwal said the company's AUM stood at Rs 10,500 crore of end-September and he expects this to cross the Rs 50,000-crore mark over the next five years.

He expects the higher targeted income and profit to come from its rural thrust under which it plans to fetch a quarter of its sales income to come from rural markets by FY25, up from under 10 per cent now.

This will also have them appoint a salesforce of 1 lakh rural folks from the present 35,000 now over the next three years.

Currently its rural sales are only 10 per cent of the total, but Aggarwal expects this to to go to 15 per cent from FY24 and over 25 per cent from FY25.

He said for the aggressive rural play, they will have more rural focused products which will be available at 25,000 electronically driven points of sale over the next three years. Currently the general insurance firm employs 2,800 of which 1,500 are sales agents.

In the first year, they plan to target 600 talukas. The next target will be to reach areas with a population of 20,000 to 1 lakh, he said, adding the distribution will be through electronic kiosks.

Though primarily a motor insurer that too commercial vehicles as no one was writing motor policies--it was the only insurer to underwrite only motor policies, Shriram General also offers travel, home and personal accident covers in the retail space and customised fire, engineering, marine products in the corporate space.

It services the over 40-lakh outstanding policies through 200 branches across 24 states.

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