By IANS,
Chennai : After three years of profitable growth, private life insurer Shriram Life Insurance is setting up a new distribution channel to target high networth individuals (HNIs).
The new channel, called Sanlam channel, will target high value policies from HNIS in northern, western and eastern parts of the country.
“The channel will be headed by an official from our joint venture partner Sanlam. We have told our other employees about the new channel and its focus. As such there will not be any heart burns or channel conflict,” Akhila Srinivasan, managing director of Shriram Life, told reporters here Wednesday.
Shriram Life is a joint venture between the city-based financial services group Shriram and South African insurance group Sanlam.
Srinivasan said the company’s average premium per policy (APPP) will go up as a result of the new channel.
“Presently the company’s APPP is around Rs.18,000. The APPP from the Sanlam channel is expected to be in the region of Rs.36,000,” she added.
She also agreed that the policy acquisition costs for the company, (marketing expenses, including agency commission) hither to under a tight leash, will go up as the infrastruture has to be set up.
Therefore, the company does not envisage any profits for the next two fiscals.
“After two years, we will be consolidating our operations and hit the profit dirt,” she added.
According to her, Shriram Life will be infusing around Rs.100 crore over the next two years as additional capital to meet the increased expenditure.
Shriram Life will add 200 new branches over the next two years, taking the total number of branches to 450.
She said the company has 20,000 individual agents and 43 corporate agents.
For the year 2009-10, Shriram Life earned a fresh premium of Rs.420 crore. The company hopes to achieve a new business premium target of Rs.1,500 crore this fiscal.