Shriram General Insurance is on a mission to significantly boost its policy renewal rate, targeting an increase from the current 40% to a robust 60% over the next two years.
Anil Aggarwal, Managing Director and Chief Executive Officer of Shriram General Insurance, revealed the company's proactive approach, stating, "We are putting in a lot of effort to increase policy renewals. Our underwriting department is reaching out to the insured to verify their mobile numbers because it is a big challenge in the general insurance industry." Aggarwal also mentioned that discussions are underway with financial advisors to enhance incentives for policy renewals.
Policy renewal rate signifies the percentage of policyholders opting to renew their policies, fostering a long-term relationship between insurers and policyholders. While exact industry figures are undisclosed, the Insurance Regulatory and Development Authority of India (IRDAI) has encouraged general insurance companies to prioritize customer relationships.
In the insurance landscape, the policy renewal rate for car insurance currently hovers around 45%, according to industry experts.
Shriram General Insurance has reported impressive financial figures. Their net profit surged by 47% year-on-year to reach Rs 217 crore in the first half of the fiscal year 2023-24 (April-March). Gross written premium also increased by 32% year-on-year, totaling Rs 1,310 crore from April to September, with approximately 83% of policies issued through digital channels.
In the motor insurance segment, gross written premium rose to Rs 1,185 crore by September 30, up from Rs 920 crore the previous year. This segment contributes to around 90% of the company's premiums.
Looking ahead, Shriram General Insurance plans to focus on non-motor segments, particularly fire insurance, with a dedicated team of engineers for risk inspection and decision-making based on their findings.
The company anticipates a 40% rise in gross premium for the current financial year and a further 33% growth in the subsequent year.
Shriram General Insurance maintains a robust solvency ratio of 4.66, well above the statutory requirement of 1.5. The solvency ratio measures the insurer's capital in relation to its risk exposure, with a higher ratio indicating greater capacity to handle claims efficiently.
Despite expecting a decrease in solvency margin due to growth, the company aims to maintain a solvency ratio between 2.5 and 3. As of September 30, ICICI Lombard General Insurance's solvency ratio stood at 2.59.
Established in 2008, Shriram General Insurance operates as a joint venture between the Shriram Group and Sanlam, a prominent financial services group in Africa.
