Shriram Life Insurance will stay away from bank-led partnerships or bancassurance channels, chief executive officer Casparus Kromhout has said, describing them as "expensive” and “risky”.
"Banca tie-ups might give a short-term boost but they come with the risk of abrupt loss if a bank switches partners," he said in an interaction with Moneycontrol.
Instead, the company is focussed on strengthening proprietary distribution, agency force, and direct-to-customer (D2C) sales, especially through cooperative banks, regional rural banks and small finance banks, Kromhout said.
In the ongoing fiscal, the company will sharpen its rural focus while keeping the exposure to unit linked insurance plans (ULIPs) modest, Kromhout said.
ULIPs contribute only around 9 percent to Shriram Life's business, a share, according to the Kromhout, that is unlikely to increase significantly.
“There are two main reasons: one, our rural customers prefer guaranteed return products and are cautious about market exposure. And two, ULIPs don’t carry enough commission margins to support deep rural distribution,” he said, adding that the cost structure makes it tough for agents to justify the effort.
The company is also leaning more heavily into retail and approaching the group business more cautiously.
“We had a 50-50 mix in FY24, but now retail is the core,” Kromhout said. “Group business is getting highly competitive with unsustainable pricing. We’re happy to grow that book but only if it's profitable."
Group premiums came in at around Rs 900 crore in FY25, while retail premiums crossed Rs 1,300 crore.
The company expects group growth to remain flat, while investments continue to build retail sales capacity, Kromhout said.
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