Not in a hurry to burn our fingers, says CEO Aggarwal after Shriram General gives crop tender bids a miss

You’ve posted more than 400 percent growth in health insurance in the June quarter. Considering that you started in December and from a very low base, the number represents an early stage of business. How do you see the coming quarters?

Yes, it is still an early stage for us. Last year, our health premium was just Rs 75 lakh. That said, we’ve already clocked Rs 4 crore in health premiums this year. We launched the health vertical in mid-December of the last fiscal and in just a few months, the uptake has been positive. Our target is to end the year with Rs 10–12 crore in health premiums and if the momentum continues, we might close the year with Rs 15-16 crore. We’re committed to growing this segment carefully, without burning capital but in a sustainable way.

In our conversation after the end of the previous fiscal, you said the company would enter the crop insurance segment in the June quarter. What happened?

Yes, we did participate in tenders this quarter but we didn’t secure any business. We are working closely with our South African partner, Sanlam, who is a market leader in crop insurance there, to assess burning costs and ensure we’re pricing competitively but sustainably. We’re not in a rush. If a tender works for us, we’ll go for it. If not, we’ll wait. We are not in a hurry to burn our fingers. We’re not chasing market share for the sake of it. The priority is profitability and bottom-line protection.

What’s your premium growth target for FY26?

We’re targeting a 45 percent growth in premiums this fiscal. The goal is to hit Rs 4,600 crore by year-end and we are confident, especially with the upcoming festive season in Q3, which usually brings in a significant bump. If growth outpaces our estimates, we might even touch Rs 5,000 crore.

Motor insurance penetration has remained low, at around 50 percent, for a few years now. What’s holding the progress back?

Penetration continues to hover around the 50 percent mark and that’s deeply concerning. One key reason is the lack of accessible, real-time data. As insurers, we don’t have the contact information or even the updated registration data for many vehicle owners. Many of these vehicles might have been scrapped but haven’t been removed from official systems. We’ve requested state governments, particularly in States like Odisha, where we’re lead insurers, to at least send mass messages to owners of uninsured vehicles. We also raised the issue with IRDAI but beyond that, insurers can only request action. We don’t have the authority to enforce. The regulatory and enforcement gap is very real and addressing it will require government intervention.

What kind of regulatory push do you expect on this front especially within the Motor Vehicles Act?

There is definitely some movement on that. The government is considering an amendment to the Motor Vehicles Act that proposes a threefold increase in penalty for uninsured vehicles. If passed, this will certainly help improve compliance but penalties only work if enforcement is consistent. Right now, whether someone is fined often depends on the discretion of the individual official. We’re hopeful that with the appointment of the new IRDAI chairman, Ajay Seth, some of these issues will receive attention.

There was a report about 80,000 fake motor policies being sold in Delhi. Has Shriram faced similar attempts?

Unfortunately, yes. About three years ago, we experienced a similar situation. Fraudsters were manipulating e-motor portals, where they’d pay the premium for multiple vehicles but only generate two policies and later reuse those entries for unsuspecting clients. The problem is fake policies look nearly identical to genuine ones and customers often don’t know until they try to file a claim.

In our case, we detected around 2,000–2,500 such fake policies and took proactive steps to cancel them. We’ve now integrated real-time validation with the Vahan database to prevent recurrence. We even approached police authorities to file complaints against the agents involved but frankly, there was very little interest from law enforcement.

IRDAI has come out with a master circular, raising the minimum specific cover. What do you think?

Sometimes the changes proposed by the IRDAI work in our favour and sometimes they don’t. But we respect the regulatory process and will comply with all circulars issued by IRDAI. In fact, we participate in industry sessions where stakeholder feedback is collected and passed on to the regulator.

Will the government's push for E20 fuel (20 percent ethanol blend ) impact vehicle insurance?

We don’t expect it to have any significant impact on vehicle insurance premiums at this point. The change may affect vehicle performance or maintenance needs but from an insurance standpoint, there’s no material concern right now.

There was an announcement last year about a deal being signed by Sanlam to increase stakes in both Shriram Life and Shriram General. It hasn’t happened yet. Why the delay?

The deal has already been signed and they are committed to increasing their stakes. The delay is due to regulatory issues. I would not like to say anything more. These are being worked through. Once resolved, the stake hike will move forward.

Are IPO plans still on track?

Yes, we are moving gradually toward an IPO. It’s still on the long-term roadmap. Back in 2024, we had said it would take two–three years and that remains.