While the coronavirus outbreak has led to a lockdown across the country leading to business disruptions, IDBI Federal Life Insurance’s key focus right now in ensuring critical activities like claims settlement, persistency (through renewals), investment operations and policy servicing are taken care of.
In an interaction with Moneycontrol, Vighnesh Shahane, MD & CEO - IDBI Federal Life Insurance, has said that - while their top-line has been seeing a decline - their focus right now is employee well-being and customer servicing.
“While the fourth quarter is important, the COVID-19 problem that has descended is far greater than JFM (January-February-March) period business. The entire world is talking about survival hence everything else is put into the backseat. But we also want to ensure that if a customer reports a claim, IDBI Federal Life should settle it quickly,” he said.
IDBI Federal Life saw a 29.5 percent year-on-year (YoY) drop in the first year premium collection to Rs 489.54 crore in the April 1, 2019 to February 29, 2020 period compared to the year-ago period. The insurer has faced challenges in topline growth ever since there was an ownership change in one parent bank.
Its profits however, have remained stable. For the nine months ended December 31, IDBI Federal profit after tax was up 54 percent YoY to Rs 29.14 crore.
In May 2018, while IDBI Bank was close to a stake sale in the life insurance company, this deal could not be completed due to valuation concerns. Now, with LIC as the majority shareholder, the stake sale process has to begin afresh.
IDBI Federal Life Insurance's parent IDBI Bank is now owned by LIC after the latter acquired 51 percent stake from the government. IDBI Bank holds 48 percent in the life insurer while Federal Bank and global insurer Ageas hold 26 percent each.
IDBI Bank, which was a primary distribution partner of IDBI Federal Life, now also sells LIC policies. This has led to an almost 60 percent drop in business from the bank for IDBI Federal Life.
As far as life insurance is concerned, Shahane explained that business is not merely about topline growth.