With the Chennai-based Shriram group on the verge of completing a significant structural reorganisation, the CFO of Shriram Capital Subhasri Sriram has said that the two insurance joint ventures of the group will have independent holding companies.
The Shriram group has a general as well as life insurance venture with Sanlam of South Africa as joint venture partners.
Under the structural reorganisation proposal Shriram Capital, the holding company, is being merged with Shriram Transport. To facilitate this revamp, the insurance ventures of the Shriram group are sought to be demerged from Shriram Capital. The entire reorganisation plan is now awaiting clearance from the National Company Law Tribunal (NCLT), she said.
According to her, the two insurance ventures will be quarantined from each other so that there are no adverse cross-effects of business worries.
Jasmit Singh Gujral, Executive Vice-President of Shriram General Insurance, made it clear that the structural reorganisation would not alter the business focus of the firm. Amidst this organisational revamp at the group level, Shiram General Insurance has moved forward to ink a pact with City Union Bank (CUB), one of the oldest private sector banks in the country. The formal coming together of two household names in this part of the world, in fact, solidifies the long-nurtured relationship between these two iconic entities.
Under the corporate agency agreement between them, CUB will distribute the products of Shriram General Insurance across its 727 branches in the country. CUB, in fact, had earlier a tie-up with Bharat Re, a broking firm once owned by the Shriram Group. According to Dr. N. Kamakodi, MD and CEO of CUB, the private bank’s partnership with Shriram General Insurance was the consequence of a change in the Insurance Regulatory and Development Authority (IRDA) rules, which now allow a bank to have tie-ups with three insurance firms across categories.
According to Anil Kumar Aggarwal, MD and CEO of Shriram General Insurance, the bulk of revenue for the company comes from motor insurance. To a query, he said that the non-motor component comprised 8 percent of the company’s revenue. He said that the claims settlement time for the company has come down to 24 days now. Efforts are on to reduce it further to 20 days, he added.
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