The slowdown in the life insurance industry has also affected Bajaj Finserv’s subsidiary Bajaj Allianz Life Insurance Company, and Sanjiv Bajaj, managing director of Bajaj Finserv, expects this to be a slowest year for top-line growth.
Addressing shareholders at the company’s 6th AGM here, Bajaj said that the life insurance industry was undergoing significant slow down. “Bajaj-Allianz is no exception,” he said, pointing out that one of the reasons was that money in financial savings and assets has fallen dramatically.
During Q1 14, gross written premiums for Bajaj-Allianz Life Insurance have reduced to Rs 884 from Rs 1,211 crore in the same period of last year, translating into a drop of around 27 per cent.
Bajaj attributed this to two factors. First, Unit Linked Insurance Policies were seen as a short term product and since a number of policies had completed the mandatory three year period, there had been significant surrenders and withdrawals, he said.
Also, several new products in the pipeline were with the IRDA, and the time required for them to come into the market as well as to train agents would impact the revenue.
“The effort to get back to growth has started, but in terms of top line, I expect this to be the slowest year,” he said, adding that the life insurance side had however, maintained market share.
Referring to why Finserv has sought a banking licence from the RBI, Sanjiv said, “On a long term, the banking platform is stronger than the NBFC platform, As banks have RBI support, the life of the entity better than that of an NBFC,” Bajaj said, adding that some short term pain then was worth it.
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