Private sector insurer Reliance Life expects to maintain a 10 per cent growth in total premium income on the back of growth in regular premium policies and better policy renewals.
By keeping in regular touch with existing policyholders and charting out a growth path for agents, the company aims to achieve double-digit business growth during the current fiscal, said Chief Executive Officer Anup Rau.
Currently, traditional life insurance products account for 80 per cent of its total product portfolio, while unit-linked insurance products account for the rest.
Agency channel
The life insurer recently launched a ‘career agency’ format, offering a fixed stipend and variable commission payout for its 1.25-lakh agents.
“We plan to focus on our strength, which is our agency channel. We want to be the alternative to Life Insurance Corporation in the private sector,” said Rau.
Reliance Life, as a late entrant in the life insurance industry, does not have a bancassurance tie-up (banks acting as corporate agents for distribution of insurance products) with any big bank.
Bancassurance accounts for 30 per cent of the premium income for private insurers. However, for Reliance Life it is miniscule on this account.
Under the current Insurance Regulatory and Development Authority (IRDA) regulations, one bank can tie-up with only one insurance company for bancassurance.
In the Union Budget this year, the finance minister announced that banks will be allowed to become insurance brokers which will enable them to sell policies of multiple insurance companies.
“We are waiting for the final bancassurance guidelines from IRDA. Life insurance companies with existing tie-ups with banks could potentially lose some percentage of their business once banks become brokers. However, for us there is only an upside,” Rau said.
Reliance Life reported a profit before tax of Rs 380 crore and mopped up total premium of Rs 4020 crore for the year ended March 31, 2013.