TL/DR –
Shriram Life Insurance’s core target segment is the lower income bracket, whose customers typically prefer guaranteed returns and savings products, according to Casparus Kromhout, the company’s CEO. Shriram’s average premium size is INR 20,000 ($270), and it has not experienced an impact from the taxation of traditional plans for premiums above INR 500,000. The company is focused on increasing the number of policies it sells and the families it protects, and is working to increase insurance penetration in Telangana, a state in India.
Shriram Life Insurance Focuses on Lower-Income Customers’ Preferences
Shriram Life Insurance primarily serves the lower-income target segment. These customers typically prefer guaranteed returns and savings products, according to Casparus Kromhout, MD & CEO of Shriram Life Insurance.
Irdai’s Proposal Impact on Surrender Value
It’s premature to predict the impact of Irdai’s proposal to increase the surrender value. The regulator aims to safeguard policyholders’ interests, but it’s unclear how this change will affect customer behavior and protection for all policyholders.
Effects of Taxation on Traditional Plans
Shriram’s lower-segment target has not been severely affected by the taxation of traditional plans. The average premium size is Rs. 20,000, and high-segment customers are nearly non-existent.
The Role of Traditional Plans for Pure Protection
While pure term life insurance is optimal and affordable, lower-income customers struggle to accept the pay-and-not-get-anything-back concept. They usually prefer guaranteed returns and savings products. Shriram aims to address the problem of underinsurance by selling these products initially and later offering additional term cover to ensure adequate protection.
Increasing Penetration and Insuring All by 2047
Shriram’s goal aligns with Irdai’s vision to ensure all by 2047, particularly focusing on increasing penetration in Telangana. Working with other insurers and the state government, the company aims to leverage existing infrastructure to reach a wider customer base.
Commission Caps Flexibility’s Impact on Sales
The recent increase in commission cap flexibility has not immediately boosted sales. It does, however, indicate the regulator’s growing trust in life insurers.
Bima Vistaar’s Role in Insurance Product Efficacy
Bima Vistaar targets entry-level market customers who likely lack various insurance products. As these customers’ needs evolve, they can add more specific insurance types. Bima Vistaar caters to customer needs and is an excellent entry-level solution.
Shriram Life Insurance’s Differentiating Factor
Shriram Life Insurance’s focus on a different customer segment, backed by a trusted brand, sets it apart. The company will continue to build capacity, foster partnerships, and innovate with the customer’s needs in mind.
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