· New Business Premium (APE) grows by 23 %, compared to industry’s negative growth of - 15 %.
· Achieves 44 % increase in the number of new business policies sold.
· Product mix further shifts to long - term traditional products, thereby driving profitability through product - mix. Traditional products account for 83 % of new business premium.
· 13th month persistency improves to 76 %. Among top five companies in persistency experience.
· AUM (Assets under Management) up by 24 % to Rs. 2,732 crore. For the calendar year 2012, IDBI Federal’s Equity Fund ranked No 1 among 72 ULIP funds bearing testimony to the firms’s fund management expertise.
IDBI Federal Life Insurance has achieved break even in 2012-13, its fifth year of operations. The firm has reported a maiden profit of Rs. 9.24 crore in 2012-13, thus making it one of the fastest to break-even in the Life Insurance industry. In an industry challenged by falling margins, shrinking new business volumes, high cost ratios and low profitability, this is a significant achievement.
IDBI Federal started its operations in March 2008 and is amongst the most successful start-ups in the Indian Life Insurance market. A pioneer in product innovation, IDBI Federal’s approach is very innovative and reflects a fresh way of looking at and thinking about life insurance.
The Company’s innovative products with trademarked names such as WealthsuranceTM, IncomesuranceTM, RetiresuranceTM, etc have been well-received by its customers and have been an important contributing factor to its success.
IDBI Federal’s New Business Premium (APE) grew by 23 % in 2012-13, which compares with the negative growth of -15 % posted by the industry. The company also witnessed a 44 % increase in the number of new business policies sold as compared to the previous year. IDBI Federal has also been driving profitability through the right product mix. The product mix has continuously been shifted to long - term, traditional products. Share of traditional products in the new business premium increased to 83 % as compared to 67 % in the previous year. Share of regular premium products increased to 78 % as compared to 69 % in the previous year.
Mr. G. V. Nageswara Rao, MD & CEO, IDBI Federal Life Insurance, said, “I am extremely happy to announce that IDBI Federal has recorded its maiden profit of Rs 9.24 crore in 2012-13. Achieving break-even in the 5th year is a significant landmark. We have pursued profitable growth as our company strategy. Our new business premium growth of 23 % compares with negative growth of -15 % reported by the industry. Our growth rate is one of the highest in the industry, with a large number of companies posting negative growth. What is even more satisfying is the fact that this achievement comes at a time when the entire Life Insurance industry is facing many challenges and growth is hard to come by.”
IDBI Federal has a healthy solvency ratio at 491 % as against the regulatory requirement of 150 %. Mr. Rao said, “I am delighted to say that IDBI Federal enjoys a comfortable solvency ratio to take care of its next phase of growth. As we have reached the profit making state, we will not require any further capital infusion. Our AUM has moved up by 24% from Rs. 2,208 crores to Rs 2,732 crores during the current year.” IDBI Federal has paid-up share capital of Rs 800 crore.
The firm recorded a 13 th month persistency rate of 76 % which is among the top five in the industry. In terms of 25 th, 37 th and 49 th month persistency rates, IDBI Federal is among the top 3.
IDBI Federal’s strong persistency record is testimony to the quality of its sales and the confidence the customers have shown in the company’s products and its investment performance.
For the calendar year 2012, IDBI Federal’s Equity Fund raked No 1 in its investment performance among the 72 ulip funds in the industry against which it is benchmarked internally. IDBI Federal’s customer complaints, as reported by IRDA, is among the lowest in the industry.
A strong focus on cost discipline ensured a drop in IDBI Federal’s cost ratio from 26 % in 2011-12 to 24 % in 2012-13, which is among the lowest expense ratios in the industry.
IDBI Federal Life Insurance’s performance has been a result of its better than industry business growth, better persistency experience, more profitable product-mix, robust investment performance as well as lower cost ratio. In a fast-changing industry landscape, IDBI Federal was quick to realize the challenges and act on them. This announcement validates its success in meeting these challenges.
“A customer centric approach is at the heart of IDBI Federal. We have introduced various measures to ensure that the policyholder’s interests are upheld at all times. We recognize the role of long term planning through life insurance and thus focus our efforts in selling regular premium long term products. Pre-Issuance calling to confirm all sales ensures that the customer is being sold the right product as per his needs. All this has resulted in value creation for the customer and is reflected in our high persistency rates. In fact, as a result, our customer complaints are also much lower than the industry average,” Mr. Rao said.
Mr. Rao also said, “This performance is testimony to our constant focus towards innovation, offering tailor-made financial solutions that create value for our customers and help them to realize their dreams and aspirations. We entered as the 18th player in the industry and differentiation was the key to our success. Our approach of product branding is unique in the industry and has helped us achieve a strong mindshare among target audiences.”
About IDBI Federal Life Insurance Co Ltd..!
IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector banks and Ageas, a multinational insurance giant based out of Europe.
In this venture, IDBI Bank owns 48 % equity while Federal Bank and Ageas own 26 % equity each. Having started in March 2008, in just five months of inception, IDBI Federal became one of the fastest growing new insurance companies by garnering Rs. 100 Crore in premiums. Through a continuous process of innovation in product and service delivery IDBI Federal aims to deliver world-class wealth management, protection & retirement solutions that provide value and convenience to the Indian customer.
The company offers its services through a vast nationwide network of 2,186 partner bank branches of IDBI Bank & Federal Bank in addition to a sizeable network of advisors and partners. As on 31st March 2013, the company has issued about 5 lakh policies with a sum assured of over Rs. 28,580 Cr.
IDBI Federal today is recognized as a customer-centric brand, with an array of awards to their credit. They have been awarded the PMAA Awards (2009) for best Dealer / Sales force Activity, EFFIE Award (2011) for effective advertising, and conferred with the status of ‘Master Brand 2012-13’ by the CMO Council USA and CMO Asia.
Please visit www.idbifederal.com to know more.
About the sponsors of IDBI Federal Life Insurance Co Ltd
IDBI Bank Ltd. continues to be, since its inception, India’s premier industrial development bank. It came into being as on July 01, 1964 to support India’s industrial backbone. Today, it is amongst India’s foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from 1082 branches and 1715 ATMs.
The Bank offers its customers an extensive range of diversified services including project finance, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services & legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients.
As part of its development activities, IDBI Bank has been instrumental in sponsoring the development of key institutions involved in India’s financial sector –National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd, SHCIL (Stock Holding Corporation of India Ltd), CARE (Credit Analysis and Research Ltd).
Please visit www.idbibank.comto know more.
Federal Bank is one of India’s leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of over 1,104 branches and 1,195 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network. In addition to interconnected branches and ATMs, the Bank has a wide range of services such as Internet Banking, Mobile Banking, Tele Banking, Any Where Banking, debit cards, online bill payment and call centre facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations.
Please visit www.federalbank.co.into know more.
Ageas is an international insurance group with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. These are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Hong Kong and UK. Ageas is the market leader in Belgium for individual life and employee benefits, as well as a leading non-life player through AG Insurance. In the UK, Ageas has a strong presence as the fourth largest player in private car insurance and the over 50’s market. Ageas employs more than 13,000 people and has annual inflows of more than EUR 21 billion.
Please visit www.ageas.com to know more.
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