New Delhi: Leading private sector insurer Reliance Life Insurance Company (RLIC) recorded a four-fold jump in third quarter net profit to Rs.40 crore on the back of improved product portfolio and distribution base.
In the three-month period ended 31 December 2012, RLIC, part of Anil Ambani-led Reliance Group’s financial services arm Reliance Capital Ltd, registered a net profit of 40% as against Rs.10 crore in the year-ago quarter.
Reliance Life’s total premium (net of reinsurance) was Rs.930 crore, while the total funds under management stood at Rs.19,366 in the December quarter, an increase of 17% over the corresponding quarter a year ago.
“Our number of policies have started growing... As long as we are selling more and more policies, we are confident that going forward our profits will continue to increase,” Reliance Life Insurance CEO Anup Rau told PTI.
“A change in the product basket with a focus on traditional products, productive agents, customer centricity and use of enabling technologies helped us reap higher profit.”
Reliance Life has tweaked its product basket, with 80% of its business coming from traditional products and the rest 20% from unit-linked products.
In the last six months, the company has launched three alternate distribution channels, Face-to-Face, Life Plaza and Career Agent, and hired over 5,000 people under the new sales formats, with a view to increase its reach and productivity.
Reliance Life Insurance is the only company among the top 10 private insurers which achieved higher profits without having a bank partner. The company has a distribution gap as it does not have any bancassurance.
Rau said, “Our focus continues to be medium and smaller towns and cities, addressing the under and uninsured opportunity. In spite of that, we have been able to increase our average ticket size to over Rs.15,000 in the third quarter from Rs.14,000 in Q2 FY13.”
With RLIC focusing on productivity, customer acquizition and retention, profitability and growth, the company aims at showing further improvement in profitability on the back of quality products and services.
The company recorded its first full-year net profit at Rs.373 crore for the fiscal ended 31 March 2012. It had sold over one million policies in 2011-12 and garnered a total premium of Rs.5,498 crore in that year.
Nippon Life, Asia’s largest private life insurer and seventh biggest globally with an asset size of $650 billion, holds a 26% stake in Reliance Life, which it acquired for over Rs.3,000 crore.
At present, Reliance Life has a market share of 4.9% of the private sector life insurance industry.