Reliance Life Insurance FY15 profit drops 62 per cent to Rs.135 crore

KOLKATA: Reliance Life Insurance Company, a unit of Anil Ambaniled Reliance Group, said its profit before tax fell 62 per cent in the year to March 2015 on higher allocation for statutory reserves.

Reliance Life’s chief executive officer Anup Rau told ET that the company added Rs.147 crore into the reserves, which contributed to the fall in profit to Rs.135 crore from Rs.359 crore in the previous fiscal.

“We are trying to strengthen our long-term prospects,” Rau said. The insurer has decided to focus on selling more traditional and long-term products this fiscal and stop pushing unit-linked policies. Its first year premium collection grew 7 per cent to Rs.1,200 crore in 2014-15, while renewal premium grew 9 per cent to Rs.2,551 crore. The insurer, a 74:26 joint venture between Reliance Capital and Japan’s Nippon Life, is also in the process of hiring 20,000 new agents and weed out the ones who have stopped servicing customers. “Customers should not suffer because some of the agents stopped working,” Rau said.



The company has about 8,00,000 agents and close to 15 per cent of them are no longer servicing customers, he said. About 80-90 per cent of the insurance agents are part-timers in India. Rau said Reliance Life’s claim settlement ratio improved to 94 per cent from 88 per cent last year.

About 80-90 per cent of the insurance agents are part-timers in India. Rau said Reliance Life’s claim settlement ratio improved to 94 per cent from 88 per cent last year. New premiums for the sector declined 12.9 per cent in the first nine months of the fiscal to Rs.73,777 crore with Life Insurance Corporation of India reporting a 21.4 per cent dip to Rs.51,667 crore, according to statistics collated by Insurance Regulatory & Development Authority of India.

Life insurers in the private sector, however, saw their collective first year premium growing 16.6 per cent in the nine months to December 2014 on strong growth in unit-linked insurance products.