Pramerica Life Insurance aims 30% CAGR in NBP in next five years
Pramerica Life Insurance, a private life insurer, is eyeing a compounded annual growth rate (CAGR) of 30 per cent in new business premium (NBP) income over the next five years, its MD and CEO Pankaj Gupta has said.
The company, which is on a path of re-establishing and regrowing itself, expects to close the fiscal year ended March 2024 with NBP over ₹1,100 crore, a sharp rise over the recent years when annual NBP was just about ₹200 crore, Gupta told businessline in an interview.
Pramerica Life has been in India since 2008 and has Prudential (of USA) as a consistent shareholder over all these years. Prudential holds a 49 percent stake in the private life insurer. Piramal Group, which came to the company a couple of years ago, has 50 percent stake in the company.
Gupta said that Pramerica Life — largely focused on traditional products with ULIPS now accounting for less than ten per cent of overall mix — is now well capitalised and there will not be any incremental need for capital this fiscal to fund the company’s growth.
“In case we do need the capital, we have the required level of support from the parents to drive our journey forward and based upon what we finally agree on as our long-term business plan”, he said.
Gupta, who has nearly three decades of experience in financial services industry, said that the company focused on creating organisational capabilities, partnerships, products and propositions that position the life insurer for the long term future.
“We do not want to grow for just one year. We want to establish ourselves in a way that we are able to consistently grow faster than the industry for the next several years”, he said.
Noting that the company was already profitable on value of new business (VNB) front, Gupta said that the company expects to sustain the positive VNB trajectory barring all those big investment areas that it may choose to assist on a lifetime basis rather than on a financial basis.
At the profit after tax (PAT) level, the company will be negative for the next couple of years because “we are growing very rapidly”, he said.
“For us, this is a rebuilding phase. In some ways, we are just a two or three-year-old company. When we started our rebuilding phase, we were aware that we would take time to be profitable from PAT perspective. We are very mindful that we have to create value and run profitable businesses”, Gupta said.
Product pipeline
Asked about the new products in the pipeline, Gupta said that the company intends to roll out a retirement and annuity product in the next few months.
In Pramerica 2.0, which is the current phase of rebuilding post-2021, there is a conscious strategy of not taking undue risks. “We do not want to do unsustainable stuff”, he said.
“Pramerica Life, currently has a bancassurance partnership with Airtel Payments Bank, is now in talks with several banks (including public sector ones) to expand its bancassurance distribution play”, he added.
“I am mindful that larger bancassurance partnerships need us to keep building our capabilities, around products, technology, marketing, brand/underwriting, sales, everything”.
“On the agency force front, the life insurer, which has a network of about 9,000 agents, plans to add around 1000 to 2000 incremental active agents in the current fiscal”, Gupta said.