Shriram Life to focus on lower-sum policy sales & market share growth in underdeveloped states

Shriram Life Insurance Company Ltd said it would focus on selling more policies at lower premiums and expanding its market share in states where it currently holds less than 1 per cent .

The company, a joint venture between Shriram Capital Ltd—the holding company of the Shriram Group—and South Africa-based Sanlam Ltd, continues to prioritize serving lower-income segments. This focus is partly driven by the strong presence of Shriram companies in these areas. Notably, 44 per cent of Shriram Life’s individual business comes from rural India, a stark contrast to the industry average of 20 per cent , reflecting its success in navigating the challenges of the low-premium market.

Shriram Life ranked 7th among private sector insurers for individual regular premium policies in FY24, while its overall market share for New Business APE (Annualized Premium Equivalent) stood at 1.4 per cent , positioning the company 13th out of 25 private players. “Despite these figures, our growth trajectory is promising, particularly in the individual regular premium segment. We saw our market share rise to 7.3 per cent in Q1 FY25, up from 5.1 per cent in FY24 and 3.6 per cent in FY23,” Casparus J.H. Kromhout, MD & CEO of Shriram Life told businessline.

While the company’s APE remains lower than some of its peers, he stated that this aligns with their objective to serve lower-income populations, where the need for life insurance is most critical. “We aim to reach a broader base of customers while keeping our business sustainable. This means keeping ticket sizes manageable. High-value policies are not always feasible for low-income groups, so we focus on selling more policies at smaller amounts to increase coverage across both rural and urban markets,” he added.

This strategy has fuelled a remarkable 131 per cent growth in individual policy sales during the first half of the current financial year, with much of the increase coming from rural areas.

Widespread underinsurance

One of the challenges the company faces is the widespread underinsurance of Indian families, particularly in rural areas. Shriram Life’s approach involves introducing an initial policy to create awareness, followed by term policies that offer additional coverage once families understand the importance of life insurance.

The company currently operates in 15 states, but rather than spreading thin, it aims to deepen its presence in these regions. In some states, Shriram Life already holds a strong position. For instance, its market share in Telangana stood at 3.6 per cent in FY24, while Andhra Pradesh accounted for 5.2 per cent , giving the company a combined market share of 4.32 per cent in these states. However, many regions still require greater focus.

“In several other states, our market share remains below 1 per cent . For example, in Gujarat, Maharashtra, and Bihar, we held shares of 0.4 per cent , 0.6 per cent , and 1.32 per cent , respectively,” he stated.

Shriram Life is now focusing on growing its presence in underdeveloped states like Gujarat, Maharashtra, and Karnataka while continuing to build on its already solid foundation in states like Telangana. “Our objective is to elevate all states to a certain threshold and steadily increase market share across the board. We expect to reach a 1 per cent share in these states within a year or two, followed by 2 per cent , and so on. We’re adopting a methodical, state-by-state strategy,” Kromhout added.

For the current fiscal year, the company aims for 30 per cent growth. Looking ahead to 2030, Shriram Life has set an ambitious target to triple its individual APE from the .₹900 crore achieved in FY24, with a projected CAGR of 25 per cent .