Mumbai, India (PressExposure) July 21, 2011 -- With three straight quarters of profits since October, Reliance Life hopes to report its first full year in the green in 2011-12 with products focussed on the family of insured than mere investment options.
The company - which draws as much as 78 percent of its business from rural areas - has also hopes launch a new career agent programme in the hinterland - that will give them both a fixed income and a commission on policies sold.
Announcing this at a media offsite here, Reliance Life president Malay Ghosh said under this new distribution model, 6,000 agents are proposed on a fixed-cum-flexible income structure and even paid a stipend during training.
"This model is quite different from the agency model that is purely based on commissions. A fixed income component will ensure the agent works full time and remains committed to the company and its products," Ghosh said.
"We have understood that in smaller locations, agents take longer to come up to the learning curve. This initiative will provide the necessary encouragement and support to stay in the insurance field," he added.
Speaking about the focus on protection as opposed to products that give returns to policy holders on a periodic basis, Reliance Life officials said two new schemes had been filed with the regulator to give clients more options at nominal cost.
Under the first scheme, the family of a deceased policy holder will be able to get 12 percent of the sum assured annually for 10 years or the balance of the policy term, whichever is longer.
"This will be in addition to the life cover under the basic policy," Ghosh said.
In the second, the company is planning another rider. In the case of the death of a policyholder, the family will also get full survival and maturity benefit, in addition to live cover as spelt out in the policy.
"This option is normally attached to child plans. But we are keen to make it available for all plans," Ghosh said, adding this plan has also been filed with the Insurance Development and Regulatory Authority of India.
Speaking about the financials, the top official of Reliance Life - a subsidiary of Reliance Capital - said the profitability and efficiency of the company had improved a lot in past 24 months.
"In 2009-10, the loss was reduced by 80 percent over the previous year. Then in the last financial year, the loss was brought down even further by 55 percent. As a result, there has been no need for capital induction since August 2010," Ghosh said.
This year, Reliance Life officials indicated a profit of around Rs.300 crore, with a target of Rs.3,500 crore in new business and Rs.5,000 crore from renewal of premia.
Reliance Life, a part of the larger Reliance Group led by industrialist Anil Ambani, ranks first among Indian companies in the business in terms of policies sold and fourth in terms of new business premium.
The total funds under management amounted to $4 billion as on March 31, an increase of an impressive 31 percent over the year.
Its deal with Nippon to sell 26 percent stake for $680 million is the largest in Indian fianncial services space.