Aviva India breaks even, posting a fiscal year profit of Rs 29 crores
Date: 09-Jun-2011
- Sustained growth despite market volatility
- Significant enhancement in Business persistency
- Total premium collected for FY 2010-11 – Rs 2,345 crores
- Largest non-captive Bancassurer
- Solvency ratio at 540%, among the highest in the industry
- Claim settlement ratio better than industry average
- Enhanced efficiency of the business
Mumbai, June 9, 2011: Aviva Life Insurance today announced a profit of Rs 29 crores in FY 2010-11, for the first year since launch of operations in May 2002, against a reported loss of Rs 345 crores in the previous year. This is despite the market volatility and significant challenges faced by the sector. The company maintained total premium collected at par with previous year at Rs 2,345 crores with total Assets under Management pegged at Rs 7,654 crores.
Speaking on the occasion, Mr. TR Ramachandran, CEO & MD, Aviva India said, “Our business focus has been on sustainable and profitable growth driven by a quality led business model focused on Bancassurance. The transition to profitability is a result of proactive steps taken to re-organise the product portfolio and continuous management focus on achieving higher productivity, improving persistency and strategic cost management.”
The company has capitalized on the large opportunity in the protection and child segment and in the last FY, nearly 10% of business has been contributed by each of these segments. Aviva India introduced a complete suite of protection products, including its online term plan Aviva i-Life which provides high life cover at the lowest cost* compared to other similar products in the market. Aviva India also launched 7 new traditional products and 4 unit-linked products in FY2010-11. Most of these have been rated among the best-in-class by independent analysts.
The strong management focus towards resource optimization and cost efficiencies led to a reduction of 20% in total operating expenses. The Company’s Operating Expenses to Gross Written Premium ratio improved from 30% in the financial year 2009-10 to 24% in the financial year 2010-11.
With its focus on rural and microinsurance, the company has significantly over achieved its rural and social sector obligations prescribed by IRDA by selling ~ 24% policies in rural sector and covering more than 3.5 mn lives in the social sector.
The Company also introduced various customer centricity initiatives like Most Important Terms in the policy document, Proposal Stage Calling, among others to ensure that the customer was aware of the product he had bought. The Company also introduced many new touch points to make it simpler and easier for customers to renew their policies. There was thus a significant enhancement in the 13th month persistency for the Business.
Thus, during the year, Aviva India’s business registered strong progress against all the strategic milestones set out by the Board and shareholders.