Shriram Life Insurance Company Limited
Shriram Life Insurance is the Shriram Group company catering to the Life Insurance business of the Group. Let us first know briefly about the Shriram Group businesses and then we will move on to study Life Insurance Business.
Shriram Group
a) Shriram Group, established in 1974, is among the leading corporate houses in India and is a major player in the Indian financial services sector.
b) Shriram Group’s presence in financial services is diverse ranging from Commercial Vehicle Financing, Retail Financing, Enterprise Financing to small business, Housing Finance, Equipment Financing, Life Insurance, General Insurance, Retail Stock Broking, Distribution of Financial Products, and Wealth Advisory Services. Financial Services Companies in the Group manage assets of around INR 1,500.
Partnership with Sanlam to start Insurance Business
Sanlam, a leading financial services group and one of the largest insurers in South Africa has partnered with Shriram Group in both its Life and Non-Life Insurance ventures. The effective leveraging of the network and brand equity of Shriram Group and strategic guidance by the Sanlam Group has facilitated a steady growth of the insurance companies.
Shriram Life Insurance Business
Started in the year 2005, they offer different life insurance plans for their customers which include Individual Plans, Online Plans, and Group Plans. To know more about the plans you can visit. Shriram Life Insurance has a branch network of 588 branches and has an advisor force of 4455.
Financials Metrics
1. New Business Premium- We know when we purchase a policy we pay the premium. That premium when added together from all the users who have taken policy in a given year is known as New Business Premium.
2. Renewal Premium – This is the premium of all the policyholders who have taken insurance policy prior to the current year in which we are calculating the premium. This is an important factor because sometimes people take the policy and then say after 1Y, 2Y or any other year discontinue the premium.
3. Solvency ratio- It is similar to D/E in other businesses. The IRDAI requires life insurers to maintain a minimum Solvency Ratio of 150%. As compared to the minimum requirement of 150%, the Company’s Solvency Ratio, as of 31st March 2019, was 182%.
Market share of the Shriram Life Insurance business
a) As of 30.09.2020, there is a total of 24 Life Insurers in India.
b) The total premium as of 30.09.2020 stands at 1,24,727 Crores. This is the total premium collected in the first 6 months of FY20-21.
c) LIC has a total premium of 89980 Crores (72%).
d) Private players have a total premium of 36709 Crores (28%). Among Private Players, SBI Life (24%), HDFC Life(23%), ICICI Life (12%), Aditya Birla (6%) are the top players in terms of market share.
e) For the first 6M FY20-21 Shriram Life Insurance has only 248 Crores of premiums. This translates into 0.067% market shares among private players.
Shriram Life Insurance Co. Ltd Unlisted Shares Details:
| Total Available Shares: | 1000 |
| Face Value: | ₹ 10 Per Equity Share |
| ISIN: | INE227H01016 |
| Lot Size: | 100 Shares |
| Current Unlisted Share Price: | ₹ Best In Industry Per Equity Share |
Promoters And Management:
Shareholding Pattern:
| Shareholder’s Name | No. of Shares | % of total Shares |
| Shriram Capital Limited | 13,37,43,744 | 74.56 |
| Sanlam Emerging Markets (Mauritius) Limited | 4,12,56,250 | 23 |
Financials of Shriram Life Insurance Co. Ltd Unlisted Shares:
| Particulars (in Cr) | Mar-16 | Mar-17 | Mar-18 | Mar-19 |
| Number of new policies | 266976 | 200691 | 247183 | 276483 |
| New Business Premium | 694.00 | 734.00 | 810.00 | 813.00 |
| Renewal Premium | 328.00 | 474.00 | 687.00 | 886.00 |
| Sum Assured in Force | 80376.00 | 81915.00 | 96070.00 | 106456.00 |
| Funds under Management | 2528.00 | 3076.00 | 3544.00 | 4196.00 |
| Expense ratio | 51% | 42% | 34% | 31% |
| No. of Offices | 568.00 | 604.00 | 609.00 | 588.00 |
| Number of Insurance Agent | 4422.00 | 4508.00 | 4498.00 | 4455.00 |
| Profit Before Tax | 23.00 | 16.00 | 93.00 | 55.00 |
| Profit After Tax | 19.00 | 17.00 | 88.00 | 63.00 |
| No. of shares | 17.50752 | 17.50752 | 17.50944 | 17.53060 |
| EPS | 1.09 | 0.97 | 5.03 | 3.59 |
Comparison With Peers:
| Peer | Premium (Cr) | Mcap | Mcap/Premium | P/E |
| HDFC Life | 17396 | 113999 | 6.55 | 85 |
| ICICI Life | 12348 | 58685 | 4.75 | 54.9 |
| SBI Life | 16591 | 77000 | 4.64 | 53.5 |
| Shriram Life | 708 | 3228 | 4.56 | 53.56 |
Please Note: 1. We have calculated Shriram Life Mcap by considering a price of Rs.180 per share. 2. The premium for 2019-20 was taken into account. 3. The EPS of 2018-19 is taken for calculating Shriram Life P/E.
Shriram Life Insurance Company Unlisted Shares – Company Overview
Shriram Life Insurance Company Limited is a subsidiary company of the Shriram Group. Shriram Group was established in 1974. It is one of the leading corporate houses in India and is a major player in the Indian financial services sector. Shriram group focuses more on common people rather than on institutional clients. Shriram Group consist of a diversified portfolio of financial services including Commercial Vehicle Financing, Retail Financing, Enterprise Financing to small business, Housing Finance, Equipment Financing, Life Insurance, General Insurance, Retail Stock Broking, Distribution of Financial Products, and Wealth Advisory Services. In 2005, Shriram Life Insurance Company Limited was established. It offers a wide range of insurance distributed in Three main segments, Online Plans, Individual Plans, and Group Plans.
Shriram Life Insurance Company Limited has entered into a partnership with “Sanlam”, a leading financial services group and one of the largest insurers in South Africa, in life and non-life insurance ventures.
Shriram Life Insurance Company Limited has shown a strong growth pattern and track record, which have attracted a large number of private equity funds and partners.
Shriram Life Insurance Limited has a network of 529 branches and an advisor force of 4436 people.
Shriram Life Insurance Share Price Share Details as of March 31, 2023
| Shriram Life Outstanding Shares: | 179,375,000 |
| Face Value of Shriram Life Unlisted Share: | Rs. 10 Per Equity Share |
| ISIN of Shriram Life Unlisted Share: | INE227H01016 |
| Lot Size of Shriram Life Unlisted Share: | 100 Shares |
| Shriram Life Share Price: | Best in Industry |
| PAN Number of Shriram Life: | AAJCS1033P |
Incorporation Details of Shriram Life Insurance
CIN of Shriram Life |
U66010TG2005PLC045616 |
Registration Date of Shriram Life |
15 March 2005 |
Category / Sub-Category of Shriram Life |
Company Limited by Shares |
Shriram Life Registered Office Address and contact details |
Plot No 31 & 32, 5th Floor, Ramky Selenium,
Beside Andhra Bank Training Centre, Financial District, Gachibowli, Hyderabad-500032. Phone: +91 40 23009400 |
Shriram Life Registrar and Transfer Agent address |
Integrated Enterprises (India) Limited
5A,5th floor, Kences Towers,1 Ramakrishna Street, North Usman Road, T.Nagar, Chennai-600017 |
Board of Directors of Shriram Life Insurance Company Limited
Mr. T S Krishnamurthy, Chairman
Mr. Casparus Jacobus Hendrik Kromhout, Managing Director & CEO
Mrs. Akhila Srinivasan, Director
Mr. Manoj Kumar Jain, Managing Director
Mr. S Lakshminarayanan, Director
Mr. Stephanus Philipus Mostert, Director
Mr. Gaurav Trehan, Director
Mr. R S Krishnan, Director
Mr. Duruvasan Ramachandra, Director
Mr. Daniel Hermanus Gryffenberg, Director
Mr. Umesh Govind Revanker, Director
Mr Sanjeev Mehra, Director
Principal Business Activities of Shriram Life Insurance Company Limited
| Name and Description of main products/services | NIC Code of the product/service | % to the total turnover of the Company |
| Insurance (Life) | 6511 | 100% |
Shriram Life Particulars of Subsidiary, Associate and Holding Companies
| S.No. | Name of the Company | Holding/Subsidiary /Associate | % of Shares Held |
| 1. | Shriram Capital limited | Holding | 74.56% |
Shareholding Pattern of Shriram Life Insurance Company Limited (As of 31-03-2023)
| S. No. | Shareholders’ Name | No. of Shares | % of total Shares of the company |
| 1. | Promoter Group | 17,49,99,994 | 97.56% |
| 2. | Public Shareholding | 43,75,006 | 2.44% |
| Total | 17,93,75,000 | 100.00% |
Shriram Life Insurance Company Limited Balance Sheet (Rs in Thousands)
|
Particulars |
31-03-2024 |
31-03-2023 |
|
SOURCES OF FUNDS |
||
|
SHAREHOLDERS’ FUNDS: |
||
|
Share Capital |
17,91,713 |
17,78,479 |
|
Reserves and Surplus |
70,20,211 |
61,10,890 |
|
Credit/(Debit)/ Fair Value Change Account |
2,28,122 |
77,779 |
|
POLICYHOLDERS’ FUNDS: |
||
|
Credit/(Debit)/ Fair Value Change Account |
16,96,000 |
2,86,596 |
|
Policy Liabilities |
10,09,15,281 |
8,17,25,806 |
|
Provision for Linked Liabilities |
49,09,992 |
40,68,002 |
|
Discontinued on account of non-payment of premium |
2,95,103 |
2,20,263 |
|
FUNDS FOR FUTURE APPROPRIATIONS |
16,60,340 |
6,27,265 |
|
TOTAL |
11,85,16,762 |
9,48,95,080 |
|
APPLICATION OF FUNDS |
||
|
Shareholders’ |
81,78,444 |
72,98,454 |
|
Policyholders’ |
9,94,37,033 |
7,85,31,170 |
|
Assets Held to Cover Linked Liabilities |
52,05,096 |
42,88,265 |
|
Loans |
20,20,066 |
14,61,689 |
|
Fixed Assets |
5,08,749 |
4,92,479 |
|
Current Assets |
||
|
Cash and Bank balances |
30,46,380 |
22,41,216 |
|
Advances and Other Assets |
49,37,062 |
42,44,565 |
|
Current Liabilities |
38,86,977 |
30,75,997 |
|
Provisions |
9,29,091 |
5,86,761 |
|
NET CURRENT ASSET |
31,67,374 |
28,23,023 |
|
TOTAL |
11,85,16,762 |
9,48,95,080 |
Shriram Life Insurance Company Limited Profit & Loss Statement (Rs in Thousands)
|
Particulars |
31-03-2024 |
31-03-2023 |
|
Amounts transferred from the Policyholders Account (Technical Account) |
11,04,581 |
11,50,802 |
|
Income From Investments |
||
|
Interest, Dividends & Rent – Gross |
4,75,461 |
4,24,465 |
|
Profit on sale / redemption of investments |
73,393 |
82,355 |
|
(Loss on sale / redemption of investments) |
-203 |
-25,664 |
|
Amortisation of (premium)/discount on investments |
18,452 |
17,259 |
|
Other Income |
16,618 |
25,119 |
|
TOTAL INCOME |
16,88,302 |
16,74,336 |
|
Expenses other than those directly related to the insurance business |
2,457 |
7,770 |
|
Contribution from Shareholders’ a/c towards excess over allowed expenses under Expenses of Management Regulations |
1,139 |
– |
|
CSR Expenses |
18,560 |
9,950 |
|
Written Off Transfer to Policyholders’ fund |
5,497 |
23,024 |
|
TOTAL EXPENSES |
27,653 |
40,744 |
|
Profit / (Loss) before Tax Provision for Taxation |
16,60,649 |
16,33,592 |
|
Current Tax |
81,055 |
73,647 |
|
Profit / (Loss) after Tax |
15,79,594 |
15,59,945 |
|
Appropriations |
||
|
Balance at the beginning of the Year |
60,71,019 |
50,49,199 |
|
Interim dividend paid during the year |
1,50,675 |
5,38,125 |
|
Final dividend for FY 2022-23 |
5,38,125 |
– |
|
PROFIT/(LOSS) CARRIED FORWARD TO BALANCE SHEET |
69,61,813 |
60,71,019 |
Shriram Life Insurance Company Limited Consolidated Cash Flow Statement (Rs in Thousands)
|
Particulars |
31-03-2024 |
31-03-2023 |
|
Cash Flow from operating activities |
||
|
Premium received from policyholders, including advance receipts |
3,50,69,810 |
2540 37 87 |
|
Other receipts |
||
|
Proposal Deposits |
401 |
-5626 |
|
Policy Deposits |
1,40,974 |
-454217 |
|
Linked Income |
1,00,469 |
95875 |
|
Misc. Income |
7,94,264 |
425431 |
|
Payments to the re-insurers, net of commissions and claims/ Benefits |
-56,861 |
-85163 |
|
Payments of claims/benefits |
-94,97,343 |
-7564808 |
|
Payments of commission and brokerage |
-37,07,729 |
-1407037 |
|
Payments of other operating expenses |
-69,89,023 |
-5600647 |
|
Deposits, advances and staff loans |
4,39,122 |
-959240 |
|
Income taxes paid (Net) |
-4,88,004 |
-259377 |
|
GST paid |
-84,650 |
-46494 |
|
Loans against policies |
-5,58,377 |
-387382 |
|
Net cash flow from operating activities |
1,51,63,053 |
9155102 |
|
Cash flows from investing activities |
||
|
Purchase of fixed assets (including CWIP) |
-1,93,187 |
-1,42,317 |
|
Sale of fixed assets & Transfer to fixed assets |
42,729 |
29,613 |
|
Purchases of investments |
-2,59,10,088 |
-1,66,68,401 |
|
Investment Income |
60,81,290 |
50,10,775 |
|
Sales of investments |
62,78,404 |
32,19,590 |
|
Net cash flow from investing activities |
-1,37,00,852 |
-85,50,740 |
|
Cash flows from financing activities: |
||
|
Proceeds from issuance of share capital |
31,762 |
4,664 |
|
Interest/dividends paid |
-6,88,800 |
-5,38,125 |
|
Net cash flow from financing activities |
-6,57,038 |
-5,33,461 |
|
Net increase in cash and cash equivalents |
8,05,163 |
70,902 |
|
Cash and cash equivalents at the beginning of the year |
2241216 |
2170314 |
|
Cash and cash equivalents at the end of the year |
30,46,379 |
22,41,216 |
Here is a summary of the Cash Flow Statement for the years 2024 and 2023:
Cash Flow from Operating Activities
Premium Received from Policyholders:
2024: ₹3,50,69,810 thousand
2023: ₹2,540,37,870 thousand
This represents the cash inflows from policyholders, including advance receipts. The substantial increase indicates a significant growth in the business and new policies written.
Other Receipts:
Proposal Deposits:
2024: ₹401 thousand
2023: ₹-5,626 thousand
Proposal deposits reflect initial deposits made by policyholders. A positive figure in 2024 indicates an inflow, compared to an outflow in 2023.
Policy Deposits:
2024: ₹1,40,974 thousand
2023: ₹-4,54,217 thousand
Policy deposits are additional funds deposited by policyholders. There is a significant inflow in 2024 compared to an outflow in 2023.
Linked Income:
2024: ₹1,00,469 thousand
2023: ₹95,875 thousand
Linked income relates to income from linked insurance products, showing a slight increase.
Miscellaneous Income:
2024: ₹7,94,264 thousand
2023: ₹4,25,431 thousand
This includes various other income sources and has seen a notable increase.
Payments:
To Re-insurers:
2024: ₹-56,861 thousand
2023: ₹-85,163 thousand
Payments to re-insurers, net of commissions and claims/benefits, decreased, indicating lower re-insurance costs.
Claims/Benefits:
2024: ₹-94,97,343 thousand
2023: ₹-75,64,808 thousand
Payments for claims and benefits increased, reflecting higher policy payouts.
Commission and Brokerage:
2024: ₹-37,07,729 thousand
2023: ₹-14,07,037 thousand
Payments for commissions and brokerage saw a substantial increase, possibly due to higher sales volume.
Operating Expenses:
2024: ₹-69,89,023 thousand
2023: ₹-56,00,647 thousand
Other operating expenses increased, indicating higher operational costs.
Deposits, Advances, and Staff Loans:
2024: ₹4,39,122 thousand
2023: ₹-9,59,240 thousand
There was an inflow in 2024, contrasting with an outflow in 2023, indicating a reduction in such advances.
Income Taxes Paid:
2024: ₹-4,88,004 thousand
2023: ₹-2,59,377 thousand
Increase in income taxes paid, reflecting higher taxable income.
GST Paid:
2024: ₹-84,650 thousand
2023: ₹-46,494 thousand
GST payments increased, indicating higher taxable transactions.
Loans Against Policies:
2024: ₹-5,58,377 thousand
2023: ₹-3,87,382 thousand
Increase in loans against policies, indicating higher borrowing against policies.
Net Cash Flow from Operating Activities:
2024: ₹1,51,63,053 thousand
2023: ₹91,55,102 thousand
Significant increase in net cash inflows, reflecting overall growth and improved operational efficiency.
Cash Flows from Investing Activities
Purchase of Fixed Assets:
2024: ₹-1,93,187 thousand
2023: ₹-1,42,317 thousand
Increased investment in fixed assets, indicating expansion.
Sale of Fixed Assets:
2024: ₹42,729 thousand
2023: ₹29,613 thousand
Increased proceeds from the sale of fixed assets.
Purchases of Investments:
2024: ₹-2,59,10,088 thousand
2023: ₹-1,66,68,401 thousand
Significant increase in investment purchases, indicating a higher allocation of funds into investments.
Investment Income:
2024: ₹60,81,290 thousand
2023: ₹50,10,775 thousand
Increase in income from investments, reflecting higher returns.
Sales of Investments:
2024: ₹62,78,404 thousand
2023: ₹32,19,590 thousand
Increase in proceeds from the sale of investments.
Net Cash Flow from Investing Activities:
2024: ₹-1,37,00,852 thousand
2023: ₹-85,50,740 thousand
Higher net outflow, indicating increased investment activities.
Cash Flows from Financing Activities
Proceeds from Issuance of Share Capital:
2024: ₹31,762 thousand
2023: ₹4,664 thousand
Increase in proceeds from issuing share capital.
Interest/Dividends Paid:
2024: ₹-6,88,800 thousand
2023: ₹-5,38,125 thousand
Increase in interest and dividends paid, reflecting higher financing costs.
Net Cash Flow from Financing Activities:
2024: ₹-6,57,038 thousand
2023: ₹-5,33,461 thousand
Increased net outflow, indicating higher financing expenses.
Net Increase in Cash and Cash Equivalents
2024: ₹8,05,163 thousand
2023: ₹70,902 thousand
Significant increase in net cash inflow, indicating improved cash management.
Cash and Cash Equivalents at Year-End:
2024: ₹30,46,379 thousand
2023: ₹22,41,216 thousand
Higher ending balance, reflecting overall positive cash flow.
Components of Cash and Cash Equivalents
Cash on Hand: Minimal change, indicating stable cash reserves.
Balances with Banks:
In Current Accounts: Increased, indicating more readily accessible funds.
In Deposit Accounts Free of Lien: Increased, reflecting higher secured deposits.
Financial Ratios of Shriram Life Insurance Company Limited
|
Particulars |
2024 |
2023 |
|
Net Retention Ratio |
99.80% |
99.70% |
|
Expense of Management to Gross Direct Premium Ratio |
31.60% |
28.60% |
|
Commission Ratio (Gross commission paid to Gross Premium) |
11.00% |
5.90% |
|
Ratio of policy holder’s liabilities to shareholder’s funds |
1211.00% |
1091.10% |
|
Growth rate of shareholders’ fund |
13.50% |
13.70% |
|
Ratio of surplus to policyholders’ liability |
2.00% |
1.80% |
|
Profit after tax/Total Income |
3.60% |
5.00% |
|
(Total real estate + loans)/ (Cash & invested assets) |
1.50% |
1.40% |
|
Total investments/ (Capital + Surplus) |
1280.30% |
1142.30% |
|
Total affiliated investments/ (Capital+ Surplus) |
36.20% |
41.30% |
Here is a summary of the financial and operational metrics for Shriram Life Insurance Company Limited for the year 2024 & 2023:
Net Retention Ratio
2024: 99.80%
2023: 99.70%
Insight: A high net retention ratio indicates that the company retains a significant portion of its premiums, reflecting stability in its risk retention strategy.
Expense of Management to Gross Direct Premium Ratio
2024: 31.60%
2023: 28.60%
Insight: The increase in this ratio suggests higher management expenses relative to gross direct premiums, which might impact profitability if not managed effectively.
Commission Ratio (Gross Commission Paid to Gross Premium)
2024: 11.00%
2023: 5.90%
Insight: The significant rise in the commission ratio indicates higher commission expenses relative to gross premiums, potentially reflecting changes in distribution strategy or increased reliance on intermediaries.
Ratio of Policyholder’s Liabilities to Shareholder’s Funds
2024: 1211.00%
2023: 1091.10%
Insight: An increase in this ratio suggests a higher level of policyholder liabilities compared to shareholder funds, indicating increased obligations towards policyholders.
Growth Rate of Shareholders’ Fund
2024: 13.50%
2023: 13.70%
Insight: The slight decline in the growth rate of shareholders’ funds suggests a marginally slower pace of equity growth, which could impact the company’s ability to raise capital.
Ratio of Surplus to Policyholders’ Liability
2024: 2.00%
2023: 1.80%
Insight: The increase in this ratio indicates a higher surplus relative to policyholders’ liabilities, reflecting improved financial strength and ability to cover policyholder claims.
Profit After Tax/Total Income
2024: 3.60%
2023: 5.00%
Insight: The decrease in this ratio indicates lower profitability relative to total income, suggesting increased expenses or reduced income.
(Total Real Estate + Loans) / (Cash & Invested Assets)
2024: 1.50%
2023: 1.40%
Insight: A slight increase indicates a marginally higher allocation of assets to real estate and loans relative to cash and invested assets, potentially affecting liquidity.
Total Investments / (Capital + Surplus)
2024: 1280.30%
2023: 1142.30%
Insight: The increase suggests a higher investment base relative to capital and surplus, indicating an aggressive investment strategy which could enhance returns but also risk.
Total Affiliated Investments / (Capital + Surplus)
2024: 36.20%
2023: 41.30%
Insight: The decrease indicates a lower proportion of affiliated investments, which could reduce exposure to related party risks.
Dividend History
|
Particulars |
2024 |
2023 |
2022 |
|
Dividend Per Share (in Rs.) |
5.29 |
6.00 |
2.47 |
