Pramerica Life Insurance, a joint venture between subsidiaries of Piramal Capital and Housing Finance and US-based Prudential Financial Inc, aims to close FY26 with Rs 3,000 crore in gross written premium. In an interview with Narayanan V, managing director and CEO Pankaj Gupta discusses the products and distribution strategy. Excerpts:
Life insurance premiums have been on a decline since October. Is the new surrender guidelines still impacting?
Premium growth trends were different in the first half of FY25, compared to the period when surrender value guidelines took effect. Whenever a major regulatory change happens, there is a period of repositioning, in which various stakeholders try to implement the changes. It will take time before the momentum comes back.
Besides that, the slowdown in group life insurance is a key factor. The employer-employee segment is seeing a dip, and in some cases, even when coverage remains the same as last year, rates have declined. More importantly, non-banking financial companies (NBFCs) and microfinance institutions (MFIs) are facing a slowdown in disbursements. Since a large share of group life insurance business comes from these partners, this has also impacted the premium growth.
How is the MFI slowdown impacting your business?
Our business is closely tied to MFI partnerships. Since many microfinance companies are seeing slow growth, we are also facing some decline. We hope that as this cycle plays out, this financial year will bring stability. When MFI loan disbursements slow down, insurance policies sold alongside these loans also decline, affecting our premium collections. This is one of the key reasons behind the plan to diversify the product and distribution mix.
What are your diversification plans?
On the products side, around 90% of our retail sales currently come from non-participating (non-par) products, with the remaining 10% being ULIPs. I want to reduce the reliance on non-par products. Ideally, non-par should not exceed 50% of the product mix while participating (par) products and ULIPs should each contribute around 25%. Additionally, we aim to have some contribution from annuity and term insurance. Over the next two-three years, we hope to achieve a more balanced mix. Last year, we launched several ULIP products and plan to introduce 8–10 products this year.
Will it change the mix between retail and group business?
Our company has been in a rebuilding phase since Piramals took over about three-and-a-half years ago. We operate in both the retail and group segments. On the group side, we have partnerships with NBFCs and MFIs. On the retail side, we primarily serve the Army and paramilitary segments.
Traditionally, we’ve had a strong presence in specific segments, particularly MFIs and the Army. Currently, 75% of our new business premium comes from group partnerships. Individual policies, which are mostly non-par, constitute the remaining. Our retail distribution will expand beyond non-par products to include more ULIPs and participating offerings. Ideally, I would like a 50-50 split between retail and group business in terms of new business premium.
Where do you see your gross written premium (GWP) in FY26?
We have closed FY25 with Rs 2,000 crore of GWP. This includes Rs 1,200 crore in new business premiums and Rs 830 crore in renewal premium. Our aim is to close FY26 with Rs 3,000 crore of GWP and Rs 11,000 crore in assets under management.