Reliance Life Insurance to have accounting profit this fiscal

Reliance Life Insurance, a part of Reliance Capital, is expected to register its first year of accounting profit this financial year, a top executive of the company said Tuesday.

The company is exploring the possibility of expanding its distribution network by adding new channels to service customers, particularly in the semi-urban and rural areas. It will involve career agents on a trainee basis and appoint employees, primarily young women, on its payroll in select locations.

“It takes about 10 years for any life insurance company to break even. We are in our sixth year…for the last 18 months we have been making month-on-month profit. I think this will be our first year of accounting profit,” executive director and president Malay Ghosh told reporters on the sidelines of a programme to unveil its new products.

The company Tuesday launched two products – Reliance Guaranteed Moneyback Policy and Family Income Benefit Rider.

Ghosh said the company has registered growth in every month compared to the previous month this fiscal.

“If you look at the life insurance industry in the current year from April (2011) to January (2012), every single month has been better than the previous month. For instance for us, May has been better than April, June has been better than May…like that, growth has been reported compared to the previous month,” he said.

Revealing that renewal premium for the company has been growing handsomely in this financial year compared to the last financial year, he said, “Renewal premium has shown a growth of about 10 percent for our company.”

On need for capital infusion, he said, “We did not need any capital infusion as we have registered profit. We have a very healthy cash flow…our present solvency is above 300 percent. At this point of time I do not think that we need capital. We can invest from our own cash flow.”

Stating that Reliance Life Insurance was the number two among all private sector life insurance companies in terms of number of policies sold, Ghosh said the next fiscal will be better than this fiscal.

He said the company was expecting that insurance regulator would give approval to its proposed Maturity Benefit Guaranteed Rider and e-term product.

“We have already answered various queries of IRDA. We are in touch with them. I think for both the Maturity Benefit Guaranteed Rider and e-term product we will get sanction between seven to 30 days,” he said.