FY2020-21 is the 9th consecutive year of continued Profitability
VNB margin was at 20.6% during FY 2020-21
AUM during FY2020-21 rise 24% to INR 12,101 crore
Final dividend of INR 104 crore declared subject to approval at the AGM
Mumbai, April 29, 2021: Ageas Federal Life Insurance, one of India’s leading private life insurance companies, today announced its financial results for the 12-month period ending March 31, 2021, reporting a Net Profit of INR 119 crore.
This is the 9th consecutive year of profit for the private Life Insurer since it first declared profit in FY2012-13. Despite the challenges posed by the pandemic, Ageas Federal’s total premium rose by 6% to INR 1,959 crore in FY2020-21 from INR 1,843 crore in FY2019-20. The growth was driven by a 24% rise in Individual New Business Premium to INR 504 crore and 4% rise in renewal premium to INR 1,327 crore. The Company also benefitted from a strong growth of 40% in Individual New Business Premium from Federal Bank.
The Board has recommended a final dividend of INR 104 crore, at a rate of dividend of 13%, subject to approval at the ensuing Annual General Meeting.
An understanding of customers’ needs during the pandemic and catering to them with the appropriate products and solutions has helped Ageas Federal to post a VNB margin of 20.6%. Our superior customer service and focus on developing long-lasting relationships with our customers has borne fruit with the 13th month persistency reaching 86% and the Company being in the top quartile of all persistency buckets.
The average turnaround time (TAT) in resolving complaints for FY 2020-21 was 2 days which is among the best in the life insurance industry and considerably lower than the industry average of 5 days. This was the seventh consecutive financial year end where the pending complaints were nil at the end of the year.
During the year, the Company ensured that the lockdown across various places in the country did not impact the claims settlement turnaround. The Company processed the claims based on scanned images to ensure a speedy settlement of claims with a main focus on claims on account of deaths due to Covid-19. Average TAT from date of intimation of the claim to date of settlement of the claim for individual death claims was 9 days. The repudiation ratio for FY 2020-21 improved to 2.16% as against 3.18% in FY 2019-20 for individual death claims, while the repudiation ratio specifically for Covid claims was 1.69%.
Adapting to the ‘new normal’, Ageas Federal Life Insurance has also reimagined the customer experience by investing in newer technology and focusing on digital channels and online applications to simplify the process for its customers.
Commenting on the financial performance during the year, Mr. Vighnesh Shahane, MD & CEO, Ageas Federal Life Insurance said, “FY2020-21 has been a challenging year for the world, and so also for us. During these difficult times due to the Covid-19 pandemic, we have taken several steps to steady the course of onboarding for our customers. Our profitability is borne out of continued efficiencies in achieving improved persistency, rationalisation in costs, decline in surrenders, and healthier solvency margin. We realigned our product suite in tune with the evolving needs of customers during the pandemic, introducing features that made our products more customer-centric and offered policyholders greater flexibility. Understanding and managing risks is of vital importance and the organisation has instituted strong governance practices and an integrated enterprise risk management system to identify, analyse and mitigate risks.”
Mr. Shahane further added, “The Covid-19 pandemic is putting us through unprecedented and difficult times, but I am confident we will get through this crisis and emerge stronger. On the business front, we will continue to ramp up our proprietary distribution channels, while looking to further leverage the relationship with our bancassurance partners. The pandemic has greatly accelerated our digital journey and we will continue to focus on digital initiatives and solutions that provide a superior experience to our customers, partners, vendors and employees.”
During the last financial year, the Company announced that the joint venture life insurance entity has been rebranded to Ageas Federal Life Insurance Company Limited, pursuant to one of its promoters, Ageas Insurance International NV increasing its stake to 49% by acquiring 23% of stake from IDBI Bank. Federal Bank holds a stake of 26% in the Company while IDBI Bank’s stake now stands at 25%.
To announce the new brand identity, the organisation launched a brand campaign led by legendary cricketer and the organisation’s brand ambassador, Sachin Tendulkar which establishes the Ageas Federal Life Insurance brand as positive and forward thinking; a brand that inspires individuals to live fearlessly, empowered by Ageas Federal’s smart financial planning and Life Insurance solutions.
The organisation was also recognised for the second consecutive time as one of ‘India’s Top 30 Best Workplaces in BFSI 2021’ by the Great Place to Work® Institute, reflecting its success in driving best people practices and an engaging employee experience.