Annual Report: 2022
Shriram Life Insurance Company Limited's 17th Annual Report for FY 2021-22 provides a detailed overview of the company's performance, financial position, and corporate governance practices.
About Shriram Life Insurance Shriram Group, established in 1974, is a major player in the Indian financial services sector, focusing on serving common people. Shriram Capital Limited (SCL) is the holding arm. Shriram Group has presence in financial services including Commercial Vehicle Finance, Retail Finance, Enterprise Finance, Housing Finance, Equipment Finance, Life Insurance, General Insurance, Retail Stock Broking, Distribution of Financial Products and Wealth Advisory Services. Assets managed by these companies total around INR 2,150 billion. Sanlam, a South African financial services group, has partnered with Shriram Group in its insurance ventures and holds 62% of Santam's shares. The Sanlam Group consists of four operating business clusters: Sanlam Life and Savings (SLS), Sanlam Emerging Markets (SEM), Sanlam Investment Group (SIG), and Santam.
Financial and Operational Review: The company's financial results for the year ended March 31, 2022, compared to the previous year, are summarized as follows:
Non-Linked business surplus after tax was Rs 76.60 Crores (vs. Rs 70.30 Crores); Linked business surplus after tax was Rs. 5.46 Crores (vs. Rs. 10.78 Crores). The Profit & Loss Account (Shareholders' account) showed a profit of Rs.2.54 Crores after tax, including transfer from Policyholders' Account of Rs. 22.57 Crores (vs. Rs. 106.19 Crores after transfer of Rs.79.60 Crores).
Business Performance: The domestic life insurance industry registered 13% growth for new business premium, while private insurers grew at 23% and LIC at 8%. Shriram Life saw ~3% growth compared to 23% for private industry and -3% for LIC. Individual APE grew 1%. Company income was Rs. 2350 Crores. Operating expenses were Rs. 513 Crores.
Rural and Social Sector Obligations: The Company met its regulatory requirements for rural and social sector obligations. 41% of the overall business was in the rural sector, against a requirement of 20%. Insured 3,851,942 social lives, compared to prescribed 308,838.
Solvency: The Company's Solvency Ratio as of March 31, 2022, was 205%, exceeding the minimum requirement of 150%.
Dividend and Reserves: A final dividend of Rs. 1.67 per share was recommended. An interim dividend of Rs. 2.47 per share was also approved. No amount was carried forward to reserves for FY 2021-22.
Share Capital: The paid-up equity share capital stood at Rs. 179,37,50,000.
Insurance Agents: The certificate of license system was replaced with a letter of appointment. The company has 423 branches, 3784 active advisors, and 110 POSPs as of March 31, 2022.
Status of Products: The company has 152 approved products/riders, with 43 available for new business. 10 new products compliant with IRDA (Linked and Non-linked) Products Regulations 2019 were launched. 9 products were withdrawn.
Other Disclosures: The Company did not accept any public deposits, nor was any loan taken from any bank or financial institution. There was no public issue, rights issue, bonus issue, or preferential issue. There was no Issue of shares with differential rights. The Company has assessed the overall impact of the COVID-19 pandemic on its business, and taken measures such as reviewing underwriting, repricing products, and setting aside a reserve of Rs 14.6 crores.
Internal Control Systems and Adequacy: The Company has an Internal Control System. The Internal Audit Department monitors and evaluates the internal control system, and reports to the Audit Committee of the Board. The Chief Risk Officer presents a risk report to the Risk Committee and the Board.
Directors and Key Managerial Personnel: The Board comprises eleven directors: six Non-Executive, three Independent, and two Executive Directors. Mr. Daniel Hermanus Gryffenberg and Mr. Umesh Govind Revankar retire by rotation and are eligible for re-appointment. Remuneration policy is recommended by the Nomination and remuneration committee and approved by the Board of Directors. The Company has a Board Appointment and Performance Evaluation Policy. Five Board Meetings and thirty Committee Meetings were held during the year.
Other Compliances: The company has zero tolerance on sexual harassment at workplace, complying with relevant provisions. The foreign exchange earnings for the year 2021-22 are Rs.20.54 crores and outgo Rs 25.34 Crores net of TDS.
Corporate Social Responsibility (CSR) Initiatives: The company has a CSR Committee consisting of three directors, including an independent director. The CSR policy is approved by the Board and is available on the company website. The company’s CSR will cover key focus areas as notified under Section 135, which includes education, health, environmental sustainability, and rural development.
Auditors: M/s. G.D. Apte & Co. and M/s M Bhaskara Rao & Co are the Joint Statutory Auditors of the Company. The Board has recommended re-appointment of M/s. G.D. Apte & Co. as Joint Statutory Auditors of the Company, for a second term.
Secretarial Auditors: M/s D V Rao & Associates are the Secretarial Auditors.
Risk Management and Internal Audit Framework: The Company has an internal audit framework with a risk-based audit approach. The Company was able to manage COVID-19 pandemic-related risks through timely execution of the Business Continuity Management (BCM) framework.
Corporate Governance: The Company adheres to the Corporate Governance Guidelines issued by IRDAI, as well as the provisions of the Companies Act, Insurance Act, and other applicable laws.
Committees: The Company has several committees, including the Audit and Actuarial Committee, Investment Committee, Risk including ALM Committee, Policyholders' Protection Committee, Compensation Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, With Profits Committee, Management Committee, and Outsourcing Committee. Details of the composition and attendance records of each committee are provided.
Shareholding Pattern: The promoter shareholding is 97.56%, with Shriram Capital Limited holding 74.56% and Sanlam Emerging Markets (Mauritius) Limited holding 23%. The top ten shareholders include the Shriram Life Insurance Employees Welfare Trust and G Vaidyanathan.
Financial Information (Extracted from Independent Auditors’ Report and Financial Statements):
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