Chennai, Aug 1 (IANS): Private non-life insurer Shriram General Insurance Company Ltd will meet the 30 per cent cap on management expenses in three years time, said a top company official.

Managing Director & CEO Anil Kumar Aggarwal also said the company will be hiring about 700 people this year, expand its branch network by 35 to 278, and reduce the focus on motor insurance by looking at other lines of business like cyber insurance.

Referring to the Insurance Regulatory and Development Authority of India’s (IRDAI) new norms of a single 30 per cent cap on expenses of management, he said the company would be able to meet that limit in three years' time.

Last year, the company’s expenses of management stood at 40 per cent and this has come down to 35 per cent during the first quarter and by the end of this fiscal, it will be about 33 per cent.

"The management expenses will be brought down from operational efficiencies, reducing the cost of acquisition of new business from digital sales and other modes than the traditional mode," Chief Underwriting Officer Shashi Kant Dahuja told IANS.

Under the earlier norm, there were sub-limits as well as overall limits for management expenses of a non-life insurer.

About the business, Aggarwal said the company closed the first quarter of FY24 with a gross premium of Rs 560 crore, logging a growth of 39 per cent. The company grew its net profit by 37 per cent to Rs 98 crore. Bulk of the premium income was from motor insurance – Rs 496.72 crore - and the balance contributed by personal accident – Rs 28.09 crore, fire Rs 23.84 crore and engineering – Rs.4.35 crore.

Aggarwal said the company plans to increase the premium from underwriting electric vehicles to about Rs 200 crore this fiscal up from Rs 82 crore earned last year.

He said the underwriting loss, or simply put, premium minus claims went down to Rs 53 crore during the first quarter of FY24 from Rs 75 crore for previous year first quarter.

Shriram General Insurance earned an investment income of Rs 185 crore during the first quarter, up by 6 per cent over the previous year corresponding period.

Aggarwal said the company was able to control its motor third party claims through a proactive negotiated settlement than waiting for the court to give the award. The average outgo under the third party claims head for the company is about Rs 8 lakh far less than what the court would award but after years of litigation.

Agreeing that the solvency margin of 4.83 in a way means the company has excess capital, Aggarwal said the growth in business will bring down the solvency margin. The statutory solvency requirement is 1.5.