Dear Shareholders,
Fiscal 2016 was marked by events with significant implications for both developed and
emerging economies.
On the global front, three key trends dominated which included slowdown in economic
growth in China, divergence in monetary policy action across developed and emerging
economies and a sharp decline in commodity prices. A noteworthy revival in global growth
continued to remain a challenge. In India, we saw improvements in several key economic
indicators like inflation, foreign investments and current account deficit.
Government’s policy initiatives were focused on creating a favourable environment for
growth, social inclusion and investments. However, there were challenges in terms of
slowdown in nominal growth, impact of muted global commodity prices on some important
sectors and subdued private investments. The financial sector saw increased opportunities
in the retail space during the year, indicating growing preference for financial savings.
The Government emphasised the importance of long-term savings in its inclusive growth
initiatives. During the year, the Prime Minister’s Jeevan Jyoti Bima Yojana was
launched which has the potential to significantly increase the penetration of insurance in
the country. Your company continued to leverage these opportunities and maintained its
leadership position in the industry. At the same time, we continue to build on the larger
goals of providing adequate financial protection to a large cross-section of the
country’s population. Our philosophy of customer centricity has earned us the trust
of millions of our customers. We have taken the lead in leveraging digital platforms for
improving the customer experience and expanding the tools available to our distribution
channels. Our digital strategy has helped us to continue on the growth path and meet the
growing expectations of world class service for our customers in a cost effective manner.
The life insurance sector continued to benefit from important policy decisions. Last
year the foreign investment limits were increased from 26% to 49%. In the current year
this was further liberalised by permitting foreign investment up to 49% under the
automatic route. I believe, this is an important step in unlocking the growth potential
and the opportunity for value creation in the sector. Fiscal 2016 marked a major milestone
for the company with the addition of two highly regarded financial investors as new
shareholders in the company. This transaction helped to establish a valuation benchmark
and was an affirmation of the substantial value created by your company. Going forward,
India presents immense opportunities to expand the life insurance business given the vast
untapped potential, rising prosperity including a potentially favourable impact of the
seventh pay commission and the increasing awareness of the need for financial protection.
We will continue to focus on meeting the diverse needs of our customers and create
sustainable value for all our stakeholders.
With best wishes,