Empowering People. Embracing Technology. Enabling Growth
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Empowering People. Embracing Technology. Enabling Growth. ANNUAL REPORT 2018 Annual Report 2017-18 CONTENTS AT A GLANCE 10 MESSAGE FROM PRESIDENT, NIPPON LIFE 12 MESSAGE FROM EXECUTIVE DIRECTOR, RELIANCE CAPITAL 14 MESSAGE FROM CEO, RELIANCE NIPPON LIFE 16 MEMBERS OF THE EXECUTIVE COUNCIL 20 CORPORATE INFORMATION 22 EMPOWERING PEOPLE TO ENABLE GROWTH 24 EMBRACING TECHNOLOGY TO ENABLE GROWTH 28 MANAGEMENT DISCUSSION & ANALYSIS 32 BOARD’S REPORT 48 CORPORATE GOVERNANCE 70 MANAGEMENT’S REPORT 84 INDEPENDENT AUDITORS’ REPORT 89 FINANCIAL STATEMENTS 96 2 EMPOWERING PEOPLE. EMBRACING TECHNOLOGY. ENABLING GROWTH. Two years ago, we embarked on a During FY2018, we significantly progressed towards superior KPIs journey of business transformation, across multiple business parameters. Thanks to our bold and imaginative with a more visionary yet prudent strategies, coupled with meticulous approach. With the culmination and disciplined execution, our people have the confidence and of various far reaching initiatives drive to go the full distance in making Reliance Nippon Life an enduring life implemented, we have successfully insurance institution in India. Going entered the profit-making zone in forward, our focus continues towards building a profitable and customer- FY2018. Now, we stand at an inflection centric growth momentum, driven by pathbreaking levels of agency point of producing sustained profitable productivity, and a superior mix of in- growth, for many years to come. demand products within our portfolio. To accomplish our goals and attain sectoral ascendency and recognition, we acknowledged the need to imbibe strong ownership and entrepreneurship zeal amongst our people. In this direction, we have made several advancements, aimed at deriving deeper individual contribution, and elevated productivity at every stage of our value chain. In this digital age, we believe innovation to be instrumental to thriving as a company, and serving the exacting needs of discerning customers through a superior engagement experience. Our intelligent use of a slew of the latest technologies has helped us to scale our business significantly, while driving efficiency and service-levels together to exceptional heights. Furthermore, we are building on our strengths to further widespread the levels of life protection within the country, and enhancing investment returns for our customers. / REPORTS FINANCIALS “Empowering People” and “Embracing Technology” are key pillars of our transformational journey, enabling our future growth and ability to foster sustained value creation for all our stakeholders. Looking ahead, we are ABOUT more focused than ever to fulfil our aim of becoming the most respected and prevailing life insurance company in the country. 1 Annual Report 2017-18 Image 2 WE USE THE LATEST TECHNOLOGY TO CONTINUOUSLY IMPROVE / REPORTS FINANCIALS THE OVERALL EXPERIENCE OF ABOUT PURCHASING LIFE INSURANCE. 3 Annual Report 2017-18 WE LEVERAGE THE LATEST TECHNOLOGY TO OPTIMISE SALES AND AFTER-SALES PROCESSES. 4 5 ABOUT / REPORTS / FINANCIALS Annual Report 2017-18 6 WE INVEST IN OUR IT INFRASTRUCTURE AND THE DIGITISATION OF OUR PRODUCT / REPORTS FINANCIALS SUITE TO ENABLE SMART ABOUT CUSTOMER ON-BOARDING. 7 Annual Report 2017-18 WE EMBRACE TECHNOLOGY IN ALL ASPECTED OF OUR BUSINESS OPERATIONS TO EMPOWER PEOPLE, AND ENABLE GROWTH. 8 9 ABOUT / REPORTS / FINANCIALS Annual Report 2017-18 AT A GLANCE ESTABLISHED IN 2006, RELIANCE NIPPON LIFE INSURANCE COMPANY IS ONE OF THE LEADING PRIVATE SECTOR LIFE INSURANCE COMPANIES IN INDIA IN TERMS OF INDIVIDUAL WRP (WEIGHTED RECEIVED PREMIUM) AND NEW BUSINESS WRP. Wide distribution ` network across India… crore4,069 in Total Premium 747 3 million Offices Policies in Force (Approx.) 65,000+ ` Active Advisors crore96,000+ Total Sum Assured 10 46% NBAP Margin Increased (% ) YoY ` crore289 50 in New Business Achieved Profit (NBAP) 40 38% 30 20 27% 10 6% YoY 2017 2018 ` crore3,220 Embedded Value 11% YoY ` crore19,096 in Assets Under Management 6% YoY ` 3,154 13th Month Persistency (% ) crore in Renewal Premium 90 72 72% 54 65% 5% / REPORTS FINANCIALS 36 YoY ` 18 crore727 ABOUT FY17 FY18 in Individual WRP 11 Annual Report 2017-18 Hiroshi Shimizu President, Nippon Life During the long history of Nippon Life, there has never been any partnership that had built such a strong bond in such a short period of time as 7 years. I believe this was only possible because we were not just a business partner, but two companies that share the same belief. 12 MESSAGE FROM PRESIDENT, NIPPON LIFE Dear Friends, Since Nippon Life’s first investment in Reliance Life in 2011, both companies have been actively exchanging personnel from top management to ground level. By sharing experiences that ended up not only as success, but also those of failure, and by learning from each other and elevating each other, we have been deepening our partnership in various areas. Such developments led to the additional investment in 2016. Symbolising our On a daily basis, we visit customers strong and solid relationship, the Company’s name has been changed to ‘Reliance Nippon to establish trust, make proposals, Life Insurance Company’. During the long and provide insurance policies. history of Nippon Life, there has never been any partnership that had built such a strong bond in I believe this cycle of gaining trust such a short period of time as 7 years. I believe and broadening our network this was only possible because we were not just a business partner, but two companies that holds great value for us. share the same belief. On July 2018, Nippon Life will enter the 130th year in business. Having the precepts of Conviction, Sincerity, and Endeavour to be the basis of “Fundamental Management Principles of Nippon Life”, we have always considered the customer’s benefit as the highest priority and managed our business based on a long-term perspective. On a daily basis, we visit customers to establish trust, make proposals, and provide insurance policies. Even after that initial phase, we continue to provide after-sales support to the customers. These processes will help expand our network to family members and other customers based on referrals. I believe this cycle of gaining trust and broadening our network holds great value for us. Based on such beliefs, Nippon Life has been able to be a top runner in the industry for many years. Although we are in different countries surrounded by a different environment, Reliance Nippon Life shares the same beliefs and will continue to be the face of the industry for years to come. Nippon Life promises to continue supporting Reliance Nippon Life based on the relationship we have built / REPORTS FINANCIALS through the years and achieve further growth and development. ABOUT Best Wishes, Hiroshi Shimizu 13 Annual Report 2017-18 Reliance Nippon Life Insurance Company has only taken the first steps on our journey of transformation. We will continue to engage with customers to enhance their experience. Anmol Ambani Executive Director, Reliance Capital 14 MESSAGE FROM EXECUTIVE DIRECTOR, RELIANCE CAPITAL Dear Shareholders, India has continued on its transformational growth journey this past year. The economy is becoming increasingly open to new-age opportunities, and it is exciting to witness the economic formalisation and digitisation trends that will impact consumers and entrepreneurs. As income levels continue to rise, India is able to spend and save more per capita. The positive economic sentiment, along with Since 2011, our partnership with increased government initiatives to promote the importance of life insurance, will continue Nippon Life has yielded excellent to help increase the penetration of our synergies for the company’s success. products, and promote industry-wide growth opportunities. With similar values and beliefs, we have built a partnership based on As one of India’s leading financial services companies in the private sector, Reliance integrity and mutual respect. Nippon Life Insurance Company has emerged as a key value proven to be an area of key business growth for Reliance Capital. With over ` 4,50,000 crore of Assets Under Management, a workforce of over 18,208 employee servicing over 2 crore customers, Reliance Capital is a strong contender for growth. This past year has been transformational for Reliance Nippon Life. Benefiting from the strategies in place to promote sustainable Since 2011, our partnership with Nippon Life has growth, we have been able to significantly improve the performance yielded excellent synergies for the company’s of our company in FY2018. With a focus on the adoption of success. With similar values and beliefs, we technological products to streamline all avenues of business have built a partnership based on integrity and operations, we will continue to leverage the market’s increasing mutual respect. Together, we have shared ideas propensity towards all things digital. and experiences, establishing a nationwide footprint of over 747offices; over 1 crore policies Reliance Nippon Life Insurance Company has only taken its first issued since inception; and an AUM of over steps on this journey of transformation. We will continue to engage ` 19,096 crore as of March 31, 2018. with customers to enhance their experience, and we believe a large part of doing so is investing in the revitalisation of our sales team. Your Company is blessed with a formidable Along with aggressively pursuing digital innovation, we will continue pedigree, with decades of experience to innovate and optimise our product-mix and improve the overall in protecting life and providing financial quality of our business. independence to individuals. We continue / REPORTS FINANCIALS to make industry leading investments into I look forward to taking the next steps of this journey with the help strengthening our distribution capabilities, and support of all our stakeholders, as we create a respectable, ABOUT helping us provide training to our sales team, enduring, and future ready life insurance company. and delivering meaningful products and services that meet the life-cycle needs of Best Wishes, our customers.