Reliance Nippon Life Insurance is "adequately capitalized" and does "not need fresh capital" for several years to run its business, a company official said on Tuesday. The joint venture between Reliance Capital and Nippon Life of Japan can increase the number of branches from 727 at present to 977 easily with the present level of capital adequacy, the official said.
"We are adequately capitalized. We do not need fresh capital infusion for several years from now. Our solvency ratio is more that 260 percent against the IRDA norm of 150 percent," company's ED and CEO Ashish Vohra told reporters here. Replying to a query on the future of the company as one of the promoter, Reliance Capital which is a part of the Anil Dhirubhai Ambani Group (ADAG), is facing liquidity crunch, Vohra said the current capital base is Rs 2,000 crore and the business of the life insurer has not been affected. "With Reliance Capital and Nippon Life having 51 percent and 49 percent of the equity base respectively, we do not anticipate any need for fresh capital for several years from now", he said. Reliance Nippon Life is "an independent board-managed firm," he said, adding that "the business has not affected as people are looking at the key operational ratios which are very good". The company has already got the board's approval to open 75 new branches, he said.
For the current financial year, Reliance Nippon Life is looking at first premium income of Rs 1,000 crore and renewal of Rs 3,500 crore, he said. Last fiscal, the first premium income earned was at Rs 900 crore and renewal at Rs 3,200 crore, he said, adding that the company has 12,000 people on its payroll.