Leapfrog has invested $ 15 million into Shriram Group, a Chennai-based financial services company, and they plan to extend quality insurance, investment, savings products etc to underserved Indian markets.
Shriram Group offers financing, retail brokerage services, insurance to customers. The company will now target lower-end mass market with insurance rather than loans. Shriram group will offer life insurance coverage of up to Rs 5 lakhs (approx) for a premium of around Rs 1000, to its target audience.
Jim Roth, co-founder of LeapFrog. Insurance said, “It’s very difficult for societies to develop without the ability to transfer risk”. In order to sustain, any business needs to make a profit. “If we don’t make a profit, this is not going to be sustainable,” he added.
“We don’t make a big margin on each client, but we look at a large number, a large base. And in India where only 2% of our target audience has insurance, the potential is huge,” he said.
G.S. Sundararajan, managing director of Shriram Capital, revealed that they are targeting people with an average annual income of close to 1,10,000. He said, “The typical Indian psyche doesn’t take insurance, especially at the lower income group where they have a tough time making ends meet.”
Shriram General Insurance and Shriram Life Insurance, are the insurance arm of Shriram Group, which is one of the largest and well-respected financial services conglomerates in India. The Group’s main line of activities in financial services include chit fund, truck financing, consumer durable financing, stock broking, insurance broking and life insurance.
