Private insurer SBI Life has registered a 46% growth in individual new business premium for the eight months ended November and said it was hopeful of maintaining in FY18 the close to 40% run rate it had achieved in the previous two fiscal years.
“We achieved 39% growth in 2015-16 and 16-17... and have kept the internal target at the same [level]; it is achievable,” MD and CEO Arijit Basu said, citing the untapped potential of the State Bank of India (bancassurance) channel.
“Compared to other major [private sector] competitors, we were able to utilise the potential better. [Business from] the bank channel used to be much lower... has been corrected to a large extent in the last 2-3 years,” he said, adding bancassurance’s share in new business premium was about 65%.
The focus on harnessing the potential of the SBI branch network as well as the bank’s emphasis on cross-selling has seen the insurer get well ahead of the industry growth rate (in individual new business premium) of 20-22%.
The focus on bancassurance would continue for 3-5 years, he said. “We will need that much time to have the SBI potential fully realised,” Mr. Basu said, speaking on the sidelines of an annual mega sales meet in Hyderabad.
‘Avoiding volatility’
A joint venture of State Bank of India and BNP Paribas Cardif S.A, SBI Life Insurance recorded an individual new business premium of ₹7,100 crore in 2016-17. The Group business premium was ₹3,000 crore.
“With 40% growth this year, we will end up with ₹9,800 crore [individual new business]. In the Group space, we have taken a conscious call to reduce the group fund management, because it is not pure insurance and there is lot of volatility. We expect that business to come down to ₹2,000 crore,” he said.
Last year, SBI Life’s total gross written premium was ₹21,000 crore and this is expected to close at almost ₹25,000 crore this year, he added.
On new policies, he said Poorna Suraksha, a policy providing cancer, cardiac disorders and diabetes cover as well as offering accidental benefits would be introduced in January. It would have multiple variants, he said, adding the sum assured would be paid, “if the policy holder contracts [any one of] the diseases.
To a query on consolidation in the insurance sector, he said there were 23 private life insurance firms and together have about 52% market share.
The top three – SBI Life, ICICI and HDFC – together account for 75% of that. The rest have very small market share.
