New business premium up `No funds constraint for growth'
CHENNAI: Even as it aims at tripling new business premium this year, SBI Life Insurance Company has no capital constraint for growth.
Addressing a press conference here on Thursday, U.S. Roy, Managing Director and CEO, said the company had an authorised capital of Rs. 1,000 crore and a paid-up capital of Rs. 500 crore. Hence, SBI Life had enough leeway on the fund front. "There is no fund constraint for us," he said. Garnering more market share could, however, prove a big challenge, he said.
SBI Life currently ranks third in terms of first year premium collection and enjoys a market share of 12 per cent among private life sector insurance companies as per the IRDA (Insurance Regulatory and Development Authority) data for April-February 2007.
Should the need arise, he was confident that the two partners State Bank of India and Cardif SA of France would not hesitate to step in to infuse more funds, he said. Mr. Roy said since SBI Life was already on the net profit mode (Rs. 3.83 crore in 2007-07, up by 88 per cent over the preceding year), any fresh funds would go only to drive the business.
SBI Life saw new business premium rise by 210 per cent in 2006-07 to Rs. 2,566.08 crore. The total premium increased by 172 per cent to Rs. 2,928.49 crore. Number of lives in portfolio was up by 55 per cent to 6.5 million.
Mr. Roy said SBI Life was planning to come out with health insurance products. It would also come out with micro insurance products this year, he added.