The Hindu Business Line : SBI Life looks to triple premium income

Even as the company is gearing up to ink bancassurance pacts with Union Bank of India and Indian Bank , plans are on to bring in more top corporates under the group insurance cover.

Mr R. Krishnamurthy

Mumbai , April 2

EVEN as it plans to scale up operations shortly, SBI Life Insurance Company Ltd is looking at tripling its gross premium income in the new financial year.

The company has set a target of earning a gross premium income upwards of Rs 700 crore and a Rs 14,000-crore increase in the sum assured and is hoping to cover another million lives in the fiscal 2004-05, Mr S. Krishnamurthy, Managing Director, SBI Life Insurance, told Business Line.

The insurer has already earned a gross premium income of around Rs 200 crore for the financial year ended March 31 (Rs 63 crore in the corresponding period, the previous year), 2004, and has covered 1.3 million lives so far.

While one of the companies' key strategies to market insurance policies has been the bancassurance model, it is also looking to give a thrust to other channels of distribution in the near future.

"Our plan is to garner around 60 per cent of the business through the bancassurance route but we will also be focusing on other channels of distribution. We have an agency workforce of around 3,500 at present and plan to recruit another 1,500 agents this year. This should contribute another 20-30 per cent of the total business," he said.

Even as the company is gearing up to ink bancassurance agreements with Union Bank of India and Indian Bank shortly, plans are underway to bring in many more top corporates under the SBI Life group Insurance cover. Currently, the insurer already has tie-ups with top corporates like Bennett and Coleman, Nicolas Piramal and banks such as Indian Overseas Bank.

As on December 2003, the company covered 4,73,526 lives, which is around 14 per cent of the total 35,39,648 lives covered by all insurers.

"One of the key strategies of the company has been optimisation of resources, by leveraging on State Bank's extensive branch network. This is very cost-effective. In fact, we can also leverage on the bank's corporate customers for business," said Mr Krishnamurthy.

Due to these strengths, the insurer may in all likelihood break even by the fifth year of its operations, much faster than the other traditional insurance models, he added. The company's joint venture partners, State Bank and Cardiff SA, injected an additional Rs 50 crore last week, taking the total paid-up capital to Rs 175 crore.

The company has also received the regulatory approval for the introduction of new products, which include a money back plan, a term plan and an immediate annuity plan, all of which will be launched shortly, according to Mr S. Muralidharan, Chief Marketing Officer, SBI Life.

SBI Life also plans to step up the marketing of its NRI policies and expects this segment to contribute around Rs 50 crore to the gross premium income this year, he said.