The Hindu Business Line : SBI Life hopes to double new biz premium growth

Mumbai, Aug. 20 SBI Life Insurance expects to register a growth rate of over 100 per cent in new business premium this fiscal, said Mr U.S. Roy, CEO and MD.

“We believe in profitable growth and our sustained effort will be to enter markets which we are not in. We are trying to fully tap the 14,000 strong branch network of State Bank,” Mr Roy said.

SBI Life grew at 210 per cent growth in the new premium income in 2006-07 at Rs 2,566 crore.

The company registered a growth of 66 per cent and raked in new business premium of Rs 426.39 crore in the first quarter of the fiscal, against Rs 256.59 crore in the previous year.

SBI Life reported a net profit of Rs 4.75 crore in the first quarter, higher than the net profit of Rs 3.88 crore for the entire fiscal of 2006-07.

In terms of expansion plans, the company plans to hike its current capital base of Rs 500 crore this fiscal by around Rs 300 crore to Rs 400 crore.

Mr Roy said that the agency force would be doubled this year from 25,000 to 50,000.

Discussions on

On State Bank of India’s proposed holding company for its insurance and mutual fund ventures, Mr Roy said that discussions were still on about the structure of the company.

He added that the valuation of SBI Life made by external agencies had shot up in the past few months.

“Eight months ago, the valuation of the company was $1.2 billion, which has now shot up to $4.5 billion,” he said.

SBI Life on Monday released the findings of a credit life survey conducted in 18 countries, including India. The sample size was 18,000, of which around 1000 came from India.

Wary of loans

According to the survey, Indians were reluctant about taking a loan and fear losing control of their budgets.

Residents of Switzerland, Japan, Germany and Belgium also shared similar reluctance. Most Indians (63 per cent) believed that paying in instalments made it more difficult to control spending.

Mortgage, home facilities and cars figured among the top items for which Indians turned borrowers.

Globally, residents of developed countries also listed leisure activities among the major items for which they took loans.

Around 75 per cent of the Indian households said they would be unable to easily maintain their current lifestyle and sustain beyond six months in the event of a disability following an accident.

Indians, however, showed low awareness about insurance with only 8 per cent of the sampled population knowing about creditor insurance, against the global average of 43 per cent.