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SBI Life Insurance, the 74:26 joint venture between the State Bank of India (SBI) and BNP Paribas Cardif, is targeting a 30 per cent growth in first year premium this fiscal.
According to Arijit Basu, Managing Director and CEO, SBI Life, the growth will come through the ‘bancassurance’ (selling of insurance products through banks) model; followed by growth in retail.
While the ‘bancassurance’ model is expected to grow at 45 per cent; retail is likely to grow at 20 per cent.
At present, the two models account for nearly 95 per cent of the insurer’s business; with ‘bancassurance’ being the major one.
“We are looking at a 30 per cent growth this fiscal mostly through the banacassurance model,” he said on the sidelines of an insurance summit organised by the Indian Chamber of Commerce (ICC).
The company reported a business of Rs 12,867 crore in FY’15; with first year premiums accounts for over Rs 5,529 crore and the remaining coming from renewal premium.
While first year premiums grew by 17 per cent, renewal premiums witnessed a 28 per cent growth.
It reported a net profit of Rs 820 crore.
It currently has 20-odd products across the various categories with a 55– 45 division towards traditional and ULIPs (unit linked insurance policies).
Ramping up Distribution
According to Basu, some 10,000–15,000-odd specified persons (SPs) are to be recruited for ramping up the bancassurance model. It currently has 30,000-odd SPs across the banks.
SPs refer to a dedicated agent selling the insurance products through the banks under the ‘bancassurance’ model.
Similarly, on the retail front, it intends to take up the agent network to 90,000 by the end of this fiscal, from the existing 83,000.
Listing and stake dilution
On the probability of listing the company, Basu maintained that there was no immediate capital requirement and a probable listing can take place in another two years time.
“Currently there is no requirement for capital…maybe in two year’s time we can explore the listing options,” he said.
Similarly, on BNP Paribas Cardiff increasing its stake to 36 per cent (from the existing 26 per cent), Basu said “talks have begun”. “Maybe it can happen within this year,” he added.
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