The Hindu Business Line : SBI Life expands capital base

INFUSION OF FUNDS: Mr S. Krishnamurthy (left), Managing Director & CEO, SBI Life Insurance, and Mr Pier-Paolo Dipaola, Deputy CEO, at a press conference in Mumbai on Wednesday. - Shashi Ashiwal

Mumbai , Jan 3

SBI Life Insurance Co has hiked its capital base by Rs 75 crore to Rs 500 crore and Mr S. Krishnamurthy, MD and CEO, SBI Life said it would fulfil the company's need for expanding its distribution network.

The solvency margin is now 2.9 times higher than the liabilities, above the mandatory 1.5 times. SBI Life's authorised capital limit is at Rs 500 crore.

In the current fiscal, the company registered a growth of 211 per cent in new business premium to Rs 1,150 crore.

On whether the company would be able to sustain making profit despite the high growth, Mr Krishnamurthy said it would depend on SBI Life optimising the product and distribution channel mix.

SBI Life was the first insurance company to post a profit of Rs 2.02 crore at the end of last fiscal.

Unit linked insurance plans, which contributed just 25 per cent of the new business last year, now brings in around 60 per cent.

Mr Krishnamurthy said the company had expanded its agency force to 18,000 against last year's 8,000. He added the company would expand its branch network to 150. Bancassurance raked in 38 per cent of the company's new business, lower than last year's 45 per cent.

SBI Life plans to leverage the corporate relationships of SBI to expand its group business, Mr Krishnamurthy said.

The company on Wednesday launched Horizon II, a unit linked pension product. The product offers Automatic Asset Allocation (AAA), an algorithm-based active investment allocation mechanism. Higher exposure to equities for the initial years, followed by increasing exposure to debt and money markets as the pension plan nears maturity, is automatically allocated by the AAA to ensure better returns to investors.