The Hindu Business Line : SBI Life posts 210% growth in new premium income

Mumbai April 30 "We don't need flashy offices to sell our products. Our brand equity will do the job," said Mr U.S. Roy, Chairman and Managing Director, SBI Life Insurance Company, announcing a 210 per cent growth in new premium income at Rs 2,566.08 in the last fiscal.

The company, the first among the new life insurance companies to make a profit in 2005-06, will focus on leveraging the brand equity of SBI Group, he said.

SBI Life, in which the French company Cardif holds 26 per cent equity, hopes to achieve a 300 per cent growth in new business in the current year.

The company plans to foray into micro-insurance and health insurance sector. "We plan to cover around 5-lakh lives in the micro-insurance sector and around one and half lakh in the area of health insurance," said Mr Pier-Paolo Dipaola, Deputy Chief Executive Officer, SBI Life Insurance.

It plans to roll out the scheme by this fiscal. "There is a huge demand for micro-insurance, we can introduce some attractive products and sell them through the banking network," Mr Dipaola added. They did not, however, disclose the premium amount for the micro-insurance scheme.

"We plan to capitalise on the self help group (SHG) strength of the State Bank of India. We are also looking at tying up with NGOs," he said.

Retirement solutions

Responding a query on unit linked insurance plan (ULIP), Mr Roy felt that an ideal model for insurance would be a balanced mix of market related and traditional products. Stressing the importance of ULIP, Mr Roy said that there was a huge need for retirement solution in the country. He felt that ULIP was best suited for retirement solutions. "Our ULIP product covers 64 per cent of the total premium income," he added.

The company has recently introduced unit-linked variants of pension products like Horizon II Pension and Unit Plus II Pension.

It has registered a net profit of Rs 3.83 crore for the year ended 2006 -07, a growth of nearly 88 per cent. The total premium went up 172 per cent to Rs 2,928.49 crore from Rs 1,075.32 crore, driven by the profitable business growth demonstrated by the distribution channels like bancassurance, agency and group corporate, said Mr Roy.

Talking about the various distribution channels Mr Roy said, "We are able to keep the costs under control due to our efficient distribution channels of bancassurance and agency model."

The agency channel of the company has grown at 255 per cent due to increased geographical presence and high productivity and activity levels among insurance advisors in the industry. The bancassurance has seen a growth of 106 per cent and contributed to over 39 per cent of the total premium of the company, with group corporate growth of 261 per cent contributing 17 per cent of the total premium.

The assets under management of the company have doubled to Rs 4,741 crore. The company has covered around 6.49 million lives, as against 4.37 million in the year 2005-06, an increase of 55 per cent.