The Hindu Business Line : SBI Life posts Rs 38-cr net

Mumbai, Jan. 24 SBI Life Insurance has reported a net profit of Rs 38 crore in the first nine months of the fiscal ending December 2007, against a loss of Rs 33 crore in the previous year. The company’s profits have now wiped out all previous accumulated losses.

Mr U.S. Roy, Managing Director and CEO, SBI Life, said that bancassurance as a business model had proved to be quite cost-efficient for the company.

“The cost of customer acquisition through bancassurance is low,” Mr Roy said.

Bancassurance now accounts for 44 per cent of the total portfolio, higher than last year’s 35 per cent.

Around 4,000 of SBI’s 8,000 strong branch network is actively selling insurance products, and Mr Roy said that the bank was now actively looking at increasing its fee-based income.

Holding company

On the proposed holding company, Mr Roy said SBI would wait for RBI’s approval. He added that if the holding company does not work out, then the company would look at independently going in for an initial public offering.

The company has raked in new business premium of Rs 2,355 crore in the first nine months of the fiscal, a growth of 98 per cent from the previous year. SBI Life’s capital base currently stands at Rs 600 crore, and Mr Roy said that around Rs 300-400 crore would be infused in the fourth quarter.

Expansion

In terms of expansion, SBI Life plans to increase its branch network from 170 to 270 by the end of the calendar year. Agency force will also be increased from 35,000 to 80,000 during the same period.

On the current volatility in the stock market, Mr Roy said that customers were making switches from debt to equity under the Unit Linked Insurance Plans.

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