Mumbai, Jan. 4
STATE Bank of India and Cardif of France would immediately inject Rs 75-crore capital into their life insurance venture, SBI Life. If required, they may also bring in another Rs 100 crore before financial year 2004-05 ends, Mr S. Krishnamurthy, Managing Director and CEO, SBI Life, said here.
According to Mr Krishnamurthy, the insurer may require about Rs 500 crore capital over the next two years. Currently, SBI Life has paid-up capital of Rs 175 crore.
Mr Pier-Paolo Dipaola, Savings Director of Cardif, said the company would need more capital because it has been growing at a fast clip. SBI Life leads the private insurance market in terms of lives insured, having covered over 20 lakh people.
Speaking to newspersons after the launch of SBI Life's unit-linked product, Horizon, Mr Dipaola said in terms of growth, India's nascent insurance market was number one for Cardif.
The insurer, owned by French banking giant BNP Paribas, hoped to replicate its experience in Korea where Horizon is its fastest growing product. "Seventy per cent of repeat sales in Korea have come in Horizon," he said.
Mr Krishnamurthy said the design of Horizon takes into consideration some of the concerns and thoughts that the insurance regulator has been voicing to insurance companies regarding unit-linked products.
Horizon is designed to provide high returns while reducing risks. It aims at balancing risk and return by initially investing more in equity but shifting to safer funds as it approaches maturity, Mr Krishnamurthy said.
Earlier, launching the product, Mr A.K. Purwar, Chairman, SBI, said the bank currently sold life insurance at 5,000 branches. That will be scaled up to 10,000 branches by March 2006.
Mr Purwar added that the bank had completed a feasibility study to enter the non-life insurance segment, as that was a product absent in SBI's portfolio.