SBI General Insurance is expecting to break-even next fiscal, according to its managing director and CEO, Bhaskar J Sarma. Having clocked a 24 per cent growth in revenue (₹700 crore) in the first six months, the company is now targeting 30-40 per cent growth this year. Revenue last fiscal (FY-14) stood at ₹1,200 crore.
“We have grown higher than industry average. We have seen good growth in retail and SME sectors,” Sarma told BusinessLine . He was in the city to attend Infocom 2014. According to the MD, the company consciously slowed down its exposure in the corporate sector. Steep discounts and low-priced products have made it difficult for new entrants like SBI General. The corporate sector accounts for 10-15 per cent of its revenue.
New tie-ups While three new products in the health category are expected to be launched in December, four more (in other categories) – mostly add-ons – are awaiting approval from IRDA.
The portfolio includes 70-odd products across categories like retail, SME, motor, crop, construction, group health and so on. Also on the cards is new tie-ups with banks. With over 60 per cent business coming through bancassurance (where insurance is sold through banks), SBI General is now in talks with some regional and smaller banks for tie-ups. This apart, the broker and agency models account for approximately 10 and 30 per cent of its revenue.
Capital infusion Maintaining there was no immediate requirement for capital infusion, Sarma said, the company had a solvency ratio of 3.4 in September this year, as against a mandated 1.5 per cent.
However, the option of Insurance Australia Group upping its stake is open.
Such options can be explored once the Insurance Bill – that seeks to increase the FDI limit in insurance to 49 per cent – gets through the Parliament.
“Depending on the situation, there can be a discussion between the parties (on capital infusions). It’s a part of the JV agreement. Whenever there is a change in regulatory, the JV partner will have the option of dialling up his stake” Sarma added.
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