SBI Life to Leverage Parent's Reach
Promoted by the nation's largest lender SBI, SBI Life has so far failed to use the parent's network fully, something which it intends to rectify in the next two to three years.
Promoted by the nation's largest lender State Bank of India, SBI Life has so far failed to use the parent's network fully, something which it intends to rectify in the next two to three years. “The potential of growing business through SBI and its associate banks was not being tapped. At present, just about half of the group's branches are active in selling insurance. We would like to grow this ratio to at least 70% in the next two-three years,“ said SBI Life CEO Arijit Basu.
In SBI Life's internal language, active branches are those which sells merely three to four policies a month.“The potential is much more. We are just scratching the surface at present,“ said Basu.
SBI and its associate branches have an enviable 16,000 branches collectively, which is at least four times its nearest rival ICICI Bank.
The insurer saw its first year premi um grow 35% to ` . 4,524 crore in the first nine months while ICICI Prudential Life recorded a 33% rise to ` . 4,763 crore, according to statistics collated by Life Insurance Council.
Group insurance contributes 30% of its new premium, but Basu said the company is planning to restrict this to 20% since “it isn't very profitable“. It also plans to go slow on single premium business. “Non-single premium business allows us to go to the customer again,“ said Basu.
SBI Life is also planning to grow its fleet of agents by 15% to nearly 1.05 lakh by March 2017, from its current 90,000.
“As a multi-channel company, we put equal emphasis on agents as well,“ sa id Basu, adding that the banking channel is giving it close to 70% growth, gi ven its untapped potential while business through agents is growing at 15%.
The bancassurance share has risen to 60% now from 45% on March 2014.The heightened focus on banking channel going forward would give rise to individual premium income.
The life insurance industry's new premium income has grown 16% in the first nine months of the fiscal to Rs 85,588 crore compared with Rs 73,777 crore in the same period 2014.
Number of policies sold was 1.66 crore in the nine month period compared with last time's 1.60 crore, recording a 3.5% rise.