SBI Life first private life insurer to post net profit
Mumbai, May 10 (UNI) Life insurance major SBI Life Insurance Company Limited became the first private sector life insurance company in the country to register a net profit. It posted a net profit of Rs 2.02 crore in FY 06.
SBI Life, a joint venture with France-based Cardif SA, also garnered a total premium of Rs 1,075-crore, a 78 per cent jump over the previous year's total premium of Rs 601-crore while new business premium stood at Rs 828-crore.
Interacting with journalists here today, SBI Life's Managing Director and CEO S Krishnamurthy said that bancassurance continued to essay a crucial role in the company's growth by contributing over 43 per cent to the total premium at Rs 470-crore.
Currently, SBI Life products are being sold in over 6,500 branches of the State Bank group. ''About 4,500 employees of the bank currently advice the bank's customers on individual products, making SBI Life's bancassurance network by far the largest and the most robust network in the country,'' Mr Krishnamurthy said.
SBI Life plans to expand its bancassurance operations this fiscal and is presently in negotiations with other banks as well, both public sector and private, revealed Mr Krishnamurthy. ''We are also looking at tie-ups with co-operative banks which we feel can contribute immensely to the growth of our credit life products,'' he said.
The Company's profitability also received a healthy contribution from the agency channel route, which grew by 190 per cent and which provided Rs 369-crore of the total premium garnered. SBI Life plans to further strengthen this channel this fiscal by increasing the number of its insurance advisors from the present 8,000 to 20,000.
SBI Life, which presently services five lakh policy holders, maintained its lead position amongst private insurers in the group insurance business.
Mr Krishnamurthy revealed that SBI Life will focus strongly on credit life cover this fiscal. ''There is a very high profit-earning potential in this business,'' he said, adding that in FY 06, this business contributed 25 per cent of the company's total business.
Last fiscal, the Company also made an initial thrust in product offerings to corporates for management of their funds relating to terminal benefits of their employees. This business netted SBI Life Rs 180-crore in FY 06 and will constitute a strong focus area for it this fiscal.
SBI Life will be launching a pension version of its unit-linked insurance products (ULIPs) by July this year along with some gratuity products, said Mr Krishnamurty, adding that three ULIPs will be modified soon to align them with IRDA regulations.
This year, the Company has set a target of Rs 2,000-crore, which Mr Krishnamurthy was confident of achieving ''by increasing our branch network, introducing innovative products, recruiting more people and vastly decentralising operations for policy issuance and servicing.'' UNI JJ MAZ SKB2054