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SBI Life to Expand Future Generali eyes growth on economy pickup
Bancassurance by 50%
Future Generali India Insurance Com- Rs.1,480 crore.
The country's biggest banking net- pany, a joint venture between retail
work SBI along with its insurer is giant Future Group and Italian insur- Solvency ratios are comfortable and
planning to expand bancasurance ance major Generali, expects to post a there is no immediate requirement to
channel by 50% alongside raising the infuse capital, Rao said.
field force by about 10% to push 20-25 percent
business growth. growth this fiscal, He expressed hope that insurance regu-
said the company's lator IRDAI will lift the current cap on
The company aims to grow business by MD and CEO K. G. commission payable to intermediaries
30% this fiscal. SBI has a 16,333 strong Krishnamoorthy to reflect current realities.
branch network with 50% of it selling Rao. This will be
SDBI Life's policies. SBI Life's Manag- well above the ex- The surveyor fee which has remained
ing Director Arijit Basu said that, its pected general in- fixed at Rs.20,000 for very long, now
average business per branch is about surance industry growth of about 15 needs a change and an upward revision
Rs.8 lakh while it would be around percent this fiscal, he added. would actually help the industry and
Rs.50 lakh for its nearest rivals. customers to complete claim settle-
Last year, the company grew at 14 ments quickly, he said.
SBI Life, the 74:26 joint venture be- percent even as the sector recorded its
tween SBI and BNP Paribas Cardif slowest growth in several years, at 9 Rao also called for a standardized ap-
was the largest private insurer in percent. proach for providing awards/compen-
terms of new business at the end of sation for road accident victims.
March 2015 while it was third
among private players in terms of The pickup in the economy and a Besides, the lack of any time bar for
total premium collection, the com- couple of regulatory changes are ex- filing third party claims often creates
pany official said. pected to usher in faster growth this problems, Rao said, adding that there
fiscal Rao said. is a need to limit both the time within
It plans to raise the number of which a claim can be made as well as
agents to 90,000 by the end of this This is contingent on auto sector sales the amount.
fiscal from 83,000. According to reviving since motor insurance pre-
Basu, SDBI Life's existing agents are mium contributes about 55 percent of Future Generali India Insurance MD
running in highest productivity and the company's revenue. and CEO K. G. Krishnamoorthy Rao
therefore, the company needs to called for a standardized approach to
expand the team to push growth. Last year, Future Generali had recorded providing compensation for road acci-
a 50 percent jump in profits at Rs.60.9 dent victims.
The company's bancassurance crore on a gross premium income of
model accounts for 55% of its busi-
ness with the balance coming Pension business of life insurers plunges 90% to Rs
through retail agencies. 2,000 cr in FY15
It reported a total business of The life insurance industry is bearing the brunt of a 90 per cent fall in pension
Rs.12,867 crore in 2014-15, with the business due to a special tax treatment for the New Pension System and a regu-
first year premium collection growing latory clause that makes it mandatory for life insurers to offer guaranteed re-
18% to Rs.5,528 crore and the bal- turns to subscribers. The pension business of life insurance players is down to a
ance coming from renewal premium. meagre Rs 2,000 crore in 2014-15, from Rs 20,000 crore in 2009-10.
SBI would have 10% of its stake in Pushed to the wall, the industry has called for a level-playing field. The plunge
the insurance company in favour of has been more pronounced since the introduction of the clause in 2009-10 which
BNP Paribas Cardif as the govern- made it compulsory for life insurers to offer guaranteed returns on pension prod-
ment allowed up to 49% foreign hold- ucts.
ing. SBI Life has an authorized capi-
tal of Rs.2,000 crore with a paid up The Budget provision of Rs 50,000 worth of additional tax-free incentive to NPS
capital of Rs.1,000 crore. investment over and above the existing Rs 1.5 lakh has only made their life
harder.
16 The Insurance Times, September 2015
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