SBI Life Insurance Company, a joint venture between the State Bank of India and French insurer BNP Paribas Cardif, is set to become the number one life insurance company in the private sector, according to a top company official.
This is despite the fact that HDFC Life and Max Life Insurance are merging, aiming to become the largest private life insurer.
“My firm belief is by the time they (HDFC Life and Max Life) come together we will be larger than them if we continue to register same growth,” said Arijit Basu, Managing Director and Chief Executive Officer of SBI Life.SBI Life had reported 69 per cent growth in new business premium on annual premium equivalent basis to Rs.722 crore in the first quarter of the current financial year. Its gross written premium growth was 53 per cent at Rs.3,383 crore during the same period.
According to data compiled by Kotak Institutional Securities, as on June, HDFC Life and Max Life had a combined market share of 11.3 per cent while SBI Life’s share was 10.8 per cent. Life Insurance Corporation of India dominated with 48.7 per cent (though it came down over the last one year).
ICICI Prudential Life was the largest private sector insurer with 12.1 per cent market share in the overall market. Earlier this month, while announcing the contours of the deal, HDFC Life said it expected the merger to be completed in the next 12 months.
“Our internal target was that we should become by far the largest private sector insurer by the end of 2017-18. But seeing our competitor’s performance, we might overtake our competitors in this financial year itself,” said Mr. Basu. Most of the life insurance companies had seen growth moderating in the first three months of the current financial year.
SBI Life had set an ambitious target of 40 per cent growth for the current financial year and Mr. Basu’s strategy is to exploit its parent’s branches to push sales. As he points out, earlier only 20 per cent of SBI’s 15,000 branches were ‘active’ and this number had now increased to 40 per cent.
“Active branch means selling a few polices per week. And if it is a small branch, selling one policy in a week would be seen as active,” Mr.Basu said.
Commenting on the 69 per cent growth in Q1, Mr. Basu said the bank was looking at equitable distribution of policy sales over the year. SBI will take a call on its IPO early next fiscal, he said.