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Insurance SBI General Insurance will reach the untapped markets: Pushan Mahapatra

SBI General Insurance will reach the untapped markets: Pushan Mahapatra

In an email interview Pushan Mahapatra, MD&CEO, SBI General Insurance says rural insurance has huge potential in India.
Team Cafemutual Dec 18, 2017

You have completed over a year as the CEO of SBI General Insurance. What changes have you made so far?

This is a good time to be in the space of general insurance, given the pace at which the industry is evolving.  Our journey over the last one year has also seen many milestones; our profit for first six months of FY 2017-18 is Rs. 301 crore vis-à-vis Rs. 6 crore for the same period last year. Our gross written premium stood at Rs. 1,593 crore in FY 2017-18, marking a 33% year-on-year (YoY) growth. This was also the first year where we recorded an underwriting profit of Rs. 110 crore. It’s been a good beginning and we see us building up the momentum.

How do you plan to increase your current market share of 2%?

We have set out to achieve a sustained profitable growth. We are looking at a growth of 30%-40% this year. We want to increase our presence in untapped areas through different distribution channels. Currently, we service 55% of our customers through the 23,000 branches of the State Bank group spread over 100 cities, over and above our existing 111 branches. We are present in over 350 locations through satellite resources.

We have a vast footprint through 8,944 agents, 305 brokers and 20,000 sales persons, we are constantly looking to expand all such channels. We are also looking to increase our employee base by 20%.

SBI General Insurance recorded its maiden profit in FY 2016-17. What has contributed to this?

So far, we have secured profits to the tune of Rs. 301 crore for H1, FY 17-18. This comprises a one-time reinsurance arrangement of Rs. 170 crore. Even if we were to exclude that, we have still made a profit of Rs. 132 crore. Cost optimization and initiatives towards cost control has led to a reduction in operating expenses for our company. A business mix with comparatively lower reliance on motor and higher concentration in retail fire (LTH), personal accident (PA) and health has helped us to generate profit.

Apart from health and motor segment, which is the emerging sector in the non-life business space and why?

Apart from motor & health, crop insurance is the emerging line of business which has seen steep growth in the last two years. Primary reasons are the launch of Pradhan Mantri Fasal Bima Yojana (PMFBY) and serious efforts from government to expand the inclusion of coverage for this business apart from industry having built the capacity to write and manage this business

IRDAI is considering allowing commission payout in third-party motor insurance, how will it impact the general insurance industry which has been incurring losses in motor insurance business?

The impact of allowing commission on third party portion of comprehensive motor insurance will be minimal as the portion of third party premium and the portion of the portfolio on which the commission is payable is comparatively small. The efforts have to be more on bringing efficiency in the claims handling of third party claims which would bring in far more savings than the additional impact of commission.

IRDAI wants non-life insurance companies to make simple products for rural India. How do you plan to offer such products to reach the untapped market?

Insurance penetration is low in our country owning to lack of awareness and inaccessibility to insurance products. As far as the reach of SBI General Insurance is concerned, we have the biggest distribution partner-the State Bank Group to distribute insurance policies across the geography. In Tier 2 and Tier 3 markets, SBI General’s simple health policy and individual personal accident insurance policy are the highest selling products.

We have been able to penetrate in the rural market with simple products and shall continue to do so.

 

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