SBI Life To Increase Focus On Protection Plans Amid Pandemic
After strong growth in new business in a pandemic-hit fiscal, SBI Life Insurance Co. will focus on protection plans in the upcoming quarters as the virus increased awareness.
The insurer is striving hard to push the share of protection plans like term insurance to the levels seen in the advanced countries as part of its social and business responsibilities, Mahesh Kumar Sharma, managing director and chief executive officer at SBI Life, said in an interview with BloombergQuint's Niraj Shah. The company, however, expects "healthy growth" across all products.
While the pandemic increased awareness about insurance, the number of deaths have shot up as a second wave of the pandemic rages in India. For FY22, SBI Life has provided for a Rs 183-crore Covid-19 provision over and above their mortality assumptions.
Key Earnings Highlights
SBI Life's value of new business rose 16% in the fiscal ended March, Kumar said. “The last three to four years have led us from 17% to 20.4% (value of new business margins) on actual tax basis and our belief is that, keeping customer at the centre, we will be able to grow at a steady pace.”
- New business premium rose 24% to Rs 20,620 crore in FY21. The growth was by all segments, led by annuity and group savings. Annuity, with a share of 15%, saw new business grow 169% over a year earlier. Group savings (22% share) grew 29%; protection (12% share) grew 18%; and savings (51% share) grew 7%.
- Assets under management grew 38% to Rs 2.2 lakh crore.
- Renewal premium rose 23% to Rs 29,630 crore.
- 13th-month persistency at 87.92% and the 61st-month persistency at 61.63% are close to the prescribed 90% and 65%, respectively, by the insurance regulator.
Sharma said the improvement in persistency could be attributed to their lowest mis-selling ratio in the industry at less than 6 per 10,000 policies. “When you sell the right product to the right person, he renews it year after year."
Price hike by reinsurers increased prices could affect some of the products but is not a major issue, he said. “Changing price of a protection product is a dynamic process depending on the circumstances, not just reinsurance prices.”
Watch the full interview here -