 "We expect 20% growth in new premiums this quarter: Arijit Basu")
SBI Life Insurance plans a revamp of its digital processes, including sales and servicing, with an external consultant. Arijit Basu, managing director and chief executive officer, talks to M Saraswathy about the strategy and the way forward. Edited excerpts:
SBI Life saw one of the highest growths in new premiums last financial year. Do you expect it to continue?
We grew both in terms of new premiums and number of policies, whereas several others saw a decline in the latter. The potential is much more, especially from the bancassurance channel. We had 50 per cent growth in the banca channel in the second half of FY15, which included State Bank of India (SBI) and its associate banks, apart from regional rural banks.
Since bancassurance is a big channel for you, do you believe an open architecture could eat away your business?
We are always for opening up, not for closing down. The initial draft by the regulator was nothing less than mandating by putting a cap. A bank would have been directed to act in a particular way. For instance, if a customer were to come to a bank branch to buy a policy and if the cap of 50 per cent with that insurer is breached, the customer might not get a particular product. Now that the caps have been removed in the latest draft, we hope this is sustained.
Has your foreign partner taken a decision to raise its stake?
SBI has got approval to divest 10 per cent stake in SBI Life. The discussions have started. BNP Cardif is interested in increasing its stake and it should hopefully happen by this financial year. The processes for deciding the valuations are on.
Would listing be next?
There are no immediate plans for listing on the stock exchanges. But, listing-related work begins based on the appetite. Both the shareholding partners, SBI and BNP Cardif, ultimately want it to be a listed, board-run company. But, this might take at least two years.
Unit-linked insurance plans (Ulips) have been the reason for many private life insurers’ growth. Did you see similar growth?
For us, too, Ulips helped. Their share in our new business is 45-50 per cent. But, we anticipate that with some market volatility, people might be a little more cautious.
Several insurers have made a big foray on the digital front. What are your plans?
The focus is on the entire digital piece, as to how much we should do and what we should do. Though we have started a few things on our own, we have also appointed an external consultant and they will give their report on this by mid-July. As a part of it, there could be indications for us to increase digital activities. We also need to digitise the internal process. The digital piece begins from sourcing and includes tab-assisted sales. We have revamped our tablet-based service, ‘Connect Life’, and also have a need analysis tabulator.
There would be one section for simple, straightforward cases and another for those which need a health check. Simple, straightforward cases will have black-box underwriting, which will cut down the turnaround time. Then, follow-up on renewals and claims will happen.
SBI Life saw one of the highest growths in new premiums last financial year. Do you expect it to continue?
We grew both in terms of new premiums and number of policies, whereas several others saw a decline in the latter. The potential is much more, especially from the bancassurance channel. We had 50 per cent growth in the banca channel in the second half of FY15, which included State Bank of India (SBI) and its associate banks, apart from regional rural banks.
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In this quarter, too, we expect to see 20 per cent growth. We hope to see 12-13 per cent of overall business coming from Q1 (April-June quarter).
Since bancassurance is a big channel for you, do you believe an open architecture could eat away your business?
We are always for opening up, not for closing down. The initial draft by the regulator was nothing less than mandating by putting a cap. A bank would have been directed to act in a particular way. For instance, if a customer were to come to a bank branch to buy a policy and if the cap of 50 per cent with that insurer is breached, the customer might not get a particular product. Now that the caps have been removed in the latest draft, we hope this is sustained.
Has your foreign partner taken a decision to raise its stake?
SBI has got approval to divest 10 per cent stake in SBI Life. The discussions have started. BNP Cardif is interested in increasing its stake and it should hopefully happen by this financial year. The processes for deciding the valuations are on.
Would listing be next?
There are no immediate plans for listing on the stock exchanges. But, listing-related work begins based on the appetite. Both the shareholding partners, SBI and BNP Cardif, ultimately want it to be a listed, board-run company. But, this might take at least two years.
Unit-linked insurance plans (Ulips) have been the reason for many private life insurers’ growth. Did you see similar growth?
For us, too, Ulips helped. Their share in our new business is 45-50 per cent. But, we anticipate that with some market volatility, people might be a little more cautious.
Several insurers have made a big foray on the digital front. What are your plans?
The focus is on the entire digital piece, as to how much we should do and what we should do. Though we have started a few things on our own, we have also appointed an external consultant and they will give their report on this by mid-July. As a part of it, there could be indications for us to increase digital activities. We also need to digitise the internal process. The digital piece begins from sourcing and includes tab-assisted sales. We have revamped our tablet-based service, ‘Connect Life’, and also have a need analysis tabulator.
There would be one section for simple, straightforward cases and another for those which need a health check. Simple, straightforward cases will have black-box underwriting, which will cut down the turnaround time. Then, follow-up on renewals and claims will happen.