SBI General Insurance plans product for protection from malware attacks

The insurance product in the pipeline would be customised separately for individuals, institutions

Realising the need for providing cushion to individuals and corporates from virus and malware attacks on digital platforms, SBI General Insurance Company is mulling to come out with a product that addresses cyber security concerns.

The insurance product in the pipeline would be customised separately for individuals and bulk institutions and also be marketed as a group insurance product. It is proposed to be made available on all the distribution channels.

"The product that we are planning on cyber security would be one of its kind. We are experiencing a different kind of fraud in digital transactions and this product would have a unique positioning. The product is being priced and it will shortly be filed with the Insurance Regulatory Development Authority (IRDA)," said Pushan Mahapatra, managing director and chief executive officer (CEO) at SBI General Insurance.

The proposed insurance product is being designed to suit the needs of individuals as well as bulk institutions like banks and credit card companies. Around 12,000 million digital transactions take place in the country every year and the share of fraudulent transactions is between 0.005 and 0.007 per cent.

As a leading general insurance company, SBI General Insurance, a 74:26 joint venture between State Bank of India (SBI) and Insurance Australia Group has been growing faster than the industry average. During the June quarter of this financial year, the general insurance industry recorded 22 cent growth whilst SBI General Insurance witnessed a growth of 32 per cent. The company broke even in last financial year with Rs 153 crore net profit and a gross written premium of Rs 2,604 crore. For this financial year, the insurer is eyeing its premium collection to reach Rs 3500 crore. Growth, Mahapatra said, would come on the back of segments like retail, SMEs (small & medium enterprises) and health.

In the last financial year, the general insurance industry's growth was primarily driven by crop insurance premium due to roll out of the new crop insurance scheme. The incremental premium in this vertical was in the range of Rs 15,000-18,000 crore. This financial year too, crop insurance (a segment exempted from GST) is expected to drive the industry's growth though not to the extent of previous financial year, he said.

Mahapatra ruled out SBI General Insurance's plan to hit the capital markets and going for an IPO (initial public offer).

"As of now, we are adequately capitalised. Our solvency levels are comfortable due to which we do not have pressure on listing or raising fresh capital. As against the prescribed asset to liability ratio of 1.5, our figure is 2.2 and at this moment, we are not in need of capital. As our profits build up, our requirement of capital will also come down. But, in the medium term, there can be a requirement and before that we want to maintain a continuous track record that builds our valuation," he explained.

The market size of the general insurance industry is estimated at Rs 1.27 lakh crore. SBI General Insurance which started operations in 2009-10, has a share of 1.9 per cent.